Sunnyvale (CA) – It’s easy to get lost in the continuous wave of bad news surrounding AMD, competitive threats and predictions that the company is on its way out. Over the past few weeks we spent time with AMD employees and partners in and around AMD’s ecosystem. Not everyone is happy anymore and AMD’s often praised talent how to treat partners is showing dents. Time for a look at AMD’s internal struggles, corporate culture as well as our prediction how AMD will cope with the current situation and possibly emerge as a much stronger player in the not too distant future. 

It does not take much to see that Barcelona, ironically the product that was supposed to save AMD from Intel’s Core 2 Duo assault, unveiled all the weaknesses in AMD. Originally, the K10 architecture (Barcelona/Agena) was supposed to enter volume production in February 2007. Then, the product was delayed to August 2007. In the end, we all know what happened – the Translation Lookaside Buffer bug delayed the volume shipment until Barcelona B3 showed up - in April of 2008. We don’t want to blame everything on Barcelona, but the fact that AMD was unable to compete this during 2007 brought the company more than $2 billion in losses. No matter how much money you have, $2 billion is steep.

The problems for delay did not surface in February 2007, nor was the delay the result of some weird technological issue from The Twilight Zone. AMD's sales executives were quite happy with the fact that the Opterons were selling like hotcakes. In fact, they were happy enough to decide that 65 nm development could be delayed to make sure the company could get out as many 90 nm wafers as possible. Delaying of the process pushed back the Barcelona development and we ended up with a rushed product. The TLB bug contributed to a grand total of 14 months of delays. If you remember, the original Opteron was also delayed for close to two years. But back then, technology caused the delay and not strategic decisions.

AMD Sludge^TM

If we compare AMD to Nvidia or Intel, it is easy to see what is actually going wrong with the company. AMD's culture was explained to us as the sludge, often seen in countries such as Spain, France, Italy, Croatia, and Greece: Distributing the responsibility for past, current and future projects to a level where it is impossible to tell who was responsible for the project that what went wrong. The result: Scapegoats get pink slips.

Over the past two years, we listened to numerous partners complaining about the projects that were started, effort (time+money) that was invested, but suddenly stopped. "Sludge" was the term we heard from several industry partners, from the AIB/OEM/Distribution industry to the Software/FAE side. We listened to partners complaining that the representatives that they were working with who aren’t reachable simply shut down their computers during important hours. Just one of the results of a scenario with virtually no flexibility is that deadlines will be missed. Problems aren’t surfacing on a 9-5 schedule.

One of the people we asked, and who requested to remain anonymous, is still an important partner for AMD and had to say this about the Radeon HD 3800 launch: "We worked hard on launching a product that would cater to the enthusiast market segment. However, seven days before the launch, we were still waiting to receive something from them. No blueprints, no dummy boards, nothing.  How can we compete with goblins [Nvidia], when their partners launch enhanced products on week one?" Another partner commented on one office in EMEAI (EMEA plus India) region: "I cannot believe that they hired a MarCom person that does not speak English. What is going on in there?

The Radeon launch was subject to a lot of criticism from a lot of vendors, but it got silenced by the Barcelona TLB bug and the cancellation of the Phenom 9700 part.

AMD executives jumping off board

The issue with “The Sludge” spreading inside the company caused several AMD executives to leave the company would span across several pages, but we're going to name just a few:

Henri Richard. One of first things he did at AMD was to establish a partnership with Ferrari. Due to this partnership, the Mubadala Abu Dhabi investment fund (UAE) bailed out AMD with a $608 milion investment and now owns 8.1% of AMD. It is the same fund that owns 5% of Ferrari, with logos located on Ferrari F1 cars and drivers. Henri left the company when the TLB-gate disaster unfolded and  now heads sales and marketing at Freescale Semiconductor.

Dave Orton. probably one of most soft-spoken executives you'll ever meet. Dave was CEO of ArtX, which got acquired by ATI, took the lead of ATI, turned them around, established a partnership with Microsoft, and expanded the company into the desktop, mobile, console, handheld and consumer electronics space. After failing to acclimatize with the new corporate culture, Dave decided to leave AMD in the summer of last year.

Phil Hester. The most recent departure, Phil was brought from IBM to head the AMD Fusion project. He left after the whole Barcelona TLB bug debacle and the delay of the upcoming "K11" core to late 2009 (Fusion processors: Falcon/Swift will feature 45 nm K10.5 core, not K11 - Bulldozer/Bobcat), a key part of AMD's APU (Accelerated Processing Unit) strategy. He was replaced by Mike Uhler (who, however, does not carry the rank of CTO).

Other departures included VPs such as Peter Edinger, Rich Hegberg, Gianluca Degliposti, and Chris Talago, just to name a few. Overall, the number of "leaving AMD" e-mails we've received so far was greater than from any other company we've seen. We have mentioned only executives here, but a lot of people left the PR department as well: Andrzej Bania, Chris Evenden, Lorenzo Martone, Lars Weinand (former Tom’s Hardware Guide editor), Bubba Woolford, Jagoda Zieleznik and many more. When executives and PRs are jumping ship, there is something seriously wrong.


Read on the next page: AMD's Asset Lite is the path to AMD 5.0 – defined by a “MAD” investment, Timeline and Conclusion