Chip Stocks Caught in Microchip Backdraft?

Shares of power regulation chip maker On Semiconductor (ONNN) are getting hit today, down as much as 7%, at one point, is now down 34 cents, almost 4%, at $8.92, on no apparent news.

The news may be as simple as today’s downgrade of fellow chip maker Microchip Technology (MCHP), which JP Morgan cut to “Neutral” today over worries about China.

But the connection’s not China, probably, but rather an American thing.

“With the Microchip downgrade today, I’m seeing guys that have exposure to North American distribution channels being a bit weaker than other semiconductor stocks,” says Robert Burleson, chip analyst with Canaccord Adams, in a brief phone chat I had with him. Burleson observes that Fairchild Semiconductor International (FCS) is also well down, off 80 cents, or 5.74%, at $13.13. I would note that National Semiconductor (NSM), another maker of diverse analog semiconductors, many of whose parts sell through distribution channels, was off about 5% earlier, though it’s now down only 64 cents, or 2.7%, at $23.06.

Kevin Calabrese with Argus Research opines that this might be a buying opportunity in shares of On Semi. He’s got a “Buy” rating on the stock and a $12 price target. “The general increase in interest worldwide in energy efficiency means that the power regulation chip category is becoming increasingly important,” Calabrese told me by phone this morning.

Comments

[D333GS]

Although the $SOX & stocks did pop in 2000 , the chip indexs have never been in a 5 wave Elliot bull market uptrend but rather has mantained an ABC bear market formation,the stocks staying in a sidways trading range ;
stockcharts.com/h-sc/u...=$SOX&p=W&st=1...

And per performance VS the general market, it has been in a down trend.
In this ratio/performance (The $SOX has bounced off it's all time low , starting it’s first bull run?)
stockcharts.com/h-sc/u...=$SOX:$NYA&p=W&...

This is a horror story! Do you have any insight as to what the fundamental (s) problem is?

Thanks

John Francis

[D333GS]

I hope the charts work here!
stockcharts.com/h-sc/u...=$SOX&p=W&st=1...

stockcharts.com/h-sc/u...=$SOX:$NYA&p=W&...

[D333GS]

No they don't , sorry