Advanced Micro Devices Inc. named former Lenovo Group Ltd. executive Rory P. Read as chief executive, concluding its search for a new leader more than seven months after its previous CEO resigned.
The Sunnyvale, Calif., semiconductor maker has long faced a tough battle with larger rival Intel Corp. Now, both companies are grappling with rising demand for smartphones and tablet computers, which don't use their chips, and slowing growth in their core PC market. Dirk Meyer left as AMD CEO in January on board concerns that he wasn't moving quickly enough to begin offering chips for mobile devices.
AMD had struggled to replace Meyer, with a number of prominent executives turning down AMD's advances. Chairman Bruce Claflin on Thursday said Read, 49 years old, is "ideally suited to accelerate AMD's evolution into the world's leading semiconductor design company."
The news sent AMD shares up 3.2% to $6.54 in recent trading, still off 20% year-to-date. Shares had been pressured by uncertainty about AMD's leadership, though they got a momentary boost last month following upbeat third-quarter guidance from the company.
"Read's background is very solid, and the performance of Lenovo has been very, very good," Bernstein analyst Stacy Rasgon said. "At first glance, this is a guy with a proven track record of execution, which they need. Execution at AMD has always been a sticking point, and strengthening the tie between AMD and Lenovo is a good thing."
Read most recently served as president and chief operating officer at Lenovo, a Chinese PC maker that has been posting soaring results and taking market share from its rivals. Chief Executive Yang Yuanqing said in a recent interview that Lenovo expects to be the No. 1 PC maker within a couple years.
Before Lenovo, Read spent 23 years at International Business Machines Corp., holding a broad range of management positions. Lenovo bought IBM's PC operations in 2005.
At AMD, Read also will join the company's board. Thomas Seifert, who has served as CEO on an interim basis since Meyer's departure, will return to his role as chief financial officer.
"I'm very pleased to be joining AMD at this important time in its history," Read said. "AMD is a true innovator and is uniquely positioned to lead the industry forward, delivering the next big thing both within the PC ecosystem and beyond."
AMD dislosed in a regulatory filing that Read will receive a base salary of $1 million a year, slightly more than the $950,000 Meyer received in 2010. His performance-based bonus equates to 150% of his base salary, slightly less than the 200% bonus for Meyer.
Read also received a $1 million lump-sump cash sign-on bonus, but he'll be required to repay up to half that amount if he's not employed at AMD in two years. In addition, Read received some stock awards.
Chip makers have posted strong results in recent quarters, but PC demand has slowed on worries about the macroeconomic environment and as consumers increasingly buy tablets like Apple Inc.'s (AAPL) iPad. Exposure to emerging markets and business spending--especially on servers--have helped buffer results of PC chip makers, but AMD has been losing share to Intel.
The fresh leadership at AMD comes as the company aims for its new processors to gain traction in mainstream notebooks and servers and to help it better compete with Intel. Last month, AMD reported it swung to a profit in the second quarter while offering strong guidance for the third quarter.
Shara Tibken is a reporter for Dow Jones Newswires, where this story originally appeared. Write to her at firstname.lastname@example.org. Mia Lamar contributed to this article.