IQE Trading Update

20 Jul 2006


IQE, the leading global supplier of customised wafer products and outsource wafer services to the semiconductor industry, is pleased to provide a trading update ahead of the formal first half preliminary results due to be presented on 30 August 2006.

Commenting on trading Dr Drew Nelson, IQE President & CEO said “Trading has continued in line with our pre Annual General Meeting Trading Update released on 30 May 2006. During Q2, the overall business has continued to grow strongly. The detailed half year results are still to be finalised, although the Directors expect 2006 H1 revenues to be in the region of £14.5 million, an increase of £3.3 million (up 30%) on H2 2005 and an increase of £4.8millon (up 50%) on H1 2005. All of IQE’s four business units have grown during the first half of 2006, particularly the wireless division, IQE Inc, located in the US, and IQE Silicon in the UK. Both the optical and substrate businesses have also grown significantly, and are both set to grow even more strongly in the second half. The EBITDA breakeven point of the Group has remained around the £30 million revenue region.”
 

“IQE has today also announced its intent to purchase the Electronics Material Division (EMD) of EMCORE Corporation for $16 million, through the placing of new shares (‘’the Placing’’). EMD is a leading provider of power amplifier products used throughout the wireless industry in both handsets and infrastructure. The addition of EMD’s products, employees and intellectual property will clearly enhance IQE’s position as the leading player in the epitaxial foundry industry. EMD’s current and next generation products are extremely complementary to IQE’s product base and its customer base will increase IQE’s customer reach to a broad spectrum of world class RF manufacturers. With both MOCVD and MBE wireless platforms, as well as a diverse range of MOCVD based optical products, IQE will be able to offer its customers the broadest and most advanced range of technologies and products in the semiconductor industry. “
 

Chairman, Dr Godfrey Ainsworth added “The acquisition of EMD is a perfect fit for IQE. The Board is confident that IQE’s existing cash resources together with the further capital provided through the Placing will provide sufficient funds not only for the acquisition but for working capital to support the business and its growth expectations over the next 12 months.”


Contacts

IQE plc +44(0) 29 2083 9400
Dr Drew Nelson, President & CEO
Stuart Hall, CFO
Chris Meadows, Investor Relations