AMD boss falls on his sword

 

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By Reuters

Posted on 11 Jan 2011 at 08:13

AMD's chief executive has resigned as the world's second largest chip manufacturer said it was seeking a new CEO to boost the company's growth.

AMD said the resignation of Dirk Meyer was the result of a "mutual agreement" with the board of directors and that Chief Financial Officer Thomas Seifert would become interim CEO, effective immediately, as the company looks for a permanent replacement.

The sudden departure of the 49-year-old Meyer, who headed the team that developed one of AMD's most successful chips before becoming CEO in 2008, caught some Wall Street analysts by surprise and sent shares tumbling by 4%.

"This is no doubt going to be viewed as a potential loss of momentum," said Gleacher & Company analyst Doug Freedman.

The company said there were no financial or performance issues with Meyer that led to his departure and a source familiar with the matter said the board viewed Meyer as somebody who had stabilised AMD but might not be right to take the chip maker into higher growth markets.

AMD is a distant second in the PC microprocessor market behind Intel, whose chips are used in more than 80% of the world's PCs, and AMD hasn't managed to break into the growing smartphone and tablet markets.

"I think what happened over last week has not helped Dirk's tenure," said Pacific Crest Securities analyst Michael McConnell as various manufacturers announced non-AMD tablets and Microsoft said it would expand support to include chips from ARM.

"It's just that it did not optimise it for the tablet market and for lightweight mobile computing. It decided to stay traditional and go after notebooks," McConnell said.