After the U.S. stock market closed on Tuesday, chip maker Texas Instruments (TXN.US) announced its fourth-quarter and full-year results for 2023. Data show that Texas Instruments sales in the fourth quarter of $4.08 billion, down 13% year-on-year, less than the market expected $4.13 billion; Earnings per share were $1.49, down from $2.13 a year earlier. Full-year sales also fell 13 percent, the company’s biggest drop in more than a decade.

Texas Instruments also reported disappointing guidance, suggesting that the downturn in industrial and automotive chip demand will continue.

For the first quarter of 2024, Texas Instruments expects sales of $3.45 billion to $3.75 billion and earnings per share of $0.96 to $1.16. By comparison, analysts expected sales of $4.09 billion and earnings of $1.42 per share.

The outlook suggests that a rebound in orders in key sectors will take longer than expected. That may not bode well for the broader market. Texas Instruments has the most extensive customer list and the most diverse product range in the chip industry, making its forecasts a bellwether for demand throughout the economy. The largest portion of the company’s revenue comes from manufacturers of industrial machinery and automobiles.

“During the quarter, we experienced increasing weakness in our industrial business and sequential declines in our automotive business,” Texas Instruments Chief Executive Haviv Ilan said in a statement.

Texas Instruments is the largest maker of analog semiconductors, chips that perform simple but important functions such as converting keystrokes into electronic signals. These components typically don’t require as advanced production technology as digital products, but the company has embarked on an ambitious program to upgrade its factories.

Texas Instruments said the move would give it an edge over competitors that rely on outsourced manufacturing, but would hurt profitability in the short term. But executives said fluctuations in demand would not dissuade Texas Instruments from that plan.

Texas Instruments shares fell more than 4 per cent in after-hours trading after the results were released. Shares of other chipmakers also fell after hours, with NXP (NXPI.US) down nearly 3 percent and ON Semiconductor (ON.US) and Adno (ADI.US) down more than 2 percent.