IQE issues trading update
Weaker demand with inventory build-up expected to reduce H1 revenue by £30m
Compound semiconductor wafer product company IQE plc has provided an update on current trading, stating that weaker demand is expected to reduce H1 revenue.
Management’s expectations for FY22 results remain in line with the update provided on 16 January 2023. Since that update, the group has seen an acceleration of the trends anticipated, with weaker demand leading to inventory build-up throughout the supply chain. This reduction in customer orders and forecasts is expected to result in a decline of approximately £30m in reported revenues for H1 2023 year-on-year.
Similar trends are evident across the industry, with the US Semiconductor Industry Association (SIA) reporting that global industry sales decreased in January 2023, down 18.5 percent year-on-year.
This near-term market softness is expected to be temporary and a return to year-on-year growth is anticipated in H2 2023 based on dialogue with our existing customers and our pipeline of new opportunities.
IQE continues to make positive progress towards the Group’s strategy as set out at the November 2022 Capital Markets Day, diversifying into high-growth markets including Power Electronics and MicroLED. The Group has a strong pipeline of strategic and long-term partnerships and new business opportunities that will underpin growth in 2024 and beyond.
Americo Lemos, CEO of IQE, commented: “The current inventory cycle is temporary. Ours is an industry that has consistently demonstrated growth over many decades. We expect IQE to return to growth in the second half of the year and remain excited about the future as we continue to execute our diversification strategy.”
