Good afternoon. My name is Huey, and I'll be your conference operator for today. At this time, I would like to welcome everyone to AMD s' Conference Call. All lines have been placed on the listen-only mode at this time. After the speaker's remarks, you'll be invited to participate in the question and answer session. As a reminder, this conference is being recorded. I would now like to turn the conference over to Ms. Ruth Cotter, Vice President of Investor Relations for AMD . Please go ahead.
Thank you, Operator, and thank you to everyone for joining us today. The participants on today's conference call are Bruce Claflin, Chairman of the AMD Board of Directors, Rory Read, Incoming President and Chief Executive Officer, and Thomas Seifert, Senior Vice President and Chief Financial Officer. This is a live call and will be replayed via webcast on AMD.com. There will also be a telephone replay. The number is 888-266-2081. Outside of the United States, the number is 703-925-2533. The access code for both is 1549039. The telephone replay will be available for the next 10 days, starting later this evening. Before we begin today's call, I'd like to caution everyone that we may be making forward-looking statements about management's expectations. The semiconductor industry is generally volatile, and market conditions are particularly difficult to forecast, especially in light of the current state of the economy.
We encourage you to review our filings with the SEC, where we discuss the risk factors that could cause actual results to differ materially from our expectations. You'll find detailed discussions about such risk factors in our most recent SEC filing, AMD's Quarterly Report on Form 10-Q for the quarter ended July 2nd, 2011. Now, with that, I'd like to hand the call over to Thomas Seifert. Thomas?
Thank you, Ruth, and good day, everyone. Over the last two years, AMD has successfully completed a number of major transformations. They are the mark of a nimble and world-class organization and essential to thriving in an industry like ours. Recently, we deployed a set of initiatives to streamline business and decision-making processes across our operations, R&D, and go-to-market functions, all aimed at accelerating our evolution to becoming a world-class design company. Today, we are announcing the next key part of that evolution, the appointment of our next CEO. I'm excited about our announcement and look forward to working closely with Rory as a part of his team.
I want to thank all of you for your support and advice during the last two quarters, and more than anything, I want to thank all of my colleagues at AMD for their commitment and focus while the search was being carried out. I believe we entered this new leadership phase stronger and better positioned to succeed than ever before. With that, I would like to turn the call over to Bruce to provide the board's perspective on today's very exciting announcement.
Thank you, Thomas, and good morning. As we started the new fiscal year in January, it was clear the company was making good progress on a number of fronts. We had completed the final separation of AMD from its manufacturing operation, successfully delivered the first Fusion APUs to the market, and our financial returns were improving. However, our Board of Directors felt that AMD was in a position to create much more value for its shareholders, customers, and employees. We believe that the company was capable of gaining market share, establishing strong leadership positions in both existing and attractive new segments, and delivering superior and sustained financial returns. We also believe new leadership would be required to achieve these ambitions. With this in mind, I'm very pleased to announce the appointment of Rory Read as AMD's new President and Chief Executive Officer, starting immediately.
Rory is a proven leader with a respected record of driving profitable growth and transformation. Until today, he was President and Chief Operating Officer of Lenovo, having led a significant transformation of that company, taking the company to some important new markets while growing market share and greatly expanding financial returns. Prior to Lenovo, Rory had a very successful 23-year career with IBM, where, among other things, he led the industrial sector of their business consulting services. He is a passionate leader who has energy and enthusiasm to match his drive and determination. He's a competitor who loves to win and hates to lose. While he is a skilled operator, he also understands the importance of sound strategic thinking in order to have long-term success. As a former customer, he will bring the voice of the customer inside the company, reinforcing the company's position as a strategic partner.
Of course, with the successful conclusion of this search process, I'm relinquishing the title of Executive Chairman and reverting to my former Chairman role. On behalf of my colleagues on the AMD Board, let me take a minute to thank Thomas for his strong leadership over the last few months. Thomas and the team did an exemplary job of delivering on every major milestone over this period, allowing the Board to focus on finding the absolute best candidate to take this company to the next level. That is just what we have done. With that, I'd like to introduce the newest member of the AMD leadership team, AMD President and Chief Executive Officer, Rory Read.
Thank you very much, Bruce. I want to thank Thomas and the team for keeping things going so well over the last several quarters. It truly is an honor to be selected as the next President and Chief Executive Officer of AMD . I believe that AMD is a very unique company in today's technology industry, a true innovator with world-class people, unique IP, and a growing track record of solid execution. That solid execution we can see in the foundation financially being built and the great momentum that we're seeing across our businesses. We're a leader in discrete graphics and notebooks and game consoles. In fact, we've shipped over 12 million AMD Fusion APU s since its launch only in 4Q 2010. We've driven over 300 design wins in notebooks and desktops, as well as embedded systems.
Our server business, with our new Bulldozer technology, is ideal for the cloud data center infrastructure environment that's emerging in this industry today. There's outstanding potential here. There's growth in our core business. There's over 350 million PCs sold each year, and that's going to continue to grow. In the server space, with the cloud and infrastructure environment exploding in the industry, there's lots of room for AMD to grow with this new Bulldozer-based solution set. We're going to see the new form factors, and we're just scratching the surface of what the AMD Fusion APU can do. We'll see it in mobility and other parts of the market. This is a changing industry. There's no doubt about it. Change is good for AMD. This change really plays to our strength as an innovation challenger in this space.
Why did I come to AMD ? It's clear. There's a proud history at AMD , and it's a great set of technology, a strong team, and clearly unlimited potential. We have a rich history in AMD of delivering the next big thing first. I think it's really an interesting role that I can play, bringing the voice of the customer. I've worked as AMDs ' customer for the past five years, and I've seen firsthand how they engage with a customer, focus on that customer's solutions and how to make that customer win in the marketplace. I want to continue to develop AMDs ' profile as an innovation leader, a great customer-centric partner, and a solid long-term investment. I want to grow AMDs ' influence and footprint.
We need to continue to attract the best and brightest people in the processing industry right here to AMD We need to be closer every day to our customers and partners. Most of all, I want to win. I see a unique set of opportunities for this company right here, right now, that could result in leadership positioning for us. I believe we can be stronger than ever. I know it's not going to be easy. It never is in this industry. I'm truly excited about our prospects and what we can deliver together as a team. I can't wait to get started. Bruce, I want to thank you and the Board of Directors for giving me this opportunity and the warm welcome I've received from the team here at AMD.
I look forward to getting to know each and every one of you over the next weeks and months to come. With that, Ruth, I'd like to turn it over to you for Q&A.
Thank you, Rory. Huey, if you could pull the audience piece for questions, we'd be happy to start.
Sure thing. Ladies and gentlemen, to ask a question, please press star, then one on your touch-tone phone. If your question has been answered or wish to remove yourself from the queue, you may press the pound key. Again, to queue up for a question, please press star, then one on your touch-tone phone. One moment for questioners to queue. Our first questioner in queue is Ian King with Bloomberg News. Please go ahead.
Good morning. First of all, congratulations on getting your new CEO in place. I'm sure you're very pleased to have that done. I'd like to ask a question to Bruce, if I may, please. Bruce, I've spoken to a lot of your shareholders and a lot of people who look at the company. It's fair to say, based on those conversations, that they've not been very happy with some of the decisions and the way that the decisions of the board have been implemented over the last 12, 18 months or so. Wondered if you could respond to that in terms of explaining how and why some of the things that were done were done and also perhaps answer the question of whether there are any plans for any changes on the board, please.
Let me take it in reverse order. No, there are no plans for changes on the board. Secondly, we believe that the process we ran resulted in a very successful outcome with the appointment of a CEO who's capable of taking the company to the next level. Third, the underlying reason for the changes, as I mentioned before, were purely driven by a desire to increase shareholder value over the long term. Our actions were motivated by shareholders' best interests. We ran a process that was thorough, and it reached the proper outcome, which is an outstanding candidate to run our company.
I'd like to add that I've had a lot of interaction—it's Rory—over this first day and been reaching out to customers, partners, et cetera, key shareholders. The feedback's been quite interesting. They really see some of the same opportunities that we see. It's an exciting time, I think, for AMD .
Thank you.
Thank you, sir. Our next questioner in queue is Stacy Rasgon with Sanford C. Bernstein. Please go ahead.
Hi, guys. Thanks for taking my question. Curious to get a feeling for what sort of incremental investment or effort you think is going to be required to drive success in some of these new initiatives, particularly the mobile space, where I think you felt DERC was lacking. I mean, just in general, AMD has not been a company that can afford to do everything, just given the size and standing that you have had. What sort of, I guess, comfort can you give the investment community that a ton of additional investment or effort is not going to be required to drive some of these new initiatives? How are you going to, I guess, avoid or prevent yourself from losing focus on the core x86 opportunity, which seems to be presenting itself at this point?
Let me get started here. It's Thomas. I think we have been very explicit over the last couple of quarters that we will keep our head on our shoulders. We've started tremendous operational improvement initiatives that will generate productivity. This productivity is what we will deploy for further investment. We have, today, no reason to deviate from a statement that we will increase our investment or increase the operating expense guidance that we have laid out to you. We are all excited by the opportunities the launch of Fusion has created. We think that is the right form factor, the right performance for the changes that happen in our ecosystem. We will be excited and working hard to take that momentum and deliver it into our core market and also take advantage of the adjacent market opportunities that are opening up.
At this point in time, there's no reason for us to deviate from the strong financial discipline we have been exercising so far.
I think Thomas is 100% right. That operational focus and improvement, that discipline, you can see it in the way the team is executing. It's clear that any strategy that we have to have in AMD has to be a balanced strategy, one where we continue to execute in our core business areas, where we're making hay, where we can continue to win. That'll give us momentum, at the same time driving the ability to attack and go after new opportunities in some of these emerging spaces. It's really about balance, both short term and long term, and making sure that we're driving profit and investment in a balanced way.
Got it. One more for you, Rory, if you could. What are some of your priorities for the next 100 days? Where do you see both the greatest challenges as well as you've already talked about where you see some of the opportunities as you try to make AMD your own at this point?
Oh, I think, Stacy, what's key in the beginning is to really take the time to learn the business, understand how we go about executing. I'm spending a lot of time with our customers, our partners. Today, we've been reaching out to them all day, and we'll do that over the next several weeks. That's the first 30 days. It's about really building a strong foundation of understanding, to reach out to the teams, to our partners, to really get the exchange of information. Over the next 60, 90, 100 days, that's all about building on the momentum that we have. We have great momentum, Stacy. Think about it. 12 million Fusion APUs shipped in the first six months. That's huge. 300 APU design wins in notebooks, desktops, and embedded systems.
Now the work around Bulldozer in the server space and where we want to go to in cloud and the data center. These things are, and you can see it in our financial execution, Stacy. Nine quarters of non-GAAP profit in a row. We're building the foundation of momentum. What we need to do over those first 100 days is build on that momentum, take it to the next level, and continue to grow.
Got it. Congratulations, Rory, and good luck.
Thanks, Stacy. Appreciate it.
Thank you. Our next questioner in queue is Jim McGregor with In-Stat. Please go ahead.
Hi, Rory. Congratulations on the position.
Hi, Jim.
I realize that you're new to it, and you're going to be spending the next quarter or two quarters trying to figure out what the direction of the company should be and everything else. Obviously, you're already in the industry, so you already have some of your own viewpoints. You know seeing where AMD is today is one thing. Seeing where AMD is tomorrow is another. Do you have any viewpoints, at least this early in the game, on what you think AMD's vision should be for a company going forward?
You know, Jim, I think it's a little bit premature for me to try and tackle that question on day one. Where I would go on that discussion is, again, back to where I was with Stacy. I think there's really strong momentum. You know it's not just financially. It's around the technical aspect. My experience when I was in Lenovo working with AMD , I could see the culture. This is a culture that embraces the opportunity, the challenge. It almost looks at that challenge with optimism and acceptance. They want that challenge. I think as this market evolves, as you and I both know it will continue to do, and there'll be more change over the next six, 12, 24 months, I think it really plays to our strength at AMD , this willingness and acceptance to change.
Again, a little bit premature for me to answer in the first four hours, but I look forward to covering it in the future.
Thanks, Rory, and good luck.
Thank you, Jim.
Thank you. Our next questioner in queue is JoAnne Feeney with Longbow Research. Please go ahead.
Yeah, thanks, and congrats everyone on getting this done. I have a question about the emerging roles now for Thomas and yourself, Rory. Could you perhaps give us a sense of how the two of you might work together and how you see the responsibilities developing over time?
Sure. Thanks, JoAnne. I think it's been really interesting. As Bruce talked about the approach that the board took to the search, I went through that firsthand, as you would imagine. It was quite a substantial and detailed set of activities. As I went through that, I met every one of the board members multiple times. I met more and more people in AMD . As I did, I got more and more excited about the opportunity and what we could do here. I could tell you there was a turning point in my desire to really be part of this team. It was a meeting that I had with Thomas in Atlanta. I felt a real sense of energy around Thomas's vision for the company, his view on productivity and efficiency, his energy about winning and doing things the right way.
I look forward to this partnership that I'll build with Thomas and across the leadership team. I think that Thomas is a pro, an expert in execution, transformation, fundamental execution. I think each of us plays a great role in where we could take the company. It takes a team to win in this space. I look forward to it. I am really serious about this. That was a turning point. I had a great job, a super experience. I wanted to come here and be part of this because of the people I met in my five years at Lenovo and my experience through this process. Thomas was a key decision point for me.
Yeah, let me make a comment now. If you could see me, I'm plastering now. I'm really red. We hit it off extremely well. We spent a significant amount of time together already, despite the fact that he only was announced this morning. I think we share a vision. We came to a point very fast where we share a vision where AMD could go. I was very honest up front that my interest is on the CFO side of this business. While we have made a lot of improvement, there's a long way to go if you look at our balance sheet. The good news is plenty of potential, plenty of work that the two of us can share together. I think we'll do a fine job doing that moving forward. I'm excited about this announcement today.
If I could, just a quick follow-on regarding the roadmap. I'm sure your customers would like to know that they should believe that the roadmap, as it's been laid out, is something they can continue to have confidence in. Are there any other restrictions that the board has created or that, in taking the position you face, in developing the future roadmap and strategy for the company?
Let me just comment on one word you used, restriction the board imposed. The board has imposed no restrictions whatsoever. We've asked him to do a few basic things: execute against the strategies that are in place, expand margins and return, and build strong positions while seizing new opportunities that are facing us. That's it. Beyond that, it's really up to Rory and his team to decide how to best execute those.
JoAnne, I'd add a little bit more. My experience going through the process, the search process, my experience meeting and discussing the company, AMD , with the board members was also a key point in my decision-making process. I saw real alignment around the board of directors. I saw that same kind of energy and enthusiasm that I got from Thomas and the other players in AMD I met. This is a first-time role as CEO for me. I've built on a career in technology. I really looked at the board as a set of very experienced industry leaders who have been very helpful in their advice and counsel, even as we've gone through the process. I'm excited to work with them.
OK, good luck.
Thanks, Joanne.
Thank you. Our next questioner in queue is Vivek Arya with Bank of America. Please go ahead.
Thanks for taking my question. Rory, congratulations on the position. I'm curious, what's your perspective on the macroeconomy and PC market growth? Are you comfortable with some of the targets that AMD has laid out for the near term?
Vivek, thank you for your support. You know, from a macroeconomic standpoint, it's very difficult to predict. I'm not sure anyone can know. I do believe that the PC market and markets that we serve will continue to expand. What we need to do is focus on building on the core momentum that we've created, to build on the solutions that we've created. This Fusion APU phenomenon that we've introduced and we're the first player there, we need to continue to build on that. 12 million units, that's outstanding. We need to continue to extend that. I really believe, Vivek, that we're just scratching the surface of where this can go. At a macroeconomic level, the market's going to be the market. The environment's going to be the market. What we need to do is continue to grow and grow our share position.
That's always the key to the future.
Got it. Just as a quick follow-up from an outsider's perspective, from your past experience in dealing with both Intel and AMD , what do you think has been AMD s' main challenge over the last five years? Has it been customer focus? Has it been innovation, not having the right fabs, or just plain tough competition?
It's interesting. I've worked with AMD over the past five years, and it's been my experience that AMD has almost a youthful exuberance around technology and challenges. They've really focused on a user-centric kind of design solution approach. I think that's why you see a 57% increase in our year-to-year design wins in the second quarter alone. That's good progress. It's been my experience that that kind of energy, that willingness to tackle the next big thing first, plays well. I think every company needs to tackle things with a sense of urgency. In our industry, more than any industry, every day matters. We need to make sure that our commitments are strong. We do what we say, and we own what we do.
These are some core things that I think that AMD is particularly good at, based on my experiences over the past five years.
Great. Thank you and good luck.
Thanks, Vivek.
Thank you, sir. Next questioner in queue is Kirk Ladendorf with Austin American-Stat. Please go ahead.
Hi, gentlemen. Without dwelling too much on the past, I guess the media has been a bit in the dark as to just sort of why this change happened. The impression has been that the board wanted the company to move faster toward approaching this ultra-mobile and maybe ARM-centric marketplace. That was the reason for the split with Derrick Meyer. Are we long in that? What was really the issue here? Why is it being solved? How is it being solved?
Yeah, there are two things that we said at the time and have said consistently since. We believe the markets that we are in offer attractive opportunities, both for growth and particularly for margin expansion. We believe through better execution, we can achieve that. We also believe there are a number of very important changes happening around our industry. These changes create opportunities. We'd like to develop strategies that thoughtfully but aggressively take advantage of these opportunities. Margin expansion and growth in the businesses we're in increase the aperture of our thinking about opportunities that are emerging. That's what the board believed we could do better at. That's what our guiding principles were as we did the search. That's what we're going to ask Rory to do going forward.
Kirk, I noticed that you're from the local area. I just wanted to mention that I had lived here before 15 years ago, and I look forward to moving back to the Austin area shortly. Actually, my daughter was born here in the Round Rock Hospital, so I actually have a Texan in the house. I look forward to meeting you here in Austin.
I do too.
Thanks, Kirk.
Thank you, sir. Next questioner in queue is Jim Covello with Goldman Sachs. Please go ahead.
Great. Good morning, good afternoon, and thanks so much for taking the question. Congratulations on the new role.
Thanks, Jim.
In the spirit of kind of keeping it to questions that I think you have a fair chance of answering, given that you've been at the company for a whole day now, the question I would have is your view from a customer's perspective on the impact that Windows 8 and then Windows 8 on ARM is going to have on the microprocessor segment of the industry.
I think it's a very interesting time in the industry, from the impact of the form factor of tablets, the kind of operating system trends that we see. I've had the opportunity to use Windows 7 for an extended period of time. That's a really nice operating system. It does well. I'm looking forward to seeing Windows 8. I think any advancement in technology on the software side that introduces solutions that make our customers more productive and more successful means more opportunity for AMD . I think Windows 8 introduces that potential opportunity as we go forward. I think customers today are looking for that kind of experience. It's going to be an interesting time.
What we want to do, Jim, is to make sure that explorer, adventuring type of personality of AMD that goes after these changes stays intact and keeps going after these changes as they emerge. It's going to be interesting to see how the market changes over the next 24, 36, and 48 months. It's truly an exciting time.
How do you understand that any new, as you said, technology transition creates opportunity for AMD ? There's also some of your old competitors, some of the OEMs, have been pretty vocal about the fact that they're going to put, you know, that they're pretty serious about putting a certain number of SKUs on an ARM -based processor. How do you think that the opportunity balances against that threat?
It's interesting. Based on the past five years, I've had a lot of opportunity to kind of look at the trends in the space. I firmly believe that the core PC market will continue to expand. I believe that will be the case for the next five, 10+ years, particularly in the emerging markets. I think it's going to continue to go very well there. In the server space, I think we're just beginning to see the emergence of the impact that the cloud and the infrastructure trends will have in the industry. Those are key opportunities for AMD . I think we're uniquely positioned to participate in them. There's always going to be pressure from the marketplace to move into new and different areas. I think you'll see us do that around the ideas of low power and mobility.
This is core and part of what we're trying to do with the Fusion technology and architecture. Watch this space. I think it's going to be very interesting over the coming years.
Sounds good. Thanks.
Thanks, Jim.
Thank you. Our next questioner in queue is John Pitzer with Credit Suisse . Please go ahead.
Hi, this is Patrick Walsh for John Pitzer. I was just calling, following up on that question. We are seeing that transition, or at least discussions around transitions to ARM architectures. I was wondering if you were thinking about maybe moving from x86 towards ARM processors.
From a standpoint of where the industry is going, the industry is going to have really around workloads and workload potentials. There are going to be a drive for increased processor capacity and power. They're looking to do that at a lower power envelope and a smaller size. I think what you're going to see is the work that we're doing will continue to bend down into those lower power bands and also be able to introduce those new technologies that allow us to compete and win in that market space as it emerges. I don't think there's anyone in the marketplace who knows the mix that will occur over the coming quarters. We truly believe that we're in a great position to participate in that, both in the core segment as well as in the merging segments, Patrick.
Thank you. As a follow-up, I was just kind of wondering if you could maybe articulate maybe what your tablet strategy would look like going forward?
I think it's a little early for me to tackle that one. Do you want to take it, Thomas?
Yeah, so we made certain announcements and changes to our roadmap. We put a tablet product on the roadmap that is going to coincide with the launch of Windows 8. You know we are excited about the changes that we have initiated. Rory, I think, is dead on. The ecosystem is moving towards our strengths in terms of power envelopes, in terms of form factors, and in terms of technology needs. You just have to look at what Fusion has done. Our first-generation triple battery life, for us, it brought a performance into a form factor, especially in the netbook segment that didn't have access to things like that before. That made us so tremendously successful. We take this architecture. We take this technology, and we will advance it to form factors that are going to come. We are excited by that opportunity.
I think what the market also starts to realize is that the software layer, our Fusion system architecture that we have been starting to put on top of this hardware architecture, is going to see more and more attraction in the market. We see that this leads to us being pulled in adjacent market segments in an extremely good way. We are excited. Change in this industry is good. The change for the smaller players is normally a good thing. Good news for us.
OK, thank you, Thomas. Thank you, Rory. Good luck going forward.
Thank you.
Thank you. Next questioner in queue is Ross Seymore with Deutsche Bank. Please go ahead.
Hi, congrats to you, Rory, and to the company for finishing the search. I guess, Rory, my question is, given your experience on the PC side of things and AMD s' strategy of raising margins, putting out higher-end parts, and really getting its pricing up, how do you balance the desire for AMD to improve profitability and raise its prices with your experience on the PC side, where the desire, at least on the pricing side, is quite different?
I think Thomas touched on it earlier, Ross. I think it's always important to start around efficiency, operational improvement. The more efficient our processes are, and as we transform our business internally, that allows us to do it even more efficiently. That allows us to make investments and potentially expand our margin. Clearly, by identifying emerging trends, like what we've done with the APUs in the Fusion segment, we open up opportunities to expand our margin potential. New things that are key, where we're the first introduced it, that helps us win. I think the work that we're doing around servers, specifically targeted at the cloud and the data center infrastructure, these are going to be very key opportunities for us as we look forward. I think all of those factors introduce an opportunity for us to participate.
Let me make an additional comment. We're not talking about raising prices. We are increasing our price performance. We are improving our product mix. We have been starting to play in product SKUs that we have not addressed before. That is the exciting part about the Fusion a rchitecture, that we can bring that technology into segments that we have not been able to address before. We have made no secret out of it that the launch of, especially of the mainstream part of our Fusion f amily, is going to be a big lever for us to improve pricing mix and price performance for the company moving forward.
Great, thank you. Congrats again.
Thanks, Ross.
Thank you. Next questioner in queue is Patrick Wang with Evercore Partners. Please go ahead.
Pardon me? Your line is open. Patrick, are you there? Please check the mute button.
Let's go on to the next question.
Sure thing. Next questioner in queue is David Wong with Wells Fargo. Please go ahead.
Thank you very much. Can you give us some idea, looking in from the outside before you joined AMD , what your view is of the strength in AMD s' product lines, and also what are the areas for improvement that might make AMD s' products more competitive?
It's interesting, David. As a customer and having that customer view over the past five years, I saw AMD s as really a leading innovator. They saw the market, and they saw it in a different way. I think what the key strengths we've seen, I've seen personally, is the work around discrete graphics, the kind of graphic solution that they've driven in notebooks and game consoles. Clearly, the work around Fusion , creating that trend. Again, David, we are just scratching the surface of where this technology will go. I always thought that that work was going to be key. When I go into one of the large-format retailers and I walk around and look at the laptops, I notice the amount of Fusion product stickers that I see. I think that's impressive.
I noticed that over the summer as I went and visited different large-format retailers. I think those things, combined with the Bulldozer technology around the cloud, really give us the strength and I viewed was the strong foundation. That, combined with what I saw around the culture and the way that the company views innovation, it's in our DNA. The way we work with customers to deliver solutions, the way we go about doing business the right way and putting people first. This company has a long 42-year track record of going about business the right way and really looking at innovation as an opportunity, embracing change. That drew me to it. As I went through the process with Bruce and the board of directors and met Thomas and others, I could see that firsthand. All those experiences were true and real. Thanks, David.
Anything on the room for improvement bucket?
I think it's always great to go faster. Faster is always better. Bigger is better. You know, those are always good things. We need to create a sense of urgency and even more passion around every single day matters. I think that's always a good thing. You know, you can't fault any company for wanting to go faster. I think we should go faster.
Great, thanks.
Thank you. Our next questioner in queue is [Craig Ryder] with FBR. Please go ahead.
Hey, congratulations, Rory. Thanks for taking the question. I guess, as you look at AMD's position in the market, where do you face, where do you put a higher priority on the mobile efforts or on the server efforts?
Craig, thanks for the comments at the beginning. I really think it's around three or four key concepts. One, execution excellence. I think that's key. Thomas has been pushing on that very hard over the past several quarters. You should go on mute because I'm getting an echo. Over this past several quarters around efficiency and our process work, that execution excellence is always important. The culture, I've referenced it several times. I'm super impressed with the culture here at AMD . I think culture, my experience working at my previous employer at Lenovo, culture is a competitive difference maker. I feel that kind of difference in the culture here. In terms of strategy, it's always about balance, balancing the core businesses that we have. There are significant and huge opportunities for us to continue to grow in those core businesses: notebooks, desktops, graphics, servers.
At the same time, in that balanced way, just like a boxer using that other hand to go after him and attack, and attack in the mobility segment. That's a balanced strategy, short term, long term, investment, return. It's all about balance. That's when I think you get the best results, especially with a company with the kind of success that AMD has driven.
Thank you. I'm sorry if this has been asked, but how far do you think ARM is going to push into the notebook market and into the server market? Is that a place you think AMD should be playing?
I think, Craig, we touched on it earlier. I think what we're seeing is some interesting evolutions in the marketplace. As I've kind of referenced here earlier, the core PC market space is going to continue to expand. I believe it'll grow over the next five, 10+ years. I think it particularly will be strong in the emerging markets as those economies expand and increase their middle classes. That's been my experience. I think there'll be interesting shifts in market usage patterns and how customers use their technology. AMD will embrace those market shifts and changes and make sure that we deliver solutions like our AMD Fusion APU to reach lower power band envelopes, better processing capability, and unique and different form factors. I think there's a lot of opportunity both in that core and in the new market spaces. Thanks again, Craig.
Thank you.
Operator, we'll take two more questions, please.
Sure thing.
Thank you.
Next questioner in queue is [David Wu I n Top Global ]. Please go ahead.
Yes, thank you. I have just one question. If you look at the last time AMD really gained significant share against your main competitor in the core business, it was between 2003 and 2006. Is there any visibility from the initial rollout of Bulldozer that you would enjoy potentially the same advantage as the first generation of Opteron enjoyed back in that period?
Very good question. You know we're not going to give any market share guidance here today, but I think it's fair to say that the first feedback on the Bulldozer architecture and products from customers that have seen material is encouraging. We've said that the launch of this product, among the other things we have implemented, is a big part of us gaining back market share in this segment. From what we've seen so far, I think we can feel confident about that statement.
OK, a quick follow-on, please. Your main competitor in the core business does enjoy a lead in manufacturing processor technology, at least. How do you think you can overcome that as a fab or semiconductor company?
Very good point. I think if we see anything in this market and the changes that are happening and the success we had with the products that we launched this year, it's that while manufacturing technology is important, it's not sufficient to be successful in this market space. We think that product design, product positioning, and value proposition around the markets that we attack is very important. I think we've clearly seen this on the process launch. We have to manage our technology foundry system very professionally. I think we have seen, especially in the discrete graphics side, that we can take market leadership and keep market leadership over many generations and years in a foundry relationship.
I think the products that are going to be rolled out this year or that we have been rolling out last quarter on the mainstream Fusion parts and also the new server products point us in the right direction. Technology and manufacturing technology is important. We'll make sure that we manage our partners this way. It's necessary, but it's not sufficient to be successful in this market segment.
Thank you.
Thank you. Our final question comes from Vijay Rakesh with Sterne Agee. Please go ahead.
Hi, c ongratulations. I had a question here. Rory, when you look at the PC and the tablet market, I just wanted to get your thoughts, what you thought there about, do you think PCs have life left and they come back to normal growth rates? If not, if you think tablets would be the way to go, how do you think AMD is positioned to compete with kind of the cheaper ARM solutions that are going to tablets? Thanks.
Yeah, Vijay, thanks for the question. You know, there's no doubt that I believe that the PC, core PC space will continue to expand. I believe that particularly in the emerging markets, as we see those economies drive more and more middle-class families, that we'll see the consumption of PCs continue to increase. Think about it. There's 4.5 billion people in the emerging markets today with no technology at all, other than perhaps a smartphone or a cell phone. This is a huge opportunity in computing. We believe that it will continue to expand. I think the market analysts also suggest that as they look out over the coming years. In terms of new and emerging technologies, I think we'll see the continued push for lighter, faster, always-on, those technologies that allowed better mobility and easier transport. Those trends are not going to change.
They've been the case over the past 20+ years. Those are going to continue to play a key role. That's why we're developing the solutions around the Fusion technology that allows us to reach better power envelopes, lower form factors, all the unique pieces around that that allow us to reach that space, Vijay. I think it's an exciting time and one that we're very, very well positioned to partake in.
Great, thanks.
Excellent, Vijay. Thank you.
Thank you. With that, I'd like to turn the program back over to Ruth Cotter.
Thank you, Operator. We'll just turn to Rory for some parting thoughts as we wrap up the call here.
Thank you, Ruth. It really is an honor to be selected as the President and Chief Executive Officer. I got to get that right. It's different. It is an honor and really a privilege to be selected as AMD's President and Chief Executive Officer. I really believe this is a truly unique company in today's technology industry. It's a company based on a very proud 42-year history with great technology that's emerging every day. I could feel the strength of this team and this energy, this desire to win. I truly believe there's unlimited potential here. This is a rich history of delivering what's next. I want to finish the way we started and say thank you for taking the time and your interest in AMD.
I look forward to working with each and every one of you over the coming months and years as we build on the momentum that we've created. In conclusion, I'd like to thank Thomas again for the work that you've done and the leadership you've driven. It's been outstanding and greatly appreciated. With that, Ruth, you're welcome. With that, we'll close the call.
Thank you. Today's call is concluded. Thanks to all the participants.
Thank you. Once again, ladies and gentlemen, this does conclude today's program. Thank you for your participation and have a wonderful day. Attendees, you may disconnect at this time.