IQE signs substrate supply contract with AXT for 2008
18 December 2007

Cardiff, UK – IQE plc (AIM: IQE, or ‘The Group’) the leading supplier of advanced wafer products and services to the global semiconductor industry, has today announced the signing of a substrate supply agreement with AXT, Inc. (NasdaqGM: AXTI), a leading manufacturer of compound semiconductor substrates. The agreement is valued at approximately $15.1 million, with an option to purchase an additional $3.5 million of substrates. All substrates ordered under this contract are to be shipped by the end of 2008. The substrates ordered by IQE are all 4-inch and 6-inch semi-insulating GaAs, principally for use in global wireless applications.

Drew Nelson, Chief Executive of IQE, commented:

“As one of IQE’s key suppliers, AXT is well positioned to be able to accommodate our increasing demand, particularly in larger diameter gallium arsenide substrates for the rapidly growing wireless applications industry. Its expansive manufacturing capacity, unique raw material capability and broad product portfolio make it an excellent choice as one of our key partners to support our strong growth plans for 2008.”

Contacts:
 

IQE plc (+44 (0)29 2083 9400)
Drew Nelson
Phil Rasmussen
Chris Meadows

College Hill (+44 (0)20 7457 2020)
Adrian Duffield / Ben Way

Noble & Company Limited (+ 44 (0)20 7763 2200)
John Llewellyn-Lloyd / Sam Reynolds
 

About IQE plc

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 ('epi-wafers') 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; optical communications, optical storage (CD, DVD), laser optical mouse, laser printers & photocopiers, thermal imagers, leading-edge medical products, barcode, high efficiency LEDs and a variety of advanced silicon based systems.

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 customized 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 six manufacturing facilities located in Cardiff (two) and Milton Keynes in the UK; in Bethlehem, Pennsylvania and Somerset, New Jersey in the USA; and Singapore. The Group also has 11 sales offices located in major economic centers worldwide.
 

About AXT, Inc.

AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising gallium arsenide (GaAs), indium phosphide (InP) and germanium (Ge) through its manufacturing facilities in Beijing, China. In addition, AXT maintains its sales, administration and customer service functions at its headquarters in Fremont, California. The company’s substrate products are used primarily in lighting display applications, wireless communications, and fiber optic communications. Its vertical gradient freeze (VGF) technique for manufacturing semiconductor substrates provides significant benefits over other methods and enabled AXT to become a leading manufacturer of such substrates, particularly in optoelectronics applications. AXT has manufacturing facilities in China and invests in five joint ventures producing raw materials. For more information, see AXT’s website at http://www.axt.com.