From Standard & Poor's Equity ResearchFriedman Billings downgraded semiconductor stocks National Semiconductor (NSM

), ON Semiconductor (ONNN

), and Texas Instruments (TXN

) to market perform.

Analyst Chris Caso says he is downgrading National Semiconductor mostly due to weaker-than-expected demand from handset segment; cuts $32 target to $22 on lower estimates and compressed multiples for the semiconductor group as a whole.

Caso cut ON Semiconductor and his price target from $8 to $5, on what he believes are easing supply constraints entering the third quarter, which likely affect the company's ability to continue its ASP improvement.

He lowers Texas Instruments' rating as recent checks suggest that signs of component weakness apparent in early June have continued to broaden; he cut his $40 target to $27.

He had formerly rated all three stocks as outperform.