U.S. chip stocks drop as widespread weak demand worries investors

By Noel Randewich

SAN FRANCISCO, Oct 23 (Reuters) - Shares of semiconductor companies slumped on Wednesday after a host of underwhelming quarterly revenue forecasts left Wall Street concerned about lackluster demand in markets from industrial to smartphones.

The Philadelphia Semiconductor Index was down 3.3 percent, with PC chipmaker Intel Corp falling 1.7 percent and mobile heavyweight Qualcomm Inc down 2.1 percent. Most other big U.S. chipmakers also trading lower.

The selloff came after Broadcom Corp, programmable chipmaker Altera Corp and radio frequency chipmaker RF Micro Devices Inc late on Tuesday joined Intel and Texas Instruments Inc on a growing list of semiconductor companies whose quarterly forecasts disappointed investors.

"It's a broad array of leading indicators for different parts of the chip market telling us we got ahead of ourselves in terms of where we thought global macro demand was going to be in the fourth quarter," said Evercore analyst Patrick Wang.