In a move that will mark a mild shake up in how AMD operates, AMD has announced that they will be undergoing a company reorganization next month. Come July 1st, AMD will be consolidating their various business groups into just two groups, and overseeing those groups will be Dr. Lisa Su, who will become the company’s new Chief Operating Officer (COO).

AMD is citing the reorganization as the latest step in their efforts to transform the company, a process that started in earnest over two years ago in 2012. Since then the company has been making changes to move away from its traditional cost-heavy PC CPU and GPU roots and towards a structure that is focused on mobile (x86 and ARM), semi-custom silicon, and other market areas with lower margins but also lower costs that are more sustainable for a company of AMD’s size and capabilities. AMD is nearing the end of that transformation – after years of losses they’re now approaching profitability at their desired margins – with AMD realigning their business groups ahead of some of their final steps, including becoming a fully ambidextrous company through designs such as the K12 CPU.

As part of that general transformation AMD’s business groups have already begun to overlap some, so now AMD is taking the next step by making it official and consolidating the relevant groups. AMD’s client, consumer graphics, and professional graphics groups will now be combined under a single group, the Computing and Graphics Business Group. By bringing together those three groups like this, this change effectively consolidates all of AMD’s core technology teams in to the same group, CPU and GPU alike. In this case in particular the lines between CPU and GPU have already been blurring for some time, with the bulk of AMD’s “CPU” business having shifted to APUs (CPUs with integrated graphics), so in a sense this is the formalization of the fact that AMD cannot build complete CPUs without technology from their graphics group.

Meanwhile AMD’s second group will be the Enterprise, Embedded and Semi-Custom Business Group. This group consolidates the server, embedded, and semi-custom groups under one roof. This structure does mean CPUs are essentially split – an Opteron sale is now an Enterprise sale rather than being kept with the Computing group CPU sales – but otherwise this marks the combining of AMD’s “fringe” groups such as SeaMicro and the semi-custom groups, which in contrast to the core technology focused Computing group are focused on building designs and applications around AMD’s core technologies.

Both of these new groups will also see their relevant sales appendages integrated into them. AMD currently has a separate sales division, which will no longer be the case after the reorganization.

Heading up these groups both directly and indirectly will be Dr. Lisa Su, who is getting a promotion from Senior VP and GM of Global Business Units to the C-level position of Chief Operating Officer (COO). AMD has not had a COO for a few years now, so this marks the return of that position to AMD’s executive organization and arguably makes Lisa AMD's second-in-command. Meanwhile AMD’s Chief Sales Officer, John Byrne, will also be getting a promotion of his own, which will see him move up to SVP and GM of the Computing group.

In regards to AMD’s new structure, Lisa will be taking direct control of the Enterprise group on an interim basis. Meanwhile Lisa will have indirect oversight of the Computing group, with John serving as GM of that group and reporting to Lisa. Lisa in turn will now report directly to CEO Rory Read.

Ultimately the consolidation of AMD’s businesses is not unexpected, especially on the core technology side where APUs and AMD’s HSA initiative has greatly worn away the distinctions between CPUs and GPUs. Meanwhile the shifts in leadership bring with it new mangers and new reporting structures, so although things will be changing at AMD it doesn’t sound like AMD’s development processes will be affected on the whole – though management shifts often come with smaller internal changes.

But perhaps the single most visible change from this may end up being how AMD reports their financials. Currently AMD separates their CPU and GPU businesses as the Computing Solutions and Graphics Solutions respectively, with Graphics also including semi-custom business and game console royalties. If AMD changes their financial reporting to match their new businesses then we’d be able to more easily see how AMD’s semi-custom and console businesses stack up, but AMD’s CPU and GPU businesses would be indistinguishable. AMD hasn’t commented on the matter in their press release, so we’ll have to see what they do for their Q3’14 results later this year (where the combined groups will have been in effect for a whole quarter). Update: AMD tells us that we can expect an update on how they'll be reporting financials in their Q2 earnings call next month.

Source: AMD

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  • Dribble - Friday, June 13, 2014 - link

    Other then by AMD getting developers locked into there technologies (mantle) so they have better performance through optimized code.
  • SleepyFE - Friday, June 13, 2014 - link

    How is Mantle still considered an end product. The damned thing is still in development, nothing is final. If they released the specs now Nvidia would just pick the parts they liked and made their own version (CUDA 5.0 or something). Then we would have two new API's. The fact that you can try it out is just good will.

    Also they did say that nothing (except not giving them the code yet) is stopping Nvidia from supporting Mantle on their hardware. We'll see how it turns out. Don't declare your hasty conclusions that they were purposefully vague about.
  • StevoLincolnite - Wednesday, June 18, 2014 - link

    Mantle isn't going to be forever locked to AMD, it will eventually be opened up and someone like nVidia or Intel can build their Drivers to support it.

    However, with that said... Even if Mantle flounders, it's done it's job as it prodded a stick over at Microsoft to bring some low-level API advantages to Direct X 12.

    Converesly, TressFX and TrueAudio both AMD technologies are open enough that nVidia if it so wanted, could actually support it.

    On the flip side... You just need to take a look at PhysX to see the kind of damaging "lock ins" nVidia can do to the market. I.E. Performance degradation for non-nVidia users.
  • LaughingTarget - Saturday, June 14, 2014 - link

    The problem AMD has right now is that they're not financially healthy. The company has failed to produce an operating cash flow in three of the past four years and posted a negative $204 million this past quarter. The company couldn't generate internal cash even on a $400 million profit in 2010. AMD has lost 90% of its market capitalization since 2006 (a trend pre-dating the financial crisis so that isn't even an excuse), is worth just 1/3 of what Nvidia is and has lost over half of its entire balance sheet equity in four years.

    Because of poor financials, AMD is unable to compete on two major fronts - CPU and GPU - effectively. Nvidia alone is outspending AMD by 50% in R&D and when Intel is thrown into the mix which is spending 10 times as much, AMD is just being overwhelmed.

    Even if AMD focused purely on the GPU market, they would be overwhelmed by Nvidia's superior financial position. AMD is further cannibalizing its internal capital base to maintain cash for operations and is not investing in new capabilities. AMD is currently on path to be left behind in the GPU and CPU markets so badly they won't be able to catch up.

    Another problem with AMD is that they're active in the console space. The key problems with the console space is that the technology required starts at two generations behind the current technology, has extremely low margins and is unable to take advantage of economics of scale and becomes a major burden as the console generation ages. In five years, AMD is going to have to maintain fabrication capability to produce extremely out of date hardware and produce it at margins that can fit within a final selling price of $200, which has to be split between CPU, GPU, mainboard, memory, storage, network controllers and input devices. With AMD locking itself into all three of the consoles as a primary supplier, they're setting themselves up to take large losses the company can barely handle as it is as the generation ages.

    Further, AMD has a poorly developed customer development capability. The customer is not you, you're the end consumer, but the B2B component. The major reason why Nvidia is the market leader is a far superior business relationship capability. AMD is rather poor in maintaining key account customers, which allows Nvidia that can now and again sell more expensive but inferior chips without much worry of AMD supplanting them. AMD hasn't been able to convince buyers that their product is a superior value.

    AMD is further harming itself by attempting to develop its own custom API, Mantle. These are resources the company can ill afford to produce since they do not have the necessary business connections to convince large volume buyers that Mantle and the AMD chips needed to run them are a good deal. One of the causes behind 3dfx's failure was attempting to push GLide and diverting resources away from producing a quality DirectX experience, which is what Nvidia focused on and ended up driving 3dfx out of the market.

    Since AMD is no longer in the financial position to effectively continue competing in the CPU or GPU markets, they'll have to find an avenue where their deteriorated financial position and weak market reputation aren't going to be a hindrance. Since AMD still has a competent and capable engineering staff, they can refocus their competencies into the mobile space and cut ties with GPU and CPU production which the company lacks the resources to continue competing with. AMD is much better than Intel at producing inexpensive and efficient chips, so their competencies are better matched to mobile production.
  • przemo_li - Tuesday, June 17, 2014 - link

    Really, really, really strange post.

    Maybe that is because You cut out TIME FRAMES from Your forecasts.

    But first You acknowledge AMD superior skills (they got ALL consoles for being inferior in design?), and then claim, that they do not have capability to create such skills (crisis started before GCN was made).

    If AMD is capable of APU development, why should they chop that into pieces?

    (However I do agree on the trend to finding better ways to conduct their R&D, bad ass simulators required for current day dGPU ain't cheap - and not always are enough)
  • LaughingTarget - Friday, June 27, 2014 - link

    Not sure what you mean about timeframe being off. The most recent quarter was also a large cash loss that was tempered with continued sales of internal assets.

    Nvidia was rather public in the fact that they simply chose not to bid on the latest hardware generation of consoles. AMD didn't beat them out on the contract, Nvidia didn't want to play given the low sale price necessary for the unit production. Nvidia couldn't justify the low margins.

    AMD is already chopping its capability. With only 2/3 of the investment base of Nvidia, they're attempting to split that between a broader product base than the competitors are. The API might be good, but at the end of the day, they do not have the resources necessary to support API development along with GPU and CPU investment. Besides, AMD's business connection and key account management is atrocious. They'd have to convince hardware resellers to prioritize AMD hardware if Mantle is ever going to be a success. Since Nvidia and Intel are unlikely to license out Mantle on their hardware, AMD has to green field develop a larger customer base.

    The financials don't lie. AMD is not healthy and they can't handle all the projects they're currently committed to. Companies can't bleed cash for years and remain in business. I'm still concerned that the company won't survive past 2016 at this rate.

    To deflect fanboy nonsense, especially since I doubt you bothered to even look at their quarterly reports (or could understand it for that matter since you find the analysis "strange"), I've been exclusive AMD for my personal built systems since the Winchester chip.
  • Zoomer - Tuesday, June 17, 2014 - link

    Didn't realize AMD owns all the console manufacturers.

    -> Console manufacturers usually license the design and then make the part themselves.
  • TristanSDX - Friday, June 13, 2014 - link

    They fall every year with market share, revenues and headcount, so they must constantly restructure itself to match smaller size of business. Soon they reach start-up or garage level business.
  • ZandalarZandali - Friday, June 13, 2014 - link

    So since when was a market cap of 3.26 Billion anywhere near start up business level? They've only restructured once so far, and this would be it technically.
  • Wreckage - Friday, June 13, 2014 - link

    That's about what a headphone company just sold for.

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