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AMD's Hector Ruiz Jumps Sinking Ship

By - Source: Tom's Hardware | B 37 comments
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Opinion - The decision of Hector Ruiz to step down from his role as CEO may not be a surprise to many, especially to those who have been following recent stories. But the timing of the announcement is surprising - in several ways. First, Ruiz leaves a company that is in shambles and way before the saving move, Asset Smart, is announced. Second, the departure is perfectly consistent with AMD’s history. But the question will be: Can Dirk Meyer repeat the cycle and get AMD out of trouble again?

Today’s announcement could leave you shocked: AMD just announced its seventh consecutive loss - totaling a stunning $5.5 billion since Q4 2006 and the time the ATI acquisition took full effect - and AMD’s CEO announces his resignation. What followed was a shoulder-padding and belly-rubbing thanks-Hector-thanks-Dirk dialog between the old and new executive that sounded, well, strange. According to Ruiz, now is the best time to hand the company over to Meyer. Can you say run and hide?

Ok, let’s be rational here. Ruiz has been rumored to have escaped his firing several times in the past and it was no secret that, lately, he wasn’t loved by analysts and investors anymore. Dirk Meyer was generally expected to become the next CEO. The question was not if, but when. Last December, Reuters ran an article stating that Hector Ruiz would not step down in 2008. And back then, analyst Ashok Kumar was quoted saying that "Ruiz has to turn the ship around before he can turn over the helm." Really? No, he did not.

In fact, when Ruiz took over AMD from the legendary Jerry Sanders, he was in a similar situation as Meyer is today. Actually, the similarities are striking: The economy was in a terrible shape. AMD had just announced its third straight quarterly loss with no short term solution in sight. As today, sales of consumer notebooks and desktops did not show any gains (and were down back then), but the company had "Hammer" in planning - a product which eventually turned into the Athlon 64 family of products that brought Intel down to its knees in 2005. Meyer’s position is similar, but a bit more challenging: The company’s balance sheet is a disaster, losses are much higher, but there are new and promising products in sight - such as Fusion.

So, Ruiz’ move isn’t particularly surprising. In some way, he is continuing a tradition and, from that point of view, it is exactly the right time to leave.

But who is Meyer and what is on his agenda? Meyer has engineering background and came to AMD in 1995, when he led engineering for the Athlon processor. In April 1999, he became vice president of engineering, in 2001 group vice president and general manager of AMD’s microprocessor business and in 2002 senior vice president and an executive officer of AMD. Before AMD, he was at Digital Equipment Corporation (DEC, alter acquired by Compaq, which was acquired by HP), where he was a co-architect of the Alpha 21064 and 21264 microprocessors.

It is too early to say whether Meyer’s engineering background fits what AMD needs at this time, but I actually feel that AMD should have looked to the blue team, where a business expert is in charge - Paul Otellini. Makes you think, right?

From what we heard at the conference call, Meyer won’t be introducing many changes. The company stays on track to get its operating expenses down to $1.5 billion per quarter (they are now slightly above $1.6 billion), as the company’s chief financial officer Bob Rivet said that it is unlikely that the company will make much more than $1.5 billion per quarter in the current economic climate. On the product side, Meyer is pushing 45 nm chips, which are now scheduled to debut early in Q4 (or 3-6 months late from the original plan), with a complete transition from 65 nm planned to be happening two to three months later. Everything points to Asset Smart as the big savior of the company. No announcement has been made, but Rivet said that "Asset Smart is not a 2009 event", indicating that the announcement will be made in Q3 or Q4. According to our sources, Asset Smart will spin off AMD’s fabs into a new company that will be run by Hector Ruiz. Dirk Meyer will keep control of the development and then fabless AMD.

So, don’t expect any big changes from Dirk Meyer for now. Meyer’s appointment makes sense from the view of AMD history and Ruiz’ legacy is preserved.

Asset Smart (or Asset Light) is what will bring the big change. Our sources mentioned that AMD is already working on an announcement and a strategy how to sell the story.

However, from a general view, Meyer has now one of the toughest jobs in the industry - to lead an extremely vulnerable semiconductor company. It is in all our interest that AMD will come back, get more competitive and drive innovation in the processor industry again. An Intel-only world would be boring and certainly not offer the excitement we have seen in the past two years.

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  • 3 Hide
    mgl888 , July 18, 2008 1:56 AM
    Sad...

    Intel monopoly definitely won't be very fun
  • 1 Hide
    ImSpartacus , July 18, 2008 2:09 AM
    I think AMD will stay afloat. The 48*0's are phenomenal, and if they can push a 45nm shrink fast enough they may catch up with big ol' Intel in good time.

    I don't see them leading Intel until a few years, but they will survive.
  • 4 Hide
    caamsa , July 18, 2008 2:11 AM
    Sad indeed. I have owned mostly AMD processors and have enjoyed them very much. I hope that AMD can make a come back as it would be boring and probably more expensive with just Intell to deal with. I know I will get flack for saying this this but I a certain that Intell was not playing fair prior to the release of its core2 processor. Now they do have the better product but prior to core2 they used some muscle to keep themselves on top ie the antitrust case.
  • Display all 37 comments.
  • 1 Hide
    mr roboto , July 18, 2008 2:27 AM
    ^^I second that.
  • -2 Hide
    lobhob , July 18, 2008 2:43 AM
    There is a very strict timeline set by shareholders for Intel to release and engineer their processors and top heads at Intel would easily be fired if they strayed from it. Also Intel wouldn't be able to sell any processors if they keep very similar performing processors year after because there would be no need for people to buy they same exact computer. So don't give me any bs that no AMD would ruin to future computer market because Intel wouldn't be around if they stopped increasing their cpus performance and go down the drains themselves. Also AMD's timeline sucks cause its not like Intels at all, AMD's shareholders need to be pressuring tops heads at AMD like Intel's shareholders do.
  • 3 Hide
    resonance451 , July 18, 2008 4:16 AM
    I've been buying mostly Intel products lately, though I'm considering building myself AMD systems and recommending them to people I build systems for. Now that AMD is finally somewhat competitive, I can justify it. And if that's what it takes to keep AMD afloat, I'm certainly willing. I love my Intel but I won't deal with a monopoly.
  • -2 Hide
    pogsnet , July 18, 2008 4:24 AM
    Yay! Fanboi, competition is good to be precise, like what happen to Nvidia recently even though they have this latest and the fastest product but because of AMD/ATI competitive pricing/performance they have to reduce prices like an axe slashing at large chunk in just few weeks from launching.
  • -1 Hide
    goonting , July 18, 2008 5:02 AM
    I dop hope AMD introduces great processor this year that would keep it close with Intel... I used Athlon Processors in the Office way back 2003... They were better than Intel then
  • -2 Hide
    jv_acabal , July 18, 2008 5:24 AM
    I believe AMD was faster in the pre-core2 time. But what I observed was that, though faster, they got intermittent crashes. I don't know if it was with the mobo or cpu. Intel is much stable. If AMD has to compete, their cpu's/platform should be stable too. And I like AMD for their price offerings..but what matters more to me is performance and performance/watt, which Intel obviously leads at present.
  • -5 Hide
    ZootyGray , July 18, 2008 6:24 AM
    As a self-confessed AMD fanboy, I will not support ntel monopoly tactics and marketing lies and unethical practices. I simply won't buy that kind of low-life crap.

    You ntel fanboys -
    - support a regime based on "screw you".
    And the bottom line is - you know it. You don't care. You say ok to that and move the world in that direction - which hurts everyone.

    Thg apparently supports it too. I look to anandtech and others for good reviews - and factual reporting - rather than lame bias and illiteracy and bogus hype and inflammatory articles. This place has about nothing to do with what I remember as the original brilliant tom's hardware guide -circa 1997. It's been sukkin for a long time.

    I am waiting for AMD to make the right parts for my needs re my next pc. I don't even know what ntel has for too much money - it will always be too much money. The real cost is even higher.

    AMD, I need a pc, and I will wait while you create it. No rush. Thanx for the vidcards. Next. :) 
  • -3 Hide
    ZootyGray , July 18, 2008 6:37 AM
    yeh this article is labelled 'opinion'
    full of subjective inuendo and rumour
    guessing wassup while listening in on a cc - which is revealed 3/4 of the way down the page - factual my butt

    thx for slop
  • -4 Hide
    Ogdin , July 18, 2008 6:44 AM
    ZootyGrayAs a self-confessed AMD fanboy, I will not support ntel monopoly tactics and marketing lies and unethical practices. I simply won't buy that kind of low-life http://en.wikipedia.org/wiki/Low-Life crap.You ntel fanboys - - support a regime based on "screw you". And the bottom line is - you know it. You don't care. You say ok to that and move the world in that direction - which hurts everyone.Thg apparently supports it too. I look to anandtech and others for good reviews - and factual reporting - rather than lame bias and illiteracy and bogus hype and inflammatory articles. This place has about nothing to do with what I remember as the original brilliant tom's hardware http://en.wikipedia.org/wiki/Tom's_Hardware guide -circa 1997. It's been sukkin for a long time.I am waiting for AMD to make the right parts for my needs re my next pc. I don't even know what ntel has for too much money - it will always be too much money. The real cost is even higher.AMD, I need a pc, and I will wait while you create it. No rush. Thanx for the vidcards. Next.


    You should put that on your resume for your new job,...... court jester.
  • 7 Hide
    resonance451 , July 18, 2008 7:03 AM
    As a self-confessed AMD fanboy, your opinion automatically holds no gravity whatsoever. The ONLY intelligent approach is to support competition and choose the best product that matches your needs. Those of you who have so little sense of self that you need to use a product to define your identity are pathetic.

    Pretty soon it'll go like this:

    Person 1: So, tell me about yourself.
    Person 2: Well, I wear Armani, Gap, and Hollister. I drink Starbucks, and I'm a type AMD personality. Sometimes I feel ATI, but my heart is leaning toward Gucci. I'm Chevy on the outside, but BMW on the inside. My horoscope says I'm most compatible with Abercrombie & Fitch people.

    OMG ily bby! ttyl, lol bff.

    Person 1: .....
  • -1 Hide
    BallistaMan , July 18, 2008 7:26 AM
    tagasurthg's fanboyism reveals itself in the last sentence.."An Intel-only world would be boring and certainly not offer the excitement we have seen in the past two years."..means to say that thg wasn't really excited when AMD brought Intel "to its knees" in 2005 and when AMD introduced the K8 architecture that pushed Intel to improve.Is thg becoming the faux news network of technology?

    You're taking things out of context. "An Intel-only world would be boring and certainly not offer the excitement we have seen in the past two years." means that without AMD pushing, we wouldn't have seen Intel advance its tech as it has. That's not fayboyism, that's logic.

    And it referenced the last 2 years, 2005 was 3 years ago, and thus not applicable. ;) 
  • 1 Hide
    chiadog , July 18, 2008 10:33 AM
    Buy the best product you can afford regardless of who made it. Don't reward the company with badly engineered products. Make them work for it. AMD graphics division got its act together with RV770 and I bought one after a long stroll down the greener side of the path.

    Even if a whole legion of fanbois turn their back on AMD, it probably will be nothing more than a tiny blip on the radar. Unless of course the fanbois have hundreds of millions of dollar at their disposal. Enthusiasts are but a tiny slice of the market (and fanbois are even smaller), and most computer shoppers don't care what is under the hood of their computer. Anyhow, AMD won't just go under and disappear from the market. It'll probably be chopped up and bought by different investment firms before that. Or if they really go under, someone will buy their design and build more. Please stop using it as a sad excuse to excercise one's fanboyism. I don't really care what other people buy or rave about, as it is none of my business. It is just really sad when one has to justify their blind devotion and purchase with an excuse.

    PS. How about rooting for the real underdog? Go VIA ;) 
  • 1 Hide
    sublifer , July 18, 2008 1:28 PM
    Little late to the conversation... most already got said...

    Go VIA!!!
  • -2 Hide
    eltouristo , July 18, 2008 2:30 PM
    go buy some ATI and AMD products!
  • 0 Hide
    Pei-chen , July 18, 2008 2:42 PM
    jv_acabalI believe AMD was faster in the pre-core2 time. But what I observed was that, though faster, they got intermittent crashes. I don't know if it was with the mobo or cpu. Intel is much stable. If AMD has to compete, their cpu's/platform should be stable too. And I like AMD for their price offerings..but what matters more to me is performance and performance/watt, which Intel obviously leads at present.

    I think it was the slower single core CPU, limited memory and unrefined windows that caused most of the crashes. My C2D WinXP crashes less than my old Athlon XP-m but so is my sister's X2 Vista.
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