Struggling microprocessor maker Advanced Micro Devices said Rory Read, its chief executive, had stepped down and will be replaced by Lisa Su, the company's chief operating officer, effective immediately.

The company said that the transition was part of a succession plan that Read and the company's board had developed together. In a somewhat unusual move, Read appeared with Su on a conference call announcing the transition.

"She's a semiconductor professional," Read of Su. "She loves this space. She knows this space." Read praised Su extensively, saying that AMD had hired Su, trained her, and apparently groomed her for the position. She's the "right leader" for AMD, he said, and is uniquely positioned for the job, he said.

"Lisa's ready and this is the right step in the transformation to lead [AMD] forward," Read said. Read will remain on at AMD as a consultant.

AMD Former CEO Rory Read stabilized AMD, but the company's growth has been sluggish.

Why this matters: AMD is the only remaining challenger to Intel's total domination in the x86 microprocessor market. A strong, viable, AMD benefits competition in the PC space. Su is well respected in the industry, and the handoff from Read to Su was unusually chummy. Here's the billion-dollar question, though: Can Su resuscitate AMD, however, or will it fade away to become just another Via Technology?

AMD's console wins keep it afloat

Although AMD has won fans for its microprocessors and graphics, the company's performance has slipped. AMD's share of the x86 PC microprocessor market has fallen to less than 20 percent.

Under Read, the company has diversifed into semi-custom chips, servers, and designs that use third-party ARM cores. AMD's semi-custom business has been successful, as the company supplies the chips to all three major game consoles. Read returned AMD to profitability, although the company's most recent earnings fell just short.

"I give Rory Read credit for stabilizing the company during a time where the PC market tanked, but AMD needs growth now more than ever," Patrick Moorhead, a former AMD fellow and now an independent analyst, said in an email. "Lisa is respected in the industry and I think she will bring a new look that will be welcomed."

Read had talked about a three-phase process: Resetting the company's business, restructuring it, and then moving forward to a third stage. Su said that third stage involves making the "right technology investments," which will involve streamlining the company's product line, but also continuing the emphasis on diversification.

"I do think moving forward it's about technology and how we accelerate the technology," Su said during the conference call. Su said there was no way that AMD would exit the x86 microprocessor space, and that ARM and the x86 lines would coexist going forward. The PC business will continue, but AMD also planned to grow the embedded, enterprise, and semi-custom space.

"I think we want to simplify the company," Su said, improving the company's time to market. One of the steps Su said she hopes to take was to nail down relationships with specific customers.

Several analysts were concerned about the timing of the announcement, given the fact that AMD is set to announce its quarterly earnings next week. Read said that the company had a "fiduciary duty" to report now, rather than waiting.