Wall Street had a bearish lean on Novellus ahead of the news with 10 of the 16 analysts covering the stock at hold (8) or underperform (2), although the median 12-month price target sits at $40.

The other bearer of bad news in the semiconductor space was Microchip Technology ( MCHP), which substantially lowered its fiscal first-quarter outlook, citing "broad-based weakness" in its business.

The company said it now expects non-GAAP earnings of 53 to 55 cents a share and a sequential decline in revenue of about 1.5% for the June-ended quarter. Its previous forecast was for non-GAAP earnings of 58 to 62 cents a share and sequential sales growth of 1%-6%. The average analysts' view is for earnings of 60 cents a share on revenue of $393.5 million.

"We believe that our overall June quarter results reflect weak global market conditions which we believe will impact the broad-based semiconductor industry in the June or September quarter depending on the individual market exposures and revenue recognition practices of the companies," said Steve Sanghi, the company's president and CEO.

Microchip gave an initial forecast for a further sequential revenue decline in the low to middle single digits for the September quarter, and said it's taking steps to control expenses, although it doesn't expect to lay off any employees.

The stock was last down 7% to $34.85 on volume of 234,000, according to Nasdaq.com.

A number of chip capital equipment makers and chip companies themselves saw their stocks dip in extended action on Monday, including KLA-Tencor ( KLAC), off 3% to $41 on volume of 44,000; Lam Research ( LCRX), down 2.5% to $43.76 on volume of around 75,000; Atmel ( ATML), losing 2.7% to $13.50 on volume of 53,000; Intersil ( ISIL), off 2.7% to $12.35 on volume of 54,000; and ON Semiconductor ( ONNN), falling 3.3% to $9.79 on volume of 21,000.

Other stocks active in late trades included Clean Energy Fuels ( CLNE), which got a lift of more than 8% on news that Chesapeake Energy ( CHK) is investing $150 million in the company; and Alcoa ( AA), which kicked off earnings reporting season in confusing style by delivering a solid beat on the top line but posting an in-line profit. Alcoa shares ticked 7 cents lower to $15.84 on volume of 2.4 million after the closing bell.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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