With AMD (NYSE:AMD) in a precarious position in the microchip industry, the company said just recently that it will probably miss revenue targets for its first fiscal quarter. AMD's CEO Hector Ruiz dropped the bomb of sorts yesterday at a Morgan Stanly technology conference for investors, which I partially liveblogged when Google CEO Eric Schmidt took to the podium.

Ruiz said that "We didn't do as good as a job as we should have" -- and AMD shares then proceeded to fall about 2% to $13.89 in late afternoon trading yesterday. With AMD having the rumor floating around that it may be a takeover target by a private equity group (or even competitor Intel (NASDAQ:INTC)if you can fathom that), the chipmaker sits on a rickety fence right now. It makes a great line of products and competes very well with market leader Intel -- but with shares so cheap, things could develop on the takeover front.

AMD ended up stating in a press release that it's "unlikely to meet" its previously estimated revenue guidance of $1.6 billion to $1.7 billion for the first quarter -- and analyst estimates were predicting $1.66 billion in revenue before that release was sent to the press wires. The chip industry's customers (computer makers) and end customers benefit from the competition between Intel and AMD, but things could change if Intel was interested in buying its largest rival just to erase a competitor. Expect a move like that to unleash a firestorm of criticism based on "antitrust" measures.