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AMD's Sanders drops another clanger

To lose Vin Dham was careless..

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Analysis Although AMD's spinola department was putting the best gloss it could on the resignation of president Atiq Raza two days ago, it could not have come at a worse time for Intel's little brother. The spin is that at some time in the future, Raza may return, in some unspecified role, to help AMD out. Further, according to AMD, Raza left for purely personal reasons. But if a Donna and Marie like relationship really existed between Jerry Sanders III and Atiq Raza, would he have resigned on the day AMD delivered its worst financial results ever, compounding interest in the company's state of affairs? As we pointed out earlier this year, AMD had always been in the position of mopping up x.86 business as Intel moved its generation of processors up a notch. That changed in 1995 when AMD bought NexGen and along with it, former Intel president Vinodh Dham, Atiq Raza and Dana Krelle. All three of these individuals made a big difference to the way AMD ran its processor business, bringing good technology, good ideas and perhaps more than this, a professional approach that was appreciated outside of AMD. This is what we said shortly after AMD introduced its K6-III roadmap at Versailles nearly two years ago: "Remember Vinod Dham? Of course, Krelle was at Intel and was wooed away to Nexgen, from there poaching Vin Dham to be his boss. When Nexgen was bought by AMD, both of them breathed a sigh of relief because they feared that NEC or another large Japanese multiple would snap them up. But Krelle said, during a lunch conversation, that Vin Dham and he had brought much more to the organisation than just technology. They also brought some of their Intel infrastructure ideas, meaning the whole company is now much sharper than it was before." Sanders is reputedly tough to work for. On the few occasions we've bumped into him, he's shown a somewhat peppery side to his nature and over the last 10 years that we've tracked AMD, many an executive has come and gone. He is also close to the age at which British judges, for example, are forced to retire and other 70 years old face the re-taking of their driving tests. The news, predictably, caused AMD's share price to bump back down to $16 a share and the risk of predators snapping the company up must now be greater than ever. AMD already faces a host of class actions following its Q1 results and there are likely to be more. But, according to an insider at IBM, although it has toyed with the idea of acquiring AMD over the last two to three years (as reported here), there is internal opposition to the idea. Unfortunately for AMD and the K7, Compaq is not currently in a position to play the white knight. Perhaps, then, Dana Krelle and Vin Dham's worst fears when they were at Nexgen will come to be realised, and some large Asian outfit will say: "That will do very nicely". Sanders' apparent fixation on the processor side of AMD's business has not helped. As one senior AMD UK executive pointed out to us when the AMD K6-III was first launched: "My side of this business (telecomms and Flash) is propping up this processor adventure." The Raza clanger may well be one clanger too many for AMD. ®

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