AMD chairman: tough times for chip industry

February 4, 2009, 11:40 PM UTC
Fortune

I ran into Advanced Micro Devices Executive Chairman Hector Ruiz at the San Jose airport Wednesday morning on the way to Austin; he was chatting on his iPhone and lining up for the same American Airlines flight I was boarding. Our conversation was quick, but illuminating.

A few nuggets:

Ruiz is still hard at work tying up the details of AMD’s (AMD) manufacturing spinoff deal with Abu Dhabi-based Mubadala Development Company, a process that’s considerably more difficult in the wake of the global economic collapse. “I’m glad we started working on this when we did,” he said. “Seems like every business in the world wants their attention now.” And with oil prices down, Persian Gulf sugar daddies have less bailout money to spread around so it’s a bad time to get in line.

Ruiz said he expects a couple of more rough quarters for the chip sector at least, considering how ugly things are out there. And though many chip businesses haven’t really started going under – a notable exception is the bankruptcy of German memory maker Qimonda (QI) – Ruiz said he expects that to change before long. As bad as things are, he said, it’s pretty much inevitable.

But Ruiz also had some upbeat things to say. Sure, times are rough – AMD’s stock is trading under $2.50, its lowest levels in nearly 20 years. But he said folks are so pessimistic and inventory levels are so low that once the economy improves, business should pick up fast.

For the survivors, anyway. (INTC) (NDVA) (AAPL) (DELL) (HPQ) (IBM)