Austria's AMS, which makes facial recognition technology, today became the latest Apple supplier to cut its revenue forecast, adding to growing evidence that the latest iPhones are not selling well.
The Swiss-listed group cut its fourth-quarter revenue outlook by 15% and pushed back its medium-term targets, blaming "recent demand changes from a major customer".
AMS, which specialises in sensors, did not name Apple as the customer, but analysts estimate that the US giant accounts for 40% of the Austrian group's sales.
Apple shocked investors two weeks ago with a lower than expected sales forecast for the Christmas quarter.
This prompted suppliers including US firm Lumentum, British chipmaker IQE and screen maker Japan Display to issue warnings that pointed to weakness in new iPhone sales.
Like Lumentum, AMS supplies Apple with software components needed for its FaceID technology.
Anglo-German chip designer Dialog Semiconductor, which struck a $600m deal with the US tech giant last month bucked the negative trend when it said last night that it does not see a drop in demand from Apple.
Dialog justified this by pointing out that it supplies many more products than the latest iPhones.
For the past year, investors had largely been willing to overlook stagnating unit sales of the iPhone because average selling prices kept rising.
But Apple now faces fierce competition from mid-priced phones from makers such as Xiaomi.
The California-based firm started selling its latest phone generation, the iPhone XS and XS Max in September and the XR model last month.
The new AMS guidance suggested between 11 and 18 million fewer iPhones would be produced in the fourth quarter than an initially estimated 77-82 million, analysts said.
AMS shares have lost nearly 30% since Apple's latest earnings release and are down 70% since the beginning of the year and some investors see a buying opportunity.
AMS said it expects revenue to come in between $480-520m in the three months to December 31, compared with the $570-610m it forecast last month.
AMS also abandoned its 2019 revenue target of more than $2.7 billion, saying it now expects annual double-digit revenue growth for the coming years.
It still aims for a 30% adjusted operating margin but no longer gives a specific time frame. It had already postponed the target to 2020 from 2019 in July, at the time due to order delays from a major customer.
AMS, which has invested heavily in research and development and in production expansion, is now seeking to address underutilised facilities, increasing competition and its reliance on Apple.