Introduction: By leading AMD back from the brink and surpassing its old rival Intel, Lisa Su can be considered to have created a business miracle.

Written by Tian Shanshan | Published by Lishi Business Review

Turning the tide and stabilizing the situation.

In the male-dominated chip industry, a Chinese woman was entrusted with a critical mission and led one of the most outstanding large enterprise transformations in Silicon Valley history.

In 2014, Lisa Su became the CEO of chip giant AMD (Advanced Micro Devices). At the time, she had only been with AMD for two years and had never served as a CEO at any company before. AMD was in a severe operational crisis, with revenue down nearly 40%, its CPU market share falling by over two-thirds, and its stock price having plunged 90% from its high. Before her, AMD had gone through four consecutive CEOs, none of whom were able to change the loss-making situation. The CEO of its rival Intel, which had been a competitor for over 50 years, even said, "AMD will never come back."

Lisa Su brought AMD back to life in just six years, and within ten years, its stock price increased by over 60 times, soaring from $2 per share to around $160 today, reaching a high of over $220 at one point, with a market value that has surpassed that of its rival Intel. As of the most recent trading day, AMD's US market value stands at $258 billion, twice that of Intel's market value of over $129 billion.

As a result, Lisa Su has been named "The World's Highest-Paid Female CEO" by Forbes magazine for four consecutive years, named "Entrepreneur of the Year" by Fortune magazine in 2021, and named "Global Best CEO" by Barron's.

Moreover, AMD is a formidable rival to NVIDIA. In early January 2019, AMD released the world's first 7-nanometer graphics card ahead of NVIDIA. In both the CPU and GPU fields, AMD holds the second-largest market share, but it is the only company in the world that makes both CPUs and GPUs, able to integrate them onto a single chip. Lisa Su has also been crowned the "Chip Queen".

Coincidentally, she is distantly related to Jen-Hsun Huang, the founder of NVIDIA. Jen-Hsun Huang's mother is Lisa Su's mother's aunt. Therefore, some people jokingly refer to the competition between the two companies as a "war between cousins".

Why was Lisa Su able to bring AMD back from the ashes?

From two of her quotes and her growth journey, we may find some answers.

1

"Find global challenges, step up, and solve them."

This is Lisa Su's motto. She has loved mathematics and science since childhood, and her parents have always taught her to challenge difficult problems.

She said, "I have always liked solving really tough problems. This is a piece of advice I received when I was young and worked as an engineer at IBM: Run towards problems, because problems actually create opportunities."

Moreover, she developed an interest in chip manufacturing during her college years. At the age of 17, Lisa Su entered MIT to study electrical engineering and obtained a PhD in electrical engineering from MIT at 24. Today, she is also a tenured professor at MIT.

"When I was an undergraduate, the first class I took was to build my own personal computer. I not only had to build the circuitry but also program it. The feeling of building my own semiconductor devices with my own hands and observing how each step was completed was something I really enjoyed. I liked touching and feeling the products I built, which gave me a sense of accomplishment."

"I had the opportunity to witness the chip manufacturing process firsthand, though they were not the most advanced technologies at the time. We were able to build transistors on coin-sized materials and test them on systems, which is why I chose to enter the semiconductor industry."

In 2014, AMD, a semiconductor company mired in a loss crisis with declining CPU market share, was not only a global challenge that Lisa Su pursued but also a once-in-a-lifetime opportunity.

2

"Navigating between technology and business"

One of the key reasons why Lisa Su, who had never served as a CEO before, was able to successfully resolve AMD's crisis was that she not only understood technology but also had experience in corporate transformation and change during her career growth.

In 1995, Lisa Su joined IBM as a technical staff member. She helped design semiconductor chips that used copper circuits instead of traditional aluminum circuits, increasing the chip's operating speed by 20%. This caught the attention of IBM's senior management. In 1999, at the age of 30, Lisa Su became the special assistant to IBM's then-CEO Louis V. Gerstner Jr. The role of CEO special assistant is a distinctive succession training method at IBM, allowing participants to actively participate in major corporate decisions. This gave Lisa Su the opportunity to observe closely Louis Gerstner's successful transformation of IBM. Through transformation, Louis Gerstner increased IBM's stagnant market value by nearly six times. She observed and partially participated in the entire process of large-scale corporate transformation, gained deeper insights into running a company, and accumulated experience for subsequently rescuing AMD.

Later, Lisa Su became the head of IBM's research and development department, participating in the development of IBM's Cell chip for the PlayStation 3 gaming console from start to finish. She helped IBM sign a joint agreement with Sony and Toshiba in 2001 to use IBM's chips in Sony's PlayStation 3. This laid the groundwork for Lisa Su to lead AMD into the chip development of the gaming field.

It can be said that Lisa Su truly experienced "navigating between technology and business" during her career at IBM.

In January 2012, Lisa Su received AMD's "olive branch," and without hesitation, she joined the company, which had always interested her in the semiconductor industry. Later, she helped AMD enter the gaming console market of Microsoft and Sony, rising to the positions of Senior Vice President and General Manager of Global Business. At the time, AMD's share of the personal computer CPU market had been halved, its stock price had fallen below $2, and it was on the verge of delisting, with continuous losses and four consecutive CEO changes failing to turn a profit. The business Lisa Su was in charge of was AMD's only bright spot.

In June 2014, Lisa Su stepped up to become CEO, becoming AMD's first female CEO in its 45-year history. In the semiconductor field, most CEO positions are held by men, and as a rare female CEO in this field, Lisa Su faced unprecedented skepticism.

Initially, she adopted measures similar to Louis Gerstner's transformation of IBM for AMD, starting with stopping the bleeding. First, she laid off 7% of the workforce to save operating costs and prioritized "resources and technology into areas that can enhance profitability and drive sustained growth." Second, she listened to customers' voices to ensure good relationships with customers and partners. Most importantly, she "committed to launching new products on time."

Afterward, leveraging her strengths in both technology and corporate transformation and business development, Lisa Su began to reshape AMD.

In 2015, Lisa Su identified AMD's long-term focus on the high-performance computing market and determined three transformation directions around this positioning: creating great products, deepening customer relationships, and simplifying business processes.

Instead of entering the hot smartphone chip market at the time, she identified three growth markets: focusing existing high-performance computing and graphics technologies on gaming, data centers, and immersive platforms. These three business decisions have hit the main fronts of current consumer-grade chips - gaming relies on high-priced hardware, AI relies on powerful data centers, and AR and VR rely even more on immersive platforms.

Drawing on her experience in developing gaming console chips at IBM, she pushed AMD to develop chips for home gaming consoles, allowing AMD to secure a foothold in the three best-selling gaming consoles: Sony's PlayStation 4, Microsoft's Xbox One, and Nintendo's Wii U, and become the chip supplier for the top three gaming console manufacturers at the time. This gave AMD, which had been devastated in the personal computer CPU market, an opportunity to continue surviving.

For a technology company, the real opportunity for a turnaround lies in creating "great products." Therefore, Lisa Su devoted the company's limited resources to the development of a new architecture for personal computer CPUs called Zen. On March 2, 2017, AMD officially launched the industry-shaking CPU - the Ryzen processor based on the new "Zen" architecture, bringing PC gamers, creators, and hardware enthusiasts worldwide CPUs that matched Intel's price but offered superior performance. At the time, Intel had a market share of up to 90% in the CPU market, but each generation of CPUs only improved by about 10% in performance.

In the third quarter of 2017, AMD achieved a net profit of $71 million. In 2018, AMD ended its six-year loss-making situation and turned a profit. In 2019, AMD released the world's first 7-nanometer graphics card (GPU) ahead of NVIDIA. It was also in this year that AMD's market value returned to over $100 billion, and its CPU market share grew to over 30%.

In the data center segment, Lisa Su's main strategy was to reach new agreements with technology giants such as Google and Amazon, which required a large number of CPUs to support their exploding cloud businesses. In 2019, due to manufacturing delays, Intel's chip processor business began to experience problems, and Apple decided not to use Intel's chips in its iPhones. Lisa Su keenly seized on her rival's mistakes and struck deals with cloud computing giants Google and Amazon, bringing AMD $6 billion in sales.

Lisa Su once summarized her experience of leading AMD's turnaround in five words, "constantly fighting battles." Looking back now, she has achieved phased victories in her battles.

In February 2022, AMD's market value surpassed that of Intel for the first time in over 50 years of competition between the two companies.

Around the same time, AMD successfully acquired Xilinx, the world's leading FPGA (Field Programmable Gate Array, a typical integrated circuit in semi-custom circuits) chip manufacturer, for $49.8 billion, making it the largest acquisition in the semiconductor industry's history. This gave AMD an additional advantage in the critical data center market and formally established AMD as a chip giant with the labels of "CPU runner-up," "GPU runner-up," and "FPGA leader".

Lishi Business Review has compiled 50 business insights from Lisa Su's leadership of and transformation of AMD, including four parts: career growth, rebuilding AMD, corporate strategy, and life experiences, to help readers gain a more direct and comprehensive understanding of the business wisdom of this "Chip Queen".