Merrill, Goldman downgrade chip sector on oversupply riskI'm with the analysts on this one.
Analysts, Industry Executives Spar Over Outlook (link requires free subscription)
From my perch in the tech market, I see it as a sector that is growing, but the level of growth has slowed. This lower growth has taken a lot of companies by surprise, who were planning for >10% growth when it's going to be more like 4-5%. This has created an over-inventory situation that is now working its way through the tech supply chain.
Now 4-5% growth isn't bad . It's when you have capital expenditures and inventory building assuming twice that amount that leads to all sorts of problems, so the downgrades in tech shares, in my opinion, are warranted for the time being.
Why, oh why, can't this industry do decent forecasts? In the 15 years I've worked it tech I have yet to see this industry do it right.