Philips Electronics Joins Chip Sector Slowdown

Philips Electronics (PHG Quote) Friday forecast lower-than-expected chip sales in the third-quarter, as the Dutch-based conglomerate joined a host of U.S. companies warning of a slowdown.

Philips said its chip unit expects sales will be flat compared to the previous quarter on a U.S.-dollar basis, but 27% higher than a year ago.

The company also said its book-to-bill ratio slipped below 1 in the third quarter and predicted an industry-wide slowdown in 2005.

Cirrus Logic(CRUS Quote) late Thursday slashed its second-quarter revenue forecast, the latest U.S. chip player to cite a slowdown.

In recent weeks, semiconductor companies from Intel(INTC Quote) to Texas Instruments(TXN Quote) to PMC-Sierra(PMC Quote) have lowered guidance.

Philips' U.S. ADR shares closed at $23.21 Thursday and were down in European trading Friday.