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This article was originally featured in the edition: Volume 24 Issue 6

IQE: 30 Years Of Growth

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Back in 1988, Drew Nelson fulfilled a long-held dream by launching his own company. Thirty years on, it could have hardly turned out better: IQE is the world’s biggest epiwafer supplier, with facilities on all three major continents; and it’s the driving force behind the creation of the world’s first compound semiconductor cluster Richard Stevenson reports

At the beginning of 1980s, companies making InP chips for the fibre-optic industry had a broad range of expertise. Their skillsets included the design of the device, its testing, and its production – including the most challenging aspect of all, the epitaxial growth of the heterostructure.

But in 1988, this situation changed irrevocably. From then on, those chipmakers could choose between adopting a vertically integrated approach, or outsourcing epitaxial growth to a new start-up. Now known as IQE, this epitaxial specialist launched under the name Epitaxial Products International (EPI), reflecting its desire to serve a global industry.

Over the last thirty years the company has increased in size, to have manufacturing facilities on all three major continents; and it has expanded its portfolio, by diversifying its range of epiwafers, and adding substrates and material technologies to the mix. What’s more, it has become the driving force behind the development in the world’s first compound semiconductor cluster, which is making much headway in South Wales.

At the helm of the company since its formation is its co-founder Drew Nelson. After gaining a doctorate at Sheffield University – where he developed microwave devices, grown by LPE and MOCVD – in 1981 he joined British Telecom, where he led a group developing epitaxial technologies for detectors, lasers and modulators. But that was never going to be his long-term career – he had always wanted to run his own company.

The spark for fulfilling this dream came through his involvement in the Joint Opto Electronic Research Scheme, an initiative sponsored by the UK government. This programme, which focused on developing the technology for optoelectronic applications such as fibre-optic networks, brought many of the nation’s biggest technology companies, such as BT, Plessey, GEC and STC, together with several smaller organisations and universities.



Through JOERS, Nelson met Mike Scott, who shared his vision for launching a supplier of epiwafers. “We gauged the level of appetite, and we were encouraged to set up the business," says Nelson.

Nelson had no intention of going to his bosses, to see if BT would fund this venture: “It definitely wasn’t the right culture." Instead, he crafted a business plan with Scott and tried to secure backing from venture capitalists. “It wasn’t easy at times, but eventually we were put in touch with Shell Ventures."

This introduction led to funding from Shell Ventures, a part of the Shell Group that had been created following encouragement by the then Prime Minister, Margaret Thatcher.“

She basically said to them, you’ve gained a huge amount of revenue from North Sea oil, and you should plough some of that back into British technology. We ended up being their keyhole on the semiconductor industry."

Coming to Cardiff

Backed by “a couple of million pounds", Nelson and Scott decided to build their facility on a brown-field site on the outskirts of the Welsh capital, Cardiff.

“The Welsh Development Agency were the premier agency in the UK industry for attracting inward investment, and we were able to get some capital grants to help the company," says Nelson.

That wasn’t the only benefit of this particular location, however: the Electronic Engineering Department at Cardiff University had tremendous expertise in building and testing lasers. “We thought that would be a good source of skilled labour and engineers."

Once the fab had been built, it was kitted out with equipment to grow and characterise epiwafers. While MOCVD tools were by no means as advanced as they are today, at least they didn’t have to be home built.

“We could have systems built for us, to our very specific designs, which we did," recollects Nelson. “So we started with one MOCVD system from Thomas Swan, and one MOCVD system from CVT."



His Royal Highness, the Duke of Edinburgh (right), unveils a plaque to mark the opening of the extension to IQE’s St Mellon’s facility.

Substrates were sourced from AXT, and some suppliers in Japan. “Two-inch substrates were the norm, and even at BT we had been using even smaller substrates than that," says Nelson. One of the benefits of the JOERCs initiative is that it helped to create a UK manufacturer of metal-organic source materials, Epichem. EPI used this supplier, which had commercialised some of the technology developed at Queen Mary University of London.