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Monday, June 17, 2013
 AMD's Investments In The Microserver Market Could Pay Off
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Message Text: With the acquisition of SeaMicro, Advanced Micro Devices (AMD) has a chance to take share in the mainstream server-computer market, in which Intel sells about 96% of the chips, according to IDC.

"SeaMicro offers AMD a chance to take share in the mainstream server-computer market, in which Intel sells about 96 percent of the chips," Barron's said, citing industry data. "SeaMicro's technology looks good; its management team, astute; and the market opportunity, promising."

Barron's said Dan Niles, an investor with AlphaOne Capital Partners, believes AMD shares could double to over $8 by 2015 if company revenue grows to $7 billion and other sales measurements improve.

The SeaMicro deal places AMD's server-microprocessor business under the purview of the start-up's founder, Andrew Feldman, a Stanford University brat and an economist by training, who built SeaMicro by allying with Intel and teaching the semiconductor giant how to better use its own chips.

Feldman built SeaMicro by convincing Intel of the promise of microservers. Intel wanted to sell traditional Xeon chips - among its most expensive - to SeaMicro to use in microservers. But Feldman insisted on much cheaper Atom chips that Intel sells for tablets and smartphones. These are vastly weaker than Xeon processors, but can be grouped to accomplish specific tasks, such as serving up Web pages or databases. "What I was able to show Intel is that we would sell four times as many Atom chips as Xeon chips, and that Intel would make 1.7 times the revenue as they would have with Xeon," says Feldman.
 
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