Bad News by Chip Makers Keeps Coming

Is there a semiconductor company left that hasn’t warned about a weak fourth quarter?

Among the chip-related firms lined up at the confessional on Tuesday:

* Dallas Semiconductor (DS) slumped $8 to $26 after the firm said fourth-quarter earnings will disappoint. Dallas Semi, which sells specialized chips to some of the largest computer and telephone-equipment makers, said customers over-purchased in earlier quarters, prompting them to cancel orders now.

* Microchip Technology (MCHP), which makes micro-controllers and memory chips, dropped $1.75 to $25.06 after saying it expects revenue in its fiscal third quarter ending this month to be little changed from the second quarter’s $176.3 million.

* Actel Corp. (ACTL), a maker of programmable circuits, said its quarterly results won’t meet estimates because of lower-than-expected bookings. The stock fell $2.88 to $30 before the warning, which was issued after the market closed.

Meanwhile, TriQuint Semiconductor (TQNT) sank $12.13 to $49.31 after Credit Suisse First Boston analyst Michael Masdea said the stock’s price failed to reflect slowing demand for the company’s chips, which are used in mobile phones and optical networking equipment.

“The recent exuberance surrounding TriQuint is unwarranted in light of the risks and [uncertain demand] we believe it faces in many of its end markets,” Masdea wrote in a report. He cut the stock to “hold” from “buy.”

The stock had soared from $25 in October to $61.44 as of Monday.

Chip-equipment makers Novellus Systems, Applied Materials and Lam Research also fell Tuesday after Thomas Weisel Partners analyst Eric Ross lowered the stocks to “market perform” from “buy” and cut Teradyne Inc. to “buy” from “strong buy,” saying equipment spending is likely to be flat in 2001.

Novellus (NVLS) dropped $3.75 to $31.63, Applied Materials (AMAT) declined $5.44 to $45.50, Lam Research (LRCX) fell $1.94 to $18.06 and Teradyne (TER) slid $3 to $37.50.