Xilinx merchandise provided Nu Horizons with nearly one-third of its annual sales, which were about $180 million in the quarter ended Nov. 30.
Nu Horizons share prices closed Monday at $4.40 per share and throughout the day Tuesday hovered just above $3 before closing at $3.31, down 24.8 percent from Monday.
The Nu Horizons Web site Tuesday afternoon still listed itself as a distributor of Xilinx programmable computer chips, as it has been for more than two decades.
"The termination is effective as of June 5, 2010, and until that date Xilinx and Nu Horizons intend to work together to ensure a smooth transition," a Nu Horizons statement said.
Nu Horizons will be allowed to return unsold Xilinx inventories, valued Feb. 28 at $41.2 million, for full refunds.
"We have worked with Xilinx for 23 years, and although we are disappointed that Xilinx has decided to terminate our relationship, this change is not related to Nu Horizons' performance but solely due to a change in Xilinx's strategy going forward," Arthur Nadata, Nu Horizons executive chairman, said in a company statement.