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Chips down, AMD charts recovery

(China Daily)
Updated: 2008-08-14 10:32

In the past few years, chip maker Advanced Micro Devices Inc has challenged its biggest rival Intel Corp as never before in the company's 40-year history. But the company took a hit after its questionable acquisition of graphic chip maker ATI in 2006 and a major product gaffe.

In China, the company has seen major success by building an active partnership with domestic computer makers like Lenovo, Tongfang and Founder that made China become AMD's largest single market last year.

Last month, as a result of a two-year transition plan, Hector Ruiz handed over his position as the company's CEO to Dirk Meyer, AMD's former president and chief operating officer.

On his current trip to Beijing for the Games, Dirk Meyer shares his views on revamping the company in an interview with China Daily reporter Wang Xing.

Q: Why is AMD in a spot and what's your plan to get the company back on track?

A: The three things that I have been talking about to reinvigorate the company are profitability, focus and execution. We owe it to ourselves, our shareholders and our customers to make this company profitable again and keep it so.

We aim to do that in part by focusing more intensively on the IT or enterprise market that gives us the biggest economic opportunities and suits our technological capabilities. Also, we are going to focus our products and technologies on the microprocessor and graphics markets.

In keeping with that plan, we recently announced that we were looking for an appropriate buyer for our DTV and handheld businesses. The reason we are in a spot has a lot to do with our success.

Between 2004 and 2006, we grew rapidly. We added customers and grew our business and hired our R&D staff. We also acquired ATI. So between 2005 and 2007, we grew very quickly. And, frankly, we did not execute our product and technology road map as we used to.

Clearly, it's much harder to grow a business and the staff at the same time as execute a given road map, and we failed to do well on both counts. Looking forward, we need to focus again on execution.

Q: Do you have a timetable to become profitable?

A: We have stated our goal is to be profitable at the operating level in the second half of 2008. We think we can get there through three factors: one, the strength of new products we introduced in the second quarter; two, in our industry the second half of the year is seasonally the strongest; three, earlier this year we launched a cost-cutting drive that will begin to show its effects in the second half. Our goal is to return to profits by the end of the year on the back of these three elements.

Q: What are the major differences between you and Hector Ruiz?

A: Hector and I share a lot in common. We both like to win. We are both very stubborn, very tough and hate to lose. Personality-wise, we are different in some ways. For example, Hector tends to be a little less direct with people and maybe more subtle in his suggestions to people, whereas I can sometimes be a bit more pointed and direct in my approach. Both styles have their strengths and weaknesses, they depend on the situation.

Q: Given the difficulties in the world economy, how can the Chinese market help keep AMD strong in the global market?

A: China is a huge market and continues to grow. We can't be successful in the long term or even in the near term if we are not successful in China. Being a global company, we need to participate in the markets around the globe to enjoy success.

Q: China has just enacted the Anti-Monopoly Law. What're your views on that? Do you have plans to press charges against Intel in China?

A: I think it's appropriate for an economy like China to have these laws. It's important for an economy to foster competition because it's competition that encourages companies and individuals to innovate. And it is really innovation that makes an economy healthy, vibrant and grow over the long term.

So clearly, you need an environment in which competition is possible and that's the spirit of the Anti-Monopoly Law. It's also appropriate for the Chinese government to decide how to apply these laws in the market. That's not our job, so we do not have any plans to launch a lawsuit in the country.