CS First Boston Downgrades Chip Sector to 'Hold'
CS First Boston downgraded the semiconductor sector to hold from buy.
CSFB's semiconductor team sayss it revised its ratings as persistent overly optimistic valuations don't reflect structural issues emerging in this downturn. While the worst may be over, the team says weak global economies, persistent overcapacity through 2002, and a reversion to back to normal growth rates still have time before stocks hold a sustained, long-term rally. For a turnaround, the team hopes to see global economic stability, renewed IT budget deployments; a bunch of fab closures; much higher utilization rates; consolidation and refinancing; and valuation rationalization down the food chain.
The downgrades include:
Altera (ALTR ) Applied Materials (AMAT ) Applied Micro Device (AMCC ) ASML Holding (ASML ) Atmel (ATML ) ATMI (ATMI ) ChipPAC (CHPC ) Cypress Semi (CY ) KLA-Tencor (KLAC ) Lattice Semi (LSCC ) LSI Logic (LSI ) Maxim Integrated (MXIM ) Micrel (MCRL ) Microchip (MCHP ) Novellus (NVLS ) Silicon Storage (SSTI ) STMicroelectronics (STM ) Varian Semi (VSEA )