IQE loses a third of its value on trading update

IQE loses a third of its value on trading update

Business news |
By Peter Clarke

The price of shares in IQE plc (Cardiff, Wales), a leading supplier of compound semiconductor wafers, fell by a third after the company issued a trading update.

The fall in the share price wiped more than £130 million off the company’s market capitalization, taking the company valuation down to about £250 million.

In its note the company said the outlook for the 1H23 was characterized by an acceleration of weaker demand. This was leading to inventory build-up throughout the supply chain.

“This reduction in customer orders and forecasts is expected to result in a decline of approximately £30 million in reported revenues for 1H23 year-on-year,” the company said in its statement. The softeness is expected to lift in 2H23 with a return to year on year growth.

The company said that its financial year 2022 results remain line with a previous update given on January 16. For the FY22 IQE expects annual sales revenue of £166 million, up about 8 percent on the previous year.

The company’s shares had been trading at about £0.46 each on Wednesday but after the note was issued the shares opened on Thursday at £0.36 before drifting below £0.30.

IQE is one of the UK companies urgently waiting for the publication of the UK government’s semiconductor strategy. This is expected to be announced in the next few days.

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