NXP Semiconductors NV shares are on track to fall the most in four years, after its third-quarter guidance disappointed investors.

The Dutch chipmaker predicted revenue will range from US$3.15 billion to US$3.35 billion in the period ending in September. The midpoint is below analysts’ average estimate of US$3.35 billion, according to data compiled by Bloomberg.

The company also projected earnings of US$3.21 to US$3.63 a share for its September quarter, compared with an average estimate of US$3.56 a share.

NXP’s shares slid as much as 9.3% in early trading in New York on Tuesday, having closed at US$283.81. If the decline holds, it will be the biggest slump since April 1, 2020. The stock had jumped 24% this year.

Semiconductor makers around the world have been struggling in recent quarters to cope with a global inventory glut that has hampered sales. Meanwhile, the European Commission has warned that the region’s chipmakers are at risk of losing substantial market share to China as the Asian nation invests in its own chip-making industry.  

Second-quarter revenue dropped 5% to US$3.13 billion. Sales at NXP’s largest division, automotive chips, fell 7% from a year earlier, the company said Monday in a statement. NXP’s results may serve as a bellwether for the semiconductor industry as it reported earnings well before other major chipmakers. 

“We continue to manage what is in our control enabling NXP to drive resilient profitability and earnings in a challenging demand environment,” chief executive officer Kurt Sievers said in the statement.

  - Bloomberg