The warning came after the company posted lower-than-expected first-quarter results.
Shares fell as much as 3.5% in early trade, but then reversed course, with analysts noting that the poor outlook had been expected. They were up 0.8% at 0810 GMT.
The company, whose clients include Tesla and Apple , said it expects revenue in the range of USD 14 billion to USD 15 billion for 2024, down from its previous forecast range of USD 15.9 billion to USD 16.9 billion.
Analysts polled by LSEG were expecting revenue of USD 16.1 billion for the year.
"During the quarter, automotive semiconductor demand slowed down compared to our expectations, entering a deceleration phase, while the ongoing industrial correction accelerated," said CEO Jean-Marc Chery in a statement.
The French-Italian company posted first-quarter earnings before interest and tax (EBIT) of USD 551 million, down 54% from a year earlier and below the USD 603.82 million expected by analysts in an LSEG poll.
Revenue fell 18% to USD 3.46 billion, missing analysts' expectations of USD 3.61 billion.
"Clearly the extent of the reset is so great that it will be perceived as initially negative and when the upgrade cycle will start is currently unknown, (...) but this has high potential to be the last cut," JP Morgan analysts said, adding that could be positive for the stock.
Weakness in auto and industrial demand have been weighing on the sector, while investors remain cautious amid high interest rates, with escalating tensions in the Middle East increasing fears.
Bernstein SG analyst Sara Russo said it was the first time the company had acknowledged the car market was weaker than expected.
"It will take probably a couple of quarters for that to impact and (...) that's why it was guided as low as it was," she said.
IPhone maker Apple said on Tuesday its smartphone shipments fell 19% in the world's biggest smartphone market China for the first quarter, while Tesla reported a 8.7% decline in its quarterly revenue to USD 21.3 billion due to slowing demand and intense competition worldwide in electrical vehicles. It plans to cut 6,020 jobs.
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