Oct 30 Reuters Chipmaker Onsemi forecast a tepid fourth quarter and cut about 900 jobs, sparking fears that weak electric vehicle EV demand has begun to hurt orders for its chips from the auto sector and sending its shares tumbling 18.3 on Monday.

The company, whose clients include European automaker Volkswagen, supplies chips that go into drive trains of electric cars and help with driverassistance systems like cameras and sensors.

We are starting to see pockets of softness, with tier 1 customers in Europe working through their inventory and increasing risk to automotive demand due to high interest rates, CEO Hassane ElKhoury said in a postearnings call.

Tesla CEO Elon Musk had raised concerns about the impact of high interest rates on car buyers after the world39;s most valuable automaker, which is also considered a bellwether for EV industry, missed revenue estimates.

Onsemi, which has laid off 1,360 employees so far this year, forecast revenue of 1.95 billion to 2.05 billion, below expectations of 2.18 billion.

In an interview, ElKhoury said the company still expects EV demand to grow, but more slowly. The job cuts announced Monday had been planned as part of a larger strategy shift to internally manufacture its more profitable chips and save costs by outsourcing other chips.

The timing of it seems like it39;s a reaction to the macro economic environment, but the timing has always been part of the strategy, ElKhoury said.

Onsemi expects fourthquarter…