REG-IQE plc : Trading Statement & Notice of Results <Origin Href="QuoteRef">IQE.L</Origin>

IqeAnnouncement

20/07/2017 07:05

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Strong growth in H1 revenues marks the start of increased VCSEL wafer demand
for mass-market consumer applications, and triggers a capacity expansion to
meet higher levels of expected demand in H2 2018.

Cardiff, UK. 20(th) July 2017: IQE plc (AIM: IQE; "IQE", the "Group"), the
leading global supplier of advanced wafer products and wafer services to the
semiconductor industry, provides a trading statement for the six months ended
30 June 2017.

The Group announces that it expects to deliver revenues of c. £70m for the
first half, reflecting increased sales in each of its three primary markets.
Notably, photonics continued to deliver strong double-digit growth, enjoying
the early phase of a significant ramp in VCSEL wafer supply for mass market
consumer applications. As a result, overall wafer sales are expected to grow
by c.16% against H1 2016. This has also been supplemented by c. £1m of
license income (H1 2016: £3.5m). 

The Group enjoys a broad range of end market drivers, which are increasing the
diversity of its wafer sales.  The Group is engaged in a range of programmes
which provide significant upside potential to its near and mid-term growth
expectations. These include VCSEL, GaN for RF and power, full service DFB
wafers, InfraRed and cREO(TM). The start of the mass-market ramp for VCSEL
wafers marks an inflection point in the commercialisation of this technology.
The Group has secured multiple, multi-year contracts for this VCSEL ramp which
reflects its strong competitive advantages including its technology leadership
and its proven track record in delivering wafers into high volume consumer
markets. As a result, the Board has now approved a capacity expansion plan to
meet higher levels of expected demand for H2 2018 than previously anticipated.
This follows increased investment during H1 2017 in operating costs, product
development and working capital to help position the Group for the expected
ramp and meet higher levels of growth in H2 of 2017.

As part of its expansion plan the Group announces that it has agreed a heads
of terms for the lease of a new premises in South Wales.  The lease is with
the Cardiff City Region, which has a goal of supporting the development of the
Compound Semiconductor Cluster in South Wales.  This lease provides the
infrastructure needed for IQE's expansion in a highly cost effective manner. 
The lease is for 11 years, and provides IQE with an option to extend the lease
or purchase the freehold. In parallel, the Group has placed orders for new
MOCVD equipment. 

Following the devaluation of sterling in June 2016, currency provided a
tailwind of c.10% year on year, however the impact is largely presentational
as the majority of the Group's costs are also denominated in foreign currency.

Notice of Results

The Group expects to report its half-year results for 2017 on 5(th) September
2017.

Dr Drew Nelson, Chief Executive of IQE, said:

"The first half of 2017 has been a very exciting time for the IQE Group.
Overall, all business units have progressed in line with expectations,
although the  Photonics unit has been the stand out with continued strong
double digit growth, accelerating towards the end of the first half. The Group
has multiple high growth opportunities ahead, and in order to ensure future
capacity is in place in a timely fashion to address H2 2018 and subsequent
demand, we have announced an MOU with Cardiff City Region to secure
operational facilities in a highly cost effective arrangement, together with
initial orders for increased MOCVD capacity. In light of recent progress and
its increasingly confident outlook, the Board expects the Group will now
exceed market expectations for the full year and whilst it remains early into
the start of the mass-market adoption of our technology, it is possible that
with the current contract momentum, a more significant upgrade to current
market expectations could be delivered for 2018."

The information contained within this announcement is deemed to constitute
inside information as stipulated under the Market Abuse Regulations (EU) No.
596/2014. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.

GLOSSARY OF TERMS

VCSEL............... Vertical Cavity Surface Emitting Laser 
GaN.................... Gallium Nitride
RF...................... Radio Frequency
DFB.................... Distributed Feedback Laser
cREO(TM)............. Crystalline Rare Earth Oxide

CONTACTS

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

Canaccord Genuity + 44 (0) 20 7523 8000 
Simon Bridges 
Henry Fitzgerald O'Connor
Richard Andrews

Peel Hunt +44 (0) 20 7418 8900
Euan Brown

ABOUT IQE

http://iqep.com
IQE is the leading global supplier of advanced semiconductor wafers that
enable 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 smartphones and wireless
infrastructure, Wi-Fi, base stations, and satellite communications; optical
communications, optical storage, printing, thermal imagers, leading-edge
medical technologies, automotive and aerospace technologies, a variety of
advanced silicon based systems and high efficiency concentrator photovoltaic
(CPV) solar cells.
IQE operates multiple manufacturing and R&D facilities worldwide.  
This announcement is distributed by Nasdaq Corporate Solutions on behalf of
Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for
the content, accuracy and originality of the information contained therein.
Source: IQE plc via Globenewswire