Semiconductor Field to Cool, Analysts Say

The semiconductor industry’s rapid growth of the past year is expected to taper off and industry analysts are predicting lower profits for at least part of next year.

Many computer analysts recently trimmed earnings predictions for 1988 for many semiconductor manufacturers and some are recommending that investors unload computer chip stocks during periodic rallies, such as Wednesday’s advance.

“The basic trend in those stock prices will be downward,” said analyst Eli Sayegh of S. G. Warburg, Rowe & Pittman.

“The first part of next year will be when we feel the worse part of the stock market crash,” said analyst Michael Stark of the brokerage house Robertson, Colman and Stephens. “But it will not be a blood bath,” he added.

The industry suffered a dramatic slump in 1985 because a sharp decline in computer sales resulted in weak demand for chips. It rebounded strongly in the past year because of higher personal and minicomputer sales.

Semiconductor shares rose Wednesday as investors cheered a higher book-to-bill ratio, which portends stronger orders in the future. The semiconductor association said Tuesday that the ratio rose to 1.06 in October from 1.04 the previous month.