Iqe Share Discussion Threads

[potential] 21/7/2017 08:23

Here goes!!!

[sweenoid] 21/7/2017 08:14

Before this post - three cheers to our 2 biggest supportive shareholders who showed foresight, patience and courage seeing IQE through its proverbial 'dark ages' in terms of its share price that is, it was during those ages that everything was put in place for future rewards. T-Rowe James and Katie Potts take a bow :-)

My only post for the day
Apologies to those that read these rather long entries, for the repetition, but some of these facts, 'guesses' and opinions are worth repeating.
I reiterate I don't follow day to day SP's or forever look at monitors-I am only interested in the big picture, which in my book reads 'big profits' so traders look away now and bypass
If you are remotely interested in my views of why yesterday's IMS and share price increase was only the beginning, of a long success story that will make us much more wealthy, make a cup of tea, relax and chill

Ps agreed with sheep-herder's comments on cREO and most everything else on IQE
Ok let's all get over yesterday's momentous reaction to a carefully crafted, totally bullish IQE IMS. It's like the market has been asleep with regard to this company and has been suddenly awoken from its slumber, by activity that's been obvious to some for years ;-)

This is why it's going to get better, this is why momentum has only just started, and amazingly to make this ditto shorter I am not even mentioning the huge potential of cREO, Solar, CMOS , Full service wafers etc etc, let's cut to the chase!

IQE are a 6 strand business, the primary earning strand - wireless , has sustained the company through its high Capex/acquisition/ R+D cycle, it's a great earner and growth is being maintained at 5-10% ( mainly due to Skyworks and Qorvo) , but it's low margin business. IQE have been relying on 1 strand and 2 big customers to survive whilst all the business ventures kick in.

My predictions
By the end of FY 2018 photonics will overtake wireless as the main revenue earner and then propel forward at a growth rate of 25-50% year on year - that's conservative folks, believe me. Photonics is a HIGH margin business. The demand for VCELS will be exponential driven by an innovation cycle started by Apple and propagated by ALL the other major smartphone companies. AR( augmented reality ) is the new key area for Apple , they are spending a fortune in being number one in that arena- all to our advantage, everyone else will follow.the wonderful thing is that VCSELS have SO many growth area opportunities-witness the next iPhone and new ranges of cars that will be jam-packed with them.

Competition - of course it exists, we know for a fact that every year Taiwanese companies try to ' steal' IQE's wireless business by cost- cutting , they don't succeed, IQE has become THE Valued, reliable go-to supplier. Work out why, I can't be.bothered to go over it again but even in today's throw-away world, quality, reliability, dependability,performance and customer service still do count for something, that's why IQE is not only maintaining , but also growing business at the expense of others with their very biggest customers - it's a fact NOT a fiction.

As for the VCSEL market where the IMS confirmed MULTIPLE, MULTI-YEAR contract wins, we simply have the best technology, 18 months at least in front of competitors, the barrier to entry for competitors even when they are at last able to offer 6inch wafers ( IQE are the only company that can do this) will be very very high. 6 inch wafers offer huge advantage in terms of production and efficiency and performance. Finisair are likely the next with a 6 inch wafer but they won't be able to produce enough volume for 6-12 months at least ( read their reports-I do) by that time they have to go through validation and evaluation ( takes months and months), serious competition is coming but in investment terms it's light years away.IQE OWN 80 % of the outsource VCSEL market, I would guess they will supply significant volume even into vertical suppliers- they simply have NOT got the capacity to produce the volumes of VCSEL wafers that will be needed, we are going from literally zero to huge volumes here- overnight, with its Capex spend on increased VCSEL reactors in 2016 , IQE positioned itself sweetly to beat the opposition in 2017-2018 , hence their multi year, multi company wins, AND in a demand run business with limited supply, Adam Smith's Wealth of Nations is still apposite ( sorry, I AM a historian these days) . IQE as niche and pivotal player will be setting the price that others simply have to pay to get in the game-it's a simple law of economics and supply/demand.

There are 4 amazing thing about IQE is the future, over and above what's already stated.
1 their indium phosphide business supplying fibre to the home, metro and data centre markets will continue its huge momentum - the demand in the high end area's like 100GB is insatiable and likely to remain so
2 MOST amazing is that the BIG OPPORTUNITY the biggest, highest revenue earner is just starting to take off-RF power using GAN on silicon will simply be HUGE , the market is massive and growing exponentially. I predict within 3-4 years this business will even outpace photonics. It's simply mouth- watering, it's not fiction, its fact and it is going to happen. Just like photonics and VCSELS , it's a concept that people don't get, if they did they would be buying massively into the RF power suppliers like IQE, most will wait till it's blindingly obvious, we here as investors in IQE can do it now and proverbially milk the market,we just have to be patient and buy cheap.
3 The advent and emergence of 5 G and the propagation of IOT is bread and butter to IQE, we know from the CEO that the company is and has been involved on multiple fronts in the 5G format from its very inception. 5G will literally be a revolution in digital enablement and performance, it's coming, it's going to be huge and IQE WILL be a major player- go work it out :-)
4 in the 2015 and 2016 AGM's the CEO waxed lyrically about the opportunities for VCSELS in 2017 the proverbial has hit the fan, he was right. BUT at those AGM's he also was even MORE positive about IQE's ability to make $$$ in the front-end FILTER business, using our new patented cREO technology. This year 5 weeks ago in response to my question, he strongly reiterated his confidence that as they were working with major 'partners' that success in this huge $$$ market was coming and would start ramping up at the 4G level, not having to wait till 5G. He was right about VCSELS , if IQE pull this off it will quadruple REPEAT QUADRUPLE our wireless income.
anyone remotely thinking that the share price rise we have seen here cannot be sustained is short- sighted, it may take breaths and pauses and have some dips to test the weak holders , but the TAM ( total available market) and SAM (serviceable market) are almost beyond belief.

I have been telling the same story for years, no one was listening initially , that didn't bother me as I bought+++ at what now seems ridiculous levels-just MONTHS ago, people at 30p, 50p , 80p all thought they had 'missed the opportunity ' , missed the 'proverbial boat' they were naive and just couldn't see the opportunities available. They believed something that got less cheap was expensive, just because it had doubled in price, I have done very well in the past. I know all about 'value' being confused with share price ;-)There is absolutely no difference at today's SP,you may see it go up and down short term , but in a year or two IMHO and DYOR the share price is likely/ inevitably given the markets being supplied to be substantially higher.

In the meantime keep an eye on IQE's customers, some named , some it's obvious to work out, watch how they are doing , look at their charts, it's a great way to work out why IQE will,prosper- Skyworks,( just last night they announced another blockbuster quarter and a brilliant bullish forecast - they are our biggest customer, the area's they see the biggest growth in , is where IQE is or will be supplying them ;-), just read if you want their conference call transcript from last night


Qorvo, Lumentum, Oclaro, Raytheon, Malcom , all are reporting soon, I would be astonished if the vast majority don't deliver excellent forward forecasts......with IQE inside ( although none of them will say that)

Very happy days
S

[potential] 21/7/2017 08:10

Bought more :) MMs taking the weak out!!!

[sheep_herder] 21/7/2017 08:06

If people want to get excited about the filter market, go and read the patent that maxwellsdemon posted. cREO is the nuts ™!

[potential] 21/7/2017 08:05

MM lining it up .. get ready fokes!!

[owenga] 21/7/2017 08:00

All ready for the start of trading... enjoy guys! Should be good.

[potential] 21/7/2017 07:52

Someuwin-- a really good summary!! It's at the start of a very long innings!

[someuwin] 21/7/2017 07:46

Skyworks reminding us that this is just the start of the massive growth yet to come. Just one of IQE's customers but the same is true of all IQE's end markets...

"Let me remind you, we are still in the very early innings of a massive sea change as big data alters the way we live, work, educate and play. Growth projections around this opportunity are impressive.

Global mobile data usage is expected to grow seven times between 2016 and 2021. IoT volumes are exploding with 75 billion devices projected by 2025 and there is still a compelling opportunity to connect the unconnected which today represents over 3 billion people worldwide.

As we look to the future, the major stakeholders in this ecosystem will be dependent upon fast, reliable and secure connectivity providing Skyworks with a tremendous opportunity to leverage our systems level solutions and global scale.

At Skyworks, we have an ambitious vision. It’s quite simply connecting everyone and everything all the time..."

[potential] 21/7/2017 07:23

This is smashing through 120 today!!

[shavian] 21/7/2017 07:21

Looks like we were knocked back to 107p after the auction last night. See price monitoring extension notice. Plently of time for it to sort itself out after 0800.

[sweenoid] 21/7/2017 07:14

Once again and to disappoint graphene fans-it's a technology in stasis, the IQE CEO dismissed it as a competitive challenge at the AGM, IQE were working on it in the past in some high level research with high-end partners - NOT anymore

Skyworks transcript of CC bodes well for us, lovely little nuggets in there. We KNOW fir a fact cREO opens up the opportunity for the high end filter market in phones-a massive growth opportunity which if won with a significant customer like Skyworks would quadruple our wireless income overnight. The CEO is as confident about success in this filter market as he was about us majoring the VCSEL market, and those wins will come before 5G :-) :-)


S

[john henry] 21/7/2017 06:52

Excellent update from IQE I have one word concerning Silicons future GRAPHENE

[dr_smith] 21/7/2017 00:46

Popped out before close with price around 100..saw close on google at 101.97 and very happy..then reading this thread see close is 112.25(as on DL).. so double cream!
..and came in at 23p to 28p.

[hannath] 21/7/2017 00:29

Mentioned in this weeks Investors Chronicle out today

BUY
Tip Update: Buy at 98p

Tip style
VALUE
Risk rating
HIGH
Timescale
LONG TERM
Our previous tip
We said BUY at 22p on 25 Jun 2015
Tip performance to date
+345%
By Mark Robinson
IQE (IQE) highlighted increased VCSEL (vertical-cavity surface-emitting laser) wafer demand for mass-market consumer applications as part of a trading update that sent its share price up by nearly a fifth. IQE, a supplier of wafer products to the semiconductor industry, expects to deliver revenues of around £70m for the first half, reflecting increased sales in each of its three primary markets. The board has now approved a capacity expansion plan to meet higher levels of expected demand for the second half of next year.

IQE:LSE
IQE PLC

1mth
Today change
32.06% Price (GBP)
112.25
As part of this expansion, the group has agreed leasehold arrangements for new premises in South Wales. The 11-year lease provides the infrastructure needed for the expansion in what the company terms “a highly cost effective manner”. In parallel, IQE has placed orders for new MOCVD (Metal-Organic Chemical Vapour Deposition) equipment.

IC View

At 98p, shares in IQE now trade at 31 times forecast earnings, but we expect upgrades on the back of this update. That view is backed by comments from the company’s chief executive, Dr Drew Nelson, who confirmed that full-year figures will “will now exceed market expectations”, while “current contract momentum, a more significant upgrade to current market expectations could be delivered for 2018”.
Last IC View: Buy, 51.5p, 22 Mar 2017

[boldlygo] 21/7/2017 00:07

Sweenoid, your comparison to Thucydides does not hold completely true because, if IQE get cREo right, they will be able to grow Compound Semiconductors on Silicon. Making the whole thing more cost effective. Cheaper, larger substrates, more devices per wafer. Processing capabilities already exist for 8 and 12 " silicon.

[big7ime] 20/7/2017 23:56

What a day! Highest vol for at least a yr, good steady rise and ended on a high
A Very good sign and bodes well for tomorrow

Looking at the current p/e I'd say it is not very high considering the huge growth possibilities

"with the current contract momentum, a more significant upgrade to current market expectations could be delivered for 2018"

[sailastra] 20/7/2017 23:46

Forget what you paid....I have held this stock for a long time and traded it in the hope that I would eventually make money.. I doubled up at 18p on an average price of 28p.. Where do we go from here? I suspect a lot higher.. This is one of the biggest winning games I have played a part in during my investment life. Having started as a broker pre big bang. Does one run for the hills or run the profit...That depends how old your kids are.....

[terry topper] 20/7/2017 23:12

Darola

It is a SETS stock - the market makers influence is very limited and is going to become even less so from here on.

I really really hope that IQE does not become one of these stocks where everyone is very clever on the way up but any falls, healthy retrenchments etc are met with one or other of the following whinges:

- the corrupt mms are marking it down
- they want your stock - don't let them have it
- the AIM market is corrupt
- the mms are trying to take out your stop losses
- why is it going down when there are more buyers than sellers
- blah, blah, blah

All of the above are almost always completely invalid with SETS

IQE is inevitably going to become very volatile on a daily basis (hopefully with an underlying upward trend)but there will be very big bumps along the way.

I would just like to add my thanks to Sweenoid - I am a UK small cap investor with over 30 years experience and your analysis and knowledge of IQE has been very valuable to me as someone who has been an investor in IQE, thick and thin, for many years.

[rivaldo] 20/7/2017 22:55

Not a bad day today :o)) But this is a stock to hold for some time to come.

Here's a link to a summary of Skyworks's excellent results - and it looks like the coming Q4 is going to be ahead of forecasts too:





Enjoy your wine Sweenoid, you deserve it.

[biglad1] 20/7/2017 22:39

All good today. But will we run out off steam tomorrow??? weak pound will helps us and thus making it a good buy for our American friend's. Drop in morning (profit taking) day finish would be happy with consolidation at present prices.

[sweenoid] 20/7/2017 22:38

Thanks for some very kind compliments folks. I shall stick to trying to provide information and comment, rather than comment on the share price

I will be exiting the stock-market in the next year or so ( been there, done it) to live a gentle peaceful life devoted to the study of history, art and literature, tonight after rather too much very good Puglian wine, I was thinking of good old 'Thucydides' and his relevance to my life ( it's sad but true ;-)) . The idea of an incumbent super-power, being threatened by an upstart, upcoming new kid on the block, emerging power is quite interesting.The bottom line is that there will always be conflict. Thucydides compared Sparta to Athens, in a boozy, hung over state I wondered why not compare silicon to Compound Semiconductors?. I think the Thucydides 'trap' is totally apt, there is going to be war folks, silicon just won't do for many purposes in the modern digital world , the new kid on the block, compound Semiconductors with king IQE is gonna take your crown and eat it

On topic -I see our BIGGEST customer ( at present) Skyworks announced stonking earnings and a lovely bullish forecast tonight... which was nice!

I am far too drunk
Nos da
S

[darola] 20/7/2017 21:58

All very bullish at the moment - and rightly so - but be interesting to see how much volatility comes to this when the current rush to get in subsides and the MM start playing games. How many of those that are new in will bail out rather than hold their nerve?

[rutter] 20/7/2017 21:43

I reckon that the key phrase driving the share price is "demand for mass-market consumer applications" I love those words "Mass market" :-) Can't see less than a 10% mark up at tomorrow's close.

[mark_jm] 20/7/2017 21:31

£70m for half year at last years GP rate of 14%, caal it 150 for the full year x 14% = £21m x say 20 for a growth stock = market cap of about £420m, so it looks to me like the market is pricing quite a bit of further growth in the quite near term. Not sure how much further this can sensibly go to give a realistic market cap without more specific future revenue forcasts

[hitsha1] 20/7/2017 21:29

Different sector but reminds me of boo, could easily double or triple from here by end of year