The plight of AMD and its troubles in doing battle with Intel were partially
self-inflicted and part due to its non-flashy, "get your hands dirty,"
roll-your-sleeves-up, management style espoused by AMD's CEO, Hector
Ruiz. That is about to change as AMD's flamboyant founder, CEO,
captain of industry, Hollywood dweller, wanna-be politician, mega-yacht owner,
and promoter extraordinaire, W.J (Jerry) Sanders III, has been nominated by
the board of directors to return to save the company with his mastery of good
old fashioned marketing, flamboyant management style, visionary ad campaigns
(remember the asparagus theme?), outlandish publicity stunts and flashy employee
morale boosting parties. And morale boosting is something AMD needs very
badly these days with missed manufacturing schedules, the "price is not right"
purchase of a graphics firm, a steep stock price slide, and, most of all,
rumblings of going fab-lite.
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 Jerry Sanders |
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"real men have fabs," a point of view he promoted which came with much
controversy as the fabless community was taking off in the late 1980s.
After all, if a young hippie-yuppie, like Steve Jobs, could come back to
restore creativity and morale among the troops at Apple after Gil Amelio
made apple sauce out of the PC company, then Sanders can once again make AMD's
star shine in the super-charged "I feel the need for speed" microprocessor
world.
Wall Street was taken by enormity of the rumors and AMD was halted in
trading. The 33-year run of Jerry Sanders as the top-gun at AMD is still
not over. The staff of InsideChips rushed to buy depressed AMD
stock -- hovering at 15-year lows.
Now, it should be said that Sanders himself recruited Hector Ruiz to
eventually take over the AMD helm ... for reasons we never understood at the
time … and to this day still ponder over. Aside from being his bipolar
opposite in management style and that only one letter stood between his last
name and the word "Ruin," Sanders must have consulted a Rodeo Drive palm reader
to make this key decision.
Ruiz, a former 22-year Motorolan, who InsideChips believes had a very
contentious time at Motorola Semiconductor in the way he re-organized and
managed the semiconductor group, was in the midst of re-inventing and downsizing
the big "M" when one of the most surprising management changes of 2001 hit
the trade press newswires. Ruiz jumped ship at Motorola to join the AMD
band of marketing renegades to do battle with Intel. The man who wanted
take down Intel with the PowerPC jumped the fence. Sanders, the
quintessential, fast-talking salesman, and Ruiz, the roll-up-your-sleeve,
Tex-Mex, manufacturing meister, was an interesting match-up in the annals of
management. At the very least, the move probably surprised some AMDers hoping
for the top job.
While growing up in Piedras Negras, Mexico, Ruiz reportedly was aspiring to be a car mechanic. As a teenager, he walked across
the United States-Mexico border daily to attend a high school in nearby Eagle
Pass, Texas, from which he graduated as valedictorian just three years after
beginning to learn English. Instead of becoming a grease jockey,
Hector de Jesus Ruiz received a doctorate in electronics from Rice University
and launched his semiconductor career at Texas Instruments.
When he took over AMD, he was still seen as "Mr. Fix-It." This was
after the tech-wreck of 2001 as chip firms were picking up the pieces and
looking to stem the red ink flowing on their P&L statements. For a
while, AMD's market share increased and its fortunes looked brighter as its
stock price almost regained the highs seen in 2000. Ruiz was named CEO of
the year in 2005 by Electronics Business magazine. AMD's move to multiple
core processors before Intel, its willingness to open its core to third parties,
and its push for lower power operation showed a winning business strategy for a
year or two. Then things began to unravel … something was amiss at AMD and Intel
found its footing again as it retook lost market share. Perhaps it was the
acquisition of ATI which began the downhill spiral. Then, the problems
with bringing AMD's much-touted Barcelona quad-core processor to market brought
additional pressure on management.
Rumors have been swirling in the press from unnamed sources that AMD's Ruiz
is going to be exiting in the not too distant future. His five year
employment contract was up last year and he has been operating on a year-to-year
contract basis since then. According to SEC filings, the current contract
expires on April 26, 2008.
As for Sanders, he was bloodied before. Growing up on the South side of
Chicago, he was once attacked and beaten by a street gang that left him so
covered with blood that a priest was called in to administer the last rites
… but he recovered. After many brutal years dueling with Intel, his
bust stands in the lobby awaiting his return. His mantra was on a poster
which he kept in his former office: "Yea, though I walk through the valley of
the shadow of death, I shall fear no evil -- for I am the meanest son of a bitch
in the valley." Seventies something John McCain is running for
president … seventies something Walter Jeremiah Sanders can rejuvenate AMD.
Jerry Sanders captured on video below by a EE student catering volunteer at
the 50th Fairchild Semiconductor Reunion in October 2007 at the
Compuer History Museum in San Jose, Calif. Sanders made his
appearance with wife Tawny Sanders, former Miss Texas.
href="http://www.fairchildat50.phanfare.com/slideshow.aspx?username=fairchildat50&album_id=467058">Fairchild Reunion party photos
Why is the saving of AMD important? Because AMD is the last remaining
microprocessor manufacturer among the 15 or so companies that Intel licensed or
self-developed x86 second-sources at the beginning of the PC boom in the 1980s
and the only real challenger to Intel's total domination of the MPU
industry. AMD should survive because it was the only company to mount a
legitimate challenge against one of the world's best known technology brands and
one of the most successful technology company's in U.S. history.
None of the others could do battle with the Intel-igentsia, including
well-heeled companies like Zilog, National Semiconductor, Motorola, Transmeta,
Japanese giants, and others. In Sanders' own words AMD is "the last man
standing" after a long-time legal and marketing cage fight with the 800-pound
gorilla. Intel and AMD have a storied past … let it continue. Much
of that will depend on AMD's ability to weather what it likes to call its
"perfect storm," i.e., pricing pressures, delayed MPU products, and a slowdown
in consumer electronics.
DISCLAIMER and DISCLOSURE: Today, April 1, 2008 is April Fool's day and
this is InsideChips' April Fools report for 2008. Sanders' return
and halted stock trading are fictitious … at least as of the date of this
report. Some aspects and analysis in this report are InsideChips'
opinion. The statement that InsideChips staff bought AMD stock is
true.