National Semi’s Shares Fall on Analyst’s Note

National Semiconductor Corp. shares fell 17% after a Salomon Smith Barney analyst said orders for chips used in personal computers and flat-panel displays will slow this quarter.

National Semi slid $4.58 to $22.75 on the New York Stock Exchange.

Demand is slipping in the chip maker’s PC and flat-panel businesses, which together account for 24% of sales, Salomon’s Jonathan Joseph wrote in a note to clients.

There also may be excess semiconductor inventory by year-end in the cell-phone market, where Santa Clara, Calif.-based National Semi is gaining ground and gets 25% of sales, he said.

He cut his rating on the shares to “neutral” from “buy” and lowered his fiscal 2003 and 2004 profit and revenue forecasts.