(Reuters) - Semiconductor stocks slumped on Wednesday after Texas Instruments Inc TXN.O and Franco-Italian chipmaker STMicroelectronics STM.PA warned of slowing demand.

A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 23, 2018. REUTERS/Brendan McDermid

While TI shares were down 6 percent in premarket trading, STMicro's stock was down 8 percent. Shares of Cypress Semiconductor CY.O, NXP Semiconductors NXPI.O and Analog Devices ADI.O were down nearly 2 percent before the bell.

Shares of Micron Technologies MU.O, Intel Corp INTC.O and AMD AMD.O were also set to open lower.

TI, which forecast its weakest fourth quarter since 2013 on Tuesday, is known for making analog chips that turn signals like sound, pressure and light to electrical signals and are used in products ranging from cars to mobile phones.

That wide presence makes Texas Instruments a bellwether for semiconductor companies, whose supply chains span continents and a weak guidance by one of them affects others.

TI said it expects fourth-quarter earnings of $1.14 to $1.34 per share, on revenue of $3.60 billion to $3.90 billion, lower than analysts’ estimates, according to Refinitiv data.

“A diversified industrial/auto-heavy business model, run by a well-regarded management team, we consider TI’s 4Q cut to be one of the first credible signals of an early stage semiconductor cycle correction,” Oppenheimer analyst Rick Schafer wrote in a client note.

Chipmakers in recent quarters have struggled with oversupply, a problem that could worsen if demand for automobiles in China keeps weakening, or if U.S. President Donald Trump places tariffs on smartphones, televisions or other Chinese products manufactured with semiconductors.

“We are heading into a softer market,” TI’s Chief Financial Officer Rafael Lizardi said on a post-earnings conference call.

He, however, said the direct effect of tariffs due to the trade war between the United States and China on its business was minimal.

“While management has previously stated a US/China trade war would have a minimal impact as just 1 percent of revenue would be subject to tariffs, we suspect TI’s end customers are more greatly affected,” Susquehanna Financial Group analyst Christopher Rolland wrote in a note.

TI’s European rival STMicro on Wednesday forecast weaker-than-expected revenue growth for the fourth quarter, citing soft market conditions in China and some inventory corrections.

Chip gear maker MKS Instruments also forecast a weak quarter, saying it expects the semiconductor market to continue to face headwinds in the near term.

At least eight brokerages cut their price targets on TI’s stock. Brokerage SunTrust was the most bearish and lowered its price target to $93 from $120.