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'There is Plenty Of Room To Grow'

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Advanced Micro Devices have been receiving its fair share of fame with its recently launched Fusion Accelerated Processing Units (APUs) - a range of multi-core chips combining the CPU and GPU. The semiconductor giant's new processor is competing with Intel's i3 chips and is meant to beat Intel's Sandy Bridge. AMD has been investing significantly in its graphics cards business too and seems to be on an expansion spree in the emerging markets. The company's Corporate Vice President of Worldwide Channel Marketing, David Kenyon was recently in India and spoke to Businessworld Online's Chetna Mehra about AMD's corporate strategy and more. Excerpts.

What is your strategy for India and China?
What we have here in India, we have in China. In terms of chip development, we have a research and development centre in China too. We have a sizeable engineering population in China and we are increasing our sales and marketing investments. This is something we have globally achieved. In China over the past 10 years we doubled our business and sales and we expect to have the similar success in India as well. In the past four months our business increased by 50 per cent of what we were already doing in India and we are only growing it.

Most Indians still prefer Intel when it comes to computers and peripherals.  What are you doing about it?
We have been participating only a little bit in the Indian market. Over the past four months, we have significantly increased the number of people working for us in the sales and marketing team. In our marketing team, we are bringing new professionals from all over India, which means we have changed the way we engage our channel partners. We have increased our investments and have new products and we work closely with our OEMs (original equipment manufacturers) to get more products here in India. Just last year, we had only a few platforms and this year we have 23-24 and that's a big deal. Getting more platforms is one of the key steps. Sales and marketing strategy is important to coordinate multiple platforms. So new people, more platforms, better engagement of channel partners, these are the few things that are happening now and we have seen the success, I am not so worried about the competition.

AMD acquired ATI a few years ago and finally is getting some returns. How did the acquisition prove beneficial if at all?
The graphics business is more important to us than just the revenue and the gross profits from the business itself because graphics is the future of computing. The computer is getting more graphical in the way the people interact with the devices. You have seen tablets and all kinds of devices that are very graphical in nature and this will make new software that takes advantage of the graphics and processor capability. May be 5-6 years ago the graphics were not that important but now it is core to the usage of device. So it is a really valued acquisition and not just for profits in the graphics business in which by the way we are doing significantly better today than we have in the past. We have a wide share of the markets than the competitor. So, things are going well.
 
AMD has significantly invested in a number of acquisitions. Do you foresee any returns from these acquisitions or do they remain a liability for now?
Only future can prove us right or wrong but we really are seeing that more and more computing is about graphics and not just about the CPU. So, we believe the future is headed down the path that we expected years ago when we made the ADH acquisition. It is a huge positive.

Few months ago, there were rumors that AMD was going to be acquired by another IT giant…
There are always rumors and speculations about companies acquiring us or us acquiring others. I can't really comment on the rumors but we are focused on growing our business and improving the company and geographies such as India and China, Russia and Brazil. We are spending a lot of time on improving our capabilities there and that's really on what we are focused.

I was reading your blog and you seem very keen on your embedded business?
It is a very interesting business. Embedded as the word signifies is a low power processor put in another assembler. For example, your car may have multiple processors inside it that control its various functions and these are considered embedded processors. The world of embedded is exciting because the computer now is the brain for so many things, the refrigerators, new appliances. There is a great market for this business because so many of these devices need CPU and graphics. And today we have these in one chip, it uses very low power.

AMD may have lesser market share but its evaluation is significantly more than your competitor. What is your take? 
I am not in a position to speculate on what's the company's worth or evaluation but we spend a lot of time working on core elements of our business and I think if you look at the last four quarters you will see positive earnings trends, positive cash flow... basically all the things business evaluation is founded on. And that's really where we are spending our time doing working on fundamentals, growing the value of business that way.

What are your future plans for both business and technology?
As you see, we have made this tremendous investment in APU technology and it's not just about the product. It's about the new world where graphics will become very important and where you will see in the next few years more specialised devices and those devices will be powered by heterogeneous processors and not just CPU. CPUs and graphics processors are combined and harness the power of some of these different cores over the time will become more and more important and manage what we have invested in and we are now reaping rewards for.   

Tell us about your expansion plans?
We separate the world into emerging markets and mature markets. It is an over-simplification but we get the idea that in the emerging countries we have people getting their first PC and it is an exciting time to be selling PCs in those places because we are able to participate in the rapid growth in the country. In the mature markets, people are on their 4th or 5th device whether it's a smart phone, tablet or PC. We have expansion plans in both the areas. Our competitors have more market share than we do and therefore, there's plenty of room for us to take that share.

chetna(dot)mehra(at)abp(dot)in


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