AMD withdraws from high-density server business

The company is ditching a business it formed by acquiring SeaMicro three years ago

AMD has pulled out of the market for high-density servers, reversing a strategy it embarked on three years ago with its acquisition of SeaMicro.

AMD delivered the news as it announced financial results for the quarter. Its revenue slumped 26 per cent from this time last year to $US1.03 billion, and its net loss increased to $US180 million, the company said.

AMD paid $US334 million to buy SeaMicro, which had developed a new type of high-density server aimed at large-scale cloud and Internet service providers.

The purchase was made under former CEO Rory Read, and has now been reversed by Lisa Su, who took over the CEO job last October.

AMD said the move is part of its effort to "simplify and sharpen" its investment focus. As a result, it is taking a charge of $US75 million.

The news sent its stock down 8 per cent in after hours trading, to $US2.63.

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Tags business issuesserversfinancial resultshardware systemsrestructuringAdvanced Micro Devices

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James Niccolai

IDG News Service
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