Hector Ruiz, chairman and CEO of AMD

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Hector Ruiz, chairman and CEO of AMD

AMD's chairman and CEO spoke to itp.net during his recent visit to the UAE about the company's technology plans, the Mubadala investment and financial stability.

There is talk of recession in 2008, IT is usually the first sector to get hit, are you concerned about that?

Only in the sense that if it is a recession, it will effect us, but we don't worry about that, we think that if there is a recession, it is going to be driven by factors that are not technology-driven, it is going to be the price of oil, or subprime lending, so all we have to do is prepare ourselves in case it does.

How did the Mubadala deal come about?

We recognize the importance of this region, where it is located is central to so many places, not only Africa and the Middle East but also eastern Europe and even India to some degree, so we began to get involved here, set up an office, built a pretty good team, which is growing, and in doing so we became acquainted with some people in the region, including the Mubadala people. As we got acquainted with them and they became familiar with our company, they expressed an interest in wanting to invest. We consider ourselves very fortunate to have a partner of that caliber wanting to invest in our company.

Is there going to be any specific R&D or lab initiatives to incubate technology in this region as part of the deal?

Let us separate the two pieces, The Mubadala investment is going to help us be able to continue making the R&D investments that we believe are necessary. Separate from that, from before Mubadala showed an interest, we were on path to make significant investments in this region, because of its location, its attitude toward trade and business is very open and progressive, and also it is very close to the regions of the world where we think affordable technology can have a big impact.

To us this region was very strategic, it just so happens that this Mubadala deal came also at the same time.

Is there any consideration of opening a fab plant here?

First of all the Middle East, in my opinion, whether it is a fab or a car factory, it is only a matter of time before things happen in the Middle East.

I have learnt a lot, I have underestimated what regions can do - when I was in China, I was told about the plans for the Suzhou industrial park, and they said that this was going to be a big industrial park, and I looked at the mud and rice and thought how could it happen? Today it is a wonderful business city. I believe that any region of the world has the opportunity to do pretty much whatever they choose to do, but there are no specific plans.

Since the announcement, shares have dropped almost two dollars, any ideas as to why that drop is occurring?

Trying to predict the market is almost as difficult as the weather, there is a lot of nervousness in the market right now, it seems to be an extremely pessimistic mood right now. When that happens, companies that have volatility, like ours, then their swings are much bigger, so I believe we are suffering from being a volatile stock to begin with, in an environment where everybody is nervous. I personally think it is an overreaction in the market.

How do you reassure your investors at a time like this?

Mubadala are very long term oriented, they did not invest with the idea that in two weeks they are going to make a lot of money. They invested with the idea that this is a long term investment. What we assure them is that the long term projection of the company has not changed, we are disappointed just like everybody else that the near term gyrations in the market are so pronounced, but the long term vision has not changed, we are very excited about what AMD is doing, and I believe our investors believe that too.

Energy efficiency, green computing is very important globally but CIOS in the Gulf that is not the primary reason for them making infrastructure upgrades. What is going to change that mindset?

I think they are in for a shock, I think they are setting themselves up for a giant disappointment. It has now been demonstrated that this idea, of energy efficient computing is not just about being ecologically sound, but it is really about money.

I use a little statistic that is shocking to people, the data centers in the US in 2005 consumed more power than the whole state of Mississippi. That gives you an idea of how power hungry those things are. So any improvement in that 5-10% translates into hundreds of millions of dollars. I think government people who don't pay attention to that are being irresponsible.

AMD two years ago was the Linux of the semi-conductor world, as compared to Intel, is that an image that you still want to push hard in terms of being able to deliver quality and making it affordable, given that Intel is now pushing that message too, how does it change that game?

First of all we are very proud that Intel has followed what we have done, we are flattered by it. We have three things in our company that we believe every thing we do has to fall into one of these three buckets. One of them is energy efficient computing, that is critical to everything from a handheld device to a supercomputer.

The second one is visual experience, we believe that visual computing is now going to be critical in the next ten years plus, visualization is something that has not been exploited, the technology wasn't there but it is now.

The third one is affordable Internet access, which is another way of saying affordable technology. The impact of places like Africa, India, eastern Europe, going straight to broadband and wireless, is really exciting, and for us, the biggest obstacle is making it affordable, we think it has to be useful, accessible and affordable, and we put a lot of effort in working with our partners to do that

You acquired ATI, are there other areas that you could imagine making acquisitions?

Nothing specific, as we move down the path of being a more complete solution provider, there might be places that we need to complement the company, but at the moment, nothing specific.

Are you going to pursue opportunities in specific verticals, with platform technologies or ranges of solutions?

I would use as an example the entertainment side, it is a little easier for us to talk about as we are definitely focused on delivering platforms to the entertainment world. If you look at the recent announcement of the Spider platform, it really is part of this big thing called AMD Live, which allows technology to be much easier to adopt to home entertainment, whether it is for watching movies, editing films or photos - whatever it is, the whole idea is to make the technology really strong, very solid, very reliable and very affordable, and very easy to work with. If you look at the spider platform, if you see the graphics on screen it is pretty powerful.

Is that an area you have to get into to carry on competing with Intel?

I wouldn't view it as a have to, I think it is inevitable that computing is becoming a consumer technology, and I think it is the natural logic of computing. If you go back 20 years, computing was for geeks, IBM PC was a machine that operated on DOS commands. Computer technology just conveyed into consumer space extremely rapidly, and I think that is only going to get more and more so.

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