Synaptics (NASDAQ:SYNA) Downgraded on Move Away From Modules

Synaptics (NASDAQ:SYNA) was downgraded by Needham & Company, citing what appears to be a move away from modules chip-only solutions.

Needham says, "Our downgrade is not based on near term results, which were roughly inline, but rather our long term concern that the capacitive touch market has moved rapidly away from modules to chip-only solutions. For the first time in 18-months, mgt. acknowledged that the current design win pipeline is overwhelmingly chip-only and in the future will accelerate with the adoption of on-sale and in-sale implementations (i.e. ITO sensor embedded directly into the LCD stack). With mgt. unable to provide details on the pricing impact of this transition, we believe SYNA’s ASPs could realistically fall over 50% Y/Y or more in FY12, negating any unit growth."

Needham & Company downgraded Synaptics (SYNA) from "Hold" to "Underperform." Synaptics closed Friday at $28.55, down $3.50, or 10.92 percent.