AMD: Let's start with what's in the glass …

Back when I was a smug 20-something and went on one of my very first real-world job interviews at a New York daily newspaper, the interviewer, trying to get a better grasp on who I was, took a sip from a Styrofoam cup, plopped it down in front of me and asked: “So, are you a glass-half-empty or glass-half-full type of reporter?” My answer: “Depends on what’s in the glass.”

I found myself at the New York Stock Exchange this morning, brought back to that memory as AMD’s CFO, Bob Rivet, spoke about the MPU maker’s position with the financial community. “I fell like I have a challenge today. I feel like you are in the glass-half-empty mode,” he told the room full of analysts and Wall Street watchers, many of which have issued negative reports on AMD’s value as its stock continues to fall from the already low $10 mark it hit at the end of November. 

Rivet’s theme played out in his presentation and presentations from the other AMD execs, including chairman and CEO Hector Ruiz; president and COO Dirk Meyer; and executive VP, computing products group, Mario Rivas, when they spoke on behalf of the company’s 2007 performance and 2008 objectives. Their hope was that this room full of analysts and press would look beyond the mess AMD made with Barcelona, its falling stock, and the handful of other missteps the Sunnyvale, Calif.-based company made in 2007, to the positive things it has done, including expanding its business relationship with Toshiba, if its leadership took responsibility and admitted its mistakes. 

Credit should be given for their bravery and stand-up attitude. It’s not every company that would walk into an event like that and start off by humbling itself. But the theme of apologizes and expressed disappointment seemingly became a fallback for the execs, with the four named above making the statements over and over, presumably as a distraction during the Q&A session.

As analysts pressed for answers on the company’s asset lite (or “asset smart,” as AMD likes to call it) manufacturing strategy or their responses to OEMs about the quad-core debacle, the “we’ve learned from this/we’re humbled” acknowledgement of the mistakes was repeatedly shared opposed to insightful replies. Instead of telling the financial community what’s in the glass – ie details on what’s going on with the capacity strategy or deep, specific projections for 2008 – so they could better evaluate the MPU maker, the execs left the attendees parched for more information and clarifications.

AMD’s reluctance or perhaps unwillingness to provide answers to the financial community’s questions took the tone in the room from uncomfortable to outright hostile. True to their nature, the analysts fired back with their own repetitive questions. When one asked a question and it was side stepped, another popped up with the same question rephrased. I especially enjoyed one analyst’s question, through which he was reworking a more professionally stated question on Barcelona’s impact on customer relations, by asking how “pissed off” AMD’s customers were by the quad-core mishaps. But, again, AMD’s Rivas turned it back to “Customers are disappointed, which hurts more than being pissed off,” and moved on to the next question. 

I also felt a smirk come over my face when one analyst asked for more details on the Barcelona “glitches” that postponed volume shipments and Meyers responded: “This is not a very good forum to conduct a design engineering forum.” Really? Because the audience, while it was dollar and cents based, does have some understanding of what chips are. And if they didn’t, would they be an analyst worth inviting to such an event?

In related comments, AMD made the point, more than once, that the Barcelona issues were on the design, not manufacturing, side. Was that – the idea that somehow, somewhere in the plans, a design by one of the semiconductor industry’s most important and influential players was tainted – intended to comfort the crowd? How would stressing that encourage these attendees to look kindly on AMD?

The room emptied after noon with many analysts scratching their heads. I rode the 2 train back uptown with an analyst that I chat with from time to time, although I have never quoted here at EDN, and asked him what he thought. His response: “They seem to have something big to say, but they just won’t say it yet. So what did I come for?”

If AMD wants Wall Street to drink the Kool-aid, as it were, then they have to fill the glass – at least halfway – with more than vague statements and promises.

As always, comments welcome. Share your thoughts on whether AMD’s glass is half empty or half full below.

For our news story on the AMD event, see “AMD seeks profitability, says Barcelona botch won’t be repeated.” And for more on this topic, see our Wednesday Now Hear This! blog post, “AMD to face tough questions at analyst day.” You’ll find the AMD presentations here.

–Suzanne Deffree, Managing Editor, News