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Chip Maker AMD Undergoing Big Restructuring

Photo courtesy of Advanced Micro Devices.

Computer chip maker Advanced Micro Devices announced major changes in its product management, to keep up with the way people are using technology. The Sunnyvale, California-headquartered company is cutting 1,400 jobs nationwide, including 320 jobs in Austin.

AMD currently designs chips for desktop PCs, laptops and some servers. John Doggett, a senior lecturer at UT’s McCombs School of Business, closely follows the semiconductor industry. He says it’s never easy to see people lose their jobs and particularly difficult in this economy, but AMD needs to transition if it’s going to stay relevant.

“AMD is faced with a really interesting challenge: the most popular new computing devices on the planet are iPads and iPhones, and AMD and Intel do not make those chips,” Doggett told KUT News.

An AMD spokesman said the company will focus more on "lower power emerging markets." While offering no specific details of what that would entail, analysts say it could include tablets and smart phones. AMD has said it wants to do more production for cloud computing, which Doggett says is just a sexier name for large server farms.

“More and more people are going to have their data stored on server farms that they can then access from anyplace in the world on any device. Server farms traditionally have been energy hogs, they’ve been large they generate a lot of heat they consume a lot of electricity and so there is tremendous amount of value in coming up with make chips for servers to run the cloud that are small, use a small amount of power and are very fast.”

AMD says it will offer more specifics in February on what kinds of new products it will start making.