AMD Merges Chip and Graphics Businesses

Three years after buying ATI for $5.4 billion, AMD is finally merging its processor and graphics businesses in a reorganization that will create four operating units. The goal is to not only help internal development of products and platforms, but to also transmit a single company message to the outside world, AMD officials said. As part of the reorganization, Randy Allen, who was in charge of the rollout of the quad-core "Barcelona" Opteron processor, is leaving AMD.

Advanced Micro Devices is folding its ATI graphics unit into the overall business, creating a new organization model designed to help push through plans to integrate its CPU and GPU technologies.

AMD announced the reorganization May 6, creating four operating units around products, future development, marketing and sales.

As part of the move, Randy Allen, senior vice president of the Computing Solutions Group and a longtime AMD employee, left the company.

Rick Bergman, who came to AMD in the $5.4 billion ATI acquisition in 2006 and who most recently was senior vice president and general manager of AMD's Graphics Product Group, is now in charge of all of AMD's platforms and products, as well as integrating the chip and graphics product development groups into a single organization.

"We are tightening our focus on delivering the winning products and platforms our customers want based on AMD's industry-leading microprocessor and graphics technologies," Dirk Meyer, AMD president and CEO, said in a statement. "The next generation of innovation in the computing industry will be grounded in the fusion of microprocessor and graphics technologies. With these changes, we are putting the right organization in place to help enable the future of computing."

Along with the products group being led by Bergman, Jeff VerHeul will head the Processor Solutions Engineering team. The new business units will also include an advanced technology group, led by Chekib Akrout, which will focus on future technology at AMD, and a marketing group, led by Nigel Dessau, whose job will be to create a consistent message across all of AMD's products and platforms.

In addition, a customer group, led by Emilio Ghilardi, is charged with building on AMD's customer relationships.

Nathan Brookwood, an analyst with Insight 64, said the reorganization fits in with the message AMD gave when it bought ATI three years ago.

"When they acquired ATI, they said the object was fusion, to integrate CPUs and GPUs," Brookwood said. "They've been at it for two years, and I think they discovered that in order to build a fused product, they needed a fused company."

It would have been difficult to integrate the computing and graphics technologies if the two businesses were separate, he said.

Brookwood also dismissed the idea that the goal of the reorganization was to clean house, particularly Allen, who was in charge of the quad-core "Barcelona" Opteron processor, which was hampered by technical issues and delays.

He pointed out that while Allen did stumble with Barcelona, he was responsible for a good percentage of successes at the chip maker.

However, Brookwood said Bergman has been at AMD long enough to have proved to company employees that he is capable of leading the integration of the CPU and GPU businesses. That will be key, given that it is difficult for such a reorganization to be successful if employees don't buy into it.

The move comes as AMD tries to get its financial footing and battles against larger rival Intel. AMD saw first-quarter revenues decline 21 percent over the previous year, and lost $416 million.

AMD officials are scheduled to address stockholders May 7.