Microchip Technology shares fall after downgrade

NEW YORK - Shares of chip maker Microchip Technology Inc. fell Wednesday after a Goldman Sachs analyst downgraded the stock to "Sell" from "Neutral," citing a market shift away from the company's strengths and growing competition.

Its shares fell $2.20, or 8.7 percent, to close at $23.08.

Microchip, based in Chandler, Ariz., produces microcontrollers, microprocessors designed for specific tasks.

Craig Hettenbach wrote in a note to clients that Microchip is not well positioned to take advantage of the growing market for features like touch control and ultra-low power. Hettenbach said he preferred stock in rival Analog Devices Inc. because of its strong position in data converters and amplifiers.

He lowered Microchip's six-month price target to $21 from $26.

He said competition from large, diversified companies is rising, a trend likely to slow the company's growth and reduce prices in its market.

Hettenbach reduced Norwood, Mass.-based Analog Devices' six-month price target to $32 from $34 but maintained a "Buy" rating.

Analog's shares fell $1.28, or 5.8 percent, to $20.92.

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