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

Reuters

By Noel Randewich

SAN FRANCISCO, Oct 23 (Reuters) - Shares of semiconductorcompanies slumped on Wednesday after a host of underwhelmingquarterly revenue forecasts left Wall Street concerned aboutlackluster demand in markets from industrial to smartphones.

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

The selloff came after Broadcom Corp, programmablechipmaker Altera Corp and radio frequency chipmaker RFMicro Devices Inc late on Tuesday joined Intel andTexas Instruments Inc on a growing list of semiconductorcompanies whose quarterly forecasts disappointed investors.

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

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