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BANGALORE, INDIA--December 7, 2009--Researched by Industrial Info Resources (Sugar Land, Texas)--According to a report released by India's Central Electricity Authority (CEA) (New Delhi), India has missed its power capacity addition target of 6,462 megawatts (MW) for April to September 2009, the first six months of the current fiscal year, by 2,029 MW. The country added 4,394 MW of thermal power instead of the targeted 6,103 MW, registering a slippage of 1,709 MW. The target for hydropower addition was 139 MW, but the nation added only 39 MW during this period. There was no addition of nuclear power capacity, although the target was 220 MW. The CEA report states that 1,424 MW of the slippage was accounted for by state power projects. Of this, 1,324 MW of thermal power capacity is under construction.

Other companies featured: Bharat Heavy Electricals Limited (BSE:500103)

The Semiconductor Industry serves as a driver, enabler and indicator of technological progress. Developments in the industry determine the way we work, transport ourselves, communicate, entertain ourselves and respond to our environment. For example, the PCs we use, the cars we drive, the phones with which we communicate, the electronic gadgets on which we watch movies, listen to music and play games, and the planes and weapons used to protect us all use semiconductor devices.

As environmental issues have become more of a concern today, semiconductor devices are being made to reduce power consumption, reduce heat dissipation, capture solar energy, create more efficient lighting solutions, and so forth.

The industry has come a long way since the last downturn, with most of the players streamlining operations and transferring more routine production to low-cost locations. This has led to the development of the Asian market, where most memory production and backend operations have shifted. According to the Semiconductor Industry Association (SIA), the Asia/Pacific region (excluding Japan) accounted for 53% of total semiconductor sales in September this year. Japan produced another 17%, followed by the Americas and Europe with 17% and 13%, respectively.

The computing market is not the only driver of semiconductor sales any more. Not only has the market matured, but it has also been severely impacted by the recession. Enterprise spending on computing has dropped, and higher levels of commoditization and corresponding pricing pressures have made it a lower-margin business. As a result, a number of chip companies have shifted focus to other areas.

The consumer electronics market is growing in importance, especially gadgets such as LCD TVs, blu-ray players, smartphones and netbooks. The problem with this segment being the major driver is its inherently low margins. Competition is fierce and aggressive pricing is the rule of the day. Therefore, although the Consumer Electronics Association (CEA) expects shipments of LCD displays, blu-ray players and netbooks to increase 24%, 112% and 85%, respectively in 2009, it expects industry-wide revenue to be down 7.7%.

Smartphones are expected to be the exception, with revenue growing around 3% this year. Since semiconductors made for consumer goods are in the nature of components, there is ever-increasing pressure on their prices that correspondingly squeeze margins.

Communications infrastructure spending is currently being driven by China, although there are some signs of improvement in the domestic market. Medical Devices is an upcoming area and some IC makers have started developing products targeted at this market as well.

According to Autodata Corporation (as quoted by the CEA), vehicle sales have declined 40% from the fourth quarter of 2007 to the second quarter of 2009. The decline was driven by the recession and the industry’s dependence on the lending environment.

However, there are a number of positives for semiconductor manufacturers serving this market. The most important is the growing electronic content per vehicle, driven by the need for fuel efficiency, entertainment and automated navigation. The fact that an automobile has a significantly longer life than a consumer device is an added bonus, as once a semiconductor has been designed in, it continues to generate revenue for a number of years. This leads to a stable business model.

The aerospace and defense markets are dependent on government spending and policy making. Currently, government spending is targeted at terrorist activity, so spending on intelligence systems and less sophisticated weaponry remains strong. Companies offering sophisticated weapons are not doing as well. Commercial aerospace remains affected by tight lending conditions. So semiconductor manufacturers serving these markets are seeing mixed results, depending on the customers served.

Given the end markets driving the current strength in the industry, we tend to think that manufacturers of DRAM and flash (both NAND and NOR) will continue to see strong demand. The transition from DDR2 to DDR3 will add to growth in this segment.

The demand for greater functionality in smaller and more power efficient gadgets is leading to greater integration within the semiconductor device. This is leading to increased demand for the system-on-a-chip (SoC), which is a single device incorporating a microprocessor, digital signal processor or graphics core, as well as memory and logic. Within SoCs, both application specific integrated circuits (ASICs) and application specific standard products are expected to do well. ASICs are usually customized for a single buyer, while ASSPs may have multiple buyers.

The major players in the industry may be categorized into chipmakers, equipment and material suppliers, and foundries.

According to Gartner Dataquest and iSuppli Corp, Intel Corp (INTC), Samsung and Toshiba Corp. were the top three semiconductor suppliers in 2008. Texas Instruments (TXN) dropped to the fourth position, as the company decided to phase off its wireless baseband business. STMicroelectronics (STM) was in fifth, followed by Japan’s Renesas. Sony (SNE), Qualcomm (QCOM) and Hynix stepped into the top ten for the first time, filling the next three positions. Infineon stayed at number 10.

The top three equipment suppliers in 2008 according to VLSI Research were Applied Materials (AMAT), ASML Holdings N.V. (ASML), and Tokyo Electron Ltd. KLA-Tencor (KLAC), Lam Research Corp (LRCX), Nikon, Canon (CAJ), Hitachi, Dainippon and Novellus Systems (NVLS) are the others in the top ten. VLSI estimates that the top fifteen equipment suppliers generated around 70% of 2008 sales. Around 46% of equipment sales were from the U.S., Japan accounted for 36%, while the rest came from Europe.

All of the top five foundries are located in Asia. Taiwan Semiconductor Manufacturing Company (TSM) and United Microelectronics Corp (UMC), the two largest players in 2008, are located in Taiwan. Chartered Semiconductor Manufacturing (CHRT) is located in Singapore, Semiconductor Manufacturing International Corp (SMI) is in China and Vanguard is also in Taiwan.

OPPORTUNITIES

Manufacturing digital ICs is expensive, as it requires state-of-the-art technology and processes. On the other hand, digital products are cheaper, so cost recovery is more difficult. This has led to specialization in the industry and a greater contribution from Asian companies.

We particularly like Taiwan Semiconductor Manufacturing Company (TSM), the world’s largest pureplay foundry, which has started seeing very strong demand from all served end markets. The company is a technology leader and management intends to maintain this lead through R&D investment in 28nm and 22nm process technologies. Higher utilization and cost controls are also driving margins.

U.S. production is more focused on the analog side, which is a market dependent on innovation. Consequently, these products generate higher margins. They are also more customized and have longer life cycles.

These advantages are not lost on U.S. players, so the number of companies entering the market is on the rise. Our favorites in this area include Texas Instruments (TXN) and Analog Devices (ADI), both of which are seeing strengthening demand.

Although other players, such as Semtech Corp (SMTC), Intersil Corp (ISIL), Maxim Integrated Products (MXIM) and Linear Technology (LLTC) are also benefiting from stronger end demand and inventory builds at distributors, other factors makes us a bit cautious about these stocks. For example, Maxim changed its growth strategy last year, which continues to impact margins. Linear Technology also revamped its portfolio, increasing its focus on the auto market. Consequently, the company has been hard-hit by the tight lending conditions.

Microprocessors are a big market dominated by a few players. We are positive about Intel (INTC) because of its market position, superior innovation, effective strategies and strong cash position. However, the company’s dependence on the PC market and recent negative publicity could impact stock prices in the near term.

Advanced Micro Devices (AMD), on the other hand, is low on cash and market position, although the company’s competitive products, the foundry spin-off and recent agreement with Intel indicate upside for the stock. It is hard to ignore ARM Holdings (ARMH) in this space, as the company’s power-efficient low-performance chips dominate the growing cell phone market.

We also like logic maker Xilinx (XLNX) for its product innovation and position in China.

WEAKNESSES

The semiconductor companies we are concerned about include those with very weak financials, such as Exar Corp. (EXAR) and FormFactor (FORM). For instance, FORM continues to burn cash despite strong demand for its specialized probe cards. It also has significant customer and market concentration that increase execution risks.

TriQuint Semiconductor (TQNT) has been severely impacted by the recession, and the slower recovery in the communications networking market is telling on results.

SIA Forecast 2009-2011

The Semiconductor Industry Association expects 2009 sales of $219.7 billion, an 11.6% decline from 2008 levels. However, sales are expected to increase over the next two years, by 10.2% in 2010 and 8.4% in 2011. The forecast for 2009 is better than before due to particular strength in PCs and cell phones, which make up 60% of total semiconductor demand.Zacks Investment Research

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China Eastern Airlines (NYSE: CEA, SHA: 600115, HKG: 0670) will become the nation's second biggest carrier in terms of fleet size after its assets merger with Shanghai Airlines (SHA: 600029) has been approved ... more

The Semiconductor Industry serves as a driver, enabler and indicator of technological progress. Developments in the industry determine the way we work, transport ourselves, communicate, entertain ourselves and respond to our environment. For example, the PCs we use, the cars we drive, the phones with which we communicate, the electronic gadgets on which we watch movies, listen to music and play games, and the planes and weapons used to protect us all use semiconductor devices.

As environmental issues have become more of a concern today, semiconductor devices are being made to reduce power consumption, reduce heat dissipation, capture solar energy, create more efficient lighting solutions, and so forth.

The industry has come a long way since the last downturn, with most of the players streamlining operations and transferring more routine production to low-cost locations. This has led to the development of the Asian market, where most memory production and backend operations have shifted. According to the Semiconductor Industry Association (SIA), the Asia/Pacific region (excluding Japan) accounted for 53% of total semiconductor sales in September this year. Japan produced another 17%, followed by the Americas and Europe with 17% and 13%, respectively.

The computing market is not the only driver of semiconductor sales any more. Not only has the market matured, but it has also been severely impacted by the recession. Enterprise spending on computing has dropped, and higher levels of commoditization and corresponding pricing pressures have made it a lower-margin business. As a result, a number of chip companies have shifted focus to other areas.

The consumer electronics market is growing in importance, especially gadgets such as LCD TVs, blu-ray players, smartphones and netbooks. The problem with this segment being the major driver is its inherently low margins. Competition is fierce and aggressive pricing is the rule of the day. Therefore, although the Consumer Electronics Association (CEA) expects shipments of LCD displays, blu-ray players and netbooks to increase 24%, 112% and 85%, respectively in 2009, it expects industry-wide revenue to be down 7.7%.

Smartphones are expected to be the exception, with revenue growing around 3% this year. Since semiconductors made for consumer goods are in the nature of components, there is ever-increasing pressure on their prices that correspondingly squeeze margins.

Communications infrastructure spending is currently being driven by China, although there are some signs of improvement in the domestic market. Medical Devices is an upcoming area and some IC makers have started developing products targeted at this market as well.

According to Autodata Corporation (as quoted by the CEA), vehicle sales have declined 40% from the fourth quarter of 2007 to the second quarter of 2009. The decline was driven by the recession and the industry's dependence on the lending environment.

However, there are a number of positives for semiconductor manufacturers serving this market. The most important is the growing electronic content per vehicle, driven by the need for fuel efficiency, entertainment and automated navigation. The fact that an automobile has a significantly longer life than a consumer device is an added bonus, as once a semiconductor has been designed in, it continues to generate revenue for a number of years. This leads to a stable business model.

The aerospace and defense markets are dependent on government spending and policy making. Currently, government spending is targeted at terrorist activity, so spending on intelligence systems and less sophisticated weaponry remains strong. Companies offering sophisticated weapons are not doing as well. Commercial aerospace remains affected by tight lending conditions. So semiconductor manufacturers serving these markets are seeing mixed results, depending on the customers served.

Given the end markets driving the current strength in the industry, we tend to think that manufacturers of DRAM and flash (both NAND and NOR) will continue to see strong demand. The transition from DDR2 to DDR3 will add to growth in this segment.

The demand for greater functionality in smaller and more power efficient gadgets is leading to greater integration within the semiconductor device. This is leading to increased demand for the system-on-a-chip (SoC), which is a single device incorporating a microprocessor, digital signal processor or graphics core, as well as memory and logic. Within SoCs, both application specific integrated circuits (ASICs) and application specific standard products are expected to do well. ASICs are usually customized for a single buyer, while ASSPs may have multiple buyers.

The major players in the industry may be categorized into chipmakers, equipment and material suppliers, and foundries.

According to Gartner Dataquest and iSuppli Corp, Intel Corp (INTC), Samsung and Toshiba Corp. were the top three semiconductor suppliers in 2008. Texas Instruments (TXN) dropped to the fourth position, as the company decided to phase off its wireless baseband business. STMicroelectronics (STM) was in fifth, followed by Japan's Renesas. Sony (SNE), Qualcomm (QCOM) and Hynix stepped into the top ten for the first time, filling the next three positions. Infineon stayed at number 10.

The top three equipment suppliers in 2008 according to VLSI Research were Applied Materials (AMAT), ASML Holdings N.V. (ASML), and Tokyo Electron Ltd. KLA-Tencor (KLAC), Lam Research Corp (LRCX), Nikon, Canon (CAJ), Hitachi, Dainippon and Novellus Systems (NVLS) are the others in the top ten. VLSI estimates that the top fifteen equipment suppliers generated around 70% of 2008 sales. Around 46% of equipment sales were from the U.S., Japan accounted for 36%, while the rest came from Europe.

All of the top five foundries are located in Asia. Taiwan Semiconductor Manufacturing Company (TSM) and United Microelectronics Corp (UMC), the two largest players in 2008, are located in Taiwan. Chartered Semiconductor Manufacturing (CHRT) is located in Singapore, Semiconductor Manufacturing International Corp (SMI) is in China and Vanguard is also in Taiwan.

OPPORTUNITIES

Manufacturing digital ICs is expensive, as it requires state-of-the-art technology and processes. On the other hand, digital products are cheaper, so cost recovery is more difficult. This has led to specialization in the industry and a greater contribution from Asian companies.

We particularly like Taiwan Semiconductor Manufacturing Company (TSM), the world's largest pureplay foundry, which has started seeing very strong demand from all served end markets. The company is a technology leader and management intends to maintain this lead through R&D investment in 28nm and 22nm process technologies. Higher utilization and cost controls are also driving margins.

U.S. production is more focused on the analog side, which is a market dependent on innovation. Consequently, these products generate higher margins. They are also more customized and have longer life cycles.

These advantages are not lost on U.S. players, so the number of companies entering the market is on the rise. Our favorites in this area include Texas Instruments (TXN) and Analog Devices (ADI), both of which are seeing strengthening demand.

Although other players, such as Semtech Corp (SMTC), Intersil Corp (ISIL), Maxim Integrated Products (MXIM) and Linear Technology (LLTC) are also benefiting from stronger end demand and inventory builds at distributors, other factors makes us a bit cautious about these stocks. For example, Maxim changed its growth strategy last year, which continues to impact margins. Linear Technology also revamped its portfolio, increasing its focus on the auto market. Consequently, the company has been hard-hit by the tight lending conditions.

Microprocessors are a big market dominated by a few players. We are positive about Intel (INTC) because of its market position, superior innovation, effective strategies and strong cash position. However, the company’s dependence on the PC market and recent negative publicity could impact stock prices in the near term.

Advanced Micro Devices (AMD), on the other hand, is low on cash and market position, although the company’s competitive products, the foundry spin-off and recent agreement with Intel indicate upside for the stock. It is hard to ignore ARM Holdings (ARMH) in this space, as the company’s power-efficient low-performance chips dominate the growing cell phone market.

We also like logic maker Xilinx (XLNX) for its product innovation and position in China.

WEAKNESSES

The semiconductor companies we are concerned about include those with very weak financials, such as Exar Corp. (EXAR) and FormFactor (FORM). For instance, FORM continues to burn cash despite strong demand for its specialized probe cards. It also has significant customer and market concentration that increase execution risks.

TriQuint Semiconductor (TQNT) has been severely impacted by the recession, and the slower recovery in the communications networking market is telling on results.

SIA Forecast 2009-2011

The Semiconductor Industry Association expects 2009 sales of $219.7 billion, an 11.6% decline from 2008 levels. However, sales are expected to increase over the next two years, by 10.2% in 2010 and 8.4% in 2011. The forecast for 2009 is better than before due to particular strength in PCs and cell phones, which make up 60% of total semiconductor demand.Zacks Investment Research

The Semiconductor Industry serves as a driver, enabler and indicator of technological progress. Developments in the industry determine the way we work, transport ourselves, communicate, entertain ourselves and respond to our environment. For example, the PCs we use, the cars we drive, the phones with which we communicate, the electronic gadgets on which we watch [...]

($INTC) Semiconductor Industry – Industry Outlook

The Semiconductor Industry serves as a driver, enabler and indicator of technological progress. Developments in the industry determine the way we work, transport ourselves, communicate, entertain ourselves and respond to our environment. For example, the PCs we use, the cars we drive, the phones with which we communicate, the electronic gadgets on which we watch movies, listen to music and play games, and the planes and weapons used to protect us all use semiconductor devices.

As environmental issues have become more of a concern today, semiconductor devices are being made to reduce power consumption, reduce heat dissipation, capture solar energy, create more efficient lighting solutions, and so forth.

The industry has come a long way since the last downturn, with most of the players streamlining operations and transferring more routine production to low-cost locations. This has led to the development of the Asian market, where most memory production and backend operations have shifted. According to the Semiconductor Industry Association (SIA), the Asia/Pacific region (excluding Japan) accounted for 53% of total semiconductor sales in September this year. Japan produced another 17%, followed by the Americas and Europe with 17% and 13%, respectively.

The computing market is not the only driver of semiconductor sales any more. Not only has the market matured, but it has also been severely impacted by the recession. Enterprise spending on computing has dropped, and higher levels of commoditization and corresponding pricing pressures have made it a lower-margin business. As a result, a number of chip companies have shifted focus to other areas.

The consumer electronics market is growing in importance, especially gadgets such as LCD TVs, blu-ray players, smartphones and netbooks. The problem with this segment being the major driver is its inherently low margins. Competition is fierce and aggressive pricing is the rule of the day. Therefore, although the Consumer Electronics Association (CEA) expects shipments of LCD displays, blu-ray players and netbooks to increase 24%, 112% and 85%, respectively in 2009, it expects industry-wide revenue to be down 7.7%.

Smartphones are expected to be the exception, with revenue growing around 3% this year. Since semiconductors made for consumer goods are in the nature of components, there is ever-increasing pressure on their prices that correspondingly squeeze margins.

Communications infrastructure spending is currently being driven by China, although there are some signs of improvement in the domestic market. Medical Devices is an upcoming area and some IC makers have started developing products targeted at this market as well.

According to Autodata Corporation (as quoted by the CEA), vehicle sales have declined 40% from the fourth quarter of 2007 to the second quarter of 2009. The decline was driven by the recession and the industry’s dependence on the lending environment.

However, there are a number of positives for semiconductor manufacturers serving this market. The most important is the growing electronic content per vehicle, driven by the need for fuel efficiency, entertainment and automated navigation. The fact that an automobile has a significantly longer life than a consumer device is an added bonus, as once a semiconductor has been designed in, it continues to generate revenue for a number of years. This leads to a stable business model.

The aerospace and defense markets are dependent on government spending and policy making. Currently, government spending is targeted at terrorist activity, so spending on intelligence systems and less sophisticated weaponry remains strong. Companies offering sophisticated weapons are not doing as well. Commercial aerospace remains affected by tight lending conditions. So semiconductor manufacturers serving these markets are seeing mixed results, depending on the customers served.

Given the end markets driving the current strength in the industry, we tend to think that manufacturers of DRAM and flash (both NAND and NOR) will continue to see strong demand. The transition from DDR2 to DDR3 will add to growth in this segment.

The demand for greater functionality in smaller and more power efficient gadgets is leading to greater integration within the semiconductor device. This is leading to increased demand for the system-on-a-chip (SoC), which is a single device incorporating a microprocessor, digital signal processor or graphics core, as well as memory and logic. Within SoCs, both application specific integrated circuits (ASICs) and application specific standard products are expected to do well. ASICs are usually customized for a single buyer, while ASSPs may have multiple buyers.

The major players in the industry may be categorized into chipmakers, equipment and material suppliers, and foundries.

According to Gartner Dataquest and iSuppli Corp, Intel Corp (INTC), Samsung and Toshiba Corp. were the top three semiconductor suppliers in 2008. Texas Instruments (TXN) dropped to the fourth position, as the company decided to phase off its wireless baseband business. STMicroelectronics (STM) was in fifth, followed by Japan’s Renesas. Sony (SNE), Qualcomm (QCOM) and Hynix stepped into the top ten for the first time, filling the next three positions. Infineon stayed at number 10.

The top three equipment suppliers in 2008 according to VLSI Research were Applied Materials (AMAT), ASML Holdings N.V. (ASML), and Tokyo Electron Ltd. KLA-Tencor (KLAC), Lam Research Corp (LRCX), Nikon, Canon (CAJ), Hitachi, Dainippon and Novellus Systems (NVLS) are the others in the top ten. VLSI estimates that the top fifteen equipment suppliers generated around 70% of 2008 sales. Around 46% of equipment sales were from the U.S., Japan accounted for 36%, while the rest came from Europe.

All of the top five foundries are located in Asia. Taiwan Semiconductor Manufacturing Company (TSM) and United Microelectronics Corp (UMC), the two largest players in 2008, are located in Taiwan. Chartered Semiconductor Manufacturing (CHRT) is located in Singapore, Semiconductor Manufacturing International Corp (SMI) is in China and Vanguard is also in Taiwan.

OPPORTUNITIES

Manufacturing digital ICs is expensive, as it requires state-of-the-art technology and processes. On the other hand, digital products are cheaper, so cost recovery is more difficult. This has led to specialization in the industry and a greater contribution from Asian companies.

We particularly like Taiwan Semiconductor Manufacturing Company (TSM), the world’s largest pureplay foundry, which has started seeing very strong demand from all served end markets. The company is a technology leader and management intends to maintain this lead through R&D investment in 28nm and 22nm process technologies. Higher utilization and cost controls are also driving margins.

U.S. production is more focused on the analog side, which is a market dependent on innovation. Consequently, these products generate higher margins. They are also more customized and have longer life cycles.

These advantages are not lost on U.S. players, so the number of companies entering the market is on the rise. Our favorites in this area include Texas Instruments (TXN) and Analog Devices (ADI), both of which are seeing strengthening demand.

Although other players, such as Semtech Corp (SMTC), Intersil Corp (ISIL), Maxim Integrated Products (MXIM) and Linear Technology (LLTC) are also benefiting from stronger end demand and inventory builds at distributors, other factors makes us a bit cautious about these stocks. For example, Maxim changed its growth strategy last year, which continues to impact margins. Linear Technology also revamped its portfolio, increasing its focus on the auto market. Consequently, the company has been hard-hit by the tight lending conditions.

Microprocessors are a big market dominated by a few players. We are positive about Intel (INTC) because of its market position, superior innovation, effective strategies and strong cash position. However, the company’s dependence on the PC market and recent negative publicity could impact stock prices in the near term.

Advanced Micro Devices (AMD), on the other hand, is low on cash and market position, although the company’s competitive products, the foundry spin-off and recent agreement with Intel indicate upside for the stock. It is hard to ignore ARM Holdings (ARMH) in this space, as the company’s power-efficient low-performance chips dominate the growing cell phone market.

We also like logic maker Xilinx (XLNX) for its product innovation and position in China.

WEAKNESSES

The semiconductor companies we are concerned about include those with very weak financials, such as Exar Corp. (EXAR) and FormFactor (FORM). For instance, FORM continues to burn cash despite strong demand for its specialized probe cards. It also has significant customer and market concentration that increase execution risks.

TriQuint Semiconductor (TQNT) has been severely impacted by the recession, and the slower recovery in the communications networking market is telling on results.

SIA Forecast 2009-2011

The Semiconductor Industry Association expects 2009 sales of $219.7 billion, an 11.6% decline from 2008 levels. However, sales are expected to increase over the next two years, by 10.2% in 2010 and 8.4% in 2011. The forecast for 2009 is better than before due to particular strength in PCs and cell phones, which make up 60% of total semiconductor demand.Zacks Investment Research

BloggingStocks: About one year after the Lehman bankruptcy, we are getting rumors of more impending bankruptcies, this time from China. The problem started last year when the price of oil dropped from $147 to $32 per barrel. Many companies use the futures markets ... Read more

Schaeffer's Andrea Kramer takes a look at activity on the Street ahead of the market open

JPMorgan slashed ratings on the key stocks airline companies yesterday and the stocks fell like a rock. Jet Fuel has increased 39% in the last 6 months, so it's time to short the industry and long the few stocks that will survive.

JPMorgan analyst Jaime Baker cut his ratings on seven major airline stocks, blaming uncertainty over the outcome of the proposed Delta-Northwest Airlines combination and forecasting major losses amid fears of a recession.

The industry may be redeemed if oil prices fall, he said, but he called that outcome unlikely.

"More likely, in our view, is that oil sits tight but revenue trends reverse," he said in a note. "Even a best-ever recessionary demand scenario results in a $4 billion industry loss."

American Airlines parent AMR Corp., Northwest Airlines Corp., Alaska Air Group Inc., US Airways Group Inc. and United Airlines parent UAL Corp. were all downgraded from "Overweight" to "Underweight."

Yesterday Northwest Airlines Corp. was among the sector's biggest decliners, dropping $1.17, or 9.6 percent, to $11.06. Alaska Air Group Inc. also fell sharply, falling $2.99, or 13.3 percent, to $19.51. No. 1 carrier AMR lost 89 cents, or 8.3 percent, to $9.78.

Baker also downgraded Continental Airlines Inc. and Delta Air Lines Inc. from "Overweight" to "Neutral." His ratings for low-cost carriers, such as Southwest Airlines Co. and AirTran Holdings Inc., remained unchanged.

Southwest, which Baker rates "Neutral," said Tuesday it suspended three employees and hired an expert to review maintenance procedures after the company was accused of flying planes that missed key safety inspections.

Here are the top 20 Airline stocks by market cap, happy trading.

Companies 1 - 20 of about 27 in Airline
Company	Quote	Change	Change%	Market Cap	P/E (ttm)	Ann. Revenue	Ann. Net Income
Ryanair Holdings plc (ADR)	28.88	-0.01	-0.03	8.64B	11.34	3,428.61	664.11
Southwest Airlines Co.	11.70	+0.21	1.83	8.61B	13.94	9,861.00	645.00
Lan Airlines S.A. (ADR)	13.75	-0.05	-0.36	4.66B	14.91	3,033.96	209.73
China Southern Airlines Limited (ADR)	41.08	-2.56	-5.87	3.59B	22.82	6,506.84	30.41
Gol Linhas Aereas Inteligentes SA (ADR)	15.20	-0.39	-2.50	3.07B	49.35	2,937.48	60.98
Delta Air Lines, Inc.	10.52	+0.39	3.85	3.07B	1.96	19,154.00	1,612.00
UAL Corporation	24.05	-0.24	-0.99	2.86B	10.91	20,143.00	393.00
China Eastern Airlines Corp. Ltd. (ADR)	51.19	+1.42	2.85	2.49B	N/A	5,277.79	-515.40
AMR Corporation	9.93	+0.62	6.66	2.48B	5.81	22,935.00	504.00
Northwest Airlines Corporation	9.86	-0.39	-3.80	2.33B	1.71	12,528.00	2,093.00
Continental Airlines, Inc.	21.45	+0.99	4.84	2.11B	5.36	14,232.00	459.00
Copa Holdings, S.A.	33.43	+0.40	1.21	1.44B	9.06	1,027.26	160.41
SkyWest, Inc.	21.21	+0.73	3.56	1.29B	8.52	3,374.33	159.19
Atlas Air Worldwide Holdings, Inc.	53.72	+0.86	1.63	1.16B	8.73	1,562.71	132.42
JetBlue Airways Corporation	4.79	+0.03	0.63	1.07B	52.62	2,842.00	18.00
TAM S.A. (ADR)	17.95	-0.86	-4.57	1.07B	3.46	4,306.87	475.22
US Airways Group, Inc.	8.76	-0.26	-2.88	804.77M	2.05	11,700.00	427.00
Republic Airways Holdings Inc.	20.23	+0.47	2.38	733.98M	9.93	1,292.68	82.76
Alaska Air Group, Inc.	18.60	+0.24	1.31	707.74M	6.15	3,506.00	125.00
AirTran Holdings, Inc.	6.11	0.00	0.00	561.49M	11.88	2,309.98	52.68