Big tech companies take a battering

After months crawling its way out of recession, the tech industry might be headed for another slump.

Shares in the big name companies such as Intel have taken a tumble after Wall Street got jittery about a weakened euro and uncertain back-to-school demand.

Intel dipped 13 cents to close at $20.18, while Broadcom, which makes chips for set top boxes and modems and mobile phones, slid 38 cents to end at $32.20.

It all started after both were downgraded by Susquehanna Financial Group – the analysts claimed that the July-September quarter will be one of the worst since 2001.

Susquehanna analysts Chris Caso and Liz Pate scribbled a note to clients that the weakening euro, and anticipated price hikes on personal computers, is threatening to sap demand in Europe.

After ringing a few manufacturers in Asia they think that sales of PCs could be “well below seasonal” averages and possibly “the worst third quarter for notebooks since 2001.”

Analysts from UBS Securities said they are cautious about US semiconductor stocks since they expect the industry to “regress to normalised trends”.

Barclays Capital analyst Tim Luke also warned that the chip industry’s “unprecedented” growth rates in 2010 will slow.

Luke thinks that the industry knows all this and has fairly modest predictions for its own growth.

Not everyone has been taking a pasting. Shares of Texas Instruments increased on the back of rumoured profit announcements.

On the whole we think that the share markets are far too jittery and they should take some time out and relax a bit more.  And the analysts should buy some new Armani suits for themselves.