Up From The Ashes
No one on the outside could see the engineers frantically fighting for answers and a path forward. What they saw were stony-faced executives and delays. Lots and lots of delays in multiple segments from graphics to CPUs to chipsets. In July, ten months after the merger, AMD executive vice president Dave Orton, arguably one of the most influential minds behind today’s hybrid processor trend, resigned. In September, chief sales and marketing officer Henri Richard followed Orton out the door.
Ultimately, the $5.4 billion decision to buy ATI rested on Hector Ruiz’s shoulders, and onlookers couldn’t help but associate this purchase with the catastrophic plummet in AMD’s financials.
Sources at TheStreet.com indicated that Ruiz might also be resigning, although his contract ran until April 26, 2008. As it turned out, Ruiz survived another three months, finally leaving in July.
Ruiz went on to become the first CEO of GlobalFoundries in March 2009. More significantly, GlobalFoundries started out as AMD’s spun-off manufacturing arm. With its various setbacks, AMD could no longer afford to maintain so much manufacturing capacity all for itself. This marks the latest and hopefully last major divestiture of the company’s assets, capping 2008’s jettisoning of the digital TV business and (this one really had to hurt) early 2009’s $65 million sale to Qualcomm of the old ATI handset division and all of the mobile graphics and multimedia intellectual property that went with it. By that point, AMD had already written off $3.2 billion in bottom-line value.
Of course, as with most major downturns in life, so long as you don’t stop moving, you’re not dead—and the odds are that things will improve. Having shed much of its former self, AMD is now left as a predominantly R&D- and IP-based company. It’s smaller, lighter, and more flexible. But is that enough? AMD’s board didn’t seem to think so. In January 2011, the last of the old directorate, Dirk Meyer, was pushed aside, according to the press release, to "accelerate the company’s ability" to "have significant growth, establish market leadership and generate superior financial returns."
Some argued that this was undeserved for a guy who apparently brought AMD back from the brink of ruin and saw the first fruits of his Fusion "grand vision" finally start to reach the market. But others questioned at the time of Meyers’s ascendance to the top post whether he had the sales chops to make the big deals that AMD so desperately needed.
With that in mind, one might examine his replacement, Rory Read. Read spent 23 years at IBM, where he held a "broad range of management positions." Following IBM’s PC division, Read then moved to Lenovo in 2006 and eventually became its president and COO in 2009. During his time there, Lenovo became the third-largest PC vendor in the world. Read was appointed president and CEO of AMD on August 25, 2011. Not even a year into the job, it’s still too early to render a verdict on Read. But if the AMD board was hoping for a guy that would yield big deals and new directions, it appears they got exactly what they wanted.