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Its shares fell 6.6% to $165 in premarket trading, as the chipmaker also missed third-quarter revenue and profit estimates.
The semiconductor industry faced a downturn last year as inflation slammed the brakes on tech spending.
A gloomy economic outlook in China has only worsened the pain. According to market analysis firm Counterpoint Research, smartphone shipments in the world’s biggest market for semiconductors fell 8% in the June quarter.
“The customer inventory adjustments we mentioned last quarter have accelerated as economic conditions deteriorate…,” said CEO Vincent Roche.
U.S.-based Analog Devices projected fourth-quarter revenue of $2.70 billion, plus or minus $100 million, compared with analysts’ average estimate of $3.01 billion, according to Refinitiv data.
Rival Texas Instruments (NASDAQ:TXN) also forecast third-quarter revenue below market estimates as weak consumer demand prompted electronics makers to be cautious about buying chips.
Shares of peers Texas Instruments, ON Semiconductor and NXP Semiconductors (NASDAQ:NXPI) fell between 2.5% and 3.1% before the bell.
Analog Devices also forecast fourth-quarter adjusted earnings of $2 per share, plus or minus 10 cents, below analysts’ estimate of $2.39 per share profit.
Its third-quarter revenue fell about 1% to $3.08 billion, missing estimates, weighed by the consumer sector.
A 21% and 23% decline in revenue in the consumer and communications segments, respectively, countered the robust demand at the company’s biggest segments — automotive and industrial.
Analog Devices posted adjusted earnings of $2.49 per share in the three months to July 29, compared with expectations of $2.52 per share.
