IQE posts positive trading update
Compound semiconductor wafer firm IQE has provides a trading update for the full year ending 31 December 2025.
The group saw strong trading momentum in H2 2025 due to faster than expected funding releases for some US military and defence programmes, previously anticipated for 2026.
IQE also experienced higher than forecast photonics demand in the period, reflecting continued growth in AI and data centre markets, and increased sales of wireless products tied to new handset introductions which benefitted the Group’s Taiwan operations.
This is expected to result in a performance at the upper end of the previously announced FY 20251 forecast range, with revenue of c.£97m resulting in an adjusted EBITDA position of at least £2.0m due to improved operating leverage as capacity utilisation improves.
Additionally, good progress has been made with stakeholders including customers and suppliers to improve near-term liquidity and working capital, resulting in a cash position of £15.6m as at 31 December 2025, according to the company.
The group's banking facilities provided by HSBC Bank plc are subject to certain covenant tests. IQE has received a waiver from HSBC in relation to Q4 2025 EBITDA covenant testing, a reflection of the established and supportive relationship with the bank.
IQE enters 2026 with a strong Q1 order book, reflecting improved demand visibility across core segments including consumer mobile, data centre and AI-related photonics markets. The momentum in wireless demand observed in Q4 2025 is expected to continue, supported by existing customers and recent platform wins.
Growth in data centre deployments and AI-enabled compute, alongside ongoing strength in consumer mobile is also supporting increased demand for the Group’s photonics products.
The board is negotiating non-binding offers for the group as a whole in addition to separate bids for certain other group assets with a view to maximising shareholder value. The board says it is encouraged by the level of interest received and the recognition of the intrinsic value of the group and its component parts.
Jutta Meier, CEO of IQE, commented: “I am pleased to report a positive second half of trading for IQE in 2025. Coupled with a strong Q1 order book and sustained demand across key end markets, the company is well-positioned to enter 2026.
"We continue to advance our Strategic Review and I am encouraged by the progress we are making. I remain confident in the opportunity ahead for the Company and look forward to updating the market in due course.”
