Shares in Nordic Semiconductor have witnessed a significant decline of up to 16% following the company’s decision to revise its revenue forecast. The semiconductor maker attributes this adjustment to weak demand for its chips, which are primarily used for Bluetooth and wifi in battery-powered devices.
Nordic Semiconductor, based in Norway, has expressed concerns about low visibility and a general slowdown in demand, in addition to inventory adjustments as the market absorbs excess stock. The company revealed that expected shipments for the third quarter have fallen below initial expectations.
Renowned for its low-energy chip designs, Nordic Semiconductor provides solutions for a wide range of battery-powered devices. These devices include fitness wearables, gaming controllers, smarthome devices, as well as industrial and healthcare applications.
Preliminary figures indicate that the company’s revenue for the third quarter will likely fall within the range of $135 million to $140 million. This range deviates from the previously guided estimate of $145 million to $165 million. Moreover, due to product and customer mix, the company expects its gross margin to be around 50%-51%, below the earlier projection of a gross margin above 52%.
In a statement, Nordic Semiconductor expressed disappointment over the persistently soft demand across its core markets. The company had expected to witness a favorable upturn in the second half of 2023 but has yet to observe any signs of improvement. As a result, visibility for the remainder of the year remains limited.
As of 0836 GMT, shares in Nordic Semiconductor were trading 12% lower at NOK107.50.