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  Besides money, is AMD hemorrhaging employees as well? 
  Aug 23, 2007, 03:19am EDT 
 
By: Sander Sassen

I mentioned the fact that AMD's executive vice president and chief sales and marketing officer Henri Richard took to the stage to outline AMD's stance on unethical business and marketing practices in a previous column called "AMD Barcelona, cheaters never win". Since delivering that speech AMD however made a 180-degree turn in that regard and did exactly what they previously accused Intel of doing - so much for corporate hypocrisy. During AMD's recent Technology Analyst Day, which outlined the company's technology and product roadmap, AMD continued on their abysmal marketing track record by missing opportunity after opportunity (see our article "AMD Phenom, another PR fiasco?") to impress the media and the shareholders by showing real world performance of upcoming products. Hence, to me the fact that Henri Richard will step down, effective on September 8th, does not come as a surprise really.

But Henri Richard's resignation does beg the question whether AMD's top brass is quickly leaving a sinking ship? Richard's resignation follows last month's resignation of AMD's Executive Vice President, Dave Orton. Dave Orton was the former president and chief executive officer of ATI before the merger with AMD in 2006. AMD has yet to issue an official press release regarding Richard's resignation, or appoint a suitable replacement so we are left guessing who is next or if there is disagreement in AMD's executive board on how to form a strategy to steer the company back into calmer waters. Frankly, it does not look that the merger has brought much success in the CPU and graphics department. Despite the fact that Dave Orton mentioned that the merger went over smoothly and the integration of the two companies into one was successful, the company has faced embarrassing delays with its CPUs, chipsets and graphic processors over the past year.

If you take a step back and look at AMD's current position from a broader perspective things indeed are looking bleak. For example, AMD has been touting their superior native quad-core K10 architecture, but has yet to launch a single quad-core processor, whereas Intel has had shipping quad-core processors since last year. Current AMD processors are no match for Intel's offerings in terms of performance so AMD has to win customers over by aggressive pricing strategies. The company also faced delays with AMD's DirectX 10 compatible HD 2000 series of graphic processors, which allowed Nvidia to take a six-month lead in the DirectX 10 market. Not surprisingly, Nvidia has seen strong sales of DirectX 10 parts while AMD has been fighting an uphill battle trying to win back some marketshare. AMD's 690G chipset which was expected to launch in 2006 suffered a similar fate.

Obviously this apparent failure to execute and deliver products on schedule is reflected in the company's revenues. The aggressive pricing strategies for its processors are not helping much to reduce AMD's debts, which are mounting up fast, certainly after its $5.4 billion USD purchase of ATI Technologies. AMD's $600 million USD 2nd quarter loss did not do much to improve that, nor did their $611 million USD first quarter loss. As a stop-gap solution AMD raised more cash by issuing $2.2 billion USD Convertible Senior Notes. That did stop the bleeding somewhat but does not negate the fact that a company has to make money to stay profitable, which is best done by selling products. That completes the circle - AMD has missed launch date after launch date and fails to ship products that can compete with Intel's and Nvidia's. Until they clean up their act and start delivering these products I am afraid that the hemorrhaging is bound to continue, both financially and in terms of employees.

Sander Sassen.

 

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Re: Besides money, AMD is hemorrhaging employees as well? Sander Sassen 37 replies Dec 11, 2007, 11:38pm EST

 

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