(Reuters) -Onsemi (ON) forecast first-quarter revenue below Wall Street expectations on Monday, hit by softening demand for its automotive chips as customers cut back on orders owing to economic uncertainty.
Shares of the company dropped 6% in premarket trading.
The company expects first-quarter revenue between $1.35 billion and $1.45 billion, compared with analysts’ estimates of $1.69 billion, according to data compiled by LSEG.
Onsemi’s forecast signals that the automotive chip market is still sluggish, with many customers holding off on placing new orders for its silicon carbide chips owing to soft demand for battery-powered cars.
Onsemi is one of the handful of suppliers of silicon carbide chips, an alternative to standard silicon and more pricey to manufacture but useful in extending the range of electric vehicles.
“While 2025 remains uncertain, we remain committed to our long-term strategy,” said Onsemi CEO Hassane El-Khoury.
The company’s comments are in line with other automotive chipmakers, which have also flagged weakness in the market. Firms such as NXP Semiconductors and Microchip Technology gave disappointing forecasts earlier this month.
Onsemi reported revenue of $1.72 billion for the fourth quarter ended December 31, missing estimates of $1.76 billion.
On an adjusted basis, the company earned 95 cents per share, compared with estimates of 97 cents per share.
It expects first-quarter adjusted earnings per share of between 45 cents and 55 cents per share, while analysts expected 89 cents per share.
(Reporting by Zaheer Kachwala in Bengaluru; Editing by Tasim Zahid and Shailesh Kuber)
