Shares of Intel Corp. and Advanced Micro Devices fell sharply Tuesday morning, amid signs of a slowing personal computer market, with one analyst warning that orders are "falling of a cliff." Intel (INTC 19.78, -0.87, -4.21%) sank nearly 4% to $19.84, while AMD (AMD 6.79, -0.63, -8.52%) was off more than 5% to $7 at the opening bell.
Other chip makers also saw their shares fall sharply, including Nvidia Corp. (NVDA 9.24, -0.40, -4.15%) , Micron Technology (MU 7.20, -0.34, -4.48%) and SanDisk Corp. (SNDK 44.84, -1.53, -3.30%) .
The Philadelphia Semiconductor Index (SOX 342.60, -11.45, -3.23%) was down 2.7%, setting the pace for a tech sector retreat.
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"Checks in Taiwan indicate PC orders falling off a cliff," wrote J.P. Morgan analyst Christopher Danely.
"We believe a host of PC companies pushed out orders throughout the supply chain." Baird analyst Tristan Gerra downgraded Intel's rating to neutral from outperform, while noting signs of "a sharp deterioration in PC-related order trends over the past week, following a below-expectation July."
He added: "Our checks point to a sharp deceleration in PC order trends continuing into August, after a below-expectation July month. Hopes of a meaningful recovery for the September month are less and less likely, in our view, leading to a likely below-expectation third quarter."
Wedbush analyst Patrick Wang also said that, based on checks, "we come away incrementally more negative on the PC supply chain, in light of lowered third-quarter forecasts for both Intel and AMD as well as an expectation for softer DRAM pricing and questionable demand."
"Visibility is now hazier than before," Wang added
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