Advanced Micro Devices is shaking up its executive team and consolidating business units to more aggressively go after "high-growth" areas of its processor business, such as embedded devices, as it preps for future growth in a changing chip market.
Starting July 1, Lisa Su will be promoted to AMD's chief operating officer. In this role, Su will oversee AMD new Enterprise, Embedded and Semi-Custom Business Group, which includes the chip maker's server, embedded, dense server and semicustom businesses, as well as its related product engineering and sales functions.
AMD also said it will create a Computing and Graphics Business Group that will be overseen by sales chief John Byrne, who is promoted to senior vice president and general manager of the group.
Prior to Su’s appointment as COO, she served as AMD's general manager for global business units. Su’s direct oversight of the Enterprise, Embedded and Semi-Custom Business Group is temporary until AMD finds a permanent head for the business unit.
Drew Prairie, AMD spokesperson, said AMD consolidated its business units into two groups so it could focus more on the "traditional PC markets" and "adjacent high-growth markets" as two separate pieces of business.
"Before there were too many distinct product lines, each with its own sales and product strategy," Prairie said. "Whittling AMD's diverse product groups down into two distinct business units will help us more closely align and focus our product sales, product engineering, product strategy and planning."
AMD partner Tuan Nguyen, director of product and marketing at AMD partner IBuyPower, City of Industry, Calif., said AMD is taking an important step to help position itself for success. “AMD has been doing a little of this and that for a while now. They've launched a lot of new initiatives with a different head for each one," Nguyen said. "Pulling groups together and consolidating product development and sales makes sense."
AMD's PC processor business has been hit hard by a declining PC market. As PC sales have declined 8.6 percent compared to the year prior, according to Gartner, AMD has worked hard to shake its image as just an Intel alternative.
Over the past few years, the chip maker's game console business helped take up the slack for its embedded systems business. AMD’s processors are in Sony's PlayStation 4 and Microsoft's Xbox One game consoles.
"Two years ago, 90 to 95 percent of our business centered around PCs," said CEO Rory Read last year in October, when it reported its third-quarter earnings. "We see it as an important business, but times are changing.” Read said at the time, AMD is not betting on the PC. He estimates PC sales will drop 10 percent in 2014.
According to AMD, it generates 80 percent of its revenue from the PC industry. Reid has stated publicly he hopes in 2014 that AMD graphics chips will represent 50 percent of its revenue mix.
Another market in which AMD will continue to compete with Intel is PC graphics chips. According to IDC, AMD owns about a third of the market, with the balance going to Nvidia.
In a statement released by Read on Thursday he said:
"Today's announcement represents the next step in our long-term strategic plan to help ensure AMD's operating structure and culture are better aligned to drive consistent growth and profitability by leveraging our leadership IP to create differentiated products that help our customers win across a diversified set of high-growth markets."
Su joined AMD in 2012 as senior vice president and general manager, Global Business Units, responsible for the company's product strategy, product definition and business plans. In her previous job at Freescale, Su held multiple positions, including chief technology officer and senior vice present and general manager, Networking and Multimedia.
PUBLISHED JUNE 12, 2014