Following a year of challenges and a massive loss of over $1.5 billion, the chief executive of Advanced Micro Devices may resign when his contract expires next year. But will the possible change of the CEO revolutionize AMD?

AMD Transforms

The last twelve months have hardly been easy for Advanced Micro Devices. The company faced incredible pressure from Intel Corp.’s new lineup of microprocessors, the chipmaker delayed the release of its quad-core chips several times and the company had to fund the acquisition of graphics chip company ATI Technologies. But after the tough year it is projected that the company will face another challenge, if Hector Ruiz, current chief executive of AMD, resigns in April, 2008.

In fact, quite a lot changed at AMD already this year, as numerous ex-ATI employees and executives have left the company since the two firms became one. Former ATI chief executive David Orton left the company in July, weeks after Chris Evenden, the former public relations chief at ATI, stepped down. Richard R. Heye, a vice president of ATI, left AMD late last year, ironically, just three years after he left AMD for ATI; Paul Dal Santo also left AMD as it absorbed ATI; whereas Peter Edinger, another vice president of ATI, departed from AMD early this year. Moreover, sales chiefs of AMD – Henri Richard and Rick Hegberg – resigned from AMD in September, whereas investor relations head Mike Hasse also left the company recently.

The logical final of exodus of executives and employees could be step down of chief executive himself, Hector Ruiz, reports The Street web-site. Dirk Meyer, the chief operating officer and president, who recently joined board of directors of AMD, will replace Hector Ruiz as the chief exec once Mr. Ruiz contract expires in April, 2008.

From 18% to 23%

Mr. Ruiz joined AMD in January 2000 as president and chief operating officer, just months after AMD released its first AMD Athlon microprocessor that helped the chipmaker to seriously challenge market leader Intel and stop to be a supplier of low-end microprocessors. Hector Ruiz was named chief executive officer in April 2002, just a little ahead of AMD’s launch of AMD Opteron and Athlon 64 processors, which have been outperforming rivals from Intel for years. He was appointed as chairman of the board in April 2004.

While under the rule of Mr. Ruiz AMD managed to increase its market share rather considerably from about 18% to approximately 23%, the key technologies that helped AMD to transform into a leading CPU maker from an underdog – HyperTransport, K7 and K8 micro-architectures – were developed under the supervision of the previous chief executive and the founder of AMD, Jerry Sanders. But Hector Ruiz could not fix several fundamental issues that AMD has always had. The ramp up of new processor micro-architectures has always took a considerable amount of time at AMD and the delays of chips based on K10 micro-architecture with up to four processing engines is a good proof for that. Additionally, transitions to new manufacturing technologies have also been slow at AMD.

Dirk Meyer – “Always Been Slotted for Being the New CEO”

Dirk Meyer joined AMD in 1995 and in 1996 was promoted to director of engineering for the AMD Athlon microprocessor development program in Austin, Texas. In April 1999, he was promoted to vice president of engineering for the Computation Products Group (CPG) and in 2001 became group vice president of CPG. In 2002, he was named senior vice president of CPG and was named an executive officer of AMD. In 2004, he was promoted to executive vice president of CPG and in 2005 was appointed president and chief operating officer of AMD’s Microprocessor Solutions Sector.

“Dirk has always been slotted for being the new CEO. That’s been clear since his nomination as president and COO in January 2006. The question as to when that transition effectively takes place is really a matter of Hector’s timing and the board’s [decision],” an anonymous source familiar with the matter is reported to have said. 

Nevertheless, while Dirk Meyer has microprocessor development background, he has been one of the primary decision makers at the company for three years and is also responsible for both success of the original Athlon and Athlon 64/Opteron processors as well as failure to speed up the development of quad-core processor in the light of Intel’s Core 2 launch. Moreover, it was Meyer, who was co-executing AMD when graphics business of ATI tumbled by 40% year over year.

AMD did not comment on the news-story due to the company’s policy not to comment on rumours.