New Chief Executive Hector Ruiz--formerly Advanced Micro Devices' president and chief operating officer--inherits a colorful legacy that he must transform into growth and profitability.
Jerry Sanders, AMD's chairman and outgoing CEO, has taken the battle withIntel personally. He doggedly invested in his microprocessor businessthrough bad times and good, and his tenacity has resulted in his company being the last significant competitor to Intel. The company has outlasted Cyrix, IDT (Integrated Device Technology), Chips and Technologies--and even IBM--in this savagely defended market. Indeed, the war has been fought on many fronts, including marketing, legal, technical and manufacturing, but AMD has weathered it all and, occasionally, turned a profit.
AMD keeps searching for opportunities. Its new group of PersonalConnectivity Solutions (PCS) processors will enable multimedia for the next generation of handheld devices. AMD sees a good opportunity as handhelddevices become more sophisticated.
The PCS group will initially expand products it acquired when AMD boughtAlchemy but will eventually move into a broader wireless networking system market. The chipmaker thus signals its desire to open up a potentially lucrativemarket supplying customers with full sets of multimedia features forhandheld and other wireless devices.
The forecasts for handheld devices are impressive: Gartner Dataquestestimates worldwide personal digital assistant shipments will total 15.5million units in 2002, with cell phone shipments exceeding 400 million unitsin 2002. AMD wants a piece of that market.
AMD is a major player in PC processors and flash memory and now has the PCSgroup. Intel is the driver of PC processors, a major player in flash memory,and two years ago embarked on an extensive program to establish itself as aforce to be reckoned with in wireless communications and handheld computing.The two companies have been archrivals in their former markets and look tobe on a collision course in the new wireless and handheld arena, onedominated by Texas Instruments and Qualcomm.
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Perhaps the nature of the challenge is underscored by AMD's unlikely deal in1995 when, for $860 million, it purchased 9-year-old start-up NexGen, which hadfailed to deliver a compelling product to the market. Overcoming cultural,geographic and technological barriers, the deal ultimately brought AMDcompelling and competitive products that compare well with Intel'sofferings--all in all, a successful high-tech merger.
(For a related commentary on AMD, see gartner.com.)
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