IQE wins new multi million pound volume manufacturing agreement for photonic products

25 June 2014

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Cardiff, UK. 25 June 2014: IQE plc (AIM: IQE, “IQE” or the “Group”), the leading global supplier of advanced semiconductor wafer products and services, has entered into a new multi-year volume manufacturing agreement expected to be worth in excess of £1m a year for epitaxial wafers for use in optical communications applications.

The new supply agreement is with an existing key strategic customer that already has a significant presence in the Asia Pacific region and includes the rapidly growing market for photonics in China. The new contract increases IQE’s share with a guaranteed minimum of 80% of the customer’s business, which is expected to be worth more than £1m in additional annual revenues to IQE’s photonics business unit.

Customers are increasingly seeking to ensure security of supply through entering into long-term supply agreements to support products and devices for LTE backbone communications for base stations, Gigabit Passive Optical Networks (GPON) and Fibre to the Home (FTTH) at 2.5G and 10G, migrating to 100G over the coming years.

The agreement also includes scope for adding new products which are currently undergoing qualification, such as Avalanche Photo Detectors (APDs) for high-speed, long-reach detectors.

The new contract takes the form of a “Vendor Managed Inventory” (VMI) agreement which enables IQE to optimise production efficiency and manage any short-term fluctuations in demand.

Dr Drew Nelson, IQE CEO, said:

“IQE provides the key enabling technology that is helping to meet the ever increasing demands on optical communications driven by trends such as ’Big Data‘ and ’The Internet of Things.’

“As the importance of photonic applications continues to grow, customers increasingly need to ensure security of supply to meet the needs of their technology roadmaps and are seeking to enter into volume manufacturing agreements.

“IQE is the global leader in wafer outsourcing and is seen by its customers as their key strategic partner to support this rapidly growing industry sector.”

Contacts:

IQE plc +44 (0) 29 2083 9400
Drew Nelson
Phil Rasmussen
Chris Meadows
Andrew Joel (Technical/Sales)

Canaccord Genuity + 44 (0) 20 7523 8000
Simon Bridges
Cameron Duncan

Peel Hunt +44 (0) 20 7418 8900
Richard Kauffer
Daniel Harris

Instinctif Partners +44 (0) 20 7457 20200
Adrian Duffield
Kay Larsen

 

 

Note to Editors

IQE is the leading global supplier of advanced semiconductor wafers with products that cover a diverse range of applications, supported by an innovative outsourced foundry services portfolio that allows the Group to provide a 'one stop shop' for the wafer needs of the world's leading semiconductor manufacturers. 

IQE uses advanced crystal growth technology (epitaxy) to manufacture and supply bespoke semiconductor wafers ('epiwafers') to the major chip manufacturing companies, who then use these wafers to make the chips which form the key components of virtually all high technology systems. IQE is unique in being able to supply wafers using all of the leading crystal growth technology platforms. 

IQE's products are found in many leading-edge consumer, communication, computing and industrial applications, including a complete range of wafer products for the wireless industry, such as mobile handsets and wireless infrastructure, Wi-Fi, WiMAX, base stations, GPS, and satellite communications; and optical communications. 

The Group also manufactures advanced optoelectronic and photonic components such as semiconductor lasers, vertical cavity surface emitting lasers (VCSELs) and optical sensors for a wide range of applications including optical storage, thermal imaging, leading-edge medical products, pico-projection, finger navigation ultra-high brightness LEDs, and high efficiency concentrated photovoltaic (CPV) solar cells. 

The manufacturers of these chips are increasingly seeking to outsource wafer production to specialist foundries such as IQE in order to reduce overall wafer costs and accelerate time to market. 

IQE also provides bespoke R&D services to deliver customised materials for specific applications and offers specialist technical staff to manufacture to specification either at its own facilities or on the customer's own sites. The Group is also able to leverage its global purchasing volumes to reduce the cost of raw materials. In this way, IQE's outsourced services, provide compelling benefits in terms of flexibility and predictability of cost, thereby significantly reducing operating risk. 

IQE operates a number of manufacturing and R&D facilities across Europe, Asia and the USA. The Group also delivers its products and services through regional sales offices located in major economic centres worldwide.