Anyone interested in investing in the chip market might want to have a look at Applied Micro Circuits (AMC), according to one analyst.
The company, which few out of the industry will have heard of, quietly decided to make server chips this year and is suddenly getting rave reviews among financial analysts.
BMO Capital semiconductor analyst Abrish Srivastava said that AMC will outperform all expectations next year even as it goes into direct competition with Chipzilla.
Srivastava told Barrons that it will take time and the transformation the company is embarking on is not without its risks.
For a start it has to get a bit of credibility and wrestle with Intel over a pool of hungry crocodiles in the middle of a recession. But Srivastava is certain that it will pull it off.
AMC is one of the first companies to design and market a 64-bit server chip based on ARM technology. ARM is in control of mobile computing, but has not been able to dent Intel’s hold on high-volume shipments of server microprocessors. Next year it will release its Romley microprocessor which should maintain its iron grip. But Srivastava said that some server. vendors, including HP have said they will ship servers using chips from ARM and its partners.
Srivastava believes that the key to beating Chipzilla will be the rise of specialised types of servers, which will be better suited to being built around chips based on the technology from ARM.
Server workloads are changing thanks to the growth of mobile users, multimedia traffic, social networking, and cloud deployments, he said. This means that computing workloads are shifting from structured, complex data to larger amounts of unstructured data. These are better served by a System on a Chip approach which ARM is better suited for, he said.