AMD to buy startup SeaMicro for $334 mn

Chip maker Advanced Micro Devices (AMD) is planning to enter the low-power server business by offering to buy Silicon Valley startup SeaMicro Inc, a maker of microservers, for $334 million.

Backed by venture funds, Sunnyvale, California-based SeaMicro, makes so-called micro-servers, which are small, energy-efficient machines for data centres.

By delivering breakthrough innovations borne of multiple technology domains – CPU design, virtualisation, supercomputing and networking, SeaMicro has created a new server architecture purpose-built for scale out infrastructures such as those found in the web-tier, online gaming, search and index computation, said AMD.

In 2009, the company received $9.3 million from the US Department of Energy, the largest grant given to a server company, as part of the American Recovery and Reinvestment program.

The acquisition is seen as a setback to AMD's rival Intel, which has a partnership with SeaMicro. All SeaMicro's servers are based on low-power Intel Atom processors.

Current systems featuring SeaMicro technology typically use one quarter the power and take one-sixth the space of traditional servers with the same computing performance, yet deliver up to 12 times the bandwidth.