AMD Appoints Lisa Su Chief Executive, Replaces Rory ReadIan King
Advanced Micro Devices Inc. appointed Lisa Su chief executive officer to replace Rory Read, swapping an executive who has stabilized the chipmaker’s finances for one who will try to make its technology competitive. The stock fell.
The promotion of Su, 44, an engineer who had been chief operating officer, is effective immediately, the company said in a statement yesterday. Read, 52, who is also stepping down from the board, will remain with AMD through the end of the year in an advisory role, the Sunnyvale, California-based company said. Read had been CEO since 2011.
AMD didn’t directly address why it was making a leadership change just a week before the company reports third-quarter earnings. Reflecting the rushed nature of the announcement, AMD said in a filing that Su is still negotiating with the board on the terms of her new employment agreement and Read is still working out a separation agreement. In the statement, Chairman Bruce Claflin said Su’s semiconductor experience makes this “an ideal time for her to lead the company.”
Read had been working to turn around AMD, a chipmaker that has struggled to jump-start sales growth. While the company rearranged debt and cut costs through job reductions under Read, it continued to lose market share in personal-computer processors against Intel Corp. AMD’s revenue growth is projected to be a percentage in the single digits through 2016, according to data compiled by Bloomberg.
Read said on a conference call yesterday that there was no disagreement behind the change and that he was aligned with the board on the decision.
“I look at it as a natural move here,” Read said. “She’s a semiconductor professional. She loves this space.”
AMD fell 10 percent to $2.95 at the close in New York, leaving it down 24 percent this year. The company has a market value of $2.3 billion.
“The timing of it seems weird,” said Stacy Rasgon, an analyst at Sanford C. Bernstein & Co., who has the equivalent of a sell rating on the stock. “It’s challenging to run this company.”
Su “is probably thought better of than Rory by Wall Street at this time,” because of her more open communication style compared with Read, Rasgon said.
Su, who joined AMD in 2012 and is the first female CEO of a major chip company, is an engineer who held technical positions at International Business Machines Corp., Motorola Inc. spinoff Freescale Semiconductor Ltd. and Texas Instruments Inc. She has a doctorate, master’s and bachelor’s degree in electrical engineering from Massachusetts Institute of Technology.
Su joined AMD in 2012 and inherits some of Read’s initiatives that have paid off. Sony Corp. and Microsoft Corp. have both based their newest video-game consoles on AMD chips. In PCs, AMD has lost sales and trailed Intel in updating its product lineup with better-performing processors.
The two companies are the only remaining makers of processors that are the main components of PCs. Intel has more than 80 percent of that market, according to researcher IDC.
“We won’t transform the company overnight -- it will take time,” Su said on a conference call. “Going forward, it’s all about the technology.”
Su becomes the latest female executives to be named CEO, after Safra Catz was appointed one of two CEOs of Oracle Corp. last month. Other new female chiefs this year include General Motors Co.’s Mary Barra, Reynolds American Inc.’s Susan Cameron and Ross Stores Inc.’s Barbara Rentler.