The new technology, which works with processors made by AMD as well as Intel, has more bandwidth while using less electricity than previous products, Andrew Feldman, formerly CEO of SeaMicro and now at AMD, told reporters at an event.

AMD bought Silicon Valley startup SeaMicro in March for $334 million to gain a foothold in smaller, lower-power computer servers, a potential area of growth as Internet services expand and corporations look to save on electricity bills.

Its focus on low-power servers comes as ARM Holdings, whose energy-efficient technology has become ubiquitous in smartphones and tablets, turns its attention to data centers, an area traditionally dominated by powerful "x86" chips made by AMD and Intel.

AMD and Intel are both rushing to expand beyond their traditional PC market as consumers increasingly turn to tablets and smartphones.

The rapid adoption of cloud computing - where data and applications are stored on or hosted on remote computers via the Internet - is driving worldwide server demand.

AMD plans to market its chip technology along with SeaMicro's platforms to its corporate partners: Hewlett Packard, Dell Inc and IBM. It has said the platforms consume a quarter of the power and take up a sixth of the space of the typical servers that make up the massive "farms" that corporations now maintain.

(Reporting By Noel Randewich; Editing by Gary Hill)

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