Industry's Capacity Limits Drive Up IQE Sales
IQE, the wafer foundry with operations on both sides of the Atlantic Ocean, says that its sales in the opening quarter of 2006 were more than 50% higher than the equivalent period in 2005.
Providing a trading update prior to the company's annual general meeting in Cardiff, UK, on May 31, CEO Drew Nelson said that business had been very strong since the beginning of the year.
IQE, which focuses on MOCVD at its Cardiff headquarters and has MBE operations in Bethlehem, PA, had already enjoyed a strong upturn prior to the update, with sales of Â£9.7 million in the first half of 2005 and Â£11.3 million in the June-December period.
"[Our] major outsourcing contracts are all performing ahead of expectations," said IQE.
Although all areas of the business are said to be enjoying strong growth, it is the market for GaAs-based wireless devices that is of particular strength, with IQE's Bethlehem operations providing much of the sales increase.
But with datacom and other optoelectronic applications also buoyant, the company believes that it is seeing something of a shift in III-V manufacturing strategies.
"We are now moving into a situation in the market where outsourcing is featuring more prominently in many companies' strategic considerations because the semiconductor industry is becoming capacity-limited in several areas," said IQE in a statement.
To help fund the additional working capital requirements resulting from this upturn in business, IQE has also taken out a Â£3 million loan and arranged a Â£2 million overdraft facility.
IQE shares were up 4% to 14.44p on the London Stock Exchange at midday on Tuesday, shortly after the update was announced.