AMD to Start Selling ARM-Based Server Chips Later in 2014

Advanced Micro Devices Inc. (AMD), struggling to regain lost sales in the lucrative market for server processors, unveiled a chip that uses ARM Holdings Plc technology.

The new product is aimed at reviving sales of chips that run servers, the powerful computers that store and dish out data for websites and corporations. Intel Corp. has boosted its share of the market to 97 percent, while AMD’s has dwindled to 3 percent from 10 percent in 2009.

Lisa Su, a senior vice president at AMD, gave the first demonstration of the Seattle chip running websites at a presentation in San Francisco today. Systems featuring the processor will go on sale from AMD’s computer-maker customers later this year.

AMD, the only other maker of processors using Intel’s x86 standard, is switching some of its designs to ARM, betting that the technology that dominates in phones and tablets will find a role in servers. The Sunnyvale, California-based chipmaker is targeting machines used by companies such as Facebook Inc. and Google Inc. to perform simple functions, such as logging users into their accounts.

“For our customers, we’re trying to be here creating something you can’t get anywhere else,” Su said in an interview. “We are setting ourselves up for the future. It’ll take time.”

Power Management

AMD will also develop chips based on ARM and X86 that can be plugged into the same computers -- an industry first, Su said. That will give customers the ability to save money on developing systems, she said. The company, which is using an ARM-designed core in its current Seattle model, is also developing its own design that will be compatible with ARM technology.

Social-networking companies and other operators of large data centers need power-efficient chips for their servers, networking and storage systems if they are to keep up with the surging demand for data from their users, ARM Holdings Chief Executive Officer Simon Segars said in an interview. Financial-services companies are also looking for computing systems that use less power, he said.

“There’s no shortage of demand,” Segars said.

Intel’s chips for server computers are among the most profitable in the company’s product line, with some selling for 10 times the price of models used in personal computers.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editors responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net Reed Stevenson, Jillian Ward

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