It may be the beginning of another series of warnings in the semiconductor sector.
Thursday slashed fourth-quarter revenue guidance, citing slow demand for video products.
The company said it now expects revenue of $43 million to $45 million, down from its earlier guidance of $48 million to $52 million. The consensus estimate is for $49.1 million, according to Thomson First Call.
"The December quarter has been affected by the continued slow demand worldwide for video products, primarily for VCD and DVD players, which has resulted in lower-than-expected revenues in the quarter," ESS said.
Shares fell 74 cents, or 9.5%, to $7.01 in the premarket.
ESS said its gross margins and earnings are also expected to be below previous guidance, while operating expenses will be higher than originally forecast.
The company said it will provide additional details when it reports quarterly results Feb. 2.