AMD's New CEO and Execution

What is on Dirk Meyer's to-do list as new CEO of the chipmaker?


The ascension of Dirk Meyer to CEO of Advanced Micro Devices (AMD) is not entirely unexpected. He was widely viewed as the successor to Hector Ruiz, who stepped down yesterday.

The 62-year-old Ruiz came to AMD in 2000 after 22 years with Motorola, where he headed the company's semiconductor unit. In his eight years with AMD (NYSE: AMD), Ruiz saw the company go from being an also-ran to Intel, to a serious threat and technology innovator, then to falling from grace after a string of seven quarters in the red.

Intel (NASDAQ: INTC) is a company that prides itself on execution, and if you're going to take on a company like that, you have to execute, or be executed.

On the conference call yesterday when the executive change was announced, Meyer, 46, said the plan was to "execute, execute, execute" and was critical of prior quarters.

Jim McGregor, senior analyst with In-Stat, noted that Meyer has been copilot during that whole period that he criticized. "My feeling is isn't that the same thing that's been going on for the past year? So is this just a shell game of titles?" he said.

"It comes down to you have to have a vision. Where is this company going to play and what is our strength?" McGregor added "And he's got to put his job on the line. He's got to say we're going to be profitable by a certain point, say it, do it mean it."

AMD spokesman Drew Prairie pointed to Meyer's previous stint as head of the semiconductor unit from 2001 to 2006 as an example of his prior work.

"If you look at where that business was in 2001, it was similar to where the company is now," he told "It was not performing well. That was a business that needed to be focused and turned around and he did. Revenues doubled under his leadership."

AMD caught Intel flat-footed on three notable occasions: it was the first to introduce 64-bit x86, which Intel dismissed for a while until it saw what a hit the processor was becoming for AMD; it was first to market with a dual core processor, and first to put the memory controller on the CPU while Intel stuck with the front side bus.

However, the last two years have not been that good to AMD. Barcelona, its native quad-core server processor, was months late and under-delivered in performance when it first shipped. OEMs remained patient with AMD more out of desire to see someone provide Intel with healthy competition than because they believed in AMD.

"They can't afford to abandon AMD, and rightfully so," McGregor said. "The AMD 64 architecture has a good place in the market, especially on multiprocessor servers. So the market would love to see a strong competitor. I think even Intel would love a strong competitor. That helps Paul [Otellini, Intel's CEO] push a lot of change he wants throughout Intel. But it can't come down to leniency by the market."

Just as Bo knew baseball, Meyer knows chips. He was an engineer with Digital Equipment Corp. and was co-architect of two Alpha processors, the first 64-bit processor on the market. He joined AMD in 1995 and led the Athlon team, which made the first 64-bit x86 processor.

AMD needs some sharp engineering to pull itself out of this mess and make chips that remain competitive with Intel. But engineering isn't everything. Meyer holds 40 patents, Intel CEO Paul Otellini holds zero. Whose company made $1 billion this quarter and whose company lost $1 billion?

"It's one thing to be a tech leader, it's another thing to be a market leader and AMD needs that marketing and management prowess," said McGregor. "I don't know if Dirk is the right guy. He's been in this management transition for two years and we haven't seen much."

Prairie said the company is retrenching after its rapid growth early this decade. "From the period of 2003 through 2006, we went on an incredible growth trajectory in terms of number of products and employees. Like all companies that grow very large very quickly, we lost some efficiencies and didn't scale successfully. So what he's doing is focusing the company back down a little on the core techs that are going to make us successful," he said.

Business News Solutions

Comment and Contribute

    (Maximum characters: 1200). You have 1200 characters left.



    Channel News| Contact Andy Patrizio | Back to top

    Click the Join button below to sign up to our newsletter!