Sensor specialist AMS said it expects revenue in the first quarter of 2019 to fall to $350-390m amid continued weak smartphone demand and first-quarter consumer market seasonality.
The Austrian group said it would not pay a dividend for 2018 after its adjusted operating profit fell more than half in the fourth quarter.
The company's profits were pulled down by slowing demand from a major customer and restructuring costs.
The Swiss-listed group supplies Apple with sensors for face-recognition technology.
It said it generated adjusted earnings before interest and tax (EBIT) of $61.9m and revenue of $491m in the three months to the end of December.
AMS results added to a bleak earnings season for semiconductor companies and further stoked fears of an industry slowdown after sales warnings from Apple, Samsung and Taiwan Semiconductor last month pointed to stagnating smartphone demand and a cooling Chinese economy.
German chipmaker Infineon Technologies today revised down its guidance for full-year revenue growth and said it would trim investments, saying it faced an "increasingly difficult business environment".
"Reflecting a more volatile end market and macro-economic environment, AMS has decided to suspend its cash dividend policy for fiscal year 2018 to focus on strengthening its business position in 2019," AMS said.
AMS provides Apple with optical sensors for 3D facial recognition features on its newest iPhones and generates around 45% of sales from that, according to analysts.
Lower-than-expected demand for these phones, especially in China, has put pressure on AMS.
Analysts have highlighted increasing competitive pressure, a threat from new technologies, overcapacity issues and a high debt level facing the company.
The group said net debt increased to $1.36 billion by the end of December from $987.9m a year ago.
AMS said 3D sensor deliveries to two Asian Android smartphone makers agreed last year have started shipping or will start in the first half of 2019.
It has finished a solution for sensors capable of scanning surroundings in 3D, so-called world-facing 3D sensors, for a major Android manufacturer and expects shipments to start in the current quarter, it added.