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IQE revenues balloon by 80 percent

The development of products including gallium nitride materials and compound semiconductors on silicon projects are progressing well
IQE plc, a global supplier of advanced semiconductor wafer products and wafer services to the semiconductor industry, provides a trading update for the six months ended 30th June 2013.

The Board expects first-half performance to be ahead of market expectations, with first-half revenues approaching £63 million, EBITDA in excess of £10 million and net debt below £39 million. This represents revenue growth of over 80 percent, and EBITDA growth of over 150 percent compared with the first half of 2012. Sales growth was primarily driven by the wireless division, which included contributions from the RFMD and Kopin acquisitions.

The wireless market has continued to grow in line with expectations, driven by the increasing adoption of more sophisticated communication devices including 4G and LTE smartphones and tablets, and newly launched dual band wifi (802,11ac). These advanced products demand the highest levels of RF performance which can only be delivered by compound semiconductor enabled front end solutions.

The integration of the RFMD and Kopin acquisitions has been successfully completed as planned. IQE says work to realise the projected synergies is progressing well. The Board will provide a full update on this progress with the Group’s half year results.

The photonics business is also making good progress with several applications in transition from research and development into production. Notably, these include a number of advanced laser (VCSEL) products for consumer, industrial and medical applications such as: optical communications devices for short range optical links; data centres and broadband delivery; optical devices for gesture recognition; gaming and cosmetic applications; and lasers for projection, medical and defence applications.

Advanced CPV solar technology acquired through the investment in Solar Junction and the exclusive seven year license agreement, is now in the final stages of qualification. The Group remains on track for this business to achieve end customer qualification and move into volume production during H2 2013.

The development of advanced products including GaN materials and the Group’s compound semiconductors on silicon projects are progressing well. They are building a platform for further diversified growth in the rapidly growing markets for energy efficient devices, such as LEDs and power semiconductors over the next few years.

The Board is confident that the Group remains on track to achieve market expectations for the full year.

Drew Nelson, Chief Executive of IQE, said, “Our key markets have continued to demonstrate robust growth, driven predominantly by high levels of demand for 4G and LTE enabled smartphone and tablet products, along with accelerating requirements for photonic products and advanced sensor applications. Additionally, requirements for energy-efficient third-generation CPV solar products, Solid State Lighting (SSL) and power efficient GaN devices, continue to increase strongly."

“Our transactions with Solar Junction, RF Micro Devices and Kopin, over the last 18 months, represent significant milestones in the execution of our overall strategy and have significantly enhanced both our short and long term growth potential," continues Nelson.

“They are highly complementary, extending our critical mass and global leadership in wireless, and bringing additional capacity to service the emerging high growth CPV market," he adds.

“Compound semiconductors are widely acknowledged as the key enabling materials that will drive a wide range of next generation technologies from high performance data transmission and management, to highly energy efficient products, including solar energy, SSL and power semiconductors.”

IQE expects to report its interim results around mid-September 2013.

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