Analog Devices forecast fourth-quarter revenue below Wall Street targets on Wednesday, in a sign that the chip industry inventory glut, fueled by weak consumer demand, might prevent fresh orders from flowing in.

Its shares fell 6.6% to $165 in premarket trading, as the chipmaker also missed third-quarter revenue and profit estimates.

The semiconductor industry faced a downturn last year as inflation slammed the brakes on tech spending.

A gloomy economic outlook in China has only worsened the pain. According to market analysis firm Counterpoint Research, smartphone shipments in the world's biggest market for semiconductors fell 8% in the June quarter.

"The customer inventory adjustments we mentioned last quarter have accelerated as economic conditions deteriorate...," said CEO Vincent Roche.

U.S.-based Analog Devices projected fourth-quarter revenue of $2.70 billion, plus or minus $100 million, compared with analysts' average estimate of $3.01 billion, according to Refinitiv data.

Rival Texas Instruments also forecast third-quarter revenue below market estimates as weak consumer demand prompted electronics makers to be cautious about buying chips.

Shares of peers Texas Instruments, ON Semiconductor and NXP Semiconductors fell between 2.5% and 3.1% before the bell.

Analog Devices also forecast fourth-quarter adjusted earnings of $2 per share, plus or minus 10 cents, below analysts' estimate of $2.39 per share profit.

Its third-quarter revenue fell about 1% to $3.08 billion, missing estimates, weighed by the consumer sector.

A 21% and 23% decline in revenue in the consumer and communications segments, respectively, countered the robust demand at the company's biggest segments — automotive and industrial.

Analog Devices posted adjusted earnings of $2.49 per share in the three months to July 29, compared with expectations of $2.52 per share.

(Reporting by Arsheeya Bajwa in Bengaluru; Editing by Shilpi Majumdar)