AMD Has to Change Corporate Policy to Stay Competitive – Former Executive

The Re-Engineering of AMD Has to Occur, Claims Former President

by Anton Shilov
05/17/2010 | 01:48 PM

Advanced Micro Devices has to shift its corporate culture and change its focus onto expensive microprocessors in order to stay competitive in the long term, according to Atiq Raza, the former president and chief operating officer of AMD.

 

“AMD has to become a different company. It has to become a much more nimble, fast-moving company to close the gap with Intel. [AMD chief executive] Dirk Meyer has to give AMD the culture of a large startup rather than a small Intel. Dirk is a very creative person and can make AMD become that company. Right now it is run as a smaller Intel. If it is a small Intel running against a big Intel, the big Intel will win,” said Atiq Raza, entrepreneur in residence at Khosla Ventures and a veteran of Silicon Valley, in an interview with EETimes web-site.

In fact, AMD had an opportunity to change significantly when it acquired ATI Technologies back in 2006 and brought a lot of new blood into the company. However, shortly from then the world’s second largest designer of chips decided to sell off multimedia businesses of ATI in order to solely concentrate on central processing units (CPUs), chipsets and graphics processing units (GPUs), which naturally limited its addressable markets. Moreover, the company retained its corporate culture and continued to be a “small Intel” instead of becoming a large ATI Technologies, partly because Hector Ruiz remained chief executive officer until 2008.

According to Mr. Raza, the founder of NexGen, the CPU designer AMD acquired in 1996, it is logical for AMD to concentrate on x86 computing, however, the Sunnyvale, California-based chip developer has to refocus onto high-end solutions.

“They have focused to where they have a benefit. But if they focus on only the lowest cost products, there will no longer be a race between Intel and AMD, just a partitioning of the market and of necessity in such a partitioning AMD will make less money than Intel. The re-engineering of AMD has to occur, but it depends on how hard AMD wants to work. It's a much more comfortable path for AMD to just be a low-cost supplier and partition that part of the business and make less money but still make some. That will give them another 5-10 years of reasonable life, but I don’t know what happens after that for that kind of company,” said Mr. Raza.

Although the market of CPUs is very well established, the entrepreneur still believes that there are opportunities for chip companies to emerge.

“It is possible to design better multi-core processors. [The cellphone is] exploding in workloads and unit demand. If markets are growing, there is always an opportunity to do something better. Whether I am able to come up with something better I don’t know, but it's intriguing me a lot. Starting another [multicore] company is a step further than I have thought, but I can imagine things that can be done that would make a big difference. Talk to me in say three years,” concluded Mr. Raza.