CRN Interview: AMD CEO Hector Ruiz

Advanced Micro Devices Chairman and CEO Hector Ruiz and Executive Vice President and Chief Sales and Marketing Officer Henri Richard shed light on AMD's channel plans, supply and financial issues, product road map and market strategy in an interview with CRN editors Edward F. Moltzen, Paula Rooney and Heather Clancy from the company's annual Executive Forum for partners in Phoenix. Here is an excerpt from the discussion.

CRN: What's your key message to partners this week?

Ruiz

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 going to do to help partners grow their AMD business?

RUIZ: We are putting new programs in place for them 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 with ATI we have a significantly larger set of products to deal with that they can support and 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, AMD's upcoming quad-core processor?

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 micro architecture. It will bring a significant new level of performance per watt, and we believe the value to this segment will be really powerful.

CRN: Recently there have been a rash of reports about pricing pressure on AMD, a sharp decline in its stock value and cash flow issues. Can you comment on those difficulties?

RUIZ: The one thing that's hard to do is trying to correlate the stock price to anything a company does. It is very difficult. We're disappointed that our stock isn't performing better, but I won't correlate it to anything other than it's just one of those things. We're not in any way being driven to react to [negative news]. What we see in the marketplace with our product line today is that it's efficient and very competitive. We find that half of the time we win on performance and performance per watt, and in workload-specific areas we don't do as well.

CRN: Intel is said to be regaining a big lead in performance over AMD and gaining mind share with the channel. What do you say to that?

RUIZ: In spite of all the hype and hoopla, there is not really such 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 with the channel?

RUIZ: As far as the channel, 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: 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.

NEXT: A cash flow problem at AMD?