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Barclays cuts Intel and other chipmakers' ratings
Reported by Dean Wilson on Tuesday, January 3 2012 11:00 pm
Investment firm Barclays Capital has downgraded a number of semiconductor companies, including Intel, Freescale, Microchip, Applied Materials and Spansion, as demand is expected to be lower than supply for the first quarter of the year.
Investment firm Barclays Capital has downgraded a number of semiconductor companies, including Intel, Freescale, Microchip, Applied Materials and Spansion, as demand is expected to be lower than supply for the first quarter of the year.
The companies saw their ratings cut from 'overweight' to 'equal weight', market lingo for Barclays' belief that these companies are no longer outperforming and are pretty much on neutral territory, seeing negligible growth or remaining flat.
"First quarter should be the trough for semis given the ongoing inventory correction, coupled with supply chain constraints, due to muted end demand visibility," said C J Muse, an analyst at Barclays, whom Reuters cited as being highly reliable.
Intel cut its fourth quarter forecast last month by $1 billion, blaming the shortage of hard disk drives (HDD) for plummeting demand in the entire PC industry, but Nomura Equity Research claims there is more to Intel's revised financial outlook than the HDD problem.
It was not all bad news for chipmakers, however, as Micron, LSI and Cymer were all upgraded from 'equal weight' to 'overweight'.
Market recovery is expected in the second half of the year, with end of year growth of five percent, followed by six to eight percent growth in 2013.
Source: Reuters
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