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AMD Split Rumors Accelerating

By - Source: Tom's Hardware | B 0 comment

San Francisco (CA) - Hector Ruiz’ time at the AMD as we know it today is coming to an end. Ruiz recently stepped down from his role as CEO, but kept his position as chairman of the board with the purpose of launching AMD’s Asset Light and Asset Smart strategies, which are expected to split AMD into two entities. And this event is only weeks away, industry sources told TG Daily.

It is widely expected that Asset Light will part AMD into two companies - one that is led by newly crowned CEO Dirk Meyer and a focus on the development of chip technologies and a manufacturing arm that will take over AMD’s fabs. Our sources indicated that critical decisions are being made at this time and the official announcement of Asset Light and Asset Smart will be made next month.

Hector Ruiz’ future role remains a mystery, but it is expected that Ruiz will remain with AMD in one capacity or the other, possibly as CEO of the manufacturing company. We previously published an extensive analysis that sheds some light on the company’s future direction. It appears that much of Ruiz’ future has already been ironed out and AMD’s marketing team is now working on a way to preserve Ruiz’ legacy in AMD’s history books to avoid the perception that the executive caused the company’s current critical state.

Officially, there is virtually no clear information on the announcement and the direction of Asset Light/Smart provided by AMD. In the company’s Q2 earnings call, chief financial officer Bob Rivet stated the announcement will not be a 2009 event and that the company will announce it "as soon as [AMD] can get it down which is what Hector [Ruiz] is focused on."

Ruiz told Tim Luke, an analyst with Lehman Brothers, that the company has made "enormous progress" with Asset Smart and hopes that it will be able provide details about the deal "before the end of the year." Apparently, the company was able to remove any roadblocks that could have prevented a deal and will not have to raise additional capital - such as from the sale of manufacturing equipment. Rivet also stated that Asset Smart will not be a requirement for AMD’s break even goal - which, however, leaves out the general belief that hitting a break even point is a requirement for Asset Smart. At this point, AMD still says that it will "achieve that break even and actually make money in the back half of this year," according to Rivet.

It is clear that AMD will be a critical event for AMD and its employees. While AMD is not offering answers yet, our sources have had a good track record and we wish the company good luck ! Ruiz offered an indication just how critical this step will be for AMD : "All I can tell you right now is that if it were something as simple as going to a foundry it would be very easy to do and talk about it but it is actually something we believe is uniquely tailored to AMD and uniquely tailored to our customers and our company and therefore much more complex to do than just a general outsourcing scenario."

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