Chipping Away

By Coco Masters

Once the underdog in the microchip world to industry leader Intel, Advanced Micro Devices (AMD) is enjoying a hard-won victory lap, thanks to its hot Opteron processors. A 70% jump over last year's first-quarter revenues has Dell turning its head; Google is already an AMD partner. Meanwhile, Intel sweats out every earnings call as some of its best customers defect. AMD's Hector Ruiz, CEO of the $6 billion chip company, spoke with TIME's COCO MASTERS about chip architecture, energy prices and doing battle with Intel.

TIME One year ago, you presented a mock magazine article with the headline FLYING HIGH: AMD'S AMAZING RISE TO THE TOP. Where does March 3, the day Intel cut its sales forecasts, fit into that?

HECTOR RUIZ We wanted to say the birth of a new icon and the death of an old one. That date marks the beginning of that.

TIME AMD's Opteron has gained significant market share in both server and desktop chips. Where to next?

HR We haven't been able to crack the commercial segment--the FORTUNE 2000 companies that buy thousands of computers every year. That's where we have the best opportunity to grow.

TIME How does AMD remain competitive with Intel?

HR We're the M.I.T. of the microprocessor business, and [we] attract great people. We spend a lot of time checking to see if what we have in mind is relevant for our customers. We also have a much healthier balance of risk taking in technology and innovation.

TIME Analysts say AMD's advantage will narrow, perhaps even reverse, in the next six months. Your reaction?

HR Analysts at the end of 2004 said that AMD had a good run, that the end had come and that 2005 would see a reversal of fortune. But we had the strongest gain in share in the history of the company. Again, people say that 2006 will be different, that Intel will recover. We don't underestimate what [our competition] can do, and I think it keeps us honest and focused.

TIME How have rising energy costs affected AMD's product design?

HR It's been a significant consideration since the late 1990s. We balanced performance and cost, and it turned out to be what customers wanted. If you look at what makes Opteron such a good product, it has tremendous benefits in cost of energy consumption and in terms of architecture. The performance per watt per cubic meter has become a very critical parameter--and we excel in such measures.

TIME Tell me about the consumer media center PC platform, AMD Live!, out later this year.

HR The idea of AMD Live! is to create a 64-bit platform for the home with players that are good at high-definition TVs, DVD recording, video transmission and IP protection.

TIME I've read that you started learning English at 16. Now, as a member of two technology-related presidential advisory panels, what should the government do to get kids excited about science?

HR At 18 I immigrated to the U.S. from Mexico to attend the University of Texas, in Austin. The government plays a huge role in education. They can ensure that there is appropriate funding, particularly in K to 12, the one area where we have suffered the most relative to underrepresented minorities in this country. But before we get the government to accept a big part of this, as voters and local participants in our communities, we need to prioritize.

TIME Where will AMD be in a year?

HR We will be more than 15% of the market. But we won't limit ourselves by picking a specific number. We proved in 2005 that we could actually do better than we thought.