Things get worse at AMD, CEO needs to go

It would be hard to do worse for shareholders that AMD (NYSE: AMD) has. The chip maker's shares have fallen from over $42 a little under two years ago to a 52-week low yesterday. It is actually a four year low, but who is counting. Over that last two years, AMD shares are down almost 70%.

The company has made a number of mistakes. The latest one was to have a meeting with securities analysts. What came out of that meeting was that a key product would be delayed. According to The Associated Press "in a note to investors, Citi analyst Glen Yeung said his view of the company was confirmed at the meeting, in which AMD acknowledged delays in key products."

AMD said that it would reach a operating profit in the second half of next year. Based on the drop in the stock over the last several days, it would appear that almost no one believes that.

AMD once had what appeared to many to be a lead in the chip performance department, especially compared to its larger rival Intel (NASDAQ: INTC). AMD picked up market share from Intel in both the server and PC markets. But, Intel made an intensive effort to improve its chip performance and the cut energy consumption in its products. The two companies also went through a price war which cut AMD's gross margin.

Most analysts also think that AMD's purchase of graphics chip company ATI was a mistake. It added a lot of debt to the AMD balance sheet.

As much as any large tech company in America, AMD needs to replace its senior management, starting with CEO Hector Ruiz. His last two years as head of the company have been nothing short of a disaster. AMD has to show Wall St. that it is willing to turn over a new leaf.

Douglas A. McIntyre is an editor at 247wallst.com.