New MEMS White Paper

Download the latest Logitech white paper and learn more about MEMS processing technology and techniques

News

9 July 2007

 

IQE’s revenues move ahead of first-half forecasts

In a trading update, substrate and epiwafer supplier IQE plc of Cardiff, Wales, UK says that the flat start to trading in January and February has been followed by monthly revenues increasing throughout the rest of first-half 2007 (as expected on issuing preliminary results at the end of March). IQE now expects overall revenues to be slightly above the market forecasts of £22.5m (and up greatly from first-half 2006 revenue of £14.6m).

The epiwafer foundries MBE Technology Pte Ltd of Singapore and IQE RF LLC of Somerset, NJ, USA (formally Emcore’s Electronic Materials & Device division ), both acquired in second-half 2006, have integrated well into the group and have performed ahead of management expectations, IQE says. By gaining exposure to the wireless power amplifier market through IQE RF, and exposure to the Asia Pacific markets through MBE Technology, the product and customer reach of IQE has been substantially enhanced, the firm reckons, especially in the global wireless communications marketplace, which now accounts for about 75% of overall group revenue.

Fixed costs remained flat during first-half 2007, and operating margins are slightly ahead of analysts’ forecasts. As a result of the IQE Group’s strong operational gearing, earnings before interest, taxes, depreciation and amortization ( EBITDA ) performance for first-half 2007 will be substantially higher than analysts’ current forecast of broadly breakeven, despite the continued and increasing weakness of the dollar against sterling, the firm says. The group has positive cash and has strengthened its financial position by putting into place £5m of overdraft facilities to ensure that working capital needs do not constrain future growth.

“As a result of the acquisitions made during 2006 and strong focus on the rapidly growing wireless communications marketplace, IQE has started to deliver on its strategy and expected financial benefits,” claims Dr Drew Nelson, chief executive. “Demand for our products is being fuelled by both the growth in wireless volumes (mobile phones, Wi-Fi, WiMAX, GPS, direct broadcast TV and Bluetooth) and significantly, the continued trend to higher-speed, feature-rich devices. Recent upgrades to the overall handset market for both 2007 and 2008, the major portion being for high-end replacement phones, bodes well for strongly increasing demand for GaAs-based power amplifier and switch products,” he adds.

IQE’s board is confident that current strong market conditions and the group’s robust strategy have positioned it to achieve continued growth, Nelson concludes.

IQE expects to announce the half-year results on 22 August.

*In recognition of the growth of the industry in Wales, Nelson (who is also the chairman of the Welsh Electronics Forum) has received a lifetime achievement award at June's S2K European semiconductor industry event at The National Museum & Galleries Wales (relocated to Cardiff this year after several years in Edinburgh).

Conference organiser, the UK-wide Joint Equipment and Materials Initiative (JEMI), was supported by the Welsh Electronic Forum and Welsh Assembly Government, which is now working to ensure the event returns to Wales next year. The Welsh technology and semiconductor industry employs about 27,000 people and comprises more than 500 companies, it is estimated.

“Nelson has made a huge impact on the industry, not only via his own companies but through his dedicated support for the Welsh Electronics Forum,” said S2K chairman Mike Smyth. “Drew thoroughly deserved his personal honour because he has been a fantastic supporter of the Forum for many years,” added Dr Chris Young, chief executive of the Welsh Electronics Forum.

See related items:

Acquisitions and strong mobile handset market boosts IQE's revenues, but not without losses

IQE acquires Singapore epiwafer foundry MBE Technology for £7.5m 

IQE closes acquisition of EMD after raising £12m

Visit: http://www.iqep.com