Chip makers delivered the latest installment this week in what is becoming a litany of bad news from the technology sector. Intel Corp. and National Semiconductor Corp. both slashed their sales guidance, and National Semiconductor and Applied Materials Inc. said they will cut a combined 2,130 jobs. Intel imposed a hiring freeze.

Semiconductor companies fortunes say a lot about the health of other tech industries, because slowdowns in chip sales can reflect slumping demand for everything from personal computers to cell phones.

Meanwhile, Silicon Valley icons Yahoo Inc. and Google Inc. are also suffering. Shares of Yahoo, which is cutting 1,500 jobs, are trading around $11 per share, a third of the price that Microsoft Corp. was willing to pay to buy the company last May. Googles shares sunk to a 52-week low of $287.76 this week after trading above $700 a year ago.

Poor execution and a heavy debt load at AMD have allowed Intel to inflict severe damage on its smaller rival since 2006. The worlds No. 2 maker of microprocessors, AMD has lost $5.6 billion over the past eight quarters.

AMDs story about how it plans to reverse course offers a look at the drastic moves other struggling companies might have to consider if their problems worsen, from hacking off parts of the business in an effort to save costs to re-pricing employee stock options that are now worthless.

“Weve had enough of losing money,” the companys new CEO, Dirk Meyer, told financial analysts Thursday at the companys Sunnyvale headquarters. Executives were unveiling new server chips and outlining AMDs plans for financial recovery.

The company has already changed CEOs, announced 2,100 layoffs this year and is cutting back on expenses. Travel is scrutinized more and even cell phone and computer upgrades for employees are being delayed. Ironically, scaled-back spending on computer upgrades at other companies is a big reason chip makers are struggling in the downturn.

AMD is also banking on some unusual strategies, highlighting the contortions that other deeply wounded companies might have to undertake in order to find funding and survive.

With the credit crunch strangling lending in the U.S., AMD has gone abroad looking for an emergency cash infusion and partners for a spin-off of its factories.

AMD is joining with government-controlled investment firms in the Persian Gulf state of Abu Dhabi to create a new company that will absorb AMDs manufacturing operations and some of its debt. The deals will also add $1 billion in cash to AMDs treasury.

Other companies have entered similar arrangements. In July General Electric Co. agreed to a joint venture with one of the companies involved in the AMD deals to pump $4 billion into GEs weakened commercial finance business.

AMD didnt offer new financial guidance Thursday. Bob Rivet, AMDs acting chief financial officer, said its too early to know how the economy will affect the company this quarter.

“Its stormy out there. There is no debate, we all know it, we all would like to forget October,” he said. “Its going to pass. It always has … so we have to figure out, where do we want to bet?”

AMDs falling stock price has also forced the company into an awkward position when it comes to employee morale.

AMD shares are trading just above $2 a share. They gained 13 cents, or 5.1 percent, to close at $2.70 on Thursday. The stock was trading above $40 per share at the beginning of 2006.

The astonishing fall has rendered many employees stock-option awards worthless. AMD says 99 percent of its stock options are “underwater,” which means they can only be redeemed for prices above where AMDs stock is currently trading.

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