AMD reflects on progress, charts course for 2005

AMD reflects on progress, charts course for 2005

Executives at Advanced Micro Devices (AMD) have painted a much different picture of the chipmaker than in recent years during a briefing for analysts and reporters at the company's headquarters in Sunnyvale, California.

Two years ago, AMD chairman, president, and CEO, Hector Ruiz, told analysts at the annual meeting about its plans to slash its workforce amid a sharp downturn in the PC market. Now, flusedh with the success of the company's 64-bit x86 processors, Ruiz spoke of an AMD that is in the midst of a major transformation.

Once a secondary supplier to the consumer desktop market, AMD now had Fortune 500 customers for its server processors and a growing stable of mobile technologies, Ruiz said.

The company has recorded four straight profitable quarters, mostly on demand for its Opteron server processor, after racking up nine consecutive quarterly losses from 2001 through 2003.

This turnaround has attracted the attention of all the major server vendors, with one notable exception. Ruiz addressed the latest round of comments by Dell president and CEO, Kevin Rollins, about the potential for a Dell Opteron server.

"My guess is we're going to want to add that [AMD] product line in the future," Rollins said last week in an interview with IDG News Service affiliate, InfoWorld.

"We'd love to get the number one computer maker left," Ruiz said. However, the competitive price advantage that Dell enjoyed as an exclusive user of Intel chips was hard for AMD to match, he said.

AMD could not provide the same financial incentives to use Opteron that Intel could dangle in front of chairman, Michael Dell, and Rollins, he said.

AMD expects to grow faster in 2005 than the market for both processors and flash memory chips, Ruiz said. It hoped to improve its balance sheet as well to attract investors, CFO Robert Rivet, said.

The company could accomplish those goals because it could take market share from Intel in the server world, a market that AMD had historically watched from the outside, Ruiz said. The average selling prices of its chips are also increasing as its Opteron and Athlon 64 processors gain traction in the market. Furthermore, the company could increase shipments to emerging markets such as China, India, and Latin America that have yet to establish a dominant supplier of microprocessors, he said.

Finally, AMD could take advantage of the vast amounts of software developed for the x86 architecture with x86 chips for handhelds, high-end servers and consumer electronics devices, Ruiz said.

Intel uses different architectures in its chips for high-end servers and its handheld processors, while AMD pursues a strategy called "x86 everywhere".

"We are the x86 company," Ruiz said. "No other company has the resources that we have on x86. We don't have three other architectures to worry about."

Software developers and IT managers are familiar and comfortable with x86 programs, and chip companies could do those customers a service by maintaining application compatibility across their products, executive vice-president and head of AMD's Computation Products Group, Dirk Meyer, said.

AMD did not disclose any new details about its plans for dual-core chips, which the company expects to release in the middle of 2005.

As many analysts expected, the company said it would eventually increase the number of cores on its processors to four and eight, but it did not attach a time frame to that plan.

Follow Us

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Industry Events

24 May
ARN Exchange
View all events