Management Turnover as Change Agent

Tuesday, October 7, 2008

New AMD CEO Makes Real Changes

AMD's AMD (NYSE) new CEO, Dirk Meyer, who took over the position back in July (see blog), has succeeded in coming up with a new way for re-structuring the struggling chip maker.  Today the company announced it would be spinning off its manufacturing arm into a new business and giving away its debt.  The new business will initially be called the The Foundry Company.  The original company will continue focusing on the design of computer chips and will be run by Dirk Meyer.  According to a CNET story by Brooke Crothers,
The newly created Foundry Company was described by AMD Chief Executive Dirk Meyer on Tuesday as a "brand-new and leading-edge semiconductor manufacturing company." It will be run by Doug Grose, who will relinquish his current role as AMD's senior vice president of manufacturing operations to become CEO of The Foundry Company.
... Hector Ruiz--the current AMD chairman--will relinquish his role as AMD's executive chairman to become chairman of The Foundry Company. 
As part of the change, AMD managed to succeed in bringing about this shift through a major additional investment of approximately $6 billion from Advanced Technology Investment Company (ATIC) and Mubadala Development both of whom are investment arms of the Abu Dhabi government and already own a large share of the firm.  It still remains uncertain how much in the end the latest dramatic changes will make for the firm in relation to its major competitor and remaining industry behemoth, Intel, but at least the company appears to be making some significant changes.  

Maybe Meyer has more up his sleeve.  Stay tuned.

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