IQE PLC Iqe Plc : Trading Statement & Notice Of Results

 
TIDMIQE 
 
 
   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. GBP70m 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. GBP1m of license income (H1 2016: GBP3.5m). 
 
   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 [phone] 
 
   Drew Nelson 
 
   Phil Rasmussen 
 
   Chris Meadows 
 
   Canaccord Genuity + 44 (0) 20 7523 8000 
 
   Simon Bridges 
 
   Henry Fitzgerald O'Connor 
 
   Richard Andrews 
 
   Peel Hunt [phone] 
 
   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 
 
 
  http://www.iqep.com 
 

(END) Dow Jones Newswires

July 20, 2017 02:00 ET (06:00 GMT)

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