Analysis: Thomas Seifert, AMD CFO, Leaves for Siemens?


A couple of weeks ago, we received hints that Thomas Seifert, Chief Financial Officer at AMD could be leaving the company before the end of 2012. On Monday, September 17, 2012 he officially signed a letter of resignation, leaving Devinder Kumar to serve as the interim CFO. During his almost three year tenure, Seifert lead fiscally responsible politics focused on getting the company out from the financial ruin brought on by almost four billion dollars in debt left by prior management.

However, those austerity policies left many market opportunities closed, and the lack of investment in certain projects meant that AMD lost deals or even entries into new markets. Furthermore, this lead to an unprecedented brain drain. For the purpose of this article, we spoke with several sources which are either still with the company or have left for greener pastures. While we do understand polarized opinions, the fact of the matter was that Thomas was brought in to bring the spending into order, as the company was burdened with debt and entangled in an anti-trust battle with Intel, which ended with AMD receiving less money than NVIDIA.

During his three year tenure, Thomas Seifert served as the CFO and interim CEO
During his three year tenure, Thomas Seifert served as the CFO and interim CEO

Seifert joined AMD in October 2009, after AMD spent almost a year without the CFO. AMD traded at $5.88, but was burdened with the expiring x86 license (March 2010), legal battle with Intel and more importantly, a mountain of debt which was practically higher than the annual revenue of the whole company. He was formerly introduced at the Financial Analyst Day 2009 held in Sunnyvale and immediately struck a tone of crisis management. Over the past three years, Seifert’s team reduced the debt from almost five billion dollars to a more manageable level.

The "house in order" did not account for sorting out European operations, to which several current and former AMD executives described as the "AMD mafia", bringing examples such as GBP 40,000 phone bill due to an executive torrenting TV shows while in roaming or paying EUR 10,000 for special cast Puma shoes with an AMD logo on it for the purpose of CeBIT exhibition. Not exactly ‘austerity measures’.

Perhaps the breaking point of Seifert’s tenure came last year, when he served a dual role of CFO and an interim CEO. Our sources told us that AMD will still need time to recover from that period, since Thomas Seifert "slowed down projects and made a bigger mess than Dirk did in 2005 with his deliberate 65nm delay." Internally, Seifert started to promote the "Project WIN", which was communicated as the reorganization that will return AMD to its heights, and naturally majority of engineers and marketing thought that AMD is preparing for a campaign in which the company would advertise its strengths and "go for gold". In fact, this reorganization was preparation to lay off between 10-15% of the company staff, with the culling in engineering and marketing department. The financial team was not cut, HR was not cut – and most of ‘fat’ remained where they were before (one of our sources calls this ‘fat’, but most of them called it ‘sludge’ or ‘mud’).

Following the forced exodus of their colleagues, engineering departments starting to suffer from a major brain drain, with Apple, Samsung and Synaptics profiting the most. We spoke with numerous sources on why they departed from AMD, and the most damning comment was, "CFO could not see a golden goose even if he tripped over it." When a person credited with changing the industry tells you that, you have a tendency of giving it quite a bit of weight. Still, all these opinions come from reliable people, so judge for yourself. 

As a consequence of ‘Project WIN’, AMD’s CEO Rory Read has had difficult time to reorganize the company and push it as a custom SoC maker. Mr. Seifert’s focus on management instead of sales lead to miscalculations in terms of which AMD products sell, and which don’t. A good example of this is Fusion – AMD had issues with Llano availability and starved the channel for launch, only to end up with supply, while the company did not order enough wafers from TSMC with Brazos (Ontario/Zacate), which according to our sources, are in continuous short supply and AMD is missing out on around 4-6 million units per quarter in orders.

However, the new team is showing the signs of progress. For example, the management of AMD China was recently laid off, after doing absolutely nothing to win the 10 million+ GPU deal for the school market in China. The management did not want to work with the advisors to the Chinese government, and the deal was only brought forward after NVIDIA executives botched the deal.

What will happen with Mr. Thomas Seifert? Need no worry. Even though it is not a matter of public, our confidential sources are telling us that Seifert is being called back to Germany. His new destination should not be Infineon (Seifert joined AMD after defecting from bankrupt Qimonda), but rather Siemens, the German industrial giant. Given the lack of confirmation, we’d advise you to take it with a grain of salt, as usual.