Updated from 12:28 PM EDTA blunt downgrade of chip stocks from Merrill Lynch knocked semiconductor stocks down across the board this morning, including leviathan Intel ( INTC - Get Report), which issues its midquarter update later today. A report from analyst Joseph Osha said semiconductor shares have simply gotten too pricey given the still-uncertain outlook for growth in earnings. "As the spring has progressed, it is becoming apparent that the semiconductor business has been benefiting mostly from easy comparisons and low inventory," Osha said in a research note. "We believe that the early semiconductor upturn has now played itself out." Osha said his specific concerns on Intel "relate to the lack of visibility into the PC end market, particularly on the corporate side, rather than anything company specific." In recent trading, Intel was down 4.1% to $27.01. The Philadelphia Stock Exchange Semiconductor Index was off 3.1%. Other stocks downgraded by Merrill also were lower: Texas Instruments ( TXN - Get Report) had given up 2.1%; Linear Technology ( LLTC) was down 5.1%; Semtech ( SMTC) was off 6.4%, and Triquint ( TQNT) was down 9.3%. Osha also joined a slew of other analysts in predicting Intel will throttle down revenue forecasts toward the lower end of the $6.4 to $7 billion range it gave earlier, to a range of $6.5 to $6.8 billion. The Merrill Lynch analyst had said last week that he expects Intel's June-quarter revenue to stay sequentially flat, at $6.76 billion, reducing his earlier estimate of an increase to $6.96 billion. Analysts currently expect second-quarter revenue of $6.7 billion, according to Thomson Financial/First Call. The Street will scrutinize Intel's pronouncements today amid growing evidence that a hoped-for pickup in semiconductor sales won't materialize in the second half of the year.