AMD CEO left partly over mobile strategy: source

SAN FRANCISCO Wed Jan 12, 2011 1:37am EST

Dirk Meyer, president and CEO of AMD, speaks during an Industry Insider session on the first day of the 2009 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 8, 2009. REUTERS/Steve Marcus

Dirk Meyer, president and CEO of AMD, speaks during an Industry Insider session on the first day of the 2009 International Consumer Electronics Show (CES) in Las Vegas, Nevada, January 8, 2009.

Credit: Reuters/Steve Marcus

SAN FRANCISCO (Reuters) - The departure of Advanced Micro Devices' chief executive followed months of concern among some board members that he wasn't doing enough to get the chip maker into the exploding mobile market, a company source said.

PC chip maker AMD's shares slumped 9 percent to close at $8.36 on Tuesday after the company unexpectedly said late the day before that Dirk Meyer was leaving as the result of a "mutual agreement" with the board of directors.

Much of the reason for Meyer's departure had to do with currents of discontent on the board about AMD's choice not to pursue making chips for the mobile market other than netbooks, the company source told Reuters.

In October, Meyer had told analysts that even though tablets like Apple's iPad were eating into demand for laptops, AMD would hold off on investing to develop microprocessors for that market until it grew more. AMD focuses on making chips for personal computers and servers, and competes directly against much larger Intel.

"Strategically they (the board) didn't feel like Dirk was taking them down the road they wanted to be on. They wanted to be on the Yellow Brick Road toward tablets and smartphones," said Patrick Wang, an analyst at Wedbush.

People may increasingly depend on tablets and smartphones -- instead of PCs -- as their main point of contact with the Internet, experts say.

Those devices typically use more power-efficient chips than the so-called x86-based processors sold by Intel and AMD that have served as the main processing brains of PCs for years.

(Reporting by Noel Randewich; Editing by Tim Dobbyn, Gary Hill)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (2)
noClue23 wrote:
So what are the chances that Apple will want to buy AMD? Nvidia’s Tegra2 has two arm cores with a great gpu. Apple makes its own A4 chips based on ARM technology. However their GPU power may not able to keep up with Nvidia’s. One solution is either to work with AMD to get their Radeon tech into Apples A4 chip or may just buy AMD???

Jan 12, 2011 5:35pm EST  --  Report as abuse
Sinbad1 wrote:
AMD was never really a leader in chip design. The only clever thing they did was to buy Nexgen. Nexgen was a company run by engineers, who were innovative and created what became the K7.
The AMD board are financial experts, people who know nothing about chip design but think that anybody can design a modern chip.
The same attitude exists at GM and many other large US companies. This is the reason the US is not the technical innovator it once was.

Accountants are there to count other peoples money, they simply do not have the creativity to make money themselves.

Jan 12, 2011 10:13pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.