Saturday, July 19, 2008

AMD CEO replaced amid losses

The CEO of chip maker AMD, Hector Ruiz, is to step down from his role at the company and will be replaced by Dirk Meyer, according to CNet News.

The move for Ruiz from CEO to executive chairman comes at a time when AMD is struggling to complete both in its traditional processor marketplace against rival Intel and in the graphics market against nVidia after the purchase of ATI back in 2006. The change in leadership was announced yesterday during a conference call run by AMD to announce its second-quarter financials, with Ruiz stating that "the time is right to turn the company over to a new leader."

It's hard to see the move as anything other than a vote of no confidence by the board. Although AMD has been suffering from poor financials for quite some time, Ruiz had previously stated that he was to continue in his role as CEO until at least 2009 – although he had already named Meyer as his successor at that time. It's clear that something had to give, however: other announcements made in the conference call included losses of $1.2 billion and the news that AMD is to cease manufacturing chips for hand-held devices and digital television equipment, which it previously did as part of its ATI acquisition. The decision to concentrate on core markets has cost the company dearly this quarter, with a charge of $876 million being made in order to leave those markets. An additional loss of $269 million completes the rather sorry picture for the company.

Although the news is unlikely to offer fans of ATI's hand-held and TV-related products cheer, it has to be hoped that a change of leadership plus the ability to concentrate its rapidly dwindling resources on its core competencies will return the popular processor maker to its rightful place at the side of current market leader Intel.

Are you hoping that Meyer will be able to bring the underdog back into the game, or has Intel stormed too far ahead with its latest ranges of products for AMD to ever catch up? Share your thoughts over in the forums.

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