Sector Snap: Chip makers fall on sales outlook cut

In afternoon trading, the Philadelphia Semiconductor Sector Index was down 7.84, or 2 percent, to 387.42. The broader markets retreated as well, with the Dow Jones industrial average slipping 1 percent and the Nasdaq 100 losing nearly 2 percent.

Earlier Wednesday, the Semiconductor Industry Association reduced its 2008 chip sales growth forecast to 4.3 percent from 7.7 percent.

The SIA cited pricing pressure in memory chips, which comprise about 20 percent of total chip sales. Excluding memory chip sales, the group forecast chip sales growth of 7.4 percent.

Shares of key memory chip maker SanDisk Corp. lost 78 cents, or 3.1 percent, to $24.72, while competitor Micron Technology Inc. fell 46 cents, or 5.9 percent, to $7.34.

Elsewhere, shares of No. 2 microprocessor maker Advanced Micro Devices Inc. fell 35 cents, or 4.7 percent, to $7.08. The stock gave back much of the gain from last week, when it rose 8 percent.

Shares of AMD's larger rival Intel Corp. fell 64 cents, or 2.8 percent, to $22.04.

Meanwhile, shares of Zoran Corp. fell 85 cents, or 5.9 percent, to $13.63, a day after the chip maker hosted its analyst day.

Among makers of semiconductor manufacturing equipment, Teradyne Inc. fell 80 cents, or 6.6 percent, to $11.31, while KLA-Tencor Corp. slipped $1.23, or 2.9 percent, to $40.69.

Bucking the downward trend was wireless chip maker Skyworks Solutions Inc. Its shares rose 22 cents, or 2 percent, to $11.03 after an Oppenheimer raised his price target and earnings estimates, citing strong demand.