IQE, a leading Welsh technology firm, has secured a $14 million multi-year production order from a strategic global technology customer. The order will be manufactured at IQE's Newport foundry and supports applications serving artificial intelligence (AI) and datacentre markets, where increasing data generation and hyperscale infrastructure requirements are driving demand for high-performance storage technologies.
Future Opportunities and Technology Development
In addition to the production order with the new undisclosed client, IQE said it continues to engage with the customer on future opportunities, including the development of next-generation technologies supporting multiple stages of the customer's data lifecycle. IQE is a leading global supplier of compound semiconductor wafer products and advanced material solutions.
Jutta Meier, chief executive of IQE, said: “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.”
Recent Funding and Strategic Investment
Earlier this year, IQE was boosted with an £81 million funding package which included a £30 million investment by US semiconductor manufacturer MACOM Technologies Solutions. MACOM is supporting the company with a further £15 million in convertible loan notes. The US business, which has become a minority shareholder, remains a long-term client of IQE.
On the back of the latest deal, broker Panmure Liberum has upgraded its hold recommendation on IQE to a buy position, with a share target price of 50p. In a note it said: “We upgrade IQE to buy to take advantage of the pullback in the shares. The recent significant investment, with MACOM becoming a strategic investor, has bolstered its balance sheet, the strongest it has been for years. MACOM is a long-term lead customer. Following on from the MACOM long-term agreement, Tower Semiconductor signed another one in June. We would expect to see further long-term agreements signed, which would further build through cycle capacity utilisation, driving higher margins and cash generation. IQE is now well placed to engage the AI, space and defence themes. Generating positive margins and cash flow through the cycle is materially more likely now.”
Board Appointments
Following the MACOM investment, its executives Robert Dennehy and David O’Carroll have joined the board of IQE as non-executives. Mr Dennehy has more than 30 years of experience at MACOM and since last November has been its senior vice president and chief operating officer. Mr O’Carroll has over 10 years of experience with MACOM, with particular 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 MACOM’s 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.”
