Welsh wafer maker reports loss but sees wireless recovery

IQE, the Wales-based semiconductor wafer supplier, has seen a recovery in the wireless chipset market during Q2, but with inventory in the pipeline and manufacturers de-stocking, IQE saw a 17% fall in revenues to £52m in the last six months.

The company slipped into the red with a pretax loss of £2.3m for the first half of the year. This was largely due to a £3m restructuring charge.

Despite this EBITDA adjusted profit was up 6% to £11.1m in the six months to 30 June 2014.

The manufacturer said restructuring of the business was largely complete. It has also aigned MOU on collaboration to create specialist R&D centre in Singapore.

“Wireless will continue to be a long term growth driver for our business as increasing connectivity continues to drive increasing demand for compound semiconductor devices,” said Dr Drew Nelson, IQE chief executive.

“The Group has again demonstrated the resilience of its business model through the delivery of continued growth in profitability despite the lower than expected revenues resulting from adverse effects of a significant inventory correction in the wireless industry and the translational effect of a strengthening of the sterling exchange rate against the dollar.”

IQE’s other big market area is wafers for photonic devices and here it saw a 22% increase in revenues to £10.1m

“This is being driven by a range of end market applications including optical communications for backhaul, fibre-to-the-home, and data centres, gesture recognition and sensing, and industrials applications. This growth will be further supported with the transition from the development phase into commercial production for high efficiency solar power (CPV), anticipated for the second half of 2014,” said Nelson.

Nelson also said the company had made significant technical and commercial milestones in GaN technology.