The departure of AMD's chief executive Dirk Meyer is linked to board concerns about missing out on the mobile market, according reports citing company sources.
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AMD's shares slumped 9% on Tuesday after the company unexpectedly announced that 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 discontent on the board about AMD's decision not to pursue making chips for the mobile market, a company source told Reuters.
In October, Meyer told analysts that AMD would continue to concentrate on PCs and servers, and hold off on investing to develop microprocessors for the tablet computer market until it grew more.
Analysts said the board did not feel Meyer was taking them down the right road, with experts predicting people will increasingly depend on tablets and smartphones to connect to the Internet.
AMD has set up a CEO search committee and the board has appointed senior vice-president and chief financial officer Thomas Seifert as interim CEO.
Bruce Clafin, chairman of AMD's board said in a statement that a change of leadership will help to accelerate the company's ability to create increased shareholder value through growth.