Shares in troubled digital giant Pace dropped sharply again today after the company was dealt another major blow.

The company, which just days ago saw its shares plunge 67 per cent to £1, looks set to lose business from one of its major clients.

Cable operator NTL yesterday announced it had struck a deal to source set-top boxes from Korean giant Samsung.

Saltaire-based Pace Micro Technology could now lose out on future business with the debt-laden cable firm.

Pace has supplied the bulk of NTL's 2.25 million set-top boxes, which allow customers to receive digital television and high-speed internet access.

But an NTL spokesman said Samsung's SMT-2100C product had more interactive features than the Pace set-top box and was also cheaper.

It is thought Samsung's set-top box costs 30 per cent less than Pace's model, a crucial difference as NTL battles debts of £12 billion.

NTL's initial contract with Samsung, which is worth around £30 million, will see the first shipments arriving in the UK in the coming months.

The NTL spokesman said: "Having a second set-top box supplier is good for our business. Pace is still a very good set-top box. We are not dropping Pace, Samsung is joining Pace as a second supplier."

A spokeswoman for Pace said: "Most cable operators like NTL will have at least two suppliers, sometimes even more. We've been expecting NTL to have a second source supplier since we've been supplying them for the last three years, so we have been expecting this for a long time.

"The fundamentals of the company remain the same and we will remain profitable this year. We are still well positioned."

Pace's shareholders are unlikely to be reassured, however, especially in the wake of the company's recent trading performance.

Shares in the group plunged 67 per when it warned full-year turnover would be a third lower than expected.

It blamed the lower sales on the struggling US economy and the debt crisis at NTL and Telewest, its other key UK customer.

Pace, which employs 1,000 staff, was due to ship 300,000 set-top boxes to NTL in the half year to June, but the order has been hit by a reluctance among trade credit insurers to increase its cover.

Pace shares plunged further today after closing at 113.75 pence on Friday. They opened at 108 - a drop of 8.35 per cent - and by 8.30am had fallen to 95.26, their lowest price this year.