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IQE bounces on orders

The semiconductor technology specialist has announced a spate of deals
July 23, 2019

IQE (IQE) shares jumped more than a fifth after the supplier of advanced wafer products to the semiconductor industry announced a handful of deals in Asia and the start of its production for a customer that serves the Android supply chains*.

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A boost in Asian demand for IQE’s products would seem to go against the current run of play, given the recent turmoil wrought by the US-China trade dispute. Yet the company has secured a deal to provide transistors for a “major Asian customer’s” power amplifiers, which will be used in mobile handsets, wifi hotspots and other wireless devices.

Production is underway with expectations of “significantly higher production capacity” from newly-installed capacity at IQE's facility in Hsinchu, Taiwan. IQE has also received “significant additional orders” from a second Asian customer, while a Singaporean customer has begun taking delivery of IQE’s ‘Pseudomorphic High Electron Mobility Transistors’, which are used in mobile devices and networks.

A day later, IQE announced that it had announced the start of Vertical Cavity Surface Emitting Lasers (VCSEL) production in Newport for the Android supply chains, with several more in “advanced stages of qualification”. IQE has subsequently signed a contract extension with one of its largest VCSEL customers, prolonging the current deal until the end of 2021. Two other contracts have also been extended with several other new contracts in final negotiations, the company says. 

House broker Peel Hunt forecasts full-year 2019 pre-tax profits and earnings per share of £5.8m and 0p.

*This article has been updated with news of IQE's latest announcement