AMD’s Lisa Su Doubles Intel Challenge with Record-Breaking Xilinx Deal

(Bloomberg) – Lisa Su spent her first six years at the helm of Advanced Micro Devices Inc. turning around the struggling chipmaker. She reduced debts and oversaw the products that launched on time and performed as advertised.

Now she’s going beyond cleanup to challenge Intel Corp. for the head of computer chips.

The 51-year-old engineer – one of the few female tech CEOs – on Tuesday unveiled a $ 35 billion acquisition in shares of Xilinx Inc., one of the largest chip deals ever. In interviews and conference calls, Su made it clear that there were few limits to his ambition. “We are even more prominent in the industry over the next five years than the past five,” she said.

Since its takeover in 2014, Su has erased AMD’s reputation as a supplier of cheap, crash-prone processors, struggling to survive in Intel’s shadow, something its predecessors failed to do so. spectacular.

The purchase of Xilinx, a maker of programmable silicon, will take AMD into new areas such as automotive and communications networking, while strengthening its offerings in the lucrative cloud data center component market. If the deal closes next year as planned, the company’s annual research and development budget will rise to more than $ 2.7 billion. It’s still small compared to Intel’s, but it’s a crucial ingredient if AMD is going to seriously challenge industry leaders.

Born in Taiwan, Su graduated from Bronx High School of Science in New York City and received her doctorate. from the Massachusetts Institute of Technology. She worked at companies such as Texas Instruments Inc. and International Business Machines Corp., then came to AMD in 2012 as senior vice president.

One of the early successes was getting AMD chips into the mainstream game consoles, Microsoft Corp’s Xbox One. and the PlayStation from Sony Corp. But most of its progress has been due to a methodical focus on meeting customer demands – a stark contrast to former AMD CEOs who were known for booming product launches that often went unsatisfactory.

While she has been involved in the innovation of the chip industry, Su dislikes representations of her as a lab-related technical genius, describing herself as an OK engineer. She says one of her main skills is the ability to understand engineers and help them make the best high-level decisions, not do the work for them.

In her usual practical fashion, she has presented the Xilinx deal to investors as a transaction that will first improve AMD’s finances and then the combined company’s transition to future technical leadership. was a need to do mergers and acquisitions for the sake of mergers and acquisitions, ”she said. “This is the next step for AMD and Xilinx is the best franchise in the industry. “

The structure of the Xilinx transaction also shows the power of Su’s transformation. AMD shares have climbed under his watch and the company uses this currency to pay for the acquisition. This will help Su avoid the heavy debt load that crippled AMD ten years ago.

Read More: AMD Tries To Avoid Debt-Riddled Past Agreement Mistakes

The chip industry’s first female CEO now wants her company to be more than just a component supplier. She sees Xilinx helping AMD set the industry agenda by defining new technology, something that has been primarily Intel’s prerogative in computing for half a century.

Getting to this post was not easy. When Su took the top job, she was AMD’s fourth CEO in a decade. The company lost money in six of those 10 years because products were released late, fell short of expectations, or had to be fixed later. That left AMD with less than 1% of the lucrative server chip market, up from a peak of 26%. Before the deal with Xilinx, Su’s most public expression of ambition was to regain that 26% market share. When discussing the future of AMD, she fell back on her standard refrain of “consistent execution” – creating a company that delivers on its promises.

One of her biggest decisions in 2018 helped Su deliver on her promises and set the stage for AMD’s next chapter. The company outsourced the production of its best chips to Taiwan Semiconductor Manufacturing Co. Soon after, TSMC overtook Intel in production technology. Now, AMD’s processors are often as efficient as Intel’s, sometimes better. When announcing the Xilinx deal, Su was careful to point out that her acquisition goal also rests on TSMC’s production prowess.

Read Bloomberg Profile 50: Lisa Su, David from AMD to GoliathIntel from Intel still eclipses AMD. The world’s largest chipmaker has an annual R&D budget of more than $ 10 billion and is expected to make a profit of $ 21 billion this year, more than double AMD’s revenue.

But Intel is making Su’s job easier. The company is going through a series of unprecedented stumbles with its once unmatched manufacturing. It has just started shipping a large number of chips made with a production technique called 10 nanometers, more than three years behind schedule. AMD and its customers are already enjoying the benefits – price, performance and energy efficiency – of a more advanced type of manufacturing known as 7 nanometers. This type of technical leadership helped persuade Victor Peng, CEO of Xilinx, to join Su. has had a great journey as a standalone company, ”said Peng, who will become president of AMD and continue to lead the Xilinx business. “We looked at the landscape and thought about it carefully. It’s about choosing to be part of an even bigger company – which is AMD. “

(Updates with CEO photo after fourth paragraph and link to Businessweek profile.)

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