The Origins and Limitations of AMD's Historic Revival
Hector Ruiz almost oversaw AMD's end in the 2000s but the risks paid off - eventually!
I’m normally quite a slow reader but I’ve just finished two books in a day. The first was Hamilton Helmer’s ‘Seven Powers: The Foundations of Business Strategy’, a terrific book that we’ll return to later.
The second was ‘Slingshot: AMD’s Fight to Free an Industry from the Ruthless Grip of Intel’ by Hector Ruiz, AMD’s CEO from 2002 to 2008.
Why ‘Slingshot’? Well that’s the weapon that David used to fell Goliath. No prizes for guessing who Ruiz casts in these roles in this story.
Reading the two books in such close succession (and in this order) was a fascinating exercise.
Ruiz took several actions that would largely define AMD’s strategy for more than a decade: he sold off AMD’s flash memory business, bought graphics chip designer ATI and spun off its fabs into an new firm - GlobalFoundries.
But these actions aren’t the central focus of Ruiz’s book.
Instead, as the book’s title implies, it’s mostly about AMD’s battle with Intel, and particularly the court case launched by AMD in 2005.
As AMD’s CEO, I was proposing to challenge Intel’s bullying practices in court. It was clear-cut, the way I saw it: good versus evil. I was so sure “good” would win that I was willing to bet the company’s reputation—and my own.
Ruiz would leave AMD in 2008, a move that was widely seen as a response to the firm’s poor performance:
Ruiz was pushed aside Thursday, July 17, 2008, after six tumultuous years as CEO of Advanced Micro Devices Inc., as the chip maker tries to pull itself out of a deep financial hole caused by a questionable acquisition and a major product gaffe. AMD also reported its second-quarter loss widened as the computer chip maker was hurt by a large asset impairment charge from discontinued operations.
‘Slingshot’, published in 2013, is clearly Ruiz’s response to criticism of his stewardship of AMD.
Today, under the leadership of Lisa Su, AMD is riding high:
Goliath, in the shape of Intel, may not have been vanquished completely but AMD’s long-time rival is certainly seriously wounded.
So, maybe it’s time for a reassessment of Ruiz’s time in charge. In the rest of this post we’ll look at AMD’s tumultuous Ruiz years, consider how much - if any - of AMD’s current success is due to his actions and consider what we can learn from all this.
