Intersil shares fall on UBS downgrade

Shares of Intersil Corp., which makes power-management chips for PCs and other analog chips for devices like cell phones and flat-panel TVs, fell to a new 52-week low Monday after UBS cut its rating on the stock.

In a research note, UBS Securities analyst Uche Orji said the downgrade to "Neutral" from "Buy" is based on the firm's belief that Intersil, which supplies between 50 percent and 60 percent of the market for power-management chips inside laptop computers, will likely have a tough time gaining a bigger slice of that business.

Orji said the Milpitas, Calif.-based company's profit margins are also likely to be pressured by lower spending on consumer electronics in 2009, which would hurt Intersil's ability to sell more chips that go into many of those products.

"We are lowering our margin assumptions for 2009 as we believe that macro headwinds and slowing end-market growth is likely to result in sizeable (average selling price) pressure," Orji wrote.

Intersil shares fell 84 cents, or 4.1 percent, to close at $19.43. The stock earlier hit $19.18, below its previous 52-week low of $19.97 set Friday.