IQE reports interim H1 results
Company investing in growth and managing costs during brief industry downturn
Compound semiconductor wafer firm IQE plc has announced its interim results for the six months ended 30 June 2023. Revenue for the period was £52.0m with a reported operating loss of £19.6m, an adjusted non-GAAP LBITDA of (£5.7m) and adjusted net funds position of £5.3m.
Americo Lemos, CEO of IQE, commented: IQE has delivered H1 revenue in line with our revised market guidance. In a challenging macro environment, we have taken decisive action to manage costs and deliver immediate efficiencies and longer-term margin benefits. We are accelerating our diversification strategy with new customer designs in GaN ower electronics and broadening our market penetration into the China wireless market. By expanding our customer base across the breadth of our product portfolio and ramping in strategic growth areas, we are focused on improving future business performance.
There have been a number of strategic highlights over the last six months. These include: sampling for GaN power with two new customers for 650V devices design wins with multiple customers to deliver wireless products to Chinese cellular and Wi-Fi suppliers customer qualifications for high-speed data centre applications, with next-generation VCSELs for AI markets developing industry's first 150mm InP photonics device platform, targeting customers in the Cloud/AI data centre markets and development of 200mm RGB epitaxial wafer products for microLED display qualification
Wireless revenue of £22.4m (H1 2022: £46.6m) was down 51.9 percent on a reported basis, largely as a result of weakness in global handset demand and supply chain inventory build. Photonics revenue of £28.0m (H1 2022: £38.5m) was down 27.2 percent on a reported basis, primarily as a result of softness in the handset market and a slowdown in Asian telecoms infrastructure programmes. CMOS revenue of £1.6m (H1 2022: £1.1m) was up 43.1 percent on a reported basis, due to growth in silicon-based switches for power control
Adjusted LBITDA of (£5.7m) (H1 2022: £12.3m EBITDA) down 146.5 percent on a reported basis, adversely impacted by a reduction in sales and under-utilisation of capacity, particularly in the Wireless business. Reported operating loss of £19.6m (H1 2022: £7.4m loss)
Current trading and outlook
The current temporary semiconductor industry downturn is stabilising, with continued pockets of recovery expected in H2 2023, albeit more slowly than anticipated at the time of the FY 2022 results. Improvement is expected in 2024 as the supply chain normalises and customer demand recovers.
IQE anticipates double digit revenue growth in H2 2023 versus H1 2023, and expects to be profitable at an adjusted EBITDA level for FY 2023.