By Ozan Ergenay

(Reuters) - German chip systems manufacturer Aixtron's annual revenue is expected to drop below last year's level because of a challenging market environment, it warned on Thursday after a 16% slide in operating profit, sending its shares on course for a worst day in a year.

The group expects full-year revenue between 530 million euros and 600 million euros ($554.65 million to $627.90 million) in 2025, down from 633.2 million euros a year earlier.

That compares with analysts' estimate of 582 million euros, according to LSEG data.

Chip companies have been under pressure as higher demand from artificial intelligence (AI) has failed to offset weak demand for automotive, PC and memory chips.

U.S. President Donald Trump's threat to impose 25% tariffs on cars, semiconductors and pharmaceuticals, which could disrupt the global supply chain, has raised concerns globally.

"Consensus expectations for 2025 have remained inflated but investors already expected a significant sales decline, in our view, given the negative news flow on silicon carbide over past months," Stifel analyst Juergen Wagner said in a note.

Aixtron shares felll around 10% in morning trade, putting them on track for their worst day since February 2024 and down down 14.4% so far this year.

Aixtron also said it expects first-quarter revenue between 90 million and 110 million euros, down from 118.3 million euros in the same period last year.

Full-year earnings before interest and tax (EBIT) dropped to 131.2 million euros from 156.8 million a year earlier.

The company will propose a dividend of 0.15 euros per share for 2024, down from 0.40 euros for 2023.

($1 = 0.9556 euros)

(Reporting by Ozan Ergenay; Editing by David Goodman and Tomasz Janowski)

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