(Reuters) -Microchip Technology forecast third-quarter net sales below Wall Street estimates on Thursday, indicating tepid demand for its chips as customers in the automotive and industrial markets continue to clear excess inventory.

Clients have been working to lower chip inventory levels, after excessive buying during the pandemic led to a supply glut, hampering demand for providers such as Microchip.

Microchip expects net sales in the range of $1.11 billion to $1.15 billion for the third quarter, compared with analysts’ average estimate of $1.18 billion, according to data compiled by LSEG.

Shares of the Chandler, Arizona-based chipmaker fell nearly 6% in extended trading.

It expects to post third-quarter adjusted earnings between 34 cents and 40 cents per share, the midpoint of whic

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