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With impatient investors drumming their fingers for signs of a semiconductor recovery, it's no surprise that


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should be punished for failing to grow revenue fast enough.

The communications chip maker said in a midquarter update that sales will grow about 8% in the current June quarter, at the high end of a forecast it made earlier.

That didn't cut it with investors: The stock got slapped down 11.1% in midmorning trading to $31.36.

Last week, Lehman Brothers analyst Dan Niles had said Xilinx might raise current revenue growth guidance from a range of 6% to 8% to a range of 8% to 10%. In its most recently reported quarter, the chipmaker made revenue magic, wowing investors by pulling a sequential gain of 20% out of its hat.

No such luck this quarter, apparently.

In conjunction with the unwelcome Xilinx news, the market seemed to disregard a research note from Bear Stearns suggesting that now might be the time to scoop up beaten-up chip stocks.

The Philadelphia Stock Exchange Semiconductor Index was down 3.7% in midmorning trading.

In its report, Bear Stearns offered the same torpid outlook for chip stocks that's become the consensus, saying growth may be flat in the September quarter. But unlike most research outfits, it said now might be the time to start buying these stocks. "We think semiconductor stocks could have 50%-100% appreciation from current levels to the top of the cycle," wrote analyst Charles Boucher.

"Stock prices are lower than at any time except the immediate aftermath of 9/11, and fundamental industry data support the conclusion that we are seeing a steady recovery," he added. "What we find interesting is that investor sentiment seems more negative today than it was during the dark days at the bottom of the cycle during the second half of 2001."

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Year-to-year and sequential growth rates have been improving since the cycle hit bottom in the fourth quarter of 2001, he pointed out.

Still, global chip sales this April were down 19.4% from a year ago, according to figures released last week from the Semiconductor Industry Association.

Investors will get a better sense of the broad outlook for chipmakers on Wednesday, when Altera offers its midquarter update. The company isn't expected to raise revenue guidance. Monday it was down 2.8% to $17.53, taking its licks along with the group and with rival programmable logic device maker Xilinx.