August 26, 2011 – AMD (NYSE:AMD) appointed Rory P. Read as president and CEO, effective immediately. Read joins the AMD board of directors as well. Read has held top positions with Lenovo and IBM. Thomas Seifert, who served as interim CEO since January when Dirk Meyer resigned, will return to his role as SVP and CFO. Claflin, named executive chairman when he assumed additional responsibilities specific to AMD’s search for a new CEO, returns to his role as AMD’s chairman.
AMD will explore growth opportunities "within the PC ecosystem and beyond," said Read, crediting AMD’s financial standing, staff, and product lines for potential to grow.
Read joins AMD from Lenovo Group Ltd., where he was spent 5 years, most recently as president and COO, leading day-to-day global operations and managing growth strategies. He helped bring Lenovo into new markets and expand existing market share. While managing Lenovo’s Americas group, Read drove double-digit revenue growth and market share gains, reversing operating losses and delivering profits. He became president and COO in 2009, bringing Lenovo rapid growth for a major PC maker, and achieving its largest worldwide market share ever. Prior to Lenovo, Read spent 23 years at IBM, where he held management positions, leading a turnaround in the Business Consulting Services Division that improved gross margins. Read graduated Magna Cum Laude with a bachelor’s degree in Information Systems from Hartwick College.
Read’s track record shows an ability to drive profitable growth, said AMD chairman Bruce Claflin, and his goal will be to "amplify the voice of the customer inside AMD."
Analysts’ Take
What does the market think of Read as AMD’s new CEO? Analysts are generally complimentary of his qualifications, but the chipmaker still has a long road ahead. (Check out our checklist for AMD’s incoming CEO here.)
FBR Capital Markets’ Craig Berger called Read "a credible executive" and a "new guard executive" who will leverage relationships at Lenovo to help AMD in PCs, and at IBM (a two-decade career) to help drive R&D and foundry strategy. Still, AMD still faces a fundamental challenge given ARM’s entrenchment on Windows and extension into tablets, which could challenge AMD’s No.2 position vs. Intel, and this won’t be resolved anytime soon, he notes. "The question now remains whether the new CEO has a clear agenda/strategy to reinvigorate AMD’s server business and accelerate AMD’s entrance into tablets/smartphones," added Credit Suisse’s John Pitzer.
Another point brought up by FBR’s Berger, is whether AMD might join the fray in TI’s rumored (yet vehemently denied) shopping of its OMAP application processor business. Intel has been floated as a buyer, too. Berger thinks AMD is a logical acquirer if TI decides to sell the OMAP biz, but advises against it as a "mistake" to plow more debt by chasing "dreams of being a big ‘ARM on Windows’ supplier" and stretching R&D and sales resources, vs. pushing forward on x86-based APU products. (For the record, Berger thinks TI should sell OMAP: it’s replaced Nvidia’s Tegra on Google’s new Android design, ASSP-baseband integration is likely to widen, such momentum would maximize the unit’s value, allowing TI to focus its attention on traditional analog & mixed-signal apps, and use the OMAP money to pay down debt from its Nat’l Semi M&A, or buy back some stock.
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