AMD outlines restructuring plans
Along with its uninspiring financial results announcement, AMD hosted a conference call yesterday to discuss its future prospects—namely how it plans to deal with pressure from Intel as well as a customer shift toward PC vendors. BetaNews has posted a two-page summary of the conference call, and a few statements made by AMD CEO Hector Ruiz stand out. Ruiz said AMD is considering a more "asset-light" business model whereby it would increase its reliance on third parties for production and/or research and development. AMD has already secured "a broad array of IP licensing agreements," Ruiz stated, and its flexibility with respect to those agreements is "damn near infinite." For instance, AMD already has a joint development agreement with IBM, and BetaNews says AMD could go as far as to license manufacturing rights for its processors to Big Blue.
After discussing its plans, AMD also shed a little more light on last quarter's poor results. BetaNews quotes AMD President and COO Dirk Meyer as saying:
"We suffered some major growing pains," including some sticking points in relationships with new OEM customers. Second, Intel applied serious price pressures on AMD - giving it some of its own medicine from prior years - "as our competitor did everything in their power to protect their monopoly."
Third, both CPU and GPU markets became more competitive - a tip of the hat to both Intel and nVidia for producing high-performing parts. Fourth, "weakening demand in the consumer electronics businesses added to our pain."
According to Meyer, the sum of all four factors was a "perfect storm" for AMD. To get out of that storm, Meyer adds, AMD must "grow the top line, change our cost structure and align with the competitive environment, and execute flawlessly on our product and technology roadmaps."