Flashing across my Twitter feed is news about the IQE and its trading update. Obviously it is a bad one, as evidenced by a sudden drop in its share price. IQE is "the leading supplier [hmm, I sincerely doubt that] of compound semiconductor wafer products ..."
Their RNS states:
weaker demand leading to inventory build-up throughout the supply chain ... Similar trends are evident across the industry ... This near-term market softness is expected to be temporary
The markets is clearly not buying the arguments. I had invested in IQE some time ago, but gave up. It didn't turn out to be the "next ARM" that I and everybody else hoped it would be. The company
"has a strong pipeline of strategic and long-term partnerships and new business opportunities that will underpin growth in 2024 and beyond."Does it? Does it really? The company was floated in May 2000 and has very little to show for itself during all these years. The company has made losses in 2019-21, and its greatest net profit in the 2016-2018 period was £18m. Its market cap is £376m. It is priced like a high growth company despite having raised its revenues by only 3% CAGR pa (before today).
Despite whatever glowing picture of the future the company portrays, its track record is less than mediocre. So I am more than a little sceptical.
The top brass in this company seem to lack any kind of vision. They're a complete waste of space.
I want to contrast this with another "high-tech" company from the UK that I hope you've heard of: Raspberry Pi. It was set up by Ebon Upton, formerly from Broadcom. Noting the decline in quality of computer graduates (from Cambridge, no less), he set out to create an SBC (Single Board Computer). It was a designed to be something that people could experiment with, and cheap, so if they fried it, no real harm done. He took an (near-obsolete) Broadcom chip, put it on a board, added connections for SD cards, keyboard, mouse, internet, and made the Linux Operating System run on it. He also broke out the "pins" from the chip so that you could all manner of devices electronically. So you can blink LEDs on and off, receive switch inputs, and connect to more sophisticated devices like temperature sensors, gyroscopes, etc..
He expected to sell…
