Iqe Share Discussion Threads

[hammerd2] 11/8/2017 15:36

Panic Investor - if that reply was to my post 4415 then I thought it was obvious.

There would obviously not be an RNS from IQE as it is not IQE's news to report on - it is MACOM's news. The reason I brought it up was that MACOM deemed it important enough to mention it along with their results Q&A session so it would seem logical to release details of the audit's results.

It is a pretty important piece of news for IQE as successful qualification by MACOM's customers will lead directly to them receiving even more orders from even more customers, thus leading them to need more wafers from IQE. (more money for IQE investors)

[scamper] 11/8/2017 15:08

Thanks for your elaboration Sweenoid

[grity] 11/8/2017 15:05

Great post about the prospects for
This little company Dave.

Now to see if I can muster up some
More coin to invest ;-)

[grabster] 11/8/2017 15:04

In a week when many highflying favourites have suffered the effects of warlike standoffs, IQE has held up well. Currently 19.5% up on where it ended last Friday. Even if it slips a little into the red in this final 90 minutes, its holders seem likely to have enjoyed a positive week.

[lurki0] 11/8/2017 14:40

Sweenoid - nice post. Cheers.

[sheep_herder] 11/8/2017 14:18

stepone68. It's not just Apple who will be selling phones with 3D sensors.

[fullbright] 11/8/2017 14:08

Good job fella, not a million miles from being ftse 250 material, although we do sit pretty on the aim

[stepone68] 11/8/2017 14:06

Hi sweenoid - You base your figures on 250m iPhone 8s annually, then say that 'all apple phones' will be 3d enabled, so revenue will be significantly higher. What additional apple phones are you talking about other than iPhone 8? Apple only sell 200 million a year of all current iPhone models (7, 6S and SE all currently available), so iPhone 8 will certainly not be any higher than that.

[someuwin] 11/8/2017 14:04

Not just phones - next generation iPads will surely come with 3D sensors too.

[galatea99] 11/8/2017 13:59

Article on Lumentum from Seeking alpha:

" 3D sensing is obviously a tremendous opportunity for Lumentum.

The company already has orders from multiple customers, and this is likely to increase. What's more, there is a lot of space for 3D sensing beyond mobile phones so we are only in the very first innings of this development.

The ramping of the other booming business, 100G, doesn't seem to be over anytime soon either, this is also likely to be a multi-year development, even if it isn't likely to maintain the heady growth it is experiencing today."

[desperate dan] 11/8/2017 13:57

Round of applause sweenoid!

[bocase] 11/8/2017 13:54

Sweenoid:

Thank you for your detailed appraisal Dave. It is appreciated.

[sweenoid] 11/8/2017 13:47

Just some thoughts, The companies producing 3D sensing modules for Apple, are essentially in competition with one another. They will have to show Apple that they are able to produce quality products, high yield and be totally reliable. At least two of these companies are vertical companies that is that they are able to produce the VCSEL wafers as well as the modules themselves, however it is obvious that all of the companies are constrained by supply, they are simply not able to produce enough modulesto satisfy the demand of Apple. Each of these companies is increasing their production by increasing their capacity. I think it is almost impossible for these companies to increase the capacity of their module production and at the same time do the same for the VCSEL wafer production. That really would be a bridge too far for most companies, trying to do both simultaneously is a recipe for going ti*s up. This is where IQE have a massive advantage.

IQE own 80% of the OUTSOURCE VCSEL wafer market and are the ONLY supplier to produce 6 inch wafers-these 6 incher's allow companies to produce modules cheaper, quicker, with higher yield, this is what they need, when capacity is constrained :-). IQEincreased their capacity massively in the second half of 2016,in preparation for the increased demand and will again increase the capacity massively with the opening of the Newport factory in H22018,that is currently underway and funded in the most cost-effective way imaginable. The barriers to entry for Competitor producers and vertical producers is extremely high. New companies will not be able to come along and enter the market because of the long validation and qualification times involved, therefore the incumbents as long as they do their job properly would likely retain contracts for a least the next two generations of iPhone and beyond. IQE have already confirmed that they have multi year multi contract wins.

Most excitingly it is now obvious the by the end of 2018 ALL iPhone models are HIGHLY likely to contain 3-D sensors therefore the market is likely to be somewhere in the region of 250 million phones to year end of 2018, MINIMUM going into 2019.by this time I fully expect other smart phone makers to be utilising these modules as well in a catch up situation. IQE are therefore likely to be THE major player in terms of wafer production for at least the next 2 to 3 years and probably beyond.

it's now thought that each module will cost approximately six dollars. My conservative guess is that IQE we will be supplying wafers for approximately one half of the market,this figure might actually be far higher therefore we will earn a percentage figure of the six dollars and I will calculate this to be a figure of approximately $.50-$.75 , this is at the lower level of the Peel Hunt guesses. However we now have the juicy prospect of All Apple phones to be 3-D sense enabled rather than just the iPhone eigh, the revenue will therefore be significantly higher, imho than PH have provisionally forecast, even for their lower case scenario.

The key to IQE earnings are based upon the barriers to entry, the vibrancy of the market and the inevitable transition of VCSEL IP into other smart phone makers, and the other 'markets' I have highlighted in posts.I simply cannot see any significant competitors arising to challenge our almost complete dominance in the outsource VCSEL wafer market, and whilst component suppliers are concentrating on the business of actually producing enough modules to satisfy Apple,whilst also being ultra-sensitive about not botching up their 'core' business- they will NOT be focused on wafer expansion, all their efforts would sensibly be placed in increasing capacity for modules not wafers :-)this is a win-win win for IQE

It seems to me that the momentum in the share price will be related to the actual outlooks summary in the interim earnings report. The analysts will take their guidance from the company in the conference call and with individual post earnings meetings. The estimates produced by the analysts will guide the market as to the PE , revenues and potential earnings for 2017 and most importantly for year 2018,that figure is now absolutely pivotal in calculating the value of the company, going forward.

Basically, the potential for a huge rerating of the revenues and EPS estimations for FY2018 based on the VCSEL market alone now seems inevitable.Its important not to get too optimistic, but looking at 'the market' we are in here, and the company involved that will give off this tsunami of earnings ( Apple), its become obvious to me that my target price is woefully low. I won't wait for the analysts, I for one raise my target share price to £2.50 and it's obviously cheap as chips under 150p.:-)
S

[someuwin] 11/8/2017 13:33

Some say the new iPhone 8 might cast as much as £1000. Makes no odds imo. Most peeps have no idea how much the phone costs as it's hidden by the monthly contract costs.I shall certainly be buying one regardless.

[panic investor] 11/8/2017 13:26

Why do they need to RNS that - hardly price sensitive and they're hardly likely to fail

[luxaeterna1] 11/8/2017 13:25

iPhones are massively overrated and overmarketed, but they have had a couple of good ideas along the way.

If you think paying £750 for a phone that cost £120 to build in China is a good deal because of all the glossy advertising, by all means keep chucking wads of cash out of the window.

[hammerd2] 11/8/2017 13:18

Given that the news that there was a customer qualification audit being completed yesterday was released by MACOM themselves, I had rather hoped news of the audit's results would have been released yesterday. I may have missed it though but I can't find any updates. Maybe today. Will be a great fillip to both companies even if the customer doing the audit may not be named.

[wossupsa] 11/8/2017 12:51

Stock is nutz, never held one quite like it!

[beermat1] 11/8/2017 12:42

Funnily enough I closed my PG position March 3 with that exact trade. FEVR remains my other speculative hold although further legs limited there near term methinks. Have built a pretty substantial shareholding in IQE since August last year , awaiting September results with much anticipation. My thanks too to the deeply informative contributors posting here.

[grity] 11/8/2017 12:05

This should help

Why I’d sell Purplebricks Group plc to buy IQE plc

[thereptile] 11/8/2017 11:07

I don't want one

I'd rather spend my money on these

[pyglet] 11/8/2017 10:42

The iPhone 8 pro is going to be THE phone that everyone wants when it is released.

[galatea99] 11/8/2017 10:25

Rumors of iPhone 8 delays might have been exaggerated after supply-chain reports claim Apple is ...

hxxps://www.cnet.com/videos/report-iphone-8-7s-and-7s-plus-mass-production-on-schedule-apple-byte-extra-crunchy-ep-95/

[fuji99] 11/8/2017 09:12

Opportunity to top up.

[fuji99] 11/8/2017 09:12

Opportunity to top up.