AMD Tech Chief Exits

Phil Hester leaves on good terms, the company says.
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SAN FRANCISCO --

Advanced Micro Devices

(AMD) - Get Report

has lost its chief technology officer. The news caps a week in which the struggling chipmaker said it will cut 10% of its workforce and tried to regain its footing after a technical glitch caused delays in its new line of microprocessors.

Phil Hester is leaving AMD effective Friday, the company said. According to a company spokesperson, Hester is leaving on good terms to pursue new and yet-to-be-announced opportunities.

AMD said it won't replace Hester with a new tech chief, noting that one of Hester's legacies was to create a network of five chief technology officers aligned with the company's various business units.

Shares of AMD were off 7 cents at $6.20 in recent trading Friday.

Hester is the latest in a string of high-level executives to decamp as AMD has fallen on hard times. In August,

sales chief Henry Richard left AMD

to join

Freescale Semiconductor

. And David Orton, the former chief executive of ATI, the graphics chipmaker acquired by AMD for $5.4 billion, resigned in July.

While competition with

Intel

(INTC) - Get Report

has taken a toll on the company, and massive debt incurred to acquire ATI has wreaked havoc with its balance sheet, many of AMD's setbacks have been self-made.

A technical glitch in the quad-core microprocessor delayed the chip's general availability for several months, leaving AMD's product lineup at a distinct disadvantage to Intel's. In 2007, AMD lost $3.38 billion -- including a large writedown for ATI -- on revenue of $6 billion.

"A lot of people can say they swallowed ATI and paid too much, but the real struggles have been on the execution front," said American Technology Research analyst Doug Freedman.

AMD said servers featuring the quad-core Barcelona chip would be available from

Hewlett-Packard

(HPQ) - Get Report

and other computer makers on Wednesday, after initially unveiling the chip in September.

As chief technology officer, Hester was responsible for setting the architectural and product strategies and plans for AMD's microprocessor business, according to an executive bio previously posted on AMD's Web site. Hester joined AMD in 2005 and worked for 23 years at

IBM

(IBM) - Get Report

.

According to AMD spokesperson Robert Keosheyan though, Hester was responsible for setting the company's long-term product strategy rather than for the development of the current microprocessors.

"We're trying to point out that his departure is not related to anything related to products or company performance," said Keosheyan. Nor is it related to Monday's announcement that AMD would lay off 10% of its workforce, or roughly 1,600 employees.

AMD also said Monday that its sales in the first quarter would be less than previously expected. Analysts expect AMD to report a loss of 51 cents a share and a 15% sequential drop in sales when the company reports first-quarter financial results next week.