00:00The race to design the most powerful computer processors is one of the most intense sports in the tech industry. When Lisa Shu an engineer by training took over FMD in 2014 she not only became the first female CEO of a major semiconductor company she also kicked off one of the biggest transformations in industry history turning a lagging maker of low end chips into a juggernaut known for the superior performance of its products. Shares are up more than 2000 percent under her tenure and AMG chips short for Advanced Micro Devices are now embedded in everything from Microsoft's X Box to Sony PlayStation and Apple Macs to massive data center machinery semiconductors the brains. Or you could call them the guts of all of our devices. Never got that much glory until the start of the covered 19 pandemic. When demand for chips shot up so much so fast it triggered an unprecedented global shortage. Raising alarm from Washington to Beijing. Joining me now to talk about when the chip shortage will end how she turned the company around and what's next for Andy. On this edition of Bloomberg Studio 1.0. Andy CEO Lisa Shu. You called 20 20 an inflection point for a M.D. given the robust demand for everything from pieces to consoles to data centers and laptops. If 2020 was an inflection point what's 2021. It's a great question Emily. You know I think when you look at the pace of technology right we we've been developing these technologies for like you know five years. Right. So we made these decisions on hey this is where computing is going. And 2020 was a phenomenal year. You know we grew revenue 45 percent year on year. It was an inflection point for our business. Now as we come to 2021 what we see is it's a mega cycle for four compute. I mean it's like you know if you had asked me a couple of years ago would we have this kind of demand whether you're talking about PCI or gaming products or the data center I would have been surprised. And so it's a mega cycle for compute. And on top of that you know we have you know just extremely strong product portfolio and so on. So yeah it's a mega cycle. That's what I would call 20 21. Andy Chips are at the heart of the Sony PlayStation Microsoft's X Box laptops of all kinds. Apple's Mac Pro Amazon Data Centers. What are the new products that you have targeted to meet this new demand. Well so frame they are our focus sort of what we're good at is high performance computing. So when you think about you know computing and processors are really you know the brains of all of the things that we use on a daily basis. And you know so for our products it's around high performance pieces. So when you're thinking about your next generation notebook and you're thinking about all the productivity you want I hope you're thinking about M.D. It's the next generation. Game consoles are actually the current generation game consoles. I think Microsoft and Sony with X Box and PlayStation have just put out phenomenal products that are extremely extremely exciting and we're proud to be a part of that. And then it is about your data center and what's beneath what's what's sort of behind the scenes and you know all the digital transformation that companies are doing the fact that you know we all pivoted to work from home and running large scale businesses you know from our study I mean that right requires incredible computing horsepower in the back end in the cloud or in on from data centers. So those are the types of products set that we're in. How far in advance do you plan your products and how do you know you'll have what the world wants by the time they're ready. That that is in fact the most difficult thing and probably the most fun thing. It's really we have to think three to five years in advance and we have to think hey these are the things that are going to be most important. And it's about providing you know more performance in smaller form factors. It's about having you know very extended battery life. It's about providing new experiences. It's about enabling companies and businesses to do something that they couldn't do before. And we do plan years in advance. But I will tell you. Emily what this year's taught us is we can turn on a dime. And we have been very actively working with our customers working with our partners on what their top priorities are. And that turning on a dime has proven to be a very useful capability. Meantime the chip shortage I've been talking to a lot of industry CEOs over the last several months and it sounds like it has been a disaster. You have demand outstripping supply by more than 30 percent. What are you seeing. You know I don't think I would use the word disaster Emily. I would use the word. It is a it is a cycle. And you know semiconductors you know I mean I've been in this industry whatever 25 years her long time. You know something. Conductors do go through these cycles and the cycles where they're sometimes when supply is much greater than demand and there's some times when demand is much greater than supply. And this particular cycle is special because what we're seeing is the incredible demand for all things that require chips is is having sort of all markets you know sort of wanting more more more supply. And yes it's a lot to manage. But I have to tell you this industry is also really good at managing these things. And you know it does take a while for the supply and demand imbalance to to balance it selves out. But we are very much working together as an industry. And you know I'm just amazed frankly at what people are able to do when they really put their minds to it. Once the shortage ends then is there going to be too much supply. Will supply outpace demand. Well as cycles go you know you do go through ups and downs. I think what's important Emily is it's it's also the strength of the product portfolio the markets that we're addressing at M.D.. We've chosen markets that we think are very resilient like everyone's going to need more computing whether it's this year 2022 2023. We just think community computing is one of those trends that that you're going to need more of. And so we've been investing in those types of areas. So you know my view of the world is that it's important to have the right products. It's important to be in the right markets. And then of course executing well along the way. AMG is one of several companies that has sent a letter to President Biden urging him to include more funding for chip manufacturing and research in the United States. Adding that you know it's competition with China. It's competition with Taiwan that is at stake. What do you think the U.S. needs to do. Well I think the U.S. is the leader in semiconductors and we want to stay the leader in semiconductors. And frankly you know many of the countries around the world are investing in the same. And then there's also a discussion about manufacturing and ensuring that there is a good balance of manufacturing across the globe as well. So I think you know all of those kind of raise the level of importance of semiconductors. And I think it's it's great that the administration is choosing this industry as one of the priorities to ensure that the U.S. maintains its leadership in semiconductors. Andy chose Taiwan Semiconductor to make Andy chips. And I wonder if there's something about Taiwan. You know what is the reason for this very prolific industry there. And producing so much top tech chip talent is there's something about the island that makes it so fruitful. We're very happy with our partnership with Taiwan Semiconductor. You know they're there. They're actually the best in the industry. And so you know when we think about taking our design capability which we think is you know at the top of the industry and combine it with their manufacturing expertise that's the best in the industry. That's how you get sort of the best products. And so certainly we're we're we're happy with that. But I think the key is sort of investing in that long term nature and ensuring that you have the right capabilities for this industry because frankly it does take many many you know double digit billions to keep pushing the leading edge. Meantime here in the U.S. you have many trillion dollar companies Apple Amazon Google bringing their chip designs in-house. Where does that leave a M.D.. Does that feel like a competitive threat. Well I look at it slightly differently I look at it as the you know the importance of computing in all products is just going up and up and up. And so as you see there will always be some specialization and you know very very you know somewhat. Some of the companies you mentioned you know certainly Amazon and Apple are very very strong companies. They will do some specialization of their chips. That being the case I mean you know we just started with you know 2021 is you know sort of we're in a mega cycle of computing. All right. So I think you know our role is really to push the envelope on computing and continue to raise the performance and the capabilities for all applications. Then there's of course Intel and in video is also a big pool of resources. Intel has a new CEO Pat Gal singer who's coming out strong saying Intel is back when the competition has a lot of money and some would say momentum. How do you view that competition. Well it's always been very competitive. Emily I don't I don't remember a time in this industry when it hasn't been competitive. What I will say though is I'm really really pleased with our you know what we've been able to accomplish. I mean it's it's fun to be able to say that you know we have really driven the direction of computing in the industry. I mean it's fun to be able to say that. And if I look at some of the things that we've done over the last five years we've really changed you know sort of what people expect from high performance computing. So I would say it's a competitive world and we're going to be very competitive in the process in video is in the process of buying arm. Do you see more consolidation in this industry or have we hit a tipping point. Well I think for the highest and sort of the bleeding edge of technology you know scale is important. So when you're when you have more engineering capability when you have a larger supply chain when you have a bigger impact on your customers sort of innovation you know scale is important. We're very excited right now that we are in the process of acquiring Xilinx. Know Xilinx is number one in the FPGA market and accelerated computing market as we think about bringing that together with HD technology. We'll be able to offer more capability and more overall system design for our customers. So I do think consolidation is one of the trends in the industry. Does that mean AMD is going to keep looking for deals. We're very focused on completing our Xilinx acquisition. We're on track to do that by the end of this year. And we'll always be looking for you know how do we bring the best technologies together under the AMC umbrella. Did you ever think you were gonna be a CEO let alone a CEO of one of the biggest chip companies in the world being a CEO of a semiconductor company and being CEO of M.D. really is. I've said it before. I'll say to get it is like a dream job. You're an engineer by training. You're also an immigrant. You came to the US from Tijuana at an early age. Tell us a little bit more about your upbringing like. What was it like growing up. Lisa Su Yeah sure. So I was born in Taiwan and my my parents immigrated to the US. My dad was was coming to graduate school here. So I grew up in New York. I would say pretty normal. Emily Chang Pretty normal. New York New York upbringing. My parents wanted me to focus on you know hard stuff. So math and sciences where I spent a lot of time. But yeah I would say you know I sort of drifted into engineering as something that was sort of real and you could touch it and feel it and do something with it. And that's. That was sort of how I grew up. Well I want to talk about how the drifting happen. Can I understand your father was a statistician. Your mom ran her own business. You played around with your brother's toys. I believe at a young age. Like how did you get there. Well I was just really curious as a kid. And so you know you know my my brother had a remote controlled car and it stopped working. And I wanted to know why. Right. So you know I opened it up and said oh this wires loose. Maybe if I put it there it works again. And it was just really amazing frankly. It was amazing to see that you could make something sort of work and you could understand how you could put these things together. And you know I went to the Bronx High School of Science which was very science focused. And so I got you know some. You know I learned about computers in high school. And you know that's those are those are some of the steps. You worked your way through the engineering and technical ranks of various companies Texas Instruments IBM. You were Lou Gerstner the CEOs technical assistant for a time Freescale Semiconductor. Did you ever think you were going to be a CEO let alone a CEO of one of the biggest chip companies in the world. You know I wouldn't say that I thought about that. I think the way I thought about things was always you know I wanted to make a larger impact. And so I spent a lot of years at IBM and I was the first time that I built products that you could actually go buy you know at the Best Buy or. And I found well that's pretty interesting. And with each opportunity I got to you know to run larger and larger teams. I would say you know being a CEO of a semiconductor company and being CEO BMD really is. I've said it before. I'll say it again. It is like a dream job. You know it's something that you don't quite say that that's what you want to be when you grow up. But you know when you grow up it's kind of a nice thing to be. So it was so interesting. Going back and looking at the history of Andy because you started at the company when analysts were worried Andy was going to run out of money after several straight years of losing money I believe shares at the end of 2015 were trading at two dollars and eighty seven cents. Now they're trading at 30 times that. What drove you to take on that challenge in that moment. Back in 2014 I start from the notion that what we do is just like really hard. There are very few companies in the world that could do it and the opportunity to lead a M.D.. And at the time you're right there were some people who are like you know are they going to be able to get this together. And so on and so forth. But I knew in my heart I mean I've seen it over and over and over. If you have the right strategy and you have the right people and you have the right focus and execution you will be able to do something amazing. So what do you think was responsible strategically for Andy's comeback. We made a couple of very good decisions. We said first of all our strategy was to focus on what we're very good at and that's high performance computing. And that means that there are some things that we were not so good at. And we said that's OK we're not going to be the best at everything. And then we really did focus on the foundation. Emily. I mean I know this sounds simple but it does take five years you know to to really build the foundation step by step of what you know how you build products and making sure that we're you know we're we're really pushing the leading edge. And then on top of that we build great relationships with our customers. And you know we started with the notion of what problem are you trying to solve and let's work on that together. So I think you know we put a really great team. Right strategy strong execution. And you know my mantra is we do what we say we're going to do. Now that Wall Street is happy does that mean you can relax a little or does that create even more pressure to be excellent. Without a doubt it does not get easier. So fast forward now to today. Now that Wall Street is happy. Does that mean you can relax a little. Or does that create even more pressure to be excellent to keep upping your own game. Oh without a doubt it does not get easier. I say that it doesn't get easier because you know we're in a very competitive market. I think we have big ambitions about what we want to be able to do. I think it's always about you know sort of what's next on the horizon. What does get a little bit easier is just the track record. All right. So you know I think well when I would say back you know three or four years ago when I said hey something was going to happen people were like really. And now when we say hey something's going to happen I think people people sort of understand. Now Andy also has an award I believe for a 5 percent award to recognise excellence when an employee makes a product or delivers 5 percent better. How do you balance the incremental with the five year plan. Well it's it's actually called the next five percent of. And the way I think about it is look we are very ambitious and what we want to do over the next five years. But then I think we also I encourage people to learn from every interaction and every project. And and that's what the next 5 percent is all about. It's like what have we learned. What can we do better the next time. How do we up our game. Because as I said the world's a very competitive place and we want to make sure we're always upping our game. There's no question you know we're at a moment of reckoning for women for Asian-Americans in general but also in leadership. And you are so unique in this sea of white men in this industry. What is your advice to people out there who look at you and think like how did she achieve what seems to be impossible. I would say that it is a time where we want to recognize great people and give them good opportunities. What was really important for me in my career is that that I was given opportunities and frankly I learned through each one of those opportunities. And so what I would say for four women is who are aspiring to do big things you know be ambitious in what you think about be ambitious and what you think about. You know I have a saying that that a mentor once told me about running towards problems. You know take on that big hard task even if you don't know how to do it you're going to learn a tremendous amount in the process. And frankly you're going to surprise yourself about how much you can do. And you know what we have to do as you know the rest of the ecosystem is provide those opportunities and provide people an opportunity to learn and maybe make a few mistakes along the way but really develop as they as they go through their careers. Do you think mentorship is really important in the own sort of next to your own next chapter of your career. I really do Emily. I mean you know again I'm a product of people who helped me along the way and I really really recognize that. I mean I was given opportunities that other people didn't have. And I feel like I can do the same. And in particular for women in engineering that's a particular passion of mine because frankly they're not enough. And and women are sometimes a little bit shy in their you know in their approach to things. And so you know if I can provide that a little bit of confidence and a little bit of help to some of our top you know the top engineering talent of of the future you know that's something that I should do and I love doing. Meantime the chip industry has been defined for so long by Moore's Law. And this idea that you can double the amount of computing crammed on to a single chip every couple of years. Are we at a point where Moore's Law could be ending. Ken Chips get even smaller than they actually are. So I do believe that Moore's Law is significantly changing. That's the way we should say it. So it's changing because you know the traditional ways that we have you know shrunk chips and put more transistors on a chip. You know those things are just getting harder. Like you're reaching physical limits. But there are other things that we're doing to you know to keep that productivity increase. You know one of the things that we pioneered was this idea of triplets. And so what that means is we can you know we can break up a big chip into little chips and we can package them together and we can put them on top of each other and we can do all kinds of things that really brings more capability into. The technology realm so I think Moore's Law is changing. I think what that means is you know other things like packaging and using using different techniques will be more important. But one of the things that I truly believe though is that the innovation is not going to stop at all. And there are so many ideas for how do you keep the productivity increases going on that that will continue to drive real capability. It'll just be done in a different way. So what about what's next for you. How long do you see yourself running Andy. Well I gotta tell you I'm having so much fun employees that there is there's no better place to be. Honestly if you're if you're thinking about really having the opportunity to interact with so many smart people in this type of ecosystem and you know chips are fun now right. Everybody's talking about chips. So this is a great place to be. Lisa Sue CEO Andy thank you so much for joining us. It's been great to have you.

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Bloomberg Studio 1.0 - AMD CEO Lisa Su

With the semiconductor industry facing a global chip shortage, one company in the eye of the storm has been experiencing a meteoric rise: AMD. At the helm is engineer turned CEO Lisa Su, who transformed the company into a chip powerhouse. Shares are up 2240% under her tenure and AMD chips, short for Advanced Micro Devices, are now embedded in everything from Microsoft’s XBox to Sony Playstation and Apple Macs to massive data center machinery. On the latest Studio 1.0, Bloomberg’s Emily Chang sits down with the chief executive to discuss AMD’s impressive comeback story; her bets that are paying off in rising market share and stock price; and the road out of the chip shortage. (Source: Bloomberg)