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AMD’s Loss is Intel’s Gain in Global Microserver Market

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Published on : Dec 21, 2015

Growing demand for cloud-based services and cloud computing has boosted the global microserver market. The low cost servers contain system-on-chip (SoC) that comprises of a number of single socket servers. Microsevers offer benefits such as reduced cost of ownership and greater reliability in system-on-chip implementations. In terms of revenue, the global microserver market is estimated to take a leap during the period between 2013 and 2019. On the basis of processor types, the overall microserver market has been segmented into ARM, AMD, Intel processor, and others including Power, Tilera, and MIPS. Since 2012, Intel processor has been witnessing the highest demand from the market.

Intel’s growth story in the global microserver market has been further fuelled by AMD abandoning the market this year. While announcing its Q1 2015 earnings release in April, the company announced that it is leaving the high density microserver market. As a result of abandoning the microserver market, the company took a US$75 million hit. In 2012, AMD bought SeaMicro to gain a stronghold in the microserver market. The acquisition was worth US$334 million. SeaMicro was known for building systems containing Intel Atom and Xeon processors. However, the acquisition did not seem helpful for AMD’s growth as it only released SM 15000, a single new SeaMicro system, since 2012. 

While leaving the market, AMD paid US$75 million as special charge owing to the impairment of intangible assets. Though the company has left the market, it has retained the fabric technology developed by SeaMicro. Though Intel has always monopolized the microserver market, AMD leaving the market has reduced the competition significantly. In March 2015, Intel launched 14 nm Xeon D processors and is planning to release Denverton microserver chips by 2016. 

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