AMD Shuffles Cards In Bid To Get Back In Black

Advanced Micro Devices has been a busy chip maker in recent weeks, announcing a major update to its roadmap and a shakeup of top executives to go along with the creation of a new engineering division. Oh, and AMD also managed to roll out its first-ever commercial client platform, new low-power quad-core Opteron processors and the initial batch of triple-core Phenom chips for OEMs and system builders.

Randy Allen, AMD's then-server/workstation chief, introduced a roadmap update last week that included plans for a six-core processor codenamed Istanbul by the second half of 2009 and a 12-core chip called Magny-Cours set for release in the first half of the following year. Allen also said AMD is on track for its transition to the 45nm fabrication process, achieved by rival Intel last fall, by the second half of this year.

A few days later, Allen had been promoted to head AMD's computing solutions group, replacing the outgoing Mario Rivas, who the chip maker described as having left "to pursue new opportunities." Also departing Sunnyvale, Calif.-based AMD was Michel Cadieux, head of human resources. Rivas and Cadieux join former CTO Phil Hester, who left last month, and ex-sales chief Henri Richard and Visual Media Business chief Dave Orton, both of whom departed late last summer.

The executive shakeup was accompanied by the creation of a new Central Engineering organization at AMD. The new unit will be led by newcomer Chekib Akrout, formerly a VP of design technology at Freescale Semiconductor, and internal selection Jeff VerHeul, a VP of design engineering at AMD. Both will report directly to AMD president and COO Dirk Meyer.

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AMD has suffered losses in six straight quarters and in April announced layoffs of about 1,600 workers from 16,800 worldwide, to be completed by the end of the third quarter of this year. It was not clear whether Rivas' and Cadieux's departures would count towards the downsizing total. AMD has stated that Hester's exit was not part of the layoffs.

The headcount reduction has not impacted the chip maker's channel team, an AMD source told ChannelWeb, adding that downsizing at AMD's Sunnyvale, Calif. and Austin, Tex. headquarters was "pretty much finished" as of early May.

AMD's strategy of trimming its way out of its struggles is well-known, but the chip maker has also released a flurry of new products to kick off the year while finally rolling out its long-delayed quad-core Opteron parts in volume to OEMs and the channel.

Allen's roadmap update also included a brief on AMD's ramp of its quad-core server chips. The Opteron chips formerly codenamed Barcelona have successfully undergone the B3 revision that addressed the silicon glitch which delayed volume shipments of AMD's first quad-core product late last year, he said. AMD had more than enough supplies to meet demand from top OEM partners and its system builder channel, Allen added.

Next: New Server, Desktop Products

To prove that Barcelona has really arrived, AMD unveiled five new energy-efficient quad-core Opterons just days after Allen's briefing. The new chips sit in the 55-watt ACP thermal envelope, making them AMD's lowest power quad-core server processors to date.

Dubbed Opteron HE (highly efficient) processors, three new chips are available in the 2300 series -- model numbers 2344 HE, 2346 HE and 2347 HE -- and two in the 8300 series -- 8346 HE and 8346 HE -- for two-way, four-way and eight-way rack servers and blades, according to AMD. In two-processor and four-processor configurations, AMD is touting the performance of the Opteron HE chips on energy efficiency benchmarks such as SPECfp_rate2006.

On the client side, AMD kicked off the second quarter with its first batch of triple-core Phenom chips and the debut of its first desktop platform aimed at commercial installations. The triple-cores give AMD an intriguing product to slot in between its dual-core Athlon and quad-core Phenom desktop chips, said Matt Wilkins, a principal analyst at research firm iSuppli.

"Quad-core is going to be at the high end of desktop CPUs. The triple-core will be at the lower end of the high end and encroaching on the mainstream. I think that it's been priced by AMD to fit into that area fairly well," Wilkins said.

"The tri-core product is an interesting offering. Clearly Intel doesn't have one."

The commercial desktop platform, codenamed Hardcastle, is part of the AMD Business Class initiative, which will also include commercial notebooks based on AMD's upcoming Puma mobile platform, projected for availability in the second quarter. The initial desktop offerings from AMD and its partners are generally tailored for SMB, mid-market and public-sector deployments, while enterprise-class SKUs will be available later, said Hal Speed, an AMD marketing executive. "The two important components of AMD Business Class are that it meets both the unique needs of OEMs and the unique needs of system builders," Speed said.

Large computer manufacturers like Hewlett-Packard, Dell, Acer, Lenovo and Fujitsu-Siemens have committed to building Hardcastle-based commercial desktop systems. HP, for example, has already announced two new AMD Business Class models, the HP Compaq dc5850 Business Desktop PC, available worldwide May 5 with a starting U.S. list price of $599, and the HP Compaq dx2450, currently available in North America with a starting US list price of $369. The HP Compaq dx2355 will also be available in the Asia-Pacific market later this quarter.

AMD has suffered financially in the past year-and-a-half, with product delays and costs associated with the company's acquisition of graphics chip maker ATI taking their toll. AMD's plan for living up to CEO Hector Ruiz's promise of profitability by the end of the third quarter combines strategic trimming of assets and personnel with the growth of new product lines and marketing initiatives, while solidifying its OEM relationships and signaling to the channel that it's ready to play ball in the commercial space.

Will all this be enough to get AMD back in the black? Is the beleaguered company making intelligent moves to return to financial health? AMD's slogan is "Smarter Choice." The chip maker will have to live by its own words to accomplish a turnaround, because it's in no position to bully its way there.