Wednesday, August 22, 2007

AMD Ruiz believes the bad tide is turning

's been a tough year for Advanced Micro Devices. The Sunnyvale computer chip maker has lost $1.2 billion in the first two quarters as its share of the market has dwindled. But Chief Executive Hector Ruizbelieves the tide is turning.

The company's next-generation server chip, Barcelona, will be released Sept. 10. A desktop PC version of the product, called Phenom, will arrive before the end of the year.
I admit, goal was pretty high and noble, but competitors were blood thirsty and note crucified Hesus, err. Ruiz in the mild shadow in the picture left.

And a new "platform" of computer and graphics chips for laptop computers, dubbed Puma, is anticipated for early next year. It will benefit from AMD's October purchase of graphics chip maker ATI Technologies.

The currents also might be changing on the antitrust front. Last month, the European Commission filed antitrust charges against Intel that parallel those AMD alleges against its rival in a civil suit in the United States. Intel says its conduct is lawful and pro-competitive.

Ruiz, in a visit with Mercury News reporters and editors, said he is confident the new products will help AMD regain lost ground. And he claimed the technical glitches that held up Barcelona are behind the company. Barcelona will be competitive with whatever Intel throws at it, he said.

Here are excerpts from the conversation:

QHow have Intel's allegedly illegal business practices affected your business?


AWe have great products. I think we demonstrated that with (the popular chip) Opteron. I think we're going to continue to demonstrate that with Barcelona. What's missing is our ability to be rewarded for having done those things right. That's the impact. We should have a significantly stronger position in the market.

QAMD is paying calls on antitrust regulators in the United States. Do you believe they should initiate an antitrust case against Intel?


AI think they should. The role of government is to protect citizens. There are laws being abused and broken. There is a monopoly that's abusing its power. I think it's the role of these regulatory agencies is to ensure that doesn't occur. From that point of view, they should take an interest.

QWhat would be an appropriate remedy in the Intel antitrust case in Europe and to your civil suit in the United States?


AThe thing we're after is the same thing our customers would like: a field in which they can make choices on products and technology strictly on the merits of the product and not because they were coerced in choosing one over the other. To me the remedy we would like to see is one where the practice of coercion and intimidation stop.

QWhat about a financial penalty?


AI think there should be, but that is not the No. 1 challenge for us.

QTwo years ago, Intel signed an order in Japan agreeing not to engage in anti-competitive practices alleged by the Japanese Fair Trade Commission. Has that helped?


AJapan found there were anti-competitive practices being exercised by Intel. In my opinion, they haven't stopped them totally. We know that there are things still being done that fall into the category of (what) shouldn't be done. When a customer tells you they have this plan with you and says, "I like it, I love it, we're going to do it," and 90 days later they change their minds because of an occurrence that happens to be along the lines of what (Intel) is not supposed to be doing . . .

(Editor's Note: Intel said it believes its business practices in Japan are fair and lawful, and that it is defending those practices in civil court.)

QWill AMD's new Barcelona chip change the competitive landscape when it is launched Sept. 10?


AI expect us to regain position in the server market because Barcelona is a very strong product. It won't have the huge impact Opteron had. If you remember at the time Intel had no new product (to compete against it). So it will be more challenging. What we're anticipating is that Intel and AMD are going to be very competitive in every space going forward. We've become big and strong enough and credible enough that we are going to flip back and forth in leadership.

QAt the same time, AMD has struggled with Barcelona. What has been the problem?

A: Frankly speaking, the issue with Barcelona has been that it is later than we wanted. We had hoped Barcelona would have been earlier in the year. We are suffering from that.

QWhat caused the Barcelona delay?
A: It's awfully complicated. We're doing something that nobody has ever done. As strong as our competitor is, they have not done a quad core on a chip (four chip cores, or brains, laid out on a single piece of silicon instead of on two pieces attached together). . . . Every time we ran into a gotcha (or technical glitch), it created a six-week or so hole in the schedule as we went back and fixed it. We hoped we wouldn't get many of those, but in the Barcelona case, we got more than we thought. By the time we got through fixing them all, we were six months-plus late from where we originally wanted to be. Picture below has been taken at Barcelona city in March 2007. As you could see, famous 4 cores Barcelona towers then weren't quite completed yet. Please note quite original direct connections between the towers. That would slash your visiting time in half compared with Intel's standard built twin towers. (Computer) architect behind this unusual design is famous Gaudi.

QYou joined AMD in January 2000 after 22 years with Motorola. Do you have any plans for retirement?


AI'm 61, and I haven't thought about retirement yet. I'm sure the time will come. At this point I feel young. I can still ride a bicycle 200 miles a week. I'm not an egomaniac. The time will come when we need to transfer power to a new generation of leaders. It's not my intent to be here forever. At this point, however, I am not planning any imminent retirement.


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