AMD’s Former Chief Executive Officer to Leave Globalfoundries

Globalfoundries’ Chairman to Step Down After Scandal with Hedge Funds

by Anton Shilov
11/02/2009 | 04:43 PM

Hector Ruiz, the former chief executive officer of Advanced Micro Devices and the chairman of the board of Globalfoundries, will take a leave of absence immediately and will officially retire from the company starting January 4th, 2010.


Mr. Ruiz will take a voluntary leave of absence effective immediately before resigning from the company in January, the company’s board announced on Monday. The former head of AMD and a high-ranking executive at Motorola and Texas Instruments, apparently, submitted his resignation back in September with an effective date of January 4th, 2010. Mr. Ruiz will be replaced by Alan E. “Lanny” Ross, who will serve as interim chairman, effective immediately, until a permanent chairman has been appointed by the board.

Although Hector Ruiz oversaw several AMD’s very successful years, he is also responsible for AMD’s record losses, uncompetitive microprocessor micro-architecture, loss of hundreds of talented AMD’s employees and numerous questionable moves. Mr. Ruiz became AMD’s chief executive officer in on the 25th of April, 2002, was elected chairman of the board in 2004 and stepped down as CEO on the 17th of July, 2008.

During the time Mr. Ruiz was the chief executive officer of Advanced Micro Devices (Q2 2002 – Q3 2008), the company reported revenues of around $24.1 billion, but despite of several profitable quarters, AMD lost $5.805 billion while Hector Ruiz served as CEO. It was not entirely the fault of Mr. Ruiz: since the year 2000, AMD earned $40.076 billion, but lost about $7.252 billion in cash.

It is questionable whether Hector Ruiz was the best possible chief executive officer for AMD. In fact, Mr. Ruiz inherited from Jerry Sanders, the founder and chief executive officer of AMD till 2002 and the chairman till 2004, massively successful AMD64 (K8) micro-architecture along with talented team of engineers and marketing specialists, but left his successor Dirk Meyer with the not very impressive K10.5 (Barcelona, Shanghai), without manufacturing facilities, without numerous talented executives, without several business units, although with in-house developed highly-competitive chipsets as well as graphics processing units.

One thing that Mr. Ruiz succeeded in was to improve trust to AMD, its products and boost the company's stock price. If in September ’02 the price of AMD’s share was $5.34, then in January ’06 the stock cost $41.80. Unfortunately, by February ’09 AMD’s stock dropped to $2.18, but that was just weeks before Mr. Ruiz resigned as the chairman of AMD and became the chairman of Globalfoundries, the semiconductor manufacturing joint-venture between AMD and Advanced Technology Investment Company.

Unfortunately, the formation of Globalfoundries is a major reason for Mr. Ruiz to resign: he is believed to be the executive who is accused of revealing non-public information about the formal announcement of the Foundry Company taking place before AMD’s third-quarter financial report to Danielle Chiesi, a manager at New Castle Partners hedge fund. Ms. Chiesi had ties with Raj Rajaratnam, the founder of Galleon hedge fund, who is accused of using insider information while trading stocks. When AMD announced the deal with ATIC, its stock was up and nearly 80 million of shares changed hands, up considerably from average daily volume.

Alan Ross, a current member of the Globalfoundries board, was previously president and CEO of Broadcom. He also served in high-level executive positions with Rockwell Automation, National Semiconductor, Fairchild Semiconductor and the Worldwide Semiconductor Manufacturing Corp.