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Advanced Micro Realigns Business, Declares COO

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Advanced Micro Devices (AMD) recently announced its latest internal business transformation plans and appointed senior executive Dr. Lisa Su as the new chief operating officer ("COO") in a bid to overcome declining demand of personal computers (PCs).

AMD declared that the latest move was a part of its multi-year strategic reorganization to merge its worldwide units, sales organizations and operations into a single, market-focused business.

As a part of the reform, AMD also announced the consolidation of its numerous business units into two segments, The Computing and Graphics Business Group and The Enterprise, Embedded and Semi-Custom Business Group.  The former will focus on client, consumer and professional graphics chips operations, while the latter will be responsible for servers, embedded and semi-custom chips businesses.

The new structure plan will be effective from Jul 1 and will be headed by Lisa Su. Lisa Su joined AMD in 2012 as general manager of its global business units. She had previously worked in engineering and leadership roles at International Business Machines (IBM) for 13 years.

For the past two years, the company has been successfully implementing its three-step strategy to reorganize, speed up and ultimately reinvigorate the brand. The latest move is expected to diversify its operations in high-growth high-potential markets and help the company to produce more differentiated products.

This will help it to reduce its dependence on the PC market, which at present is suffering from declining sales worldwide. We believe that such measures will also enable the company to broaden its customer base and boost its top- and bottom-line performance.

AMD is the world's second-largest maker of microprocessors. In the last reported quarter, AMD’s top line was better than its guidance, supported by healthy demand for Radeon GPUs and semi-custom gaming APUs. Also, the company’s bottom line beat the Zacks Consensus Estimate by a couple of cents.

AMD currently holds a Zacks Rank #2 (Buy). Other better-ranked stocks in the same sector include Applied Micro Circuits Corporation (AMCC) and OmniVision Technologies, Inc. (OVTI), both carrying a Zacks Rank #1 (Strong Buy).

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