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Atmel (ATML) shares are trading sharply higher on takeover rumors.

TheFlyOnTheWall.com is reporting that there is talk that Texas Instruments (TXN) might be interested in buying the chip company.

Citigroup analyst Terence Whalen today launched coverage on 11 analog semiconductor stocks - and he’s bullish on most of them. Whalen writes that the stocks “fit squarely in the sweet spot of the analog cycle’s time-return vectors.” In other words, he writes, risk-reward on the stock looks good with EPS estimates being revised upward and sales growing. He notes that the stocks are up 16% over the last four weeks, and 29% since the November bottom on the SOX, but contends they could rally another 25% over the next six months.

Filed under: Analyst reports, Analyst upgrades and downgrades, CBS Corp 'B' (CBS), Analyst initiations, Deere and Co (DE)

Microchip Technology (MCHP) this afternoon said it expects sales for its fiscal fourth quarter ending March 31 to be down 8%-12% from the third quarter, consistent with its previous forecast for revenues down 10% sequentially, or about $173 million. The company also repeated its previous forecast for non-GAAP profits of 13-15 cents a share.

Microchip also said it expects to have sufficient cash flow to support its current dividend; MCHP pays out $1.36 a share, for a 7.4% yield.

In today’s regular session, MCHP rose 98 cents, or 5.5%, to $18.92.