Now that a few hours have passed since the news was announced, more details about Rick Bergman’s departure from AMD (NYSE:AMD) have come to light. Instead of being apocalyptic-ally bad, it is now a range from awful to apocalyptic-ally bad.
The short story is Rick Bergman is suddenly gone from AMD. There is no good way to spin this, but there are two scenarios that could have lead to it. SemiAccurate’s corporate switchboard lit up last night, and singing moles were serenading our offices until the wee hours of the morning. None of them brought good news, but some bits were less bad.
Of the two scenarios, the most problematic but least likely one is that Rick Bergman was fired. While it is possible, a firing is so unlikely it is almost a certainty that he wasn’t fired. Why? First up, AMD is in a quiet period, and Bergman is high enough in the company that they had to file an 8-K about it. Everyone SemiAccurate talked to yesterday said that this is something you simply do not do if you are in a quiet period, period. AMD has lawyers more than capable of strangling anyone who makes them deal with an SEC complaint, so this rule of survival probably holds there too.
Another thing is that if Rick was part of the inevitable new CEO transitional housecleaning and dinner party, he is unlikely to have been the first one to go. Most companies have executives that almost everyone agrees need to go, and he wasn’t among them. More importantly, as of this morning, four separate sources and several analyst reports all say that Bergman wasn’t fired.
That brings us to the next scenario, he left voluntarily. Fair enough. If you look at the turnarounds at ATI and then AMD, Rick is widely credited with being a major factor in that. This makes him a very sought after person in the tech industry, and he was no doubt being actively courted by headhunters all the time. If he turns up in a CEO position in the next week or two, we won’t be surprised. (Note: You don’t know how tempting it is to start a rumor here about Rick going to Apple as the new CEO. Bad Charlie, bad Charlie. Just watch though, because I said it was a joke, it will probably happen.)
So, what does it mean? As we said yesterday, if Bergman was fired, it could be the end of AMD. This is the apocalyptic scenario. As of this writing, we no longer think what is that bad, it is just very very bad. Bergaman was one of the bright spots at AMD, the new breed of managers that took part in moving the company from something that couldn’t hit a deadline if their lives depended on it, to something that is competitive again.
If you look at AMD over the past 2-3 years, they have been remarkably good at doing what they promised. Recent process based problems aside, they are putting out chips that people actually want and fill consumer needs. There are problems, but they are solved in short order, and don’t tend to get repeated. This isn’t another Barcelona, and that is due to internal process and workflow changes, basically good management. Rick is far from the solitary reason for this sea change, but he definitely was a big part of it. Losing him is bad thing #1.
Next up is the inevitable brain drain that follows. Once one high level and well respected exec leaves, others either follow or look for different and greener pastures. There is currently a huge brain drain at AMD, especially at the ex-ATI campuses. For weeks now, some of the higher level engineers have been leaving, and they are not all going to one place. The one really painful loss that we know of is Dr. Gamal Refai-Ahmed, AMDs thermal management guru and founder of the upcoming TFE conference. While this current exodus isn’t directly related to the current changes, it is a worrying trend that high level engineers like this are leaving. These are bad things #2 and #3.
That brings us to bad thing #4, and it may not seem that way, but it is possibly the worst problem out there. If you read the AMD press release about the changes, there is a big and somewhat overlooked second change, a new hire. Paul Struhsaker joins AMD from Comcast as Corporate VP and GM of the newly formed Commercial Business Division. Newly formed is the key phrase here, you can read this as a pre-announcement of an impending reorg. New CEO = reorg? How shocking. Not. That said, it probably played a role in Bergman’s calculus about the merits of being elsewhere.
This reorg ties in with the rumors of an impending announcement about a focus on phones, tablets, and widgets at AMD. We should point out that this worked out really well for Intel, and AMD is so well regarded in that space that they were the only ‘valued partner‘ not mentioned in the MS keynote at their recent Build debacle. Are you feeling the love too? I really hope AMD has a cunning plan here to somehow not do what Intel did in this space. Bad thing #5.
More problematic is that that everything we are seeing is the AMD board is putting in people from companies that they are familiar with, and moving the company in directions that are borderline suicidal. It sends a very clear message about who is calling the shots, and is pushing things in a direction that we strongly disagree with. Nothing like abandoning your niche to fill an already over-occupied niche.
It says AMD is looking to throw away their one competitive advantage, x86, to fight an uphill battle against ARM and the 17.619 billion partners that company has. As we mentioned, this worked out well for Intel, and they have process tech two generations or more better than AMD has access to. If these hirings are coincidental, and there isn’t anyone calling the shots, good. If not, bad thing #6.
All in all, given the information that has come in to SemiAccurate over the last day or so, things may not be apocalyptic, but it could easily fall in that direction. Any misstep by management could lead to many key people jumping ship, and years of subsequent floundering. The rosiest scenario is that AMD lost one of their brightest spots yesterday, and there are no good things to balance it out. At best, there are four or more really bad things happening at AMD, at worst, game over.S|A
[insidejoke] To RickyB8675309@yahoo.com: I waited for you in the usual spot, by the elevators in Building 100 on Wednesday the 31st. LN2 was in the air, and the scent of He was wafting from the air vents, but you never showed up. If you had, I would have told you about this career move like the last few. -NotAStalkerReally31337@bingmailsupcomingrename.com [/insidejoke]
Editor’s note: A previous version of this story originally appeared. That version was unfinished and the person responsible for hitting the wrong buttons will spend the weekend alternatively being lashed with a wet noodle and shocked with a cattle prod. Apologies.