Needham's Rajvindra Gill has cut Cypress (CY -15.6%) to Hold in response to its Q3/Q4 warning. However, he also argues the warning shouldn't be seen as a "direct negative read" for mobile IC rivals/peers Synaptics (SYNA +1.4%), Atmel (ATML -2.5%), MagnaChip (MX +0.1%), and Silicon Image (SIMG -0.9%).
Gill thinks "end of life actions" for certain Nokia products are hurting Cypress, as are year-end inventory cuts at Samsung, Japanese exposure, and customer push-outs (believed to be from Sony and/or Chinese OEMs). He suspects customer ramp uncertainty and "perceived share loss" to Synaptics will limit 2014 earnings and offset Cypress' operating leverage.
Though Atmel continues to trade lower, Synaptics has turned positive after dropping in premarket trading.