Updated from April 21

Shares of KLAC-Tencor ( KLAC) sagged Thursday after the company said orders could fall as much as 15%. The worst-case scenario guidance aroused some fears that the chip equipment industry could be nearing the top of the current upcycle.

The stock was recently down $3.06, or 6.3%, to $45.26.

Investors shrugged off upbeat news related to the quarter ending in March: Late Wednesday, the chip-equipment maker said it surpassed analyst estimates on the top and bottom lines for its fiscal third quarter.

Instead, they focused on the more unsettling details of the company's current outlook. KLA said after the close that orders for new equipment could rise as much as 10% or fall by as much as 15% in the June quarter.

Chip equipment analysts have been nervously scanning for signs of slowing growth that would show the current upcycle is about to peak and prompt further slides in stock prices -- although investors, having bid down many names in the sector year to date, seem to have already started pricing in that scenario.

First Albany downgraded KLAC shares Thursday, citing weak bookings momentum for both the June quarter and the just-reported March quarter (which saw bookings rise 18%, below the bank's expectations of 20% to 30% growth).

The bank said KLA delivered a "solid quarter" in terms of revenue and EPS, and it actually raised its earnings estimate for the June quarter, predicting EPS of 46 cents instead of 40 cents, and for fiscal year 2005, increasing EPS to $2.09 from $1.92. But the upside in earnings was outweighed by the prospect of decelerating growth, First Albany said.

But other investment banks were more forgiving. "The fuss is ultimately about the timing of bookings, not fundamentals," said a research note from CIBC analyst Ali Irani, who argued KLAC could still see upside given customer demand for its tools, which help semiconductor makers transition to new manufacturing processes.