The former boss of graphics outfit ATI , Dave Orton, has resigned from his job at parent company AMD .

The announcement is the latest in a string of bad news stories for AMD since it acquired ATI last summer. Orton will relinquish his role as executive vice president of AMD at the end of July.

The 'new AMD'

In an official statement, Orton said: "It is with mixed feelings that I am leaving AMD. I am very optimistic about AMD's future. I believe strongly in the strategies that brought AMD and ATI together and the talented employees of the 'new AMD' who are committed to winning in the market by delivering the best possible solutions for customers."

Needless to say, Orton's resignation is being linked to current difficulties at AMD in general and within the ATI graphics subsidiary in particular.

Specifically, the company's new Radeon HD 2000 family of DirectX 10 graphics chips has been a huge disappointment. It simply cannot compete on performance terms with its main competition, the GeForce 8000 series from Nvidia .

Consequently, AMD has been forced to reposition its new chips at a lower price point - a move that will undoubtedly compromise profit margins.

AMD is losing to Intel

Meanwhile, AMD's bread and butter CPU products are falling ever further behind Intel's sickeningly successful Core 2 line of chips. As with the Radeon HD graphics chips, AMD has slashed prices and shaved margins on the entire Athlon 64 X2 range.

Last week, AMD belatedly announced that its crucial new quad-core processor would finally appear next month in server and workstation trim. However, it also revealed that the chip would initially top out at just 2GHz.

That's well below expectation and almost certainly not enough to frighten Intel's Core 2. AMD has not divulged when the desktop variant of the new quad-core chip, codenamed Agena, will appear.