Nov 20 (Reuters) - Shares of Micron Technology led falls for U.S. microchip producers on Tuesday, driven by a combination of concerns over slackening iPhone demand and a series of brokerage downgrades that reflect a growing technology stock selloff.
Micron shares fell 7 percent in early trading after brokerage Baird Equity Research downgraded the stock to "underperform", citing fall in memory chip prices.
Weak demand for chips has been hurting the semiconductor stocks. Advanced Micro Devices Inc shares fell 7 percent, while those of Nvidia Corp shed 5.7 percent, taking an additional hit from one of the top cryptocurrency Bitcoin plunging to its lowest in 2018. Both companies get a share of their revenue by selling chips to cryptominers.
Micron's NAND flash memory chips and dynamic random access memory (DRAM) memory chips help power servers and smartphones, including Apple Inc's latest generation of iPhones.
"Continued deterioration in both DRAM and NAND pricing leads us to model eight consecutive quarters of gross margin and EPS contraction," Baird analyst Tristan Gerra, who also lowered his PT to $32 from $75, said in a note.
"NAND outlook continues to worsen, with contract pricing expected to decline mid teens in each of the next two quarters," Gerra said.
Shares of Micron also took a hit from a report on Monday that Chinese authorities would deepen their probe into the chipmaker and Korean firms Samsung Electronics and SK Hynix Inc, claiming "massive evidence" of antitrust violations.
"At this moment, we can only comment that we are sincerely cooperating with the investigation," SK Hynix spokesperson Hyun Kyung Lee told Reuters.
Micron declined to comment.
Shares of Micron are down 10.4 percent this year compared to a 6.3 pct fall in the broader Philadelphia SE Semiconductor Index. (Reporting by Arjun Panchadar in Bengaluru; Editing by Arun Koyyur)