Chipmaker

PMC-Sierra

(PMCS)

was down 2.9% in preopen

Island

trading after

Credit Suisse First Boston

downgraded it to hold from buy and cut its 2001 earnings estimate to 69 cents from 88 cents. CSFB said conditions in the semiconductor industry have worsened in the last three weeks.

Lehman Brothers

cut its estimate for PMC-Sierra to 70 cents from 85 cents. CSFB also downgraded

Applied Micro Circuits

(AMCC)

, cutting it to buy from strong buy, but said the stock is well-positioned for an upturn once the industry recovers.

Applied Micro was down 1.7% in the preopen. Lehman also weighed in on the company, cutting its 2002 earnings outlook to 67 cents from 80 cents.