AMD Places Chips on 64

Interview: CEO Hector de Ruiz is wagering on 64-bit processors to revitalize the company's sales among users and computer manufacturers.

Like just about every other company in IT, Advanced Micro Devices Inc. is burdened with the challenges of an economic slowdown and drop in IT spending. But unlike anyone else, to turn itself around, the Sunnyvale, Calif., semiconductor manufacturer must win over end users and computer makers thoroughly aligned with chief rival Intel Corp. But AMD has a plan. And as it licks the wounds from its third consecutive quarterly loss for the third quarter, the tenacious chip maker is focusing on the future--the first half of 2003, to be exact. Thats when the company releases its first 64-bit processors based on the Hammer architecture. The chips, which will be priced comparable to 32-bit chips and backward compatible with 32-bit apps, are the keys to AMDs turnaround and future, according to President and CEO Hector de Ruiz. eWEEK Executive Editor/News Michael R. Zimmerman and Editor in Chief Eric Lundquist caught up with Ruiz at Comdex in Las Vegas recently for a candid conversation about AMDs challenges, its future and Intels influence in the market.

eWEEK: What is AMDs most pressing issue today given all the things youre faced with?

Ruiz: Well, how do you measure that? You measure that when you lie awake at night thinking about what it is that occupies your mind the most. And frankly, its just assuring our people are focused and motivated. Theres hope that, in this time of a tremendous difficult environment, that we have a strategy that they feel is within their [reach and are] motivated to follow through. And Id say, just the hope of our employees is the biggest thing Id like to see is for them to not lose focus, not lose track.

eWEEK: If we were to narrow it down to in-house business challenges vs. external challenges, which garners more of your attention?

Ruiz: There are two sides to that. Internally, we try to focus on things we can control, intensify our effort from every angle we can on those things. We would like to tell employees there are some things that we cannot control. We really cant control whether well go to war with Iraq, and all that sort of thing. So we place focus on things we can control, and one of them has some external elements to it, and that is our customers. To a large degree we have to work hard and win our customers, in addition to … making sure we meet our milestones and targets. But there is an element of control on the outside. It has to be customers--we have to convince them we have a winning plan, our products are not only good and competitive today, but theyre going to be good and competitive in the future.

So theres two pieces. Theres an outside element that we dont control and we dont worry about it. Theres an outside element that really is a function of how well we do internally. And so we tend to not to lose sight of that.

eWEEK: Would you agree that theres a somewhat less positive perception of AMD by enterprise customers and certain OEMs when compared to the perception they have of Intel?

Ruiz: No, I dont agree with that. Let me explain what I mean by that. We have for about three years now been doing surveys almost every six months of the perception of the enterprise customers of AMD to understand what are we doing that we should be doing and what are we doing that we shouldnt be doing, etc. And the rate of change has been so large in the three years that I would say the momentum is strongly in our favor right now. We went from 20 to 30 percent of the enterprise customers having a positive image of AMD to today, [where] the last survey we just did said that 80 percent of the enterprise customers have a very positive image of AMD. Thats not much different than our competitors numbers. So, OK, weve gotten out to the point where that issue doesnt seem to be as strong as it was three years ago. The next step, of course, is turning that into real business.