Ruiz Out, Meyer In At AMD

Hector Ruiz is out as chief executive at Advanced Micro Devices as the struggling chip maker on Thursday reported its seventh consecutive quarter in the red to the tune of a $1.19 billion loss in the second quarter of this year. Dirk Meyer, Sunnyvale, Calif.-based AMD's president and chief operating officer, has been elected by AMD's board to replace Ruiz as CEO, according to the company.

Ruiz replaced Jerry Sanders as CEO in 2002 upon the AMD co-founder's retirement. Ruiz will stay on in a director's capacity at AMD, he said on Thursday's Q2 earnings call, where the news was announced at about 2 p.m., PT.

Ruiz joined Sunnyvale, Calif.-based AMD as president and COO in January, 2000 following a 22-year career with Motorola, where he had been president of the company's Semiconductor Products Sector. He was with Texas Instruments for several years before joining Motorola.

Meyer, like Ruiz, has an engineering background. He was co-architect of the Alpha 21064 and 21264 microprocessors at Digital Equipment Corporation, where he worked for nearly a decade before joining AMD in 1995. He led engineering for the Athlon microprocessor at AMD and in April 1999 was named VP of engineering. He became a group vice president and GM of AMD's microprocessor business in 2001 and the following year was named an executive officer.

Asked if there would be strategic changes at AMD with his promotion, Meyer stressed his respect for Ruiz and the collegial nature of their partnership in running the company, but added that, "Looking forward, there will certainly be some changes."

AMD's second quarter was described as "a tough one" by AMD chief financial officer Robert Rivet. Over $1 billion in losses included an $880 billion write-down to the company's consumer electronics business, reported last Friday by AMD. The company has decided to divest its Handheld and DTV product businesses, which represented $920 million in losses over the just concluded quarter.

AMD's just-concluded quarter represented a serious nosedive from a first-quarter loss of just $358 million -- which at the time seemed like progress for a company that had staggered out of 2007 with a $1.77 billion loss for the fourth quarter and down $3.38 billion for the whole of last year.

On AMD's first-quarter earnings call in April, Ruiz announced downsizing plans that would bring AMD's headcount down by 10 percent by the end of Q3. A month later, the chip maker kicked off an executive reshuffle that included the replacement of Ruiz's old Motorola colleague Mario Rivas as head of the Computing Solutions Group by Randy Allen, promoted from his position as server/workstation chief. With several other executive departures at AMD making headlines in recent months, the big question was if and when Ruiz himself would suddenly discover a need to "spend more time with his family."

In the face of AMD's recent problems, it's easy to forget that Ruiz's tenure as AMD's CEO included some of the chip maker's biggest triumphs over archrival Intel, which today owns between 75 and 80 percent of the global microprocessor market.

AMD, which owns a license to build microprocessors based on Santa Clara, Calif.-headquartered Intel's x86 microarchitecture, raced ahead of its larger competitor to produce a commercially viable 64-bit instruction set architecture with its Opteron and Athlon devices released in 2003. Intel later admitted to developing a clone of the smaller chip maker's AMD64 extensions.

AMD under Ruiz struck again in 2005, beating Intel to a multi-core central processor with its dual-core Opterons. But if Intel had been complacent before, the emergence of multi-core technology seemed to wake the sleeping giant. The chip leader put itself back on even terms with AMD with the introduction of its Core architecture. Intel then raced ahead of AMD in the core wars, shipping quad-core products almost a year before its rival.

Meanwhile, Ruiz also orchestrated the $5.4 billion acquisition of graphics chip maker ATI, which closed on Oct. 25, 2006. The integration of ATI has been a rocky one for AMD. The company has enjoyed healthy competition with top graphics chip maker Nvidia in the discrete graphics business while building well-received integrated products to rival Nvidia's and Intel's.

But the ATI acquisition has also led to billions of dollars in impairment charges for AMD, which in turn led to the brutal financials for Q4 2007 and for the just-concluded quarter that marked the end of the line for Ruiz.

This article was updated late Thursday.