AMD's Boss on the Latest in Chip Making

Advanced Micro Devices CEO Lisa Su has overseen a 30-fold rise in the chip maker's stock price since taking the top job seven years ago, to a market value of around $115 billion. Needless to say, that's an enviable record.

A push into processors used in servers and other high-performance computing applications has been behind the AMD's rise. The company's next chapter will include additional new end markets, with the pending $35 billion acquisition of Xilinx expected to close by the end of this year.

Barron's Max Cherney recently spoke with Su—a repeat member of Barron's best CEOs ranking—about the ongoing global chip shortage, AMD's growth plans, and the Xilinx deal.

Here are a few highlights from the Q&A:

The Covid-19 pandemic has upended the delicate supply and demand balance in the semiconductor sector. How have you guided AMD through this environment?

We make many of these decisions years in advance. But what’s happened over the past 12 months is that the demand has far exceeded even our aggressive expectations. From our standpoint it is very much about continuing to ramp capacity, because we do have such strong demand. Our visibility and our partnerships, with both our suppliers and customers, are really good. This is all about communication in all channels to ensure we’re all growing in the same direction.

Do you have any update for our readers on when you suspect the situation with normalize a little bit?

I think it’s different for every subsegment of the market. For this year, it’s going to continue to be quite tight. I think going into 2022, it will depend a little bit on the dynamics of the market overall. But we’re certainly bringing on more capacity every quarter, so you’ll see more output every quarter for sure.

AMD participates in several markets dominated by other chip businesses such as Intel and Nvidia (NVDA), in terms of market share. How does AMD go about demonstrating its competitive edge?

I think we’ve made some very important technology bets. If I get a little geeky, excuse me, but we pioneered some of this chiplet technology, which is really the idea of breaking up these very large and complex microprocessors into different pieces, because it’s a better way of putting systems together. That was a big bet at the time, and it turns out it’s the best way to build high performance microprocessors today. Our claim to fame is always going to be pushing the envelope on technology and having the best technology in the computing market.

The decision to acquire Xilinx is a consequential one for AMD. How does this big bet fit into your vision of the company’s future?

The technology business is about making big bets. Xilinx is a big bet for AMD. We believe that when you look at computing over the next five plus years, Xilinx is the number one player in adaptive computing and programmable chips. We think that is very complementary to the central processing unit and graphics processing unit technology that we have. We believe in this world—where you need all different types of computing. Xilinx also has a very strong presence in some of the markets that AMD isn’t in. When you combine the two together, you have a great set of technology, as well as a great set of markets.

Read the rest of Max's Q&A with Lisa Su here.