Hector Ruiz, the chief executive of Advanced Micro Devices, might be careful what he wishes for.

At the company’s annual shareholder meeting on Thursday, Ruiz said one of his top goals has been to “bring competition back” to the $30 billion PC processor industry, which is dominated by Intel Corp.

Intel took that message to heart after losing market share to AMD in 2005 and 2006. A slate of new chips helped Intel gain back in one quarter all the market share it lost last year. Intel held 80.5 percent of the market at the end of March, up more than 6 percentage points from the 74.4 percent in December, according to market tracking firm Mercury Research.

One shareholder asked Ruiz why AMD shifted tactics and made aggressively optimistic forecasts about gross margins and revenue at its analyst meeting last December, just weeks before sales and profits took a sharp turn south.
Ruiz replied: “Everything we said in that conference, except for our financial performance in the first quarter, is unchanged”.

Oh, okay. To recap, AMD said in December that it expected sales would grow twice as fast as the industry average of 10 percent due to market share gains. It also forecast gross margins of 50 percent, give or take two points, in 2007.

AMD will be challenged to make good on those after its dismal first quarter, which Ruiz called a “disaster” and “unacceptable”. In those results, AMD said margins fell to 31 percent from 59 percent a year earlier while revenue fell 7.4 percent.
A lot of AMD’s hopes rest on a new chip called Barcelona, scheduled to debut in the middle of the year. By combining four processing cores on one piece of silicon, AMD hopes to leapfrog Intel’s high-end chip, gain market share, and win a respite from a damaging price war.

“I have every confidence that with this product, AMD will be far and away the x86 quad-core leader,” Ruiz said.