'Blockchain tech is here to stay'
In a little over three years, Lisa Su, 48, President and CEO of Advanced Micro Devices (AMD), has changed the fortunes of the semiconductor company that develops computer processors and related technologies for business and consumer markets. When she took over AMD in 2014, the company was bleeding and reported losses of $403 million in FY2014 on revenues of $5.5 billion. In 2017, it clocked a net profit of $43 million on revenues of $5.4 billion. Su, a recreational boxer who also loves playing golf, has landed quite a few punches on competitors as she scripts a turnaround story. On a recent visit to India, which accounts for over 1,500 of the company's 9,500 employees, she spoke to Deputy Editor Venkatesha Babu about how the turnaround story is likely to accelerate. Edited excerpts:
When you laid out the three-year roadmap, nobody believed AMD would be in the position where it is now. Is growth sustainable over the longer term?
A: It is an exciting time to be in the semiconductor industry and our speciality is high-performance computing. Everywhere you look, people need more compute capability. I believe we are building something very special because the foundation is good. For several years, my focus has been to build a strong foundation around intellectual property. The IP that we have for the central processing unit (CPU), the microprocessor and the graphics processing unit (GPU) is unique in the industry. We have been patiently building the pieces of the foundation.
In 2017, we launched over 10 product families. The market response has been positive, but I view it as the beginning. When you talk about sustainability, the foundation is the core product for a technology company like us. We have to build great products; we have to be dependable in delivering promises to our customers and end users. We have demonstrated that we can do it. But yes, there are sceptics and we need to keep demonstrating success for the next few years.
When you joined in 2012, almost all revenue came from the PC business. But you have focussed on getting market share from other areas. Do you see this shift accelerating?
A: Yes, over 90 per cent of our 2012 revenue was from the PC market. Today we get about 50 per cent from PC and the rest from the non-PC segment. We have done very well in gaming. Game consoles and high-performance PC gaming happen to be a key focus area for us. But the No. 1 growth opportunity over the next few years is cloud data centres. As computing is very important, data centre growth is a key area. When you look at AMD three years from now, you will see our mix change. Right now, the data centre is a small piece of our business, but that will change.
Intel tried to morph and provide solutions for mobile computing with little success. You have perhaps consciously tried not to take that route. Will you be addressing that market in the near future?
A: We are a high-performance computing company and I think we should focus on our strengths. Others may find mobile to be a key market segment, but we have many opportunities in our current market segment, and that is where we want to focus. Apart from cloud data centres, automobiles will be an interesting market going forward and so will be the overall machine learning and the artificial intelligence space.
Mobile computing players like Qualcomm and ARM are pushing into the traditional PC business. How do you view them?
A: For us, there is still a lot of growth opportunity in the PC market. I do not view the new entrants as competition per se. I think they are trying to add something to the market and if they bring value to end users, the latter will pick it up.
What is the thinking behind your re-entry into the server space? How do you intend to go ahead?
A: The server industry is very different today. Earlier, it used to be mostly enterprise customers. Now it is split between enterprise and cloud customers. Our solutions are very competitive. Our new server product line launched last year is called EPYC. The most important thing in the server business is to have a strong multigenerational roadmap. We know what we are going to do in the next five years and we will work closely with customers to help accomplish their goals.
We are focussed on both enterprise and cloud customers, and believe there is a growth opportunity for us in this space. Our share today is about 1 per cent and our intermediate goal is to get to 10 per cent. Our previous capability, when AMD was quite strong in the server market, was over 25 per cent. So, there is potential for us.
What is your take on the cryptocurrency mania and blockchain? Will it trigger growth for you?
A: There is a lot of interest in cryptocurrency and we have benefitted as graphics processors are important for those. I believe blockchain technologies will be a long-term trend. It is very interesting in terms of what they mean for the technology infrastructure going forward. Cryptocurrency may go up or down, but the technology will become prolific across the globe.
Does crypto mining make up 10 per cent of your revenue or less? Will fluctuations in that market impact you significantly?
A: We grew 25 per cent in 2017 and cryptocurrency contributed in mid-single digits. Yes, we have benefitted from crypto, but we have seen better growth in the rest of our business. We are in a position to take advantage of growth across multiple markets.
Global gaming is dominated by a handful of players - Sony, Xbox, Nintendo. Do you see continued growth opportunities there? Is there any threat to a player like AMD now that a larger chunk of your revenue comes from this market?
A: The game console market has been very good and we are the market leaders there. We partner with Sony and Microsoft who occupy a large piece of the market. It is quite a stable market. Console generation usually lasts five to seven years and that has given us some good business. But there are other opportunities outside of consoles, like in PC gaming and graphics applications.
AMD has both CPU and GPU. Will marrying those into an integrated solution give you an edge over some larger players?
A: I think this is our big advantage. In almost every market you can benefit from that combination, be it gaming or servers, machine learning or workstations. We are investing in these solutions and we see it as one of our competitive advantages going forward.
In India, you punch above your global weight with an 18 per cent overall market share according to IDC. What opportunities do you see here?
A: We have a great team in India and here our solutions work particularly well. We have nearly 30 per cent share of the commercial market. We are deeply involved in some opportunities in the education space - it is something we strongly believe in. We have heavily engaged with the top OEMs here to provide overall solutions. Over the next few years, I expect India to be one of our fastest growing markets. Our focus is to continue to grow our commercial business. We are excited about the digital infrastructure opportunity in India. We also want to increase brand awareness among consumers. HP is very strong in India and we have set up a branded store with them in Gurgaon to showcase our products. We will be setting up more stores with other OEMs across the country.
One-sixth of your global workforce is in India. How important are they for your global operations?
A: Our 1,500-plus team in India is really important and they work on every product. The CPU core development happens in India. We do a lot of software development in Bengaluru. In Hyderabad, we do our system on chip design for both PCs and servers. The India team has a significant level of ownership. For our newest product - the Ryzen for notebooks - the design team involved was primarily in Hyderabad. They had the ownership of that project. As for servers, our Bengaluru and Hyderabad teams own a large part of EPYC. The India team is highly involved in our overall business. We will also expand the R&D footprint in India. The talent here is quite exceptional and our value proposition is: You get to work on the most advanced processor products as part of AMD India.
Do you have any plan for Indian start-ups?
A: Yes. The Indian start-up and venture capital communities are extremely interesting, especially as we have interests in technology, computing and artificial intelligence. We have a VC arm called AMD Ventures that makes some investments and we are also looking at collaborating with the local funds here. We have not invested in India recently, but we are reviewing potential opportunities.
@venkateshababu
