The company announced the departure just after the close of trading on the New York Stock Exchange. CEO Rory Read will handle Ghilardi’s sales responsibilities in the interim while the search for a replacement gets underway.

Ghilardi (pictured) joined AMD in 2008 as senior VP and general manager for Europe, Middle East and Africa. The following year, he was promoted to chief sales officer.

Before AMD, he worked in Hewlett-Packard’s consumer group, running sales operations of PCs and printers in the EMEA region. And before that, he did the same thing for HP’s commercial business, also in EMEA. He joined HP in 1982, and served on the board of directors of HP Italy (I didn’t know there was such a thing!) from 2001 to 2008. Ghilardi holds a master’s degree in electronic engineering from Italy’s Politecnico di Torino.

It’s hard to know what kind of signal this move is intended to send for AMD. Last week, in a meeting with financial analysts, Read confounded the audience with statements that AMD — whose chips are fundamentally similar to those of Intel and use the same x86 technology — might pursue an “ambidextrous” strategy and incorporate technology used in chips from other companies. This has generally been interpreted as a hint that AMD might incorporate designs from the British chip outfit ARM Holdings in some future hybrid design.

ARM-based chips, as you probably know, are in most of the world’s smartphones and tablets, and for AMD to embrace that technology would be a huge shift in strategic thinking. And by huge, I mean Republicans-embracing-Socialism huge. It wasn’t so long ago that AMD was actively sponsoring a campaign to get x86 chips everywhere, including phones, though it obviously hasn’t worked out that way.

Since then, Read hasn’t really elaborated on what he meant, other than to say that future AMD chips might have a modular design that would allow bits of other types of chips, including an ARM core, to be added. Clearly some big changes are afoot at AMD.

AMD’s statement on the departure is below:

AMD Announces Departure of Emilio Ghilardi as Senior Vice President and Chief Sales Officer

AMD President and CEO Rory Read to Serve as Interim Chief Sales Officer

SUNNYVALE, CA–(Marketwire -02/07/12)- AMD (NYSE: AMD – News) today announced the departure of Emilio Ghilardi as senior vice president and chief sales officer, effective immediately. Rory Read, AMD president and chief executive officer, will serve as interim chief sales officer while the company actively seeks a replacement.

“I’d like to thank Emilio for his contributions to the business and wish him well in his future endeavors,” said Read. “Developing relationships with our customers that are grounded in a foundation of trust through consistently delivering on our commitments is critical, and we are making progress toward that goal. AMD enters 2012 with significant momentum, and we are building upon that momentum by embracing the shifts occurring in the industry and marrying market needs with innovative technologies to become a consistent growth engine.”

Mr. Ghilardi joined AMD from Hewlett Packard in 2008.

AMD CEO Rory Read

First there’s Intel, which has parlayed its deep strategic command of the complex and expensive process of manufacturing chips into a commanding position at one of the crucial pivot points of tech hardware, despite the uncertain state of the global economy, and also despite the dire predictions of analysts.

Then there’s Advanced Micro Devices, which competes for the same sockets in PCs and servers that Intel does, but with a lot less success to show for it. While it reported a non-GAAP profit of 19 cents a share on $1.7 billion in sales, its outlook for the current quarter was weak enough to send AMD shares down 2 percent in after-hours trading. Its revenue forecast of $1.51 billion to $1.61 billion caught analysts by surprise, as they had been expecting average revenue of $1.6 billion.

Then there’s the matter of a $209 million charge from the writedown of AMD’s stake in Globalfoundries, the contract chip manufacturer that was cobbled together out of what used to be AMD’s factories in Germany, Texas, and one under construction in upstate New York; plus the former Chartered Semiconductor. That expense went a long way toward pushing AMD’s results into a 24-cent per-share loss on a GAAP basis.

Spinning off its expensive factories was supposed to save AMD, and it may well have done so. AMD now owns less than 9 percent of Globalfoundries. But the strategic shift has yet to pay off in the kind of success that AMD envisioned when it first plotted the move.

This fact caused chipmaker Intel to slash its sales forecast for the quarter by $1 billion, to $13.7 billion plus or minus $300 million. Today we’ll see just how bad the damage was, and how bad it’s going to be going forward, as the company reports its results after the close of markets today.

In a note to clients, Deutsche Bank analyst Ross Seymore says not to expect many surprises from Intel. Despite the lower sales guidance, he sees little change to Intel’s overall profitability. He expects Intel’s gross margins, a key metric in measuring profitability, to come in only slightly below the 64.5 percent that Intel had previously forecast. “We see little risk to gross margins despite the lower revenue because product mix continues to be solid,” Seymore wrote.

And while the first half of the new year is always seasonally slower than the second half, Seymore expects it to be slower still for Intel. He’s expecting sales in the first quarter of 2012 to come in at $12.73 billion, with a per-share profit of 51 cents, which is below the consensus of analysts who expect Intel to book sales of $12.8 billion. He also expects the hard drive shortage to hit Intel harder in the first quarter, as the supply of hard drives dries up. Gross margins in the quarter, he expects, will drop below 61 percent. Expect conservative guidance on PC demand for the quarters ahead.

Even so, Seymore rates Intel a Buy, with a $27 price target. “We believe Intel is well-positioned to benefit from new product introductions, improved execution and stable PC demand,” he wrote. He said that competition in chip prices from Intel rival Advanced Micro Devices should “remain benign,” mainly because AMD is fabless and so is at a competitive disadvantage with Intel. Other sectors of Intel’s business, including its flash memory operations, are showing improvement.

Early this summer AMD will debut its new Trinity chips, which promise to deliver the same performance while consuming half the power of AMD’s A-series chips. Launching alongside them: A new class of ultrathin, lightweight laptops to run them.

Why are they called “ultrathin” when we’ve been taught to refer to these devices as “Ultrabooks”?

Because Ultrabook is a moniker trademarked by Intel and entirely off limits to AMD.

So what’s to distinguish an ultrathin laptop from an Ultrabook, keeping in mind that they’re really both just laptops with sillier names?

Evidently, the biggest difference between the two will be price. Sources tell the occasionally reliable Digitimes that AMD is looking to seriously undercut Intel on this front by pricing Trinity 10 percent to 20 percent lower than its rival’s offering.

If that is indeed the case, these ultrathin machines could end up being $100-$200 cheaper than their Ultrabook couterparts. A troubling development for Intel, which is hoping the Ultrabook will carve out a 40 percent slice of the laptop PC market. The company has said in the past that it plans to drop the Ultrabook’s price over time. With AMD now aiming to undercut it, it may need to make those price cuts earlier and deeper.

I am in need of a new computer. I currently run Windows XP. When is Windows 8 due and should I wait for it? Should I just buy a new computer now with Windows 7 and upgrade to 8 when it arrives?

A:

Windows 8 will likely be released in test, or beta, form, early in the year, and then in final form by the 2012 holiday shopping season. Whether you should wait depends on how badly you need a new PC. One thing to bear in mind if you do buy now is that while Windows 8 will work fine with a keyboard and mouse, its slick new user interface is designed for a touch screen.

Q:

What is the difference between the AMD and the Intel microprocessor chips?

A:

They are different designs from different companies, though Intel is the dominant brand by far. In broad strokes, Advanced Micro Devices’ chips have often claimed better graphics performance and have generally been less expensive. But most computer makers choose Intel, which has lately focused intensely on better battery life without compromising performance.

For average consumers, the most important factor is that Windows runs fine on both, and a typical user doing typical, low-stress tasks might find it hard to distinguish between roughly comparable chips made by the two companies. So, if you are on a budget and an AMD-based machine you like costs less, you are safe to go with it.

Q:

I read your article about using Boot Camp to run Windows on a Mac and it was extremely informative. But I did not understand how to create the drivers needed to make Windows recognize the particular features of the Mac hardware.

A:

Apple’s Boot Camp Assistant program, which is used to set up the Windows installation on a Mac, includes a step in which you download and store the drivers on either a CD or DVD, or an external USB drive. This is software Windows needs to properly operate the Mac’s keyboard, mouse, trackpad and camera.

If you just follow the steps in the Assistant software, you should be able to download and install these drivers, which Apple calls Windows Support Software. It’s a good idea to print the Boot Camp installation guide before you start, an option that appears on the first screen of the Assistant program.

Email Walt at mossberg@wsj.com.

That would be the unit that sells graphics chips to dedicated PC gamers and others that pay top dollar for blazing speed. Its latest offering is definitely styled as a silicon Ferrari, not a Honda Civic.

“A single one of these is the fastest thing on the planet,” says Devon Nekechuk, a product manager at the AMD operations in Canada, acquired as part of the 2006 acquisition of ATI Technologies.

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Users had been accustomed to scouring retail store shelves, but Windows President Steven Sinofsky said expectations have shifted, and consumers are looking to download the programs they need.

“What has dramatically changed over the years is digital distribution of software,” Sinofsky told AllThingsD in an interview Tuesday, shortly after Microsoft announced its plans for the marketplace at an event in San Francisco.

The Windows Store is a key component of Microsoft’s biggest overhaul in years for its flagship operating system. In addition to changing the way apps are sold, Microsoft is also changing the way they are programmed, and expanding the types of chips on which programs will run.

Microsoft is looking to deliver the operating system in fairly short order — on Tuesday, the company said a beta would be available in late February. Windows 8 is widely expected to arrive late next year, though Sinofsky declined to say anything about when the final version would ship.

Well, I asked, is it fair to say that things are going well?

“I always feel great,” Sinofsky said. “I get to come to work every day and see the build from the night before, and every day we do more stuff.”

I also got clarifications on a few nerdy details.

First of all, Microsoft has not changed its plans to make the store mandatory for developers looking to sell new-style Windows 8 apps to individuals. Businesses and developers will have their own means for delivering programs to users, though Sinofsky said Microsoft is not yet ready to detail just how that will work.

“When we get to beta, we will detail the mechanism,” he said.

Sinofsky also clarified that the Windows Store won’t be ported backward to run on older Windows versions. Though understandable, given that the marketplace is designed for all-new apps, the move means that Microsoft will have to build from the ground up when it comes to recruiting developers and building a user base.

That leaves Microsoft vulnerable to a chicken-or-egg problem at launch, though it can count on the fact that hundreds of millions of machines are sold each year, with the vast majority running the latest version of Windows.

Sinofsky would not address a question that has been making the rounds on Windows sites in recent days — whether Windows 8 machines running ARM processors will be able to run classic desktop-style applications.

Microsoft has demonstrated a classic desktop running on an ARM chip, though the company stressed that was merely a technology demonstration; Sinofsky declined to comment on Microsoft’s plans in that area.

And while Microsoft detailed the cut it expects to take from the Windows store (30 percent on apps or 20 percent once they generate $25,000 in sales), the company isn’t offering any guesses on just how big that business could be.

At last January’s CES, Microsoft confirmed its plans to have Windows 8 run on the ARM-based chips that power smartphones and tablets, along with the Intel and AMD chips that have traditionally been used. At our D9 conference in June, Sinofsky showed off the new look of Windows 8; the company added further technical details and issued an early preview release at its Build developer conference in September.

The vast majority of servers — including those from H-P — use the chips sold by Intel and AMD that are based on a technology called x86. But HP, which jointly developed Itanium with Intel in the 1990s, continues to use that chip for three lines of large systems used for heavy-duty computing jobs.

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Patrick Moorhead, AMD’s corporate VP for strategy and an AMD Corporate Fellow, is leaving the company, and according to people familiar with his plans, will be launching a consumer-focused technology analyst and consulting firm around the time of the International Consumer Electronics Show in Las Vegas in January.

Moorhead is the last remaining VP been hired by AMD’s legendary founder and former CEO, Jerry Sanders. Over 11 years at AMD he led the company’s marketing efforts around its Athlon PC and Opteron server chips that led to a bit of a renaissance at AMD from about 2005 to 2007, when the chips won a lot of business away from Intel and thus gave the bigger company a major migraine headache.

To place Moorhead (pictured from his Twitter feed) appropriately in AMD’s history, it was during these years that AMD put into products a concept called x86-64, which essentially extended the x86 instruction set — the underlying code that chips from Intel and AMD share — into what was then the bright new world of 64-bit computing, thus paving the way for machines that could contain more than two four gigabytes of memory and could handle more complex computing tasks.

AMD first put forth its approach at a chip industry event in 1999 — one that I happened to cover for a now-defunct outlet called Electronic News — at a time when Intel was championing a different approach to 64-bit computing by starting from scratch with an entirely new design. Its technology was called EPIC, for “explicitly parallel instruction set computing.” The product that eventually resulted was the exotic Itanium chip, which is today the subject of a legal dispute between software giant Oracle and Hewlett-Packard, which is for all intents and purposes the only company selling hardware that runs on Itanium.

AMD ultimately won that argument and Intel embraced its own implementation of AMD’s x86-64, now common in their mainstream desktop, notebook and server chips, but only after giving Intel and its investors fits over lost market share during 2005 and 2006.

Moorhead joined AMD in 2000 from Compaq and had also worked at the not entirely forgotten search engine outfit AltaVista, which had been launched at Digital Equipment Company, then acquired by Compaq, and is now part of Yahoo.

In more recent years he had been known primarily for being an outspoken advocate for the opportunities in mobile computing. One suspects he’ll have more to say on that topic in the coming months.

The job cuts will hit the company globally and will be completed by the end of the first quarter of 2012, the company said in a statement. The company says the move will reduce operating expenses by $118 million in 2012 and by $10 million in the fourth quarter of 2011.

The cuts will amount to about 1,400 of AMD’s 12,000-strong workforce. What you’ll read elsewhere is that AMD is suffering from a worldwide slowdown in PCs, caused in large part by the growth of Apple’s iPad business and to a lesser extent other tablets. But it’s a little more complicated than that when you consider that AMD’s share of the market actually grew slightly in the second quarter, according to the latest numbers I have from Mercury Research, which tracks the market share between the two chipmakers. As of August, AMD was running a 19.4 percent share of the PC and server business, up from 18.2 percent in the first quarter, while Intel’s share dropped slightly from 81 percent in the first quarter to 79.9 percent in the second. Those fractions of a percentage point actually matter to both companies.

The bigger problem is that AMD is nowhere in tablets or smart phones and that was one of the reasons that Read was brought in to replace Dirk Meyer, who surprised everyone by resigning after a fight with his board of directors in January.

In the meantime, expect AMD to make a big fuss about server chips in the coming weeks.

AMD’s statement is below.

AMD Optimizes Cost Structure to Enhance Competitiveness and Accelerate Growth

Operational Savings of More Than $200 Million in 2012 Designed to Accelerate Future Growth in Lower Power, Emerging Markets and the Cloud

SUNNYVALE, CA–(Marketwire -11/03/11)- AMD (NYSE: AMD – News) today announced a restructuring plan and implementation of operational efficiency initiatives designed to strengthen the company’s competitive positioning. AMD expects that these combined actions will create a more competitive cost structure and rebalance the company’s global workforce skillsets, helping AMD to continue delivering industry-leading products while improving productivity, reducing time-to-market and better aligning with key industry trends that are expected to drive growth.

“Reducing our cost structure and focusing our global workforce on key growth opportunities will strengthen AMD’s competitiveness and allow us to aggressively pursue a balanced set of strategic activities designed to accelerate future growth,” said Rory Read, AMD president and CEO. “The actions we are taking are designed to improve our ability to consistently address the needs of our global customer base and stake leadership positions in lower power, emerging markets and the cloud.”

AMD expects that the restructuring plan will result in operational savings, primarily in operating expenses, of approximately $10 million in the fourth quarter of 2011 and $118 million in 2012, primarily through a reduction of its global workforce by approximately 10% and the termination of existing contractual commitments. The workforce reduction will occur across all functions globally and is expected to be substantially completed by the end of the first quarter of 2012. Based on anticipated savings from the restructuring plan, AMD expects fourth quarter 2011 operating expenses will be approximately $610 million.

As a result of implementing efficiencies across the company’s operations, AMD expects to save approximately $90 million in 2012 operating expenses in addition to the restructuring plan savings, resulting in more than $200 million of expected combined operational savings in 2012.

The company expects to reinvest a significant portion of the savings to fund initiatives designed to accelerate AMD’s strategies for lower power, emerging markets, and the cloud.

The company’s actions pursuant to the restructuring plan will take place primarily during fourth quarter of 2011, with some restructuring plan activities extending into 2012. The company currently estimates that it will record restructuring expense in the fourth quarter of 2011 and in 2012 of approximately $101 million and $4 million, respectively. Of the total restructuring expense, approximately $56 million will be future cash expenditures in 2011, $33 million will be future cash expenditures in 2012 and $15 million will be future cash expenditures in 2013.

About AMD
AMD (NYSE: AMD – News) is a semiconductor design innovator leading the next era of vivid digital experiences with its groundbreaking AMD Fusion Accelerated Processing Units (APUs) that power a wide range of computing devices. AMD’s server computing products are focused on driving industry-leading cloud computing and virtualization environments. AMD’s superior graphics technologies are found in a variety of solutions ranging from game consoles, PCs to supercomputers. For more information, visit http://www.amd.com.

Today it was Fujitsu’s turn. The Japanese computing giant teamed up with RIKEN, the quasi-public Japanese research institution, to announce that they had built a machine they call the K Computer, which can perform 10.51 petaflops, or 10.51 quadrillion floating point operations per second.

And while all that may sound very impressive, it’s not quite as muscular as the Titan machine being assembled in the U.S. at the Oak Ridge National Labs, which can — or will — perform 20 petaflops.

The machine (pictured) is made up of 864 racks with 88,128 interconnected CPU chips, all of them based on the SPARC architecture for which Sun Microsystems, and therefore Oracle, are best known, though Fujitsu has long been a SPARC licensee. The new K Computer is basically an improvement and extension to the same K computer that took the top spot on the last Top 500 list in June, supplanting in the process a Chinese machine that had taken the crown last November.

Never mind that it contained all U.S.-made chips, the Chinese feat caused the leader of the free world to kvetch about the apparent sorry state of U.S. supercomputing, thus prompting, perhaps indirectly, the Titan machine at Oak Ridge.

It’s not as though China hasn’t been heard from on the supercomputing front recently. Last week its Sunway BlueLight MPP raised eyebrows not for its performance — a relatively pokey 795 teraflops — but rather for the fact that it’s built using all Chinese-made components.

So what will it be used for? Weather simulations, research into drugs and solar cells, and simulating earthquakes and tsunamis.

Here are the more formal descriptions from the announcement:

–Analyzing the behavior of nanomaterials through simulations and contributing to the early development of such next-generation semiconductor materials, particularly nanowires and carbon nanotubes, that are expected to lead to future fast-response, low-power devices.

–Predicting which compounds, from among a massive number of drug candidate molecules, will prevent illnesses by binding with active regions on the proteins that cause illnesses, as a way to reduce drug development times and costs (pharmaceutical applications).

–Simulating the actions of atoms and electrons in dye-sensitized solar cells to contribute to the development of solar cells with higher energy-conversion efficiency.

–Simulating seismic wave propagation, strong motion, and tsunamis to predict the effects they will have on human-made structures; predicting the extent of earthquake-impact zones for disaster prevention purposes; and contributing to the design of quake-resistant structures.

–Conducting high-resolution (400-m) simulations of atmospheric circulation models to provide detailed predictions of weather phenomena that elucidate localized effects, such as cloudbursts.

So what’s a petaflop anyway? A FLOP is a floating point operation. Its a type of mathematical function that involves decimal points. Adding 5.6 and 11.21 is a floating point operation and is therefore slightly more complicated from a computing standpoint than adding 11 and 5. But in computing, even day-to-day computing, it’s massively more complicated than all that.

A top-of-the-line NVidia GeForce GTX 590 graphics card, which specializes in floating point operations, can run about 2,400 gigaflops. Since a gigaflop is a billion flops, I guess that technically puts the GeForce GTX 590 into the teraflop, or trillion-flop range.

Petaflops are then in the quadrillion-flop territory, which as I noted before makes them fun because they’re among those rare numbers that are larger than the U.S. national debt. So 10.51 quadrillion flops gets written like so: 10,510,000,000,000,000. Didn’t I say this was fun?

All this is leading up to a big supercomputing conference starting in 10 days in Seattle. So expect lots more supercomputing news in the coming days!

AMD — which designs semiconductors that serve as calculating engines in computers, servers and game consoles — has benefitted from strong demand for its new chips that combine graphics and computing on the same piece of silicon.

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Although the new Windows offers a number of upsides, including the fact it runs on a wider range of processors, such flexibility comes at a cost.

Systems that run Windows 8 using low-power ARM processors will be able to run all of the new-style Windows applications, but it appears few traditional Windows programs will run. Microsoft demonstrated a technology preview of Office running on ARM back in January, but Sinofsky said that in general older Windows applications won’t run on ARM-based machines.

That’s not to say Microsoft didn’t make the right choices when it comes to Windows 8. Were Microsoft to have brought over all of its legacy to the new chips, it might well have lost the long battery life and other benefits that ARM-based systems can provide.

A strong case can be made that this break with the past is exactly what Microsoft needed in order to compete with a new generation of devices running operating systems designed with mobility in mind.

However, the choice means that Microsoft and its partners will need lots of new apps to make Windows 8 a success. Indeed, a big part of this week’s Build conference will be equipping developers with the tools they need to write such programs and convincing them of the upside of doing so.

Recognizing this, some of Redmond’s partners are taking matters into their own hands. Nvidia, for example, plans its own program to convince developers to write new-style Windows apps.

“We’re going to be investing in our own effort to get developers on board,” Nvidia General Manager Rene Haas said in an interview.

But if the company faces challenges getting developers to write the new apps, Haas said he is not worried about finding PC makers willing to make machines with the ARM-based processors. Such systems, he said, can be slimmer and cheaper and offer better battery life than those running traditional PC processors from Intel and AMD, he said.

“We’ve seen very big OEM interest,” Haas said, using the industry term for PC makers. “Virtually every OEM around the world wants to do something with Windows-on-ARM.”

Related posts

• Exclusive: Making Sense of Our First Look at Windows 8
• Windows 8 Gets Ready for Its Big Debut
• Gearing Up for Microsoft’s Big Week
• Microsoft Details Windows 8 at Build Conference in Anaheim
• What We Just Learned About Windows 8
• Microsoft Releases First Test Version of Windows 8
• Windows 8 Forces Some Compromises After All
• Boys and Their Toys: Developers Rush to Get Windows 8 Tablets
• Windows 8 Shows Its Server Side
• Ballmer: 500,000 Downloads of Windows 8 Since Last Night

With the rise of the smartphone and the emergence of the tablet, that threat has become real. Now, as the pressure mounts, Microsoft is due to make its case for why Windows can not only hang on to the desktop, but finally deliver on the tablet promises it has been making for a decade.

At a developer conference in Anaheim, Calif., the company is expected to offer a great deal more detail on Windows 8 — the next version of the operating system first shown at our D9 event in June. Windows 8 boasts a touchy-feely new interface, literally, along with a whole new means for writing Windows apps. Also, in a shift, Windows will run on the same kinds of ARM chips that power many of today’s smartphones and tablets.

With the changes, Windows chief Steven Sinofsky says Microsoft is in a position to deliver a “no compromise” operating system that is equally at home on small tablets and powerful desktops.

Some are hoping that Microsoft would go a step further and announce some sort of plan to allow Windows Phone apps to run on Windows 8. That, however, seems unlikely. While Windows and Windows Phone may someday converge, for now the two remain on different architectures.

Whatever Microsoft has to say, AllThingsD will be on hand to make sure our readers don’t miss a beat.

Redmond will also be talking about its bottom line, holding a financial analysts’ meeting on Wednesday. And since it is bringing out its big guns, AllThingsD is doing the same, with Kara Swisher joining me in Anaheim to bring her wit and wisdom to that part.

Today it fell to Harry Wolin, AMD’s senior vice president and general counsel, to sound a bit like Orson Welles doing a 1970s wine commercial for Paul Masson. At the opening of AMD’s quarterly earnings conference call with analysts, Wollin made a statement that the search for a new CEO remains a “top priority,” but that meeting a timeline is “not the driving force for the search.” Finding the right person is. I hate to say it, but I knew it was going to be a complicated search.

Wolin doesn’t sound much like Orson Welles, but you can hear his statement below. And if you’re drawing a blank on the reference to Orson Welles in wine commercials, there’s an example of one from 1978 below that.

AMD-Harry-Wolin by ahess247

Advanced Micro Devices Inc.’s search for a new chief executive has entered its seventh month, a delay seen as an indicator of the challenges facing the chip maker’s next leader.

A number of prominent executives—including Michael Capellas, the former chief of WorldCom Inc. and Compaq Computer Corp., and William Nuti, chief executive of computer maker NCR Corp.—have turned down approaches by AMD since the company’s board forced out its leader in January, people familiar with the situation said.

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Doug Freedman, an analyst who covers the chip sector for Gleacher & Co. in San Francisco, trimmed his estimates on both Intel and on its smaller rival Advanced Micro Devices amid a weakened PC market that is running well behind the typical seasonal patterns. Last week, market researcher Gartner reported that worldwide PC shipments grew less than three percent over the year-ago period, as consumers remain focused on tablets and smartphones and hold off on upgrading their desktops and notebooks.

At a high level, that’s not good news for Intel and AMD, both of which have yet to penetrate the tablet market in any meaningful way. And both are grappling with the impending entrance of competing chips — based on designs from ARM, from vendors like Nvidia and Qualcomm — burrowing their way into new consumer notebooks.

In a July 15 note to clients, Freedman cut his estimates on both Intel and AMD for the quarter ending in June and the quarter ending in September. He expects Intel to report sales of $12.7 billion, which is about $100 million below the street consensus of $12.8 billion. He also expects Intel to report per-share earnings of 53 cents, which would amount to a two-cent improvement over the year-ago quarter.

The quarter being reported today isn’t the story, however: It’s September. Typically it’s a seasonally strong quarter, as college students head back to school with new notebooks under their arms. This year Freedman thinks PC sales will lag behind historical patterns. He trimmed his September quarter revenue forecast to $13.16 billion, down from $13.43 billion — or $300 million below the street view — and knocked it down by two cents to 59 cents, a penny above the street.

Intel has, in recent quarters, taken a fairly aggressive stance on the state of the PC market, and has criticized analysts for fanning investor fears. “Management should offer more subdued PC unit growth expectations thereby alleviating investor fear that Intel is setting its bar too high,” Freedman wrote. One other thing Intel has in its favor is that the average selling price of chips is edging upward, which should give it a slight hedge against the weaker market. This should help keep gross margins — a key metric for Intel — in the higher end of the 59 to 63 percent range the company said to expect. He also says that Intel could deliver a surprise with better-than-expected results from other parts of its operations, namely its flash memory unit, which makes solid-state hard drives.

For AMD, which reports its results tomorrow, the picture is a mixed bag. The search for a new CEO is now in its sixth month, with no sign of being resolved anytime soon. Freedman doesn’t expect a CEO to be named today nor in the near term. Finding an external candidate is proving harder than expected. (Note to Freedman: You don’t say.) Pressure on its share price, thanks to short-sellers, has created a buying opportunity in the near term.

Even so, Freedman trimmed his estimates for AMD’s June and September quarters. He expects AMD to report sales of $1.55 billion, down from $1.6 billion previously, which would amount to a four percent decline in year-on-year sales. He also shaved a penny off his EPS estimate to nine cents from 10. For September, he expects AMD to report sales of $1.63 billion, down from $1.7 billion before, and cut his EPS estimate to 16 cents from 20.

I’ll be back later today to cover Intel earnings live. See you then.

Alex Gauna of JMP Securities cut his rating on AMD to “market underperform,” arguing that its Fusion line of chips isn’t winning sufficient business from PC makers. Having interviewed people at PC retailers and at PC manufacturers, he concludes Fusion is going nowhere. He says he was unable to purchase a Fusion-based PC from Dell via its Web site.

AMD’s Fusion processors aren’t winning many positive reviews, Gauna says, indicating a “lack of market interest.” Sales representatives at various online retailers steered his researchers “away from AMD platforms.”

As you might expect, it doesn’t take much to send AMD shares south these days. Intel is far and away the king of the hill in PC and server microprocessors, and chips from companies like Nvidia and Qualcomm based on the designs of ARM Holdings are coming into notebooks and tablets, minimizing AMD’s chances to win business there. He slashed his target price on AMD to $4.50 a share, which would constitute a drastic drop from the $6.80 at which it opened today, having closed Friday at $6.95. By today’s close of regular trading, investors knocked AMD’s shares down to $6.76, a drop of nearly 3 percent.

The day ended however, with AMD shares being defended by analyst JoAnne Feeney at Longbow Research. Dell is not an early adopter of the AMD technology, she says, but will be offering systems using AMD’s Fusion chips — the codename of the specific AMD product is Llano — soon. I heard the same thing from a source at AMD. On top of that, Toshiba and Lenovo are happy AMD customers. Tiernan Ray at Barron’s has a little more on Feeney’s note.

The downgrade came 10 days before AMD is due to report quarterly earnings and amid growing speculation on the company’s ongoing search to find a new CEO to replace the ousted Dirk Meyer. The search is about to drag into its sixth month, and I’m told it won’t be resolved before earnings are announced.

There were reports last month that several A-list executives, none of whom would have realistically considered the job in the first place — Oracle’s Mark Hurd, Apple’s Tim Cook — had turned down approaches by AMD’s recruiting agency, Heidrick & Struggles. Another who topped AMD’s list early on, Pat Gelsinger, the former Intel CTO who’s now in line to succeed Joe Tucci as the CEO of storage giant EMC, even said he told AMD no not once but twice. A lot of those people, Hurd and Cook especially, are really just names that any recruiter looking to fill a senior position would call in the course of building a list, just to make sure they’ve covered their bases.

The sense of urgency to find a new CEO seems to have dissipated at AMD, though not entirely. With the company running a profit again — its most recent quarter showed a $510 million profit on sales of $1.6 billion — it may be that directors feel they have the luxury of time in finding the right candidate, so they don’t have to rush the process, though obviously they’ll want to get it done soon. Expect the company to face a lot of questions from analysts when it reports earnings on July 21.

The Milpitas, Calif. company sprung from the spinoff of the manufacturing operations of Advanced Micro Devices Inc., and was later combined with Singapore-based Chartered Semiconductor Manufacturing Ltd.

Globalfoundries said Chief Executive Doug Grose, a former AMD executive who spent 25 years at International Business Machines Corp., will step down and become a senior advisor to the company. Chief Operating Officer Chia Song Hwee, Chartered’s former CEO, will step down in August and return to Singapore, the company said.

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This is exactly the sort of problem I predicted in January. That Hurd, who is also a former CEO of Hewlett-Packard and of NCR before that, and Gelsinger, a former CTO of Intel once considered a possible successor to Paul Otellini, have been approached is not surprising, given their tech and managerial bona fides. Nor is the fact that they turned the job down.

The third name jumps out at me simply because I’m not familiar with Greg Summe. His bio on the Carlyle Group site says he spent 20 years as chairman and CEO of PerkinElmer, the $2 billion health sciences company, and before that, he ran the Avionics business at AlliedSignal, now part of Honeywell.

The search is being run by Heidrick and Struggles, Bloomberg says, and the fact that Summe was approached indicates how widely the company is casting its net. The clock, however, is ticking. When I last spoke to someone at the company, not directly involved with the search, I was told that the plan was to have a new CEO named before its next earnings report, scheduled for July 21. That’s 36 days away.

Historically, this is unlike AMD, which has always taken care to have a managerial bench, and like most big companies, has typically had a CEO successor waiting in the wings. Former CEO Dirk Meyer (pictured) was named COO in 2006, tapped by then CEO Hector Ruiz, who had himself been recruited from Motorola’s Semiconductor unit (now Freescale) to succeed AMD’s founding CEO, the colorful Jerry Sanders. Ruiz, however, had been recruited in 2000 because of the surprise resignation in 1999 of AMD’s heir apparent, Atiq Raza, who’s now a tech investor, backing, among others, Violin Memory.

That’s not to say there aren’t internal candidates who could step up. Rick Bergman, senior vice president and general manager of AMD’s products group, has been mentioned as on the list for consideration, though the board has favored an external candidate from the start. But the company has been bleeding talent. Two other internal contenders bolted in February — Bob Rivet, AMD’s onetime COO under Meyer, and Marty Seyer, the well-regarded senior vice president for corporate strategy, who in 2006 personally landed the deal to sell the first AMD server chips to Dell (until then an Intel-only shop) and had been known to occasionally jam with Ruiz on the electric guitar. Other senior managers are bailing out as well. Just last week Jeff VerHuel, corporate vice president of platform strategies, left AMD to join SMSC as its head of engineering.

Meyer’s sudden departure is said to have come after a row with the board of directors, impatient that AMD is not showing up in any meaningful way in the market for chips for mobile devices. The days when it was dealing perennial market leader Intel bruising punches in the punishing business of selling server chips are over. And its overall share of the market for PC and server chips has slipped to 13.2 percent versus Intel’s 86.5 percent as of March, according to Mercury Research. It still makes a compelling case as an alternative supplier for chips in notebooks and desktop PCs, as The Wall Street Journal reported yesterday, but Intel’s lead, given its powerful manufacturing infrastructure — AMD no longer owns its own factories, opting instead to farm those duties out to GlobalFoundries, its onetime manufacturing arm — will as the years progress prove ever more difficult to erode even incrementally.

And even trying will increase the operational costs of an already profit-challenged company. AMD delivered profits in 2009 and 2010, but only after undergoing a massive restructuring to rid itself of its manufacturing operations. Still, the profits are thin: In 2010, AMD reported income of $471 million on sales of $6.5 billion. Compare that to Intel’s $11.5 billion profit on nearly $44 billion in sales, and you see how hard a time even the new, leaner, fabless AMD has competing with Intel.

Competing with Intel for share of its traditional markets is hard enough. If AMD’s board is determined to push the company into the business of selling chips for mobile devices, the path to success looks nearly impossible. Just look at the troubles Intel is having in that space competing with ARM Holdings and its numerous licensees, which include Nvidia, Qualcomm, Broadcom, and Texas Instruments to name but a few. When it comes to mobile devices — tablets and smart phones — ARM-based chips are as ubiquitous as x86 chips are in PCs and servers: They are the standard. Intel’s low-power Atom-based chip has so far been largely unsuccessful in penetrating that business. And if Intel is not scoring any significant wins there, why would anyone want to take on the job of leading AMD into a likely failure? No wonder potential candidates are finding it easy to say no. Bloomberg quotes Gelsinger: “I said no, and I said no again.”

So where does that leave AMD now? There are two paths. First, consider an internal candidate to lead the company. As more external candidates spurn AMD’s approaches, the list of objections AMD’s board may have to hiring internally could shorten. Bergman may get a second more serious look.

The other is to sell the company to someone bigger. That’s another complicated question, mainly because with the terms of its settlement with Intel (or what I like to call the Treaty of Maui) and the terms of its complicated patent-cross licensing agreements that date back the the 1980s, any buyer would have to first pass muster with Intel or find themselves in a very expensive lawsuit. Then there’s the fact that AMD is 20 percent owned by Mubadala Development Company, the investment arm of the Arab Emirate of Abu Dhabi. Buying AMD — at current valuations it would take about $7 billion — would be, to paraphrase Steve Jobs, a “big bag of hurt.”

Even private equity players who specialize in buying troubled companies, fixing them up and spinning them off at a profit, are wary of AMD, having learned well the lessons of the disastrous 2006 buyout of Freescale by the Blackstone Group, Carlyle, TPG Capital and Permira Advisers.

Ultimately there will be no easy options at AMD. No surprise, its shares are trading down by 11 cents or more than 1 percent as of 9:45 am New York Time this morning.

AMD on Tuesday is unveiling its second product line that combines two once-separate classes of chip technology, this time targeting notebook PCs at mainstream price points. The new chips include graphics circuitry — good for chores like playing games and high-definition-movies — along with the microprocessor circuitry AMD has long offered for handling other computing chores.
Besides boosting performance, AMD says laptops using its new A-Series chips can run 3.5 hours more on a single charge than those using its prior technology.

“I think we’re really going to surprise the industry with how much we’ve improved the battery life,” Rick Bergman, senior vice president and general manager of AMD’s products group.

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