JMP Securities chip analyst Alex Gauna cut his rating on shares of Advanced Micro Devices (AMD) to Market Underperform from Market Perform, writing that the company’s “Accelerated Processing Unit,” or APU, chips in the “Fusion” family, with integrated graphics circuitry, are falling flat.

“Our view stems from interviews with various computing retailers and OEMs where representatives are not only unsupportive of new APU offerings but are also discontinuing offerings, such as in the case of Dell (DELL) where we were surprised to learn we could not even purchase an AMD model on-line.”

Gauna notes reviews of the chip family are “sparse and lackluster.”

“We believe many investors have been gravitating to the name [AMD] on the view that APU offerings could close some of the gap [with Intel], when in fact it appears the reverse is happening as Intel ramps its Visibly Smart 2nd Generation Core offerings.”

Moreover, with the prospect that PCs and tablets will arrive next year with Microsoft’s (MSFT) Windows 8 operating system, running on chips designed around the ARM Holdings (ARMH) CPU designs, AMD could be bumped as the primary alternative to Intel (INTC) in the PC world, he thinks.

“OEMs could pull the life support from AMD, as other ARM-based second source alternatives to Intel emerge with the Windows 8 transition expected to emerge around year-end. We see this leading to market share erosion in 2012 where we now see sales of $6.1 billion versus our prior expectation for $6.4 billion.”

The Street is still modeling $7.1 billion, he notes. Gauna cut his EPS estimate for 2012 to 25 cents from a prior 40 cents, well below the Street consensus of 75 cents. For the current year, he’s modeling 40 cents, down from 45 cents, and below consensus of 55 cents.

Nor are server chip prospects good for AMD, Gauna thinks:

The recent refresh of Intel’s Xeon E7 line keeps us cautious that AMD will be able to gain any considerable server momentum in the near-term as Intel continues to focus on bringing its 22nm products to market by early 2012. This is especially concerning because the AMD server roadmap does not go beyond 32nm at this juncture.

And as for the current absence of a CEO, it’s a situation that could improve, but it almost doesn’t matter, in Gauna’s view: “We have heard rumblings that AMD may be close to finding a CEO, which could provide a bump in sentiment depending on the individual. Our view, however, is that the primary investment criterion in AMD is takeout potential, for which the filling of the CEO position has little relevance.”

AMD shares this morning are down 18 cents, or 2.6%, at $6.77 in early trading.