Cardiff-based IQE, a global supplier of compound semiconductor wafer products, has reported a strong first half of its financial year, exceeding management expectations. The company now anticipates full-year revenue growth of more than 30% compared to 2025, driven by robust demand across all core segments.
First Half Performance
In a trading statement, IQE said first half revenues are expected to be at least £64 million, underpinned by accelerating demand for its indium phosphide (InP) solutions. These are critical for optical photonics products used in data centres and AI infrastructure. Additional support came from ongoing strength in aerospace and defence segments, as well as robust demand for 3D sensing and wireless products.
Full Year Outlook
For the full 2026 calendar year, IQE expects revenue growth exceeding 30% year-on-year, resulting in EBITDA in the “low teen” millions. The group remains debt-free with a cash position of £41.6 million as of 30 June.
Chief executive Jutta Meier said: “I am very pleased that half trading exceeded our expectations. Our long-established leadership in InP and other key material systems means we are critically embedded in supply chains enabling industry trends that will continue to deliver further progress in H2. I remain extremely excited about the significant opportunities ahead for the transformed IQE, and look forward to sharing our continued progress.”
Analyst and Market Reaction
Following the trading statement, broker Panmure Liberum increased its share target price from 50p to 54p, having recently upgraded its hold recommendation to a buy.
Last week, IQE secured a multi-year production order valued at $14 million from a strategic global technology customer. The order will be manufactured at IQE’s Newport foundry and supports applications serving AI and data centre markets, where increasing data generation and hyperscale infrastructure are driving demand for high-performance storage technologies.
IQE continues to engage with the undisclosed client on future opportunities, including next-generation technologies for multiple stages of the customer’s data lifecycle.
Mr Meier added: “We are pleased to have secured this production order with a strategic global technology leader, supporting the rapid growth of AI and datacentre markets from IQE’s volume manufacturing facility at Newport and expected to build over the coming years. This highlights the role IQE plays supporting high-performance infrastructure from the datacentre to the edge, enabled by our differentiated epitaxy portfolio, which also includes indium phosphide optical communications, silicon photonics and gallium arsenide vertical-cavity surface emitting laser-datacom applications.”
Strategic Investment and Board Changes
Earlier this year, IQE was boosted by an £81 million funding package, including a £30 million investment by US semiconductor manufacturer MACOM Technology Solutions. MACOM also provided £15 million in convertible loan notes. The US business, now a minority shareholder, remains a long-term client of IQE.
Following the MACOM investment, executives Robert Dennehy and David O’Carroll joined IQE’s board as non-executives. Mr Dennehy has over 30 years of experience at MACOM, serving as senior vice president and chief operating officer since November. Mr O’Carroll has over 10 years at MACOM, with expertise in international operations, finance, and government relations across Europe and Asia. He has served as MACOM’s vice president since October 2023, managing facilities in France, Japan and Ireland and overseeing Asian operations.
Mark Cubitt, chairman of IQE, said: “I am delighted to welcome Robert and David to the board of IQE. I look forward to working with them and the rest of the Board as we capitalise on the opportunities ahead for the company.”
