AMD’s proposed $35 billion purchase of chip maker Xilinx will get a lot of attention as an example of consolidation in the semiconductor industry. But it is also significant for symbolizing the extraordinary turnaround that Lisa Su has engineered at AMD since taking the helm in 2014. The company wouldn’t be in a position to even consider an all-stock purchase of this size if its shares hadn’t soared 2,200% over the past six years—from around $3 to its recent highs of around $90.
In 2014, AMD was burning cash while revenue was declining. To raise money, it borrowed money, cut staff and sold office properties. Some expected it to be bankrupt by now. Instead, thanks to an array of new chips introduced in the past few years, AMD is generating a steadily growing amount of cash while its revenue is up 67% since 2015. In the most recent quarter, revenue rose 56%. It has gained market share against Intel, the Wall Street Journal noted today, and it has nearly repaid its debts.