Iqe Share Discussion Threads

[adejuk] 23/7/2018 14:41

so glad to see the share price fall again
all you lucky peeps who can buy cheaply

[mad foetus] 23/7/2018 14:37

It would surely be ironic if the share price is knocked down because of a fear about Trump levying tariffs at the same time as we are expanding our US capacity. Looks like IQE can never win!

[coolhandfluke] 23/7/2018 14:18

Just lighthearted comment as to the secrecy as to where the phantom machines are heading. Seams unnecessary to me.

[sheep_herder] 23/7/2018 14:13

coolhand, are you really trying to suggest that one of the options you cooked up in your mind was that IQE were buying MOCVD machines and then gifting them to their competitors?

I thought it was the technology side that gave people brain freeze but this, this begs other questions..

[horneblower] 23/7/2018 14:06

To our other manufacturing base presumably.

[bulltradept] 23/7/2018 13:55

Another test of £1.00 coming up, anyone?

[regasclockwork] 23/7/2018 13:32

sailastra23 Jul '18 - 13:17 - 19001 of 19001
0 1 1
"You seem to have appointed yourself judge a jury over what others post on this board," -End-

Please don't be so sanctimonious - just keep buying!

Edit: If you get 50 or more 'thumbs-up' for your post, it would not surprise me one bit - or make me ill?

[sailastra] 23/7/2018 13:17

You seem to have appointed yourself judge and jury over what others post on this board, cutting and pasting their remarks. Believe me and I am sure that I am not alone....You are the bore and far too regular about being so.

[regasclockwork] 23/7/2018 12:52

Just what a bloke needs to cheer him up when he's feeling down. I'll say LOL! now. - Read on:

DR_SMITH23 Jul '18 - 11:42 - 18996 of 18996 [Edited edition]

Sweenoid.
Thank-you. I hope you are now back in the land of the living..and found/resolved the cause. Mate of mine had food poisoning last year and had secondary infection, leading to 6 weeks in hospital and his blood and bp still aren't back to what they were. One year on and he is still visiting specialists. He is an active chap of 62 who does HIITS, MTB and other exercise. The point: don't be bashful in seeing Doc/specialist to ensure all is now well. He didn't act quick enough due to mis-advice and delayed response/action from GP.

Thank-you again Sweenoid, your single post from your death bed,..." -End-

From above: "One year on and he is still visiting specialists."

Not the sort of thing that a hypochondriac wants to hear. Another LOL! GLA.

[mad foetus] 23/7/2018 12:25

I have had a revelation. We are back in stage 1. Buy at 130/140 if you play it safe. But stage 4 looks to be over. DYOR

[gnnmartin] 23/7/2018 12:23

Thanks from me too, Sweenoid, and my hopes for your health.

[oldscallop] 23/7/2018 12:11

Thanks to Sweenoid for a comprehensive report in difficult circumstances. Much appreciated.

[yankeekraut] 23/7/2018 11:27

thanks for the informative post Sweenoid. Your perspective is much appreciated! Now you know what they really mean when they say "watch what you eat"....

[rivaldo] 23/7/2018 11:21

Cheers sweenoid, much appreciated and very encouraging. Looking forward to the trading update.

[beermat1] 23/7/2018 10:25

My thanks again too DS, more support for the potential revenue stream from Licensing fees perhaps, as referenced back in June..

[picobird] 23/7/2018 10:19

Sweenoid....very much appreciated update, thank you.

[colsmith] 23/7/2018 10:14

Thanks Dave, good report., appreciate it.

[whosaninja] 23/7/2018 10:07

Great update Sweenoid, thanks. Did they reference how the CFO search is going?

[sheep_herder] 23/7/2018 09:13

Thanks for that Sweenoid. Did you talk about the NIL machines in any more detail? Any idea how many they have or how much they can process?

On your cREO and 12" point, I'd assume it's because of what you said previously, it uses MBE. I'd assume that the accuracy and cost of the machine would be the limit as you went up in wafer size. MOCVD is 'just' a spinny disc in some gas. :-)

[mad foetus] 23/7/2018 08:50

Thanks sheep, you are truly a"respected poster"!

[sweenoid] 23/7/2018 08:50

Site visit

The week leading to visit I had food poisoning, lost 8 pounds in weight, I only just made the visit, but had to leave the tour before the end, as I felt dreadful and had done from the start, I got home and spent another 24 hrs in bed. This has obviously ‘coloured̵7; what I have to say, but I have a retentive recall, so although not comprehensive, my report is not a right- off.
In no particular order
Thanks to Chris Meadows and his lovely assistant ( very caring when I nearly keeled over at the end ;-)) for a comprehensive and informative talk and tour of a truly amazing facility,in attendance, me, Ken ( Hammerd) , and Richard from Cheltenham- nice guy.we talked a lot about the ‘business̵7; NDA’s were discussed in depth- they really are hamstrung in terms of PR, but it’s nice to see ‘events’ being flagged- even after the event has happened!, apparently some recent events for customers have attracted PI’s so much so that they have been in part destabilised.

Reason for new date of results, is that there are important investor conferences the original week, that IQE want to attend, good reason. An investor roadshow will occur for 3 days from the new results day in August, they would have preferred to avoid a BH week, but I for one support the earlier date :-), one less week to go.

Whoever ‘pretendedR17; to having been on a visit and saw 10 reactors is either delusional, a stupid muppet or simply lying-motive???

As promised 5 in situ, 5 in soon, there are 15 bays ready for the extra reactors, the new reactors are in various states of qualification, 2 are production ready,we certainly saw all 5 in different ‘stages’ of activity.Because it is a new facility the 1st set of reactors and then customer specifications qualifications are drawn out, but then become less onerous. One reactor can and does supply multiple customers. As the batches of 5-10@ a time are installed, the whole process accelerates. ALL the new reactors at present are and will be MOCVD mainly for VCSELS, however they will also be installing MBE machines especially for cREO applications. All the new machines are significantly more efficient than the older kit.

The building is HUGE, interestingly SIGNIFICANT interest is being expressed by partners,cluster customers, University of Wales etc etc no names mentioned but the ‘inferenceR17; I got, was that big- name, large scale customers would potentially be occupying space at the factory both for production but mainly for administrative office space. Remember, IQE is leasing the building and it’s free for 3 years, all the INFRASTRUCTURE building work, which is extensive+++ is being paid for by City Deal- NOT IQE, who will solely be responsible for installing and running the reactors. That ‘deal’ still sounds just too good to be true :-)There seems to be scope for revenue earnings, albeit small, by sub- letting :-) also brings everyone closer together, which is good, the very biggest end users of IQE’s CS products who will be nameless now want close access to the entire food chain.Such is the secrecy and NDA’s that most of IQE’s employees have no idea who the end customer is, for the product they make.

One SIGNIFICANT FACT I learned on the day, and I don’t think Chris slipped up ;-) , he knows I pick up on everything- even in a disheveled state!, is that IQE are not just installing reactors in Newport, other sites are also having ADDITIONAL ( not replacement) machines installed, paid for by the recent placing. This has not been publicly announced , but is apparently referred to in the ‘blurb’ about the placing. Since everyone is assuming that Newport was the sole site for extra reactors and using that to figure in their guesstimate forward revenues ....they can now rethink. However Chris would not let on how many, my guesstimate is 10 spread over the other sites over a 1 year period? This would appear to be very good new news, that figure could be higher. So the slight disappointment at not seeing the next 5 reactors at Newport NOW( due imminently),was significantly tempered by the knowledge that those ‘big boys’ are actually being deployed elsewhere and are in addition to what we know about and are being installed :-)

Talking of the VCSEL demand, Chris talked a lot about the potential for LIDAR,but particularly the extensive other automotive uses for VCSELS,interesting he was at pains to point out that IQE have signed up AT LEAST 10 new VCSEL customers- he really stressed AT LEAST , remember the AGM statement said this “we are actively engaged in VCSEL qualification programmes with over 10 additional key VCSEL chip manufacturers, which are progressing in line with the board’s expectations.” It would seem that the vast majority of companies producing applications (3D sensing, automotive,industrial and medical) for VCSEL use are queuing up at IQE’s doors- 1st mover advantages abound.IQE just need to DELIVER! but since the TAM and SAM for VCSEL use is exponential, it’s certainly exciting.

The time taken, trust needed and ability to deliver in volume are crucial components in a supplier- customer relationship, coupled with the onerous qualification procedures that are not just company specific, but also tied to individual machines, make changing supplier a very costly and timely process. CHRIS was at pains to emphasise the ‘sticky’ nature of IQE’s relationships with its ever growing customer base. That ‘stick’ factor , combined with 1st mover advantages, should not be underestimated imho.

6 inch wafers are the order of the day, the machines can scale to 12 inch- Chris gave a long complicated answer to why that is years off and may never happen for cREO enabled silicon wafers , by that time I was getting a little frazzled ;-), but the bottom line is that the new line of reactors are essentially ‘future proof’ and although ‘run’ 24/7 , will achieve very long shelf lives.

Just a little on the DFB laser business, to add some colour. IQE have been in this business for years. Up to now, they produce a wafer with preliminary layers, this is then transported to Taiwan for etching via a holographic process, the wafer is then sent back to Wales for finishing and completion for named customers - what a tedious and timely and expensive process. The NIL technology allows the whole process to be done on one site, hence saving $$ and time. It would appear that if customers are satisfied , this ‘extra’ business could very quickly ramp to significant revenues, for obvious reasons and Chris was at pains to make that point.

The sheer scale and size of the new factory is amazing, it’s big from the outside but then you get 3 floors inside , some of which can be multiplexed and you get some idea , but the scope and scale has to be actually seen to be believed.

AMS the Austrian outfit who make the WLO - wafer level optics, containingIQE’s VCSELS, report tonight at about 4.30pm our time, their statement and in particular their guidance for July - September quarter, will be very informative, the Q and A tomorrow will be Extra interesting,remember as well as supplying Apple, they have recently announced the 1st 3D sensing modules forAndroid smartphones are actually being produced- that’s going to be a huge additional market, as multiple if not all the Android community join the party.

My guess for update is Tomorrow but I still prefer Wednesday

In summary, excellent factory tour, tempered by illness, very positive news on reactors being installed elsewhere in addition to Newport. Chris Meadows seemed to exude confidence and optimism, whether that’s based on reality or just ‘hype’ we shall find out in the next 6 months!

Toodly pip
S

[sheep_herder] 23/7/2018 08:38

I need to update my numbers again and try to model it a bit more accurately, but I think they have capacity to beat 200m easily.

I'm expecting the TU to state that they're in line with what management has told us as they've already given us growth expectations for photonics. Everything else is basically flat.

I'd expect 1H18 to be a fairly modest rise in photonics from c.30m in 2H17 to £36m and then the usual 2H jump as the product ramps start. If they have the capacity, and the volume more than doubles for Apple, then I don't see why they couldn't double the 2H17 numbers to over £60m. I'm making the assumption here that nearly all of that 2H17 jump was due to the iPhone.

I'm looking for more detail on how much capacity they're using and hopefully news of an accelerated purchase plan on reactors. Also some visibility on the NIL business would be good and how much capex that will take. I have no clue on what the cost of those machines is or how many they need.

So wireless is £95m, i/r is £13m and photonics in the range £64-76m with the possibility of a beat if things go very well. NIL and other business might contribute £1m. So that puts 2018 on a minimum of £172m with an upper limit of £184m given what the company said in the 2017 finals. However, that should be beaten if we see Apple push out face ID to 3/4 products and we get at least 1 Android customer.

2019 should be a much better year as the other parts of the business return to growth as well.

[Edit: one more number. If you look at the half year growth in photonics, 2H17 would have been about £18m without the iPhone. So you're looking at a £12m uplift from a single high end phone. De-rate that by 40% to be safe and apply that across how many phones might ship in this half, and you get a very inaccurate, finger in the air guesstimate of what they might contribute.]