- Aug 10, 2012
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Former AMD Chiefs Book Describes Fight Against Intel
Advanced Micro Devices for years accused Intel of illegal tactics in the market for microprocessor chips, a dispute that many people may have forgotten. Hector Ruiz wants the story remembered.
The former AMD chief has written a book that memorializes his bet-the-company decision in 2005 to file an antitrust case against its much larger rival, a volume of roughly 200 pages that comes with heavy doses of David versus Goliath imagery. Its called Slingshot, and subtitled AMDs Fight To Free An Industry From The Ruthless Grip Of Intel.
Intel never admitted wrong-doing, either in the suit brought by AMD or in other antitrust cases or investigations pursued by multiple government agencies, including the Federal Trade Commission. It did pay AMD $1.25 billion as part of a 2009 settlement, after Ruiz had left the company.
We dont believe that we violated any law and consumers benefited from our business practices, said Chuck Mulloy, an Intel spokesman.
Ruiz, who hails from a small town in Mexico, elaborates on his humble upbringing as well as advice and lessons learned from relatives and teachers. Despite early difficulties mastering English, he did well in Texas schoolsincluding a doctorate from Rice University. He worked at Texas Instruments TXN +0.21% and Motorola Inc. MSI +0.51% before joining AMD in 2000.
Much of the book deals with why Ruiz took the risk of attacking Intel in court, an effort called Project Slingshot. The companies had legal battles as early as the 1980s, but the conflict in the last decade came after AMD introduced a particularly strong lineup of chips but failed to gain as much market share as expected. The book cites multiple examples of big U.S. and Asian PC makers getting excited about using AMDs products, only to back away or reduce their commitments under what Ruiz describes as Intel financial inducements or threats.
The examples, and quotations from internal company emails, may seem familiar to those who followed the various legal documents released by AMD, the FTC, the state of New York and antitrust regulators in Europe, Japan and South Korea. But the book adds details on how Ruiz and other AMD executives developed their legal strategies.
There are also insights into other developments during Ruizs tenure. Slingshot, for example, states that Nvidia NVDA +2.91% had been AMDs first preference to buy to add graphics-chip expertise, a possibility Ruiz says foundered on high price and the requirement that Nvidias chief take over leadership of AMD. (An Nvidia spokesman declined comment). AMD eventually purchased ATI Technologies.
Other details concern AMDs negotiations for financial help from Abu Dhabi, an effort that stalled until some helpful match-making by a member of the Ferrari sports car family (Investors in the oil-rich country had purchased a stake in Ferrari, and AMD had sponsored one of its race cars).
The introduction helped lead to a meeting with Abu Dhabis crown prince and lengthy negotiations with others there, aimed at spinning off AMDs manufacturing operations and making the country a new force in global chip production. It also led to what Ruiz says was one of the most difficult moments in his career; he decided he had to join the manufacturing company to reassure the investors about his commitment.
If the Abu Dhabi deal were to fall through, AMD would not survive, Ruiz writes. I had to do everything in my control to make it happen.
The deal relieved AMD of the costs of running factories. The resulting company, now called Globalfoundries, has prominent operations in upstate New York, Germany, Silicon Valley and Asia.
(The book doesnt mention that Ruiz became publicly associated with the Galleon insider-trading case; the Wall Street Journal in November 2009 identified him as an AMD executive accused in a federal complaint of sharing advance information about the chip-manufacturing venture. He was not accused of wrongdoing, but stepped down a couple of months earlier than expected as Globalfoundries chairman).
AMD has had a bumpy road since Ruiz left. He points out that AMD reported three years of annual profits after the Intel settlement in November 2009. But it finished 2012 with a loss of nearly $1.2 billion.
And Ruiz found the settlement disappointing. Although I never expected the lawsuit to go to trial, I harbored hopes that Intel would admit wrong-doing, he writes. I also believed AMD merited damages well beyond the $1.25 billion.
Ruiz found more satisfaction in the subsequent FTC settlement, which contained restrictions on Intels behavior, and the more spiritual benefits of simply doing what AMD employees were convinced was the right thing.
Project Slingshot had been a battle cry for our people at AMD to rally around a just cause, to fight a fight no one but us believed we could win, Ruiz writes. We blew the top off of the industry and exposed its unsavory secrets in a way that forced Intel and computer makers to back off their backroom deals, clean up their act and refocus on what really mattered: the customer.
But Intel executives have said the concessions to the FTC really didnt have much impact on its business. And the changes certainly havent been sufficient to counteract AMDs struggles in the marketplace.
AMDs share in the relevant market for microprocessors peaked at 25.3% in the fourth quarter of 2006, with Intel accounting for 74.4%, according to Mercury Research. By the fourth quarter of 2012, AMDs share had slid to 14.7%, compared with Intels 84.8%.
Slingshot, which is co-written with journalist Lauren Villagran, is set for publication April 23.
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