Nvidia on Tuesday lowered its fourth-quarter revenue forecast, citing weakness in demand for its products and inventory reductions by channel partners.
The company's revenue for the fourth quarter of 2009 will decline 40 per cent to 50 per cent from the third quarter, Nvidia said in a statement.
Nvidia reported third-quarter revenue of $897.7 million, which could bring revenue for the fourth quarter between $449 million and $538 million.
Analysts polled by Thomson Reuters estimated revenue of $801.94 million for the fourth quarter.
The revision represents a significant drop in year-over-year revenue for Nvidia. For the fourth quarter of 2008, Nvidia reported a record revenue of $1.20 billion.
Nvidia will report its fiscal fourth-quarter earnings on 10 February.
Softening demand for a wide range of products including PCs and consumer electronics is taking a toll on chip companies, research firm Gartner said in December.
A number of companies, including Intel and Advanced Micro Devices, have dropped revenue forecasts in recent months.