WRAPUP 2-Cool response to Europe chip sector recovery talk

* Infineon, ASML shares down sharply

* Analysts expected better, concerned they lagging rivals

* ASML downgraded

* Infineon: sales could grow by more than 10 pct in 2010

* ASML repeats Q4 order intake at least on Q3 level (Recasts, adds analyst comment, background, updates shares)

By Christoph Steitz and Tarmo Virki

FRANKFURT/BARCELONA, Nov 19 (Reuters) - Upbeat talk from two of Europe's top chip makers about joining the global sector recovery drew a cool response from share traders who saw their performance lagging stronger rivals.

"Despite Infineon beating consensus estimates, we expected better numbers for the fourth quarter, as well as a more optimistic outlook for the running quarter, following bullish statements from competitors," Sal Oppenheim analyst Juergen Wagner wrote, keeping a "reduce" rating for the stock.

Traders also saw as negative remarks by Infineon's Chief Executive Peter Bauer that the company would need to boost profit margins well above 10 percent as it seeks to generate sustainable earnings amid the current recovery. [ID:nFAB015338]

Shares in Infineon (IFXGn.DE: 行情) were down 5.3 percent at 1208 GMT, reversing a gain of upto 2.7 percent earlier, while the DJ STOXX European Technology Index shed 1.5 percent.

The German chipmaker on Thursday said sales could grow by more than 10 percent in the fiscal year 2010, adding cost cuts helped it report September quarter results above market expectations. Based on fiscal 2009 sales, this would mean sales of at least 3.33 billion euros ($4.99 billion) for the year to Sept. 30, 2010.

Dutch chip equipment maker ASML (ASML.AS: 行情) -- whose order book is viewed as a barometer for major chipmakers such as Intel or TSMC (2330.TW: 行情) -- also said that it still expected order intake in October-December to be at least on the same level as the previous quarter.

But shares in ASML were down 3.9 percent after Bank of America Merrill Lynch downgraded the stock to "neutral" from "buy" as part of its wider semiconductor sector review.

"After strong orders in Q3 and Q4, we expect a near term decline in H1 2010 as customers digest capacity," Bank of America Merrill Lynch analysts wrote, adding that the 2010 recovery was "largely priced in".

They cut the ASML price target to 22 euros from 24.8.

Around the globe, chipmakers are recovering from a prolonged downturn. Samsung (005930.KS: 行情), the world's top maker of memory chips and LCD screens in late October posted its best quarterly net profit and forecast a strong 2010 due the global turnaround in the sector. [ID:nSP438961]

Taiwan's TSMC (2330.TW: 行情), the world's top contract chip maker, also posted its biggest quarterly net profit in a year last month and was bullish about future capex, aiming to invest $2.5 billion in upgrading its technology. [ID:nTP297251], [ID:nTP163864]

Infineon posted a fourth-quarter net profit of 14 million euros on sales of 855 million euros, beating the average estimates of 11 million euros and 848 million euros in a Reuters poll of analysts. The quarter ended on Sept. 30. (Additional reporting by Nicola Leske in Barcelona and Hakan Ersen and Tyler Sitte in Frankfurt; Editing by David Cowell)