Advantest, the world's largest maker of microchip testers, said on Thursday it had halved its annual outlook to below market expectations, amid competition from rivals' cheaper products.
Price falls have hit memory chip makers, including big customers like South Korea's Samsung Electronics and Japan's Toshiba, denting their appetite for semiconductor-related equipment.
That has had an especially big impact on Advantest as chip makers seek out cheaper testers instead of Advantest's specialty top-line equipment.
Advantest, which competes with Teradyne, said it now expects a net profit of 17 billion yen (US$159.4 million) for the year to the end of March, down from its previous outlook for 33 billion yen.
That compares with a consensus estimate for a 30.58 billion yen profit, based on the views of 18 analysts polled by Reuters.
The company said it now expects an operating profit of 24 billion yen, down from its previous outlook of 47 billion yen.
Shares of Advantest ended morning trade down 7.7 percent at 2,270 yen, prior to the news, compared with a 1.4 percent rise in the benchmark Nikkei average