AMD may have fallen behind Intel in manufacturing efficiencies, but product innovations will help it rebound, Hector Ruiz, AMD’s chairman and CEO, said at the company’s recent annual shareholder meeting.
Ruiz acknowledged that AMD is sometimes two or three quarters behind Intel in improving manufacturing capabilities. For instance, Intel is already manufacturing 45-nanometer chips, while AMD only recently moved to 65nm and won’t get to 45nm production until mid-2008. The smaller the chips, the greater the yield from each silicon wafer from which the chips are cut.
AMD is working to close the manufacturing efficiency gap with Intel, Ruiz said. And, on the horizon is the new quad-core Barcelona chip, due in the second half of this year. Also, new mobile computing processors are in development from AMD’s 2006 acquisition of graphics-processor company ATI.
“We don’t want to spend an inordinate amount of energy focusing on [manufacturing] alone when we know that the innovation that we bring to the market ... far outweighs any two- or three-quarter disadvantage we could have in manufacturing,” Ruiz said, in response to a shareholder’s question.
AMD made a serious run at Intel when it introduced the Opteron dual-core processor in 2003 and won new business from server and desktop computer manufacturers. But Intel responded with its own dual-core processors and by cutting the price of its products to force AMD to lower its price.
The price competition was among the factors leading to an AMD net loss of US$547 million (NZ$742 million) in the fourth quarter of 2006, followed by a net loss of US$611 million in the first quarter of 2007.
Ruiz responded: “There is no way to sugar-coat our performance ... It was a disaster and unacceptable.”
Ruiz outlined initiatives for AMD aimed at returning the company to profitability: an increased emphasis on graphics processors given the new graphics capabilities in Microsoft Vista; more focus on energy efficiency, such as quad-core processors that deliver better performance-per-watt than dual- or single-core models; and global market opportunities in developing nations.
Regarding the latter, Ruiz touted AMD’s 50-15 initiative which aims to deliver computing capabilities and internet access to 50% of the world’s population by 2015.