AMD CEO's Shoddy Record Taints Turnaround

On the other hand, Ruiz has the advantage of focusing his turnaround effort on a single market -- PCs and servers -- whereas Motorola's chip business was spread across various, disparate markets. Ruiz underscored the point in April, announcing the company's intention to evaluate "noncore" businesses, suggesting that AMD will dump its modest business making chips for consumer electronics devices.

The most eagerly awaited step in Ruiz's current effort is his yet-to-be-announced plan to overhaul AMD's manufacturing model. Like Motorola, AMD was born as an integrated device manufacturer, designing its own chips and producing the parts in its own network of semiconductor fabrication facilities.

Ruiz moved away from that tradition at Motorola by shutting down many of the facilities and outsourcing more chip production to third-party "foundries."

He has promised to do the same at AMD, working behind the scenes for more than a year on a plan he calls "asset smart." The move could ease some of the financial burden on AMD by reducing the massive capital expenditures to build and maintain advanced manufacturing facilities.

But outsourcing manufacturing is a particularly risky and unproven strategy when it comes to microprocessors -- it's not clear that a third-party manufacturer could build chips with the most advanced technology necessary to be competitive in the microprocessor game.

"If you have to depend on someone else to do the legwork, naturally you're going to be further behind," says Bill Ong, an analyst at American Technology Research who covers semiconductor manufacturing. As it stands today, the world's No. 1 foundry, Taiwan Semiconductor Manufacturing(TSM Quote), is about a year behind Intel in manufacturing process and technology, Ong says.