AMD Sheds SeaMicro Microserver Business
Rumors circulated late last month that Apple might be interested in buying AMD, but King said that made little sense, given Apple's lack of interest in the data center. What does make sense is AMD's exiting the microserver business, he said. The hardware technology was good—the SeaMicro SM15000 system housed compute, storage and networking in a 10U (17.5-inch) rack system that offered 64 sockets for AMD's eight-core Opterons or quad-core Xeons from Intel, 160 gigabits of I/O and more than 5 petabytes of storage. The real prize in the SeaMicro deal was the Freedom Fabric, a 1.28-terabyte supercompute fabric. AMD is keeping the fabric technology as part of its IP portfolio, Su said. The trouble comes from a chip maker getting into the server business, King said. "There are inherent problems when a vendor known for doing one thing decides to go into a business that directly competes with those of its customers," he said.Still, AMD will continue to pursue the server business with both its x86 Opteron servers and its upcoming AMD-based "Seattle" SoC, which is due out later this year, said Su, who took over from Read as CEO about six months ago. The Seattle chip is sampling with hardware and software makers and is due out in the second half of the year. "It's clear the x86 server market is a very large market, and one in which we have historically been successful," she said, adding that AMD "can be successful in the mid-term."
The decision to drop the SeaMicro business will be a costly one, according to Devinder Kumar, senior vice president and CFO at AMD. Of the $87 million AMD has to pay in charges for the quarter, $75 million is related to exiting the microserver business, he said.