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Given mounting evidence of weakness in the chip sector, you can imagine some difficult times ahead in the contract fab business, as well. And that explains today’s move by Merrill Lynch analyst Daniel Helyer, who cut estimates today on 10 contract semiconductor manufacturers.

Helyer chopped numbers on Taiwan Semiconductor (TSM) United Microelectronics (UMC), Semiconductor Manufacuturing International (SMI), Chartered Semiconductor (CHRT), Siliconware (SPIL), Advanced Semiconductor Engineering (ASX), Chipbond (6147.TW), Nanya (8046.TW), Phoenix Precision (2446.TW), and Kinsus (3189.TW).

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Taiwan-based contract chip maker United Microelectronics (UMC) confirmed that Taiwanese prosecutors have been to its offices as part of an investigation into the company’s investments, according to Reuters.

Taiwan prosecutors were at UMC’s headquarters in Hsinchu and its Taipei office to investigate the company’s investments, a spokeswoman from the Hsinchu District Prosecutors Office told Reuters. The spokeswoman said they received the case from the country’s Financial Supervisory Commission. Asked whether the case involved insider trading, the spokeswoman said that “”it involves one or two

Filed under: Analyst reports, Analyst upgrades and downgrades, Washington Mutual (WM)

MOST NOTEWORTHY: Anadigics, American Axle and Caterpillar were today's noteworthy downgrades:

• Stephens downgraded shares of Anadigics (NASDAQ: ANAD) following the company's Q2 results, as they believe shares could trade sideways until the macro environment improves. The firm lowered their target to $9 from $14. Jefferies downgraded shares to Hold from Buy to reflect the company's lower than expected outlook. The firm lowered their target to $9 from $15.
• Deutsche Bank cut American Axle (NYSE: AXL) to