Struggling chipmaker AMD has reported an operating loss of $1.189 billion for the second quarter of 2008, as the company formally announces it plans to divest itself of its handheld and digital television product businesses which it acquired with graphics developer ATI back in 2006. However, perhaps more importantly, AMD has decided to change the man at the top: long-time CEO Hector Ruiz has announced he is stepping aside, to be replaced by chief operating officer Dirk Meyer.
Ruiz, currently 62, came on board at AMD in 2000 as president and chief operating officer and took over as CEO in 2002. Ruiz oversaw the company as it gave rival chipmaker Intel a serious run for its money in the CPU market…and also launched a length legal campaign in an attempt to establish that Intel used its market dominance to shut AMD out of the chip market. Although AMD has been around nearly 40 years, under Ruiz’s leadership it rose to give Intel its first serious challenge, btu investors began to lose condifence in the company when it made what proved to be an overpriced purchase of graphics developer ATI, and a technical failure in the successor to AMD’s Opteron chips forced the company to delay the technology—and fire-sale existing chips—in order to stay afloat. Intel, of course, capitalized on the opportunity to cut into AMD’s market share. Intel accounts for about 80 percent of the processors on the market; AMD accounts for most of the remaining 20 percent.
Ruiz will stay on board at AMD, serving a role as executive chairman that will see him retaining some day-to-day roles in the company. His successor as CEO, Dirk Meyer, is a former engineer and chip designer who had previously headed up AMD’s microprocessor division and was involved in the design of the company’s Opteron processors. He has been running the company jointly with Ruiz since 2006 and is already familiar with AMD’s operations.
It’s not clear whether Meyer’s elevation to CEO will convince investors to continue backing AMD, but the sale of the mobile and DTV units acquired from ATI should let the company get one burden off its balance sheet.
