On June 10, 2014 shares of Applied Micro Circuits (NASDAQ: AMCC) jumped nearly 12 percent following several positive analyst notes on the company. Experts initiated coverage on Applied Micro Circuits that evening, giving the stock a buy rating and a $16 per share price target. They cited Applied Micro's first-to-market position with 64-bit ARM processors designed specifically for enterprise servers, which should result in particularly strong X-Gene chip sales over the near term as the competition strives to catch up. So the reason for this particular interest of investors in the computing and connectivity solutions provider for cloud infrastructure and data centers is not hard to comprehend.

With more data center services and cloud solutions have been created on the way, experts are concerned that electricity consumption inside the massive data centers that power the internet and different enterprise server applications. In fact, a survey report of data centers today highlighted it consumes about two percent of the world's electricity production, and increased seven percent in 2013 compared to 2012. Data center owners and operators have faced increasing electricity bills and taxes while increasing hardware density and, at the same time, maintain or improve the user experience.

In recent years, several server solution providers have worked to create a new 64-bit ARM-based single chip solution driven by lower power consumption and reduced total cost of ownership (TCO) not unlike the one in current Smartphone. Headed by Dr. Paramesh Gopi, Applied Micro Circuits Corporation, a NASDAQ-listed fabless semiconductor company producing computing and connectivity IC chips, has built brand new flagship server chips X-Gene product lines and the ecosystem. Paramesh has made it clear they intend to watch the market developed for many years and witnessed not only how data center demands has developed, but also how companies compete amid increased competition in current hyperscale challenges.

X-Gene chips promise to significantly reduce the power consumed by the modern server, and that is an attractive prospect for Facebook and other cloud service companies that now run their web services atop tens of thousands of servers.

A Little Lesson in History

It all started in 2011, when this firm from Sunnyvale, CA became the first company to implement the ARMv8-A architecture with its X-Gene Platform. This move was the brainchild of Paramesh Gopi, who had been newly appointed back then as CEO in 2009. Since taking over the position, he has been helping the company to design network and embedded Power Architecture, and server processor ARM, optical transport and storage solutions with a greater success rate.

This company which has a sponsor level membership of Power.org, is one of the original members and also an executive member of the Ethernet Alliance and a member of the Open Compute Project operates in two segments: Computing and Connectivity.

The Company's products line include the X-Gene ARM 64 bit Server on a Chip solution, along with the X-Weave family of connectivity products, for cloud/hyperscale data center and enterprise applications. X-Weave products segments including 10, 40, and 100 gigabit per second (Gbps) solutions serving data center and service provider market opportunities. These connectivity products include devices for Optical Transport Network (OTN) equipment and physical layer (PHY) devices that transmit and receive signals in a high speed serial format.

Reason for Such Success

Therefore, the reason for the impressive results that this company has been due to its impactful range of products and services, which address the concerns of various industries.

In transport networks linking cities and countries around the globe, AppliedMicro leads the industry by leveraging innovative IP in mixed-signal, low-power silicon to enable telecommunications carriers to converge voice-based networks into a high-speed Internet technology. The transition enables the seamless delivery of video, voice and data services as traffic volumes continue to explode. The firm's 10 Gigabit per second framer-mapper-physical layer devices are designed into multi-service switches, routers and dense wavelength division multiplex equipment in long haul, core and metropolitan networks. This is made possible because the company's embedded processors are designed into cellular base stations that enable mobile device communications. Systems equipped with AppliedMicro's solutions enable Telco's to deploy higher data rate broadband connections, high reliability, low error rates, low latency and high quality of service.

In the Embedded World AppliedMicro's high-speed, low-power PACKETpro family of embedded processing solutions provide the ideal balance for conserving energy and lowering costs while maintaining high performance. The firm's embedded products provide an optimized solution for a variety of applications including next-generation multifunction printers, enterprise control planes, consumer NAS systems, wireless access points and industrial applications by offering the industry's most advanced capabilities in power management, security and concurrency. The PACKETpro family of SoCs are enhanced by AppliedMicro's Scalable Lightweight Intelligent Management Processor (SLIMpro), a separate ARM processor subsystem that provides power management, true Asymmetric Multi-Processing (AMP), inline packet processing, look aside hardware offloads, tamper detection and response circuitry for applications demanding low-power operation, end-to-end security and RTOS concurrency.

AppliedMicro also plays a huge part with today's cloud-scale data center operators. They look for three key benefits from their next-generation server and connectivity products: high performance, high density, and low power consumption. The outcomes include a great end-user experience, lower operating costs and a greener planet. The company's product, both X-Gene and X-Weave are purpose-built for large-scale public and private cloud and enterprise environments. Whether it is brawny cores, high-speed connectivity, carrier-grade reliability, packing more retrieve-and-compute capability in an existing data center footprint, or lowering power and operating costs by up to 70 percent, X-Gene and X-Weave deliver the goods.

The Differentiator

Paramesh's huge wisdom from his past in the semiconductor industry tagged along with the firm's experience and knowledge in processor design, embedded processor System-on-Chip (SoC) design, mixed-signal design, high speed signal processing, Internet protocol, OTN and Ethernet packet processing gives AppliedMicro the foundation to compete and excel in such markets and provides such quality solutions. This has led the firm to grow at a pace, which no other small-cap semiconductor company can match.

Impressive Client List

AppliedMicro builds extensive relationships with its customers and suppliers in order to deliver the solutions that accelerate time-to-market and capture market share with leading-edge capabilities. The company uses its design expertise to assess the needs of end markets in order to develop devices that will provide its partners with a competitive edge. It also engages with customers at every level of the system design phase so that product integration becomes a seamless process, allowing OEMs to get to market with advanced features intended to enable market share growth. AppliedMicro partners benefit from its advanced semiconductor designs, comprehensive evaluation boards and full-featured reference designs with software and a comprehensive ecosystem of third-party vendors that all help customers to complete development tasks successfully.

Moving Forward

The team at AMCC anticipates its new addressable market will consist of server solutions for cloud data centers and enterprise applications, data center connectivity solutions and a variety of related products including routers, network-attached storage appliances, top of rack switches, and wireless access points.

The company claims that their flagship offering X-Gene Server-on-a-Chip product will lead its entire product portfolio in hyper scale data centers, increasing by 2016 their overall addressable market to as much as 10x that of 2008 levels. X-Gene builds on the firm's history as a global leader in providing energy-efficient, sustainable solutions to process and transport information for current and next generation networks.

With a strong heritage in innovation, and a clear commitment to energy efficiency, AppliedMicro is bringing breakthrough technology advances to telecommunications, data centers, enterprise and consumers. AppliedMicro's management team and employees are aggressively focused in executing the vision to realize a business breakout of a magnitude seldom seen in the semiconductor industry.