(Reuters) - IQE (IQE.L), whose semiconductor products are used in Apple Inc’s (AAPL.O) latest iPhones, forecast a 16.4 percent decline in full-year profits, citing a drop in orders at a major chipmaker which supplies 3D sensing technology.
The British company joins a list of firms in Apple’s supply chain that have warned on their profits, pointing to weakness in iPhone sales.
IQE, which had already warned on results on Monday without issuing numbers, said it now expects to earn about 31 million pounds for the full year.
The company did not name the chipmaker, but is a major supplier to U.S.-based Lumentum Holdings Inc (LITE.O) which slashed its forecasts on Monday and said that one of its largest customers would “materially reduce” shipments for the current quarter.
Lumentum is the main supplier of the Face ID technology in the latest generation of iPhones, and IQE supplies wafers or thin layers of silicon-based material used in making computing chips to the U.S. company.
The company said on Tuesday that inventory buildup due to slower demand for 3D sensing technology would affect the company.
IQE’s shares closed down nearly 29 percent on Monday after its warning. The stock was up 4 percent on Tuesday.
“We remain convinced we are still at the foothills of the opportunity, and given the share price reaction yesterday, remain positive on IQE’s medium- to longer-term value upside,” Peel Hunt analysts said in a report on Tuesday.
IQE also said it expects to deliver revenues of about 160 million pounds for the year, up from 154.6 million pounds last year.
Shares of many Asian suppliers and assemblers fell on Tuesday, leading some market watchers to call the peak for iPhones in several key markets.
Reporting by Tanishaa Nadkar and Pushkala Aripaka in Bengaluru; Editing by Sunil Nair