Under Hector Ruiz's leadership, chip maker Advanced Micro Devices Inc. rose to challenge larger rival Intel Corp. as never before in AMD's nearly 40-year history.

Yet after six years as AMD's CEO, the embattled Ruiz stepped down Thursday as pressure mounts on the Sunnyvale-based company to dig itself out of a deep financial hole and recover from a devastating product stumble that wound up benefiting Intel in a big way.

Ruiz, 62, the only person to head AMD other than founder and longtime chief executive Jerry Sanders, will remain on the board of directors. One of the few Hispanic CEOs of a major U.S. corporation, Ruiz had also been AMD chairman but now takes on the title of executive chairman, a distinction that lets him retain some day-to-day responsibilities.

One of his biggest jobs will be to help craft AMD's strategy for slashing its manufacturing expenses, a major concern for any semiconductor company but one of particular importance for AMD as it burns through cash and struggles in a fierce battle with Intel.

He's being replaced as CEO by AMD's current president and chief operating officer, Dirk Meyer, 46, an engineer and chip designer who has been helping Ruiz run the company since 2006. That means he knows AMD's operations intimately but also that he shares some of the responsibility for the company's financial distress.

"I'm not a man of many regrets," Ruiz said in an interview with The Associated Press. "We have a tremendous, talented group of people at this company, and we've gotten AMD to be a true contender. But being a contender and actually winning, we're not there yet. ... This is the perfect time to pass the baton to someone like Dirk."

Meyer had previously led AMD's microprocessor division, the company's primary business unit. Microprocessors act as the brains of personal computers.

Nearly all the world's personal computers and many of the servers inside corporate data centers run on chips made by AMD or its much larger Silicon Valley rival, Intel Corp. Intel commands 80 percent of the global market for microprocessors. AMD has roughly the other 20 percent.

Meyer was involved in the design of AMD's Opteron server chip, which marked the company's 2003 foray into a lucrative segment of the server market where Intel had a stranglehold. The success of that chip _ and Ruiz's sales savvy in lining up new customers _ helped AMD transform itself from a perennial second-fiddle to Intel into a serious rival across all computing platforms.

But the semiconductor industry is notoriously volatile, prone to boom-and-bust cycles. AMD has crashed hard over the past two years, racking up billions in losses and struggling to regain the competitive edge it squandered against Intel.

The management changeover will be welcome news to AMD investors who have questioned Ruiz's leadership as the company has faltered. But it's unclear if Meyer's appointment will be enough to woo Wall Street back to a company that hasn't yet provided a clear picture about how it intends to mend its battered balance sheet.

The executive changeover came as AMD reported that it lost $1.19 billion in the second quarter, worse than the $600 million it lost in the same period a year ago. Taking one-time events into account, AMD's adjusted loss totaled 60 cents per share, below the 52 cents expected by analysts polled by Thomson Financial.

AMD's revenue rose to $1.35 billion from $1.31 billion, but it was short of the $1.45 billion in revenue expected on Wall Street.

The biggest damage to AMD's finances came from the divisions that make chips for cell phones and digital television sets. The businesses were absorbed as part of AMD's 2006 acquisition of graphics chip maker ATI Technologies, and they were both underperforming, forcing AMD to write down their value by $876 million, or $1.44 per share.

AMD said it plans to sell the businesses and have classified them as discontinued operations in its financial results.

AMD shares fell 35 cents, or 6.6 percent, to $4.95 in after-hours trading. The stock had finished trading Thursday up 24 cents, or 4.7 percent, at $5.30. AMD's stock was above $40 per share as recently as 2006, and the resulting fall has vaporized $20 billion in shareholder wealth.

Ruiz's tenure will be marked by the way AMD became a much more dangerous rival to Intel than it had ever been in AMD's nearly 40-year history. He also was an effective advocate for pushing AMD's antitrust claims against Intel to regulatory authorities around the world. On Thursday, in fact, European regulators broadened their antitrust case against Intel, claiming that it has deliberately squeezed AMD.

Yet Ruiz ultimately takes the blame for a series of management miscues and technical problems.

One notable fumble happened in the aftermath of the original Opteron chip's success. A technical glitch delayed the launch of the Opteron's successor by eight months, forcing AMD to slash the price of its existing chips to stay competitive.

AMD also continues to be hurt by the heavy debt it took on to finance its $5.6 billion acquisition of ATI. AMD says ATI is now worth just over half the price it paid.

The deal was done to improve the graphics abilities of AMD's chips _ increasingly important with more Internet video and high-definition movies being watched on computers. But it has forced AMD to sell off parts of itself and tap the market for urgent cash infusions to stay afloat.

In November, the company sold an 8.1 percent stake to the Abu Dhabi government's investment arm.

Ruiz defended the ATI acquisition but said the Opteron delays seriously hurt the company.

"The expectations were met, but we were late," Ruiz said. "It made it very difficult to execute in other places as a result. But that's behind us now."

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Rachel Metz reported from New York