Sector Snap: Chip stocks retreat along with Street

The Semiconductor Industry Association said Monday that chip sales grew 5.9 percent in April on a year-over-year basis, but were flat compared with March. April sales grew to $21.2 billion from $20.1 billion in the same month of prior year.

SIA President George Scalise called the year-over-year growth healthy considering rising energy costs that have reduced disposable income.

Meanwhile, the Philadelphia Semiconductor Sector index fell 6.73 to 408.48 in afternoon trading.

Lehman Brothers analyst Tim Luke said the April sales data was "seasonally weak after a strong March." The weakness, he wrote in a note to investors, was led by logic products and microprocessors.

Shares of Intel Corp., the world's largest chip maker, fell 28 cents to $22.90.

Shares of LSI Corp. whose products include logic chips as well as system-on-a-chip devices, fell 30 cents, or 4.1 percent, to $6.97. The stock has traded between $3.75 and $9.08 in the past year.

U.S.-traded shares of Infineon Technologies AG slipped after Citi Investment Research analyst Glen Yeung assumed coverage with a "Hold" rating. Citi previously rated the company at "Buy."

"Infineon shares have appreciated substantially from their recent bottom, reflecting an improved semiconductor sentiment, but also contemplating the long-awaited divestiture of Qimonda and speculation of a potential sale of the company proper," he wrote in a note to investors.

American Depositary Shares of memory chip maker Qimonda AG, in which Infineon holds a major stake, rose 7 cents to $3.93. The stock has traded between $3.04 and $17.29 in the past year.