Q&A: AMD CEO Hector Ruiz

Advanced Micro Devices Chairman and CEO Hector Ruiz shed light on AMD's channel plans during an interview with CRN at the company's Executive Forum in February. Here are excerpts:

CRN: What's your key message to partners?

Ruiz: As we grow and acquire a larger footprint of customers around the world, this channel needs to know that to us they continue to be a strategic partner and that the fact we've grown our relationship with OEMs around the world is no reflection at all on the importance or significance of this channel. The message is that, frankly, being more relevant to OEMs around the world is actually an important thing for them because it makes us stronger, makes our brand better known, and they benefit from that.

CRN: What are you doing to help partners grow?

Ruiz: We are putting new programs in place for [channel partners] and elevating the relationship to a higher level. The message to them is we're putting in things for them that are more relevant to products, that we're a different company, and [that] with ATI, we have a significantly larger set of products to deal with that they can support, and [we] need to make sure we accommodate that.

The other message is there will be a transition to a new platform and product, and it's very important. I'd put it in the same category as the introduction of the Opteron three years ago, and it's important for them to be intimately aware of what we're thinking about.

CRN: Which platform? Barcelona?

Ruiz: I'm talking about Barcelona. It's important in so many different ways. From my point of view, it's four cores in a single piece of silicon and architected with new cores and microarchitecture. It will bring a significant new level of performance per watt, and we believe the value to this segment will be really powerful.

CRN: Intel is said to be gaining a big lead in performance and channel mind share.

Ruiz: In spite of all the hype and hoopla, there is not really such a thing that Intel has leapfrogged AMD. It's quite the contrary. As a matter of fact, despite all the perceptions of Intel closing the gap, half the time they do a little bit better and the other half we do. And all of that will end with the introduction of Barcelona because it's such a significant jump in performance and quality. I'm confident we will lead in that respect.

CRN: And Intel's gains in the channel?

Ruiz: Frankly, we had a supply logistics issue late in the year where we were not able to serve our customers as well as we would have liked to, and that not only includes the channel but also OEMs. We took our eye off the ball relative to channel and, unfortunately, that is the result.

But what happened was the challenge in the mix of our product. It moved so dramatically toward mobile platforms that we couldn't react fast enough. Our mobile platform grew 75 percent quarter over quarter and 95 percent year over year—well beyond anything we could forecast. And in an attempt to react to that, we were unable to supply the channel.

We feel bad about it, and we're disappointed. That gave our competitor an opening to gain some mind share with the channel. It is our fault, and we'll deal with it. We'll recover, and we have plans to do that. Those [supply] issues are behind us.

CRN: What have you done to address the supply issues?

Ruiz: So we said to [suppliers] we have to take some risks and commit to higher volumes in supply chains, which we are doing. And we are getting a more effective engagement process with customers around the world so we're as up to date as possible. When the third quarter began, the expectation for the transition to mobile was very different than what actually happened at the end of the year, and that's no fault of anyone. It's just the way the market dynamics moved. So what we put in place is a more effective engagement process, taking more risks with the supply chain, and we're getting more inventory. And that combination of things puts us in a good position. We feel pretty confident.

CRN: And the pricing pressures?

Ruiz: The pricing environment will continue to be challenged because we're not backing off. The strategy of our competition is to get us to blink, and we're not going to. We're going to fight for every piece of business that we can, and we're very much emboldened and will hang in there. We ended up in 2006 at the highest market share in the history of our company, in the mid-20s, and we intend to fight like crazy to retain it.

CRN: Will Dell revisit its relationship with AMD now that Michael Dell is back?

Ruiz: I think that the plans we have with Dell have been worked on for quite a long period of time, and [Chairman and CEO] Michael [Dell] himself was very instrumental and involved in the discussions and all negotiations. I've had no conversations with Michael that led me to believe that there is anything different at the moment. We're rooting for them. They're going through a transformation of the company. We're a partner, and we'll do what we can to help.