AMD Picking Up Speed, CEO Says

Advanced Micro Devices Inc. is riding high, maintaining the strong momentum it built up last year. In addition to rolling out its first 64-bit processors and scoring major OEM customer deals in 2003, the Sunnyvale, Calif., chip maker refurbished its memory business and made a couple of key partnerships.

The moves helped AMD string together its first two consecutive profitable quarters—fourth quarter 2003 and first quarter 2004—in several years. Company chairman and CEO Hector Ruiz last week sat down with Michael R. Zimmerman, executive editor of news, and Jeffrey Burt, senior editor, in New York to discuss these and other issues.

Opteron was released a year ago and got off to a tough start. Was there a single point during the year when you realized, "A-ha, now were going to get traction with this"?

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Was there a trigger? Was there an "a-ha"? I would have to say that it was when I went around—this is about a year ago—I went around talking to a lot of customers, the actual users of this product, and wanted to know how theyd feel about an AMD-based product.

Part of the crowd treated me with politeness. But at the same time there was some truth, and what I was learning was that they were all very excited about what they thought an extension to the X86 architecture can do. And they were very much looking forward to evaluating it.

Theres a difference in how you say things, like, Yeah, sure, well be glad to take a look at it, as opposed to, We really think this could make a big difference. And, Were anxious to see it. And when I kind of saw that sparkle in these peoples voices and eyes, I really thought, Golly, this thing will really get some traction.

Was that after you rolled out Opteron?

It wasnt a month earlier or a month later.

As far as OEMs are concerned, looking forward, can we expect to see Dell [Inc.] involved with Opteron as well?

Well, you know, Dell is an interesting story [laughs]. We have a great relationship with Dell. As a matter of fact, Ive talked to Michael [Dell, co-chairman] sometimes more than Ive talked to some of our other OEMs that buy a lot of products of ours. But I believe that its just around the corner when they are really going to be surrounded.

Be surrounded by other OEMs with AMD.

By other OEMs with AMD products. I believe, I happen to know two in particular—I cant unfortunately tell you their names—but I happen to know two major, major users that basically said theyre not going to buy Dell products because they dont have an Opteron solution. I think more and more of that will occur. And Michael is a shrewd businessman because he will react to that sort of thing more than he will to cheaper prices and that sort of thing.

Next page: Dual-core products will "shock the hell out of everyone," Ruiz says.