HELSINKI, March 11 (Reuters) - Shares in the world's top cellphone maker Nokia and several other European technology firms fell on Tuesday after Texas Instruments cut its first-quarter forecasts, citing a weaker 3G market.
Texas Instruments said the warning came after one of its key clients cut plans for 3G phone production for March.
Analysts said the 3G chip customer, which TI did not names, was likely Nokia, its biggest client for mobile chips.
Shares in Nokia tumbled as much as 6 percent and were 5 percent lower at 20.40 euros by 0826 GMT, helping to pull European technology index down 2 percent.
Citing weak wireless demand especially for third-generation high-end chips, TI cut its January-to-March quarter profit forecast and sales target ranges on Monday.
Brokerage Cazenove downgraded its recommendation on Nokia stock to "in-line" on the news, saying weaker demand for high-end 3G phones would likely hurt the Finnish firm's average selling price and earnings per share.
"We are usually careful about comments from Nokia's supply chain, but the scale of the downgrade at Texas Instruments and the precision of the comments make us conclude that demand for Nokia's 3G/high-end phones has decreased in the second half of the quarter," Cazenove analysts said in a note.
TI said demand was as expected for chips used in low-end phones sold in emerging markets such as China.
"TI's warning is about high-end, having little impact on volumes. I don't expect Nokia's volumes in the first quarter to disappoint," said Glitnir analyst Pasi Vaisanen.
Other technology shares were buffeted by the news as well.
"There have been some smaller indicators, but this is the first big vendor to warn," said analyst Hannu Rauhala from Pohjola.
Shares in Texas's rival chip makers Infineon were trading 1.3 percent lower in Frankfurt, while STMicroelectronics stock fell 1.4 percent.
"In our view, STM stands to be the most impacted in Europe as it has focused on 3G and above technologies with little exposure to the low end," Credit Suisse analysts said in a note to clients. TI cut its first-quarter earnings per share forecast range to 41 cents to 45 cents from a target of 43 cents to 49 cents issued on Jan. 22. It now sees revenue of $3.21 billion to $3.35 billion versus an earlier target range of $3.27 billion to $3.55 billion.
Analysts on average had expected earnings of 46 cents per share on revenue of $3.4 billion, according to Reuters Estimates. (Reporting by Tarmo Virki; Editing by Quentin Bryar)
