Dirk Meyer’s decision to step down as chief executive of US chipmaker AMD was prompted by the firm’s weaknesses in the mobile space, reports Reuters. Meyer (pictured) announced on Tuesday he was stepping down as the result of a “mutual agreement” with the board of directors. But the move appeared to take the market by surprise and AMD shares slumped 9 percent to close at US$8.36 by the end of the day. A company source told Reuters that much of the reason for Meyer’s departure had to do with “discontent” on the board about AMD’s choice not to pursue making chips for the mobile market other than netbooks.

This discontent is being linked to comments made by Meyer last October when, in a briefing with analysts, he said that AMD would hold off on investing in the tablet market until it matures. “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. Like Intel – its main rival in the PC chip space – AMD is faced with a challenge of developing more power-efficient chips that are able to work in mobile computing devices such as tablets – a market that is encroaching on the traditional PC space.