Shares in Wolfson Microelectronics, the chipmaker, plunged by 25 per cent on Thursday after it reported a sharp downturn in orders over the past few days.

The Edinburgh company, which makes chips for products including Apple's iPhone, said that it experienced a “material reduction” in orders. A supply glut and fears of a sharp downturn in spending on electronic goods in the run-up to Christmas have hit many chipmakers.

In early trading the shares fell to 77p, their lowest level since listing five years ago, before closing at 82¼p, off 27¼p, just under 25 per cent down.

Wolfson said that it now expected fourth-quarter revenue to be between $45 million and $50 million (£25 million to £28 million), compared with a previous consensus expectation of $58.87 million.

Last month, David Shrigley, the chief executive, said that he was stepping down for family reasons and would return to the United States. He will be replaced at the end of the year by Mike Hickey, a multimedia expert from Motorola.

The latest boardroom reshuffle comes after after Wolfson appointed Michael Ruettgers, former head of EMC, the data storage and services provider, last November to take over as chairman and provide “a fresh, external perspective” to the board's leadership.

Wolfson was floated in 2003 but in the past year its shares have lost more than half of their value after suffering blows such as the loss in March of a contract with Apple to supply parts to its iPod Touch and iPod Nano devices. This alone resulted in the shares slumping by 26 per cent.

In July Mr Shrigley gave warning that the economic slowdown was taking its toll. He said: “While we expect a third-quarter seasonal uptick in trading, the weaker macro-environment is impacting our customer order patterns.”

Panmure Gordon, the broker, cut its share price target for Wolfson to 100p from 120p, but maintained its “hold” rating on the stock. “Market conditions combined with negative newsflow should continue to result in the stock trading well below fundamental value,” Nick James, an analyst at the broker, said.

— Axon, the consulting company, has accepted a £441 million bid from HCL of India, rejecting an earlier offer by another Indian company, Infosys.HCL offered to buy Axon for 650p a share on September 26, an 8.3 per cent premium to the 600p a share offer that Infosys had made six days earlier.

The acquisition, the largest by an Indian IT company, comes at a difficult time for India's technology sector, which depends heavily on American financial services firms that have been hit hard by the credit crisis.

Axon shares closed at 678p in London, up 2.5p. An HCL spokeswoman said that it was “too early to speculate” on whether there would be layoffs as a result of the merger.

Axon, which specialises in supporting SAP business software, has about 2,000 employees and maintains offices in Britain, North America, Malaysia and Australia. An Infosys spokeswoman said that the company would consider its options.

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