A worker prepares to load a silicon wafer machine in a clean room at the Texas Instruments semiconductor fabrication plant in Dallas, Texas.

The semiconductor industry may be facing a significant downturn, according to Deutsche Bank.

The firm reduced its 2019 earnings estimates by 5 percent on average for eight chip stocks, citing increasing weakness in business activity.

"Over the past few months, cyclical fears have risen across the semiconductor sector as macro uncertainties (tariffs, falling PMIs, etc.) have combined with a growing list of 'slowing' data points across the supply chain," analyst Ross Seymore said in a note to clients Wednesday. "Our net conclusions are that current consensus [estimates] imply a 'smooth landing' that is rare in the semi sector and therefore risks of incremental cuts to revenue/ EPS estimates is rising."

The analyst also reduced his price targets for several chip stocks – including Analog Devices, Maxim Integrated and Texas Instruments.

The iShares PHLX Semiconductor ETF declined 1.8 percent Thursday. Shares of Analog Devices, Maxim Integrated and Texas Instruments all fell at least 2 percent.

Seymore compared the current chip market to the chip downturn during the second half of 2015. He said that down cycle lasted two to three quarters and resulted in drop of 25 percent on average for semiconductor stocks.

"While each cycle is different, we view this particular downturn to be the appropriate base on which to make inferences, and adjust our estimates accordingly," he said.

Last month, Morgan Stanley and an executive at KLA-Tencor said the memory chip market is deteriorating versus expectations, which spurred a decline in the semiconductor sector's shares.

— CNBC's Michael Bloom contributed to this story.