Advanced Micro Devices, in a surprise move, announced Oct. 8 that Rory Read, who had been CEO for three year, is stepping down and being replaced by Lisa Su, until now the company’s chief operating officer.
In a conference call, Read said the leadership change was part of a succession plan he and the chip maker’s board of directors had been working on for more than a year. The former CEO said that when he assumed the position in 2011 after coming over from AMD customer Lenovo, he had a three-step plan for turning around the company, which was being pummeled in the x86 chip space by larger rival Intel.
Read said he has accomplished the first two steps—resetting the company and then restructuring it. The last step is transforming the company, a step that focuses on technology, he said. That is Su’s forte, he said.
“The part I’m good at, I’ve already done that part,” Read said in the call with analysts and journalists, noting Su’s experience in the semiconductor industry with Freescale and IBM. “I look at it as a natural move at this time. She is a semiconductor professional. … Now is the right time to take the reins.”
Read will stay on with AMD in an advisory role through the end of the year.
For her part, Su said Read and the rest of the leadership and engineering teams that have come together over the past three years have done a good job of making AMD financially healthier and of diversifying the product portfolio.
“At our core, we are a product and technology company,” Su said, adding that this next step in AMD’s turnaround “is about technology. It’s about creating differentiated and leadership IT.”
Read, 52, came to AMD in 2011 after serving as Lenovo’s president and COO to run a company that was struggling with products and deadlines, was continuing to lose market share in PCs and servers to Intel and—like it’s competitor—was missing the transition to mobile computing. AMD was a company that relied on the global PC market for more than 90 percent of its revenues, and PC sales were about to begin a years-long decline.
Under Read, AMD restructured its leadership team, including bringing Su on board in 2012. That same year, began a plan to diversify AMD’s portfolio and reduce its reliance on the PC space. The company would extend its reach into such areas as embedded and semi-custom chip making, ultraportable PCs, energy-efficient servers and graphics. During Read’s tenure, AMD embraced the ARM architecture for low-power servers, pushed its heterogeneous computing efforts with its accelerated processing units (APUs), expanded its graphics capabilities and rolled out better products that hit the market on time.
AMD’s Read Steps Down as CEO, Su Takes Over
AMD also was able to get back to profitability on the back of a semi-custom business that produced chips that are being used in the latest gaming consoles from Microsoft, PlayStation and Nintendo. That said, the company in the second quarter saw its revenues grow 24 percent over the same period in 2013, but had a net loss of $36 million.
“Rory has basically delivered on what he said he would deliver,” Nathan Brookwood, principal analyst at Insight 64, told eWEEK. “He told us what he was going to do, and he did it.”
Having Su take over as CEO makes sense, Brookwood said. She’s respected throughout the industry, has the experience AMD needs and has done well at the company, first as senior vice president and general manager of AMD’s Global Business Units and later as COO.
However, the timing of the announcement confused Brookwood, as it did several other analysts on the conference call. It comes a week before AMD announces third-quarter financial earnings.
“I’m very puzzled why they chose Oct. 8 to do this,” he said. “We’re hearing a lot of concern about the timing. Not the move, but the timing of the move. … The answers they gave were less than satisfying.”
Read said during the call that it was a succession plan the company had put in place, and that once the decision was made, he had a “fiduciary duty” to announce it.
“The board and I felt this was the right time, this was the right place, and Lisa was the right leader,” he said.
Su, 44, said she had some priorities she wanted to pursue as CEO, including continuing the technology roadmaps the company has set out. In response to a question, she said the company would continue its dual-architecture game plan of developing x86 and ARM-based processors. She also said she wants to “simplify the company” to make it easier for AMD employees to do their jobs. Su didn’t elaborate.
In a video interview by AMD, Su said she was excited about AMD’s future.
“There are so few companies out there that have what AMD has to offer,” she said. “We’re best as a company when we have that heritage of being a maverick and bucking the status quo, and this is our time to do that.”