ARM.L Share News (ARM)

By Noel Randewich

SAN FRANCISCO, May 5 (Reuters) - Chipmaker Advanced MicroDevices has expanded its licensing technology agreementwith Britain's ARM Holdings as the U.S. company seeksgrowth outside the slowing personal computer industry.

AMD said on Monday it has acquired an architectural licensefrom ARM, the Cambridge, England-based company. ARM's low-powertechnology is widely used in smartphones and tablets and is alsobehind an upcoming crop of energy-efficient server chips.

The new license provides more room for AMD to customize its chip architecture and differentiate its products from othersbased on ARM technology.

The Sunnyvale, California, company is planning this year tolaunch low-power server chips based on ARM technology to competein data centers against Intel Corp's high-end Xeonprocessors. Those chips will use off-the-shelf technologylicensed from ARM in a previous agreement.

"We're well on our way to developing our own ARM cores," AMDSenior Vice President Lisa Su said at a news conference.

With PC shipments falling for eight straight quarters asconsumers shift toward tablets and smartphones, AMD aims to gethalf of its revenue from new, fast-growing businesses such asgame consoles and microservers by the end of 2015.

AMD also plans to expand further into making chips for othermarkets, including industrial equipment and medical devices.

At the event on Monday, executives repeatedly described AMDas unique in its ability to create chips using technologycombining ARM and x86, the personal computer architecture it hashistorically used to compete against Intel Corp.

Proponents of microservers, which have yet to be widelyimplemented in data centers, say that servers built with severallow-power chips can be less expensive to buy and manage thanservers built with Intel's high-powered chips.

AMD is also supplying processors for Microsoft Corp and Sony Corp's latest game consoles.

Strong Playstation 4 sales helped AMD beat expectations inthe March quarter but the company has yet to convince investorsit can transform its business. Twenty-one analysts tracked byThomson Reuters rate AMD's stock as neutral or negative, whilejust six recommend buying it. (Reporting by Noel Randewich; Editing by Richard Chang)