Podcast Summary: Building AMD with Mark Papermaster: How Bold Bets and Breakthroughs Reshaped the Semiconductor Industry

Podcast Information:

• Title: Building One with Tomer Cohen
• Host: Tomer Cohen, Chief Product Officer of LinkedIn
• Episode: Building AMD with Mark Papermaster: How Bold Bets and Breakthroughs Reshaped the Semiconductor Industry
• Release Date: May 6, 2025

1. Introduction

In this episode of Building One, Tomer Cohen engages in a profound conversation with Mark Papermaster, the Chief Technology Officer (CTO) of AMD. The discussion delves into the strategic decisions, cultural shifts, and innovative breakthroughs that facilitated AMD's remarkable turnaround in the highly competitive semiconductor industry.

2. Mark Papermaster’s Background and Career Path

Mark Papermaster's journey into the semiconductor industry is rooted in his early passion for chip design. He began his career at IBM, contributing to mainframe computers, which laid the foundation for his deep understanding of computing's critical role in industries like banking and national security.

Mark Papermaster [04:39]: "I took a class that really helped me understand all of the physics and the math and how chip design could really solve difficult problems. And so I switched and did my last internship with IBM doing chip design and the rest is history."

His tenure at Apple, under Steve Jobs, significantly influenced his approach to product development by emphasizing bold vision and prioritizing the end-user experience.

3. AMD's Turnaround Strategy: Bold Bets and Exit from Server Business

Upon joining AMD in 2011, Mark faced a company struggling with plummeting stock prices and a loss of competitive edge. Recognizing the need for drastic measures, Mark and CEO Lisa Su charted a transformative roadmap.

One of the decisive moves was AMD's strategic exit from the server business to focus on areas where they could be truly competitive.

Mark Papermaster [00:26]: "We made the decision early on, over a decade ago we'd actually have to exit the server business. This business is over $5 billion per annum for us right now, but we had to leave it before we could come back in."

This bold decision was pivotal in redirecting AMD's resources towards more promising sectors, ultimately fueling their resurgence.

4. The Role of Culture and Leadership in AMD’s Success

Mark emphasizes the critical role of culture and leadership in AMD's turnaround. At IBM, he honed his leadership and management skills, learning the importance of systematic processes and minimizing failures.

Transitioning to Apple, he absorbed the value of a strong, bold vision and the courage to break norms, which he later applied at AMD. Under Lisa Su’s leadership, AMD fostered a culture of transparency, accountability, and collaboration.

Mark Papermaster [08:14]: "Culture is absolutely fundamental... There's healthy contention, you know, challenging each other but then aligning on that. Why?"

5. Innovation Post-Moore’s Law: Chiplet Architecture

With Moore's Law slowing down, AMD had to innovate beyond traditional scaling of transistor counts. Mark introduced the concept of chiplet architecture, a modular approach that integrates multiple smaller chips (chiplets) into a single package.

Mark Papermaster [30:56]: "We were the first in the industry to this type of chiplet deployment... the way that we put these chiplets, these Lego blocks together really provided value."

This strategy allowed AMD to enhance performance and efficiency without relying solely on shrinking transistor sizes, positioning them ahead of competitors in addressing modern computational demands like AI.

6. Risk Management and Big Bets

Mark discusses the importance of making big bets while simultaneously implementing robust risk management strategies. At AMD, this involved building multiple exit points and fallback plans to mitigate potential failures associated with large-scale innovations.

Mark Papermaster [37:16]: "You have to manage risk. You have to know what those variables are... and you have to put exit points in the process."

An example cited is the development of the Zen processor family, where AMD committed to a new CPU architecture despite inherent risks, ultimately leading to significant market gains.

7. Future of Semiconductors and AI

Looking ahead, Mark envisions a future where AI is embedded ubiquitously across all devices, driving the need for more specialized and efficient chip designs. AMD’s holistic design approach aims to integrate advancements in hardware, software, and system-level optimization to stay ahead in the AI revolution.

Mark Papermaster [43:23]: "AI is going to be built in everywhere. We're going to basically just have smart devices in all walks of our life."

8. Managing Talent in the Age of AI

The advent of AI is transforming roles within AMD, automating repetitive tasks and enhancing productivity. However, Mark underscores the irreplaceable value of human creativity, strategic thinking, and empathy in leadership and product development.

Mark Papermaster [41:01]: "We're brainstorming, looking at all the different variables... it's a completely creative process that is not just based on data that I can train."

9. Misconceptions and Myths in the Semiconductor Industry

Mark addresses common misconceptions, particularly the belief that innovation in semiconductors is reaching its limits. He asserts that relentless innovation continues to push boundaries, dispelling myths that the industry is nearing its physical constraints.

Mark Papermaster [46:23]: "They were wrong every time. Innovation is an indomitable force."

10. Key Takeaways and Conclusion

Tomer Cohen concludes the episode by highlighting the key lessons from Mark Papermaster’s insights:

1. Holistic Product Development: Success hinges on understanding the "why" behind product features, not just the "what." Combining systematic processes with bold, user-centric visions leads to superior products.

2. Strategic Big Bets: In challenging times, incremental improvements are insufficient. Making substantial, calculated bets can redefine a company's trajectory, provided there are robust risk management and exit strategies in place.

3. Paradigm Shifts Drive Innovation: Embracing new architectures like chiplets exemplifies the necessity of breaking traditional molds to address evolving technological landscapes, such as the limitations of Moore’s Law.

AMD's journey, as narrated by Mark Papermaster, serves as a testament to how strategic vision, cultural alignment, and continuous innovation can overturn industry challenges and drive sustained success.

Tomer Cohen [47:53]: "Mark is drawing a compelling contrast between IBM's systematic process orientation and Apple's bold vision and user experience focus."

Notable Quotes:

• Mark Papermaster [04:39]: "I switched and did my last internship with IBM doing chip design and the rest is history."

• Mark Papermaster [08:14]: "Culture is absolutely fundamental... There's healthy contention, you know, challenging each other but then aligning on that. Why?"

• Mark Papermaster [30:56]: "We were the first in the industry to this type of chiplet deployment... the way that we put these chiplets, these Lego blocks together really provided value."

• Mark Papermaster [37:16]: "You have to manage risk. You have to know what those variables are... and you have to put exit points in the process."

• Mark Papermaster [46:23]: "They were wrong every time. Innovation is an indomitable force."

Conclusion

This episode of Building One provides invaluable insights into AMD's strategic renaissance under Mark Papermaster's technical leadership. By blending bold decision-making with meticulous process management and fostering a culture of innovation, AMD has not only revitalized its market position but also set new standards in the semiconductor industry. Listeners gain a comprehensive understanding of navigating complex industry challenges, the power of strategic risk-taking, and the relentless pursuit of technological excellence.