AMD Appoints Lisa Su as New CEO, Shares Down 6.4%
Advanced Micro Devices, Inc. (AMD) recently announced the appointment of its Chief Operating Officer, Lisa Su, as its new chief executive officer (CEO). Following the news, the shares went down 6.4% in the after trading hours.
The 44-year old Lisa Su joined AMD in 2012. She climbed the ranks over these two years and was appointed as the COO in June. Su will now be AMD’s new CEO, effective immediately, replacing Rory Read. However, Read will remain with the company in an advisory role until the end of the year. Currently, Su is paid an annual base salary of $650,000, with her new increment figures not yet finalized.
AMD is the world's second largest manufacturer of microprocessors but it has recently been losing ground to its larger rival, Intel Corp (INTC). Under Read’s tenure, though the company rearranged debt and reduced its costs through job eliminations, it continued to lose market share in personal-computer processors to Intel. Also, despite improvement in the overall PC market, consumer market continues to remain under pressure. As a major share of Advanced Micro's chips is integrated into consumer desktops, it could likely suffer and apparently continue to lose market share to Intel.
Over the past two years, AMD has been expanding in high-growth high-potential markets such as game consoles and low-power servers. Read has been making continuous efforts to reorganize, speed up and ultimately reinvigorate the brand, but progress has been slower-than-expected.
Therefore, in order to expand the company’s bottom line and stay ahead of rivals like Intel and NVIDIA Corp. (NVDA), we believe that Su needs to execute her plans well. She needs to come up with new ideas to generate more resources for investment into newer business areas, site consolidations and Internet-related opportunities (mainly cloud computing).
Su stated that she would focus on identifying future product needs and increasing revenue base, rather than aiming at existing smartphones and tablets. The company hopes that Su will be able to generate fruitful results with her wide experience in the technology domain. She is an engineer who held technical positions at International Business Machines Corp. (IBM), Motorola Inc.’s spin-off Freescale Semiconductor Ltd. and Texas Instruments Inc. Additionally, she has a doctorate, master’s and bachelor’s degree in electrical engineering from Massachusetts Institute of Technology.
Though the company’s recent results have been impacted by the weak PC market, we believe Su’s expertise should help AMD to get back on the growth track.
Advanced Micro is expected to release its third-quarter results on Oct 16, 2014.
Currently, Advanced Micro has a Zacks Rank #3 (Hold).
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