Re Joint Venture

IQE PLC
4 September 2001



4th September, 2001



 IQE WORKS WITH MOTOROLA TO CREATE WORLD'S FIRST 12-INCH GALLIUM ARSENIDE ON
                                SILICON WAFERS







IQE plc (LSE : IQE.L) is pleased to have been closely involved in the
development of a revolutionary new semiconductor materials technology
announced today by Motorola Inc (NYSE : MOT), which has resulted in the
demonstration of the world's first 8-inch and 12-inch GaAs on Si wafers. The
new technology is the first to successfully combine the best properties of
workhorse silicon technology with the speed and optical capabilities of
high-performance compound semiconductors that are known as the III-V
materials.



Motorola's discovery, which solves a problem that has been vexing the
semiconductor industry for nearly 30 years, opens the door to significantly
less expensive optical communications, high-frequency radio devices and
high-speed microprocessor-based subsystems by potentially eliminating the
current cost barriers holding back many advanced applications. For consumers,
the technology should result in smarter electronic products that cost less,
perform better and have exciting new features. Motorola's technology
innovations will change the economics and accelerate the development of new
applications, such as broadband 'fiber' cable to the home, streaming video to
cell phones and automotive collision avoidance systems.



Other potential markets include data storage, lasers for such consumer
products as DVD players, medical equipment, radar, automotive electronics,
lighting, and photovoltaics. Until now, there has been no way to combine
light-emitting semiconductors with silicon integrated circuits on a single
chip, and the need to use discrete components has compromised the cost, size,
speed and efficiency of high-speed communications equipment and devices.



IQE III-V on Silicon technology announcement



Specifically, the discovery impacts the semiconductor industry by:

*         Increasing substrate size, reducing substrate cost and processing
          costs for III-V manufacturing

*         Integrating the superior electrical and optical performance of III-V
          semiconductors with mature silicon technology to create a new industry
          based on Integrated Semiconductor Circuits

*         Extending the life of silicon and existing capital investments

*         Improving cost effectiveness for higher performance applications
          such as optical communications

*         Enabling larger scales of integration



'This is a tremendous achievement by our scientists and one that has the
potential, when fully commercialized, to transform the industry in a way that
is similar to the transition from discrete semiconductors to integrated
circuits,' said Dennis Roberson, senior vice president and chief technology
officer, Motorola, Inc.



'Motorola's announcement that they have successfully made GaAs transistors in
a thin layer of GaAs grown on a silicon wafer could go down in history as a
major turning point for the semiconductor industry,' said Steve Cullen,
director & principal analyst, Semiconductor Research, Cahners In-Stat Group.



The Technology

Motorola's technology enables very thin layers of so-called III-V
semiconductor materials (which include gallium arsenide, indium phosphide,
gallium nitride and other high performance / light-emitting compounds) to be
grown on a silicon substrate. Until now, this has been a virtually impossible
task due to fundamental material mis-match issues.

Specifically, the underlying crystalline structures of silicon and the various
III-V compounds do not match. As a result, previous industry attempts to
combine them resulted in dislocations or 'cracks' in the material as the two
mismatched structures struggled to bond.  The key to solving the problem was
introducing an intermediate layer of material between the silicon and the
III-V material.  The solution was found in discovering exactly the right '
recipe' for a material that would easily bond with both silicon and GaAs,
reducing the strain between the two target materials in the process.

The idea was originally developed by Motorola Labs' scientist, Dr. Jamal
Ramdani.  Developing and proving the exact recipe and process grew out of work
done by a broad team of scientists and engineers. Motorola Labs is now working
on developing the optimum intermediate layer for indium phosphide and other
materials.



IQE III-V on Silicon technology announcement



Another Industry First



IQE engineers and scientists from Motorola Labsworking together created the
world's first  12-inch GaAs on silicon wafers and a variety of other wafer
sizes. Motorola scientists then made working power amplifiers from GaAs on
silicon wafers and successfully completed numerous wireless calls using those
devices in several phones over the past few months. In addition, Motorola
built several light-emitting devices to demonstrate the optical potential of
the technology.



'GaAs on silicon is just the first step and has created a baseline technology
for extending our research to other materials systems,' said Jim Prendergast,
vice president and director, Motorola Labs, Physical Sciences Research Lab. '
One of our next goals is to complete the task of growing indium phosphide on
silicon.  This technology should support chip clock speeds of more than 70GHz
and long-wavelength lasers that are critical to fiber-optic communications.'



Changing the Economics of Optical Communications



Until now, the industry has been dependent on costly gallium arsenide and
indium phosphide wafers for optical and high performance applications. Because
of their brittle nature, no one has previously been able to create commercial
GaAs wafers larger than 6 inches or InP wafers larger than 4 inches.
Scientists have also been unable to combine light-emitting semiconductors with
silicon integrated circuits on a single chip.



'More than 90 percent of the existing fiber optic cable is still unused and
underutilized,' said Bob Merritt, vice president, Semico Research Corporation.
'This technology could be the switch that eventually turns on those
communications channels.'



'This innovative technology opens up a wealth of possibilities and
opportunities including full scale integration of optical and electronic
components and is in many ways analogous of Kilby's 1958 development of the
first Integrated Circuit which saw the birth of today's silicon industry as we
know it,' said Dr Drew Nelson, Chairman and CEO of IQE.



Plans to Commercialize



Motorola has filed more than 270 patents on inventions related to this new
technology and the company intends to broadly license the technology.
Padmasree Warrior, a Motorola corporate vice president has been selected to
lead the commercialization effort. Warrior has worked in all aspects of the
semiconductor segment, including device technology, research and development,
process engineering, manufacturing and pilot line operations.



IQE has been an important partner in the development of this technology,
particularly the transition of the technology to near production potential,in
the epitaxial substrates segment.  Commercialization discussions are underway.




IQE III-V on Silicon technology announcement



About IQE



IQE plc (LSE: IQE.L, NASDAQ EUROPE: IQEP) is the leading global outsource
supplier of advanced epi-wafers to the Semiconductor Industry with
manufacturing operations in Cardiff and Milton Keynes, UK and Bethlehem, PA,
USA. Its wafer products are used by a diverse range of customers worldwide to
manufacture the critical, advanced components used in fibre optic
communications systems, wireless and mobile telephony applications, optical
storage devices such as CD, DVD, Minidisc and a range of other leading edge
technologies including High Brightness LED displays, medical devices,
satellite systems and automotive applications. The group has expanded to over
450 people worldwide.



About Motorola



Motorola, Inc. (NYSE:MOT) is a global leader in providing integrated
communications and embedded electronic solutions.  Sales in 2000 were $37.6
billion. Motorola Labs serves as the advanced research arm of the company,
focusing on leading edge technologies for future products and product
enhancements. Motorola also actively licenses technologies developed in the
Labs to external customers.



Business Risks: Statements about the impact of this new technology are
forward-looking and are based on current expectations that involve risk and
uncertainties.  Factors that could cause actual results to differ materially
from those in the forward-looking statements include: market acceptance of the
technology; success in expanding technology to other materials; unanticipated
technological delays; competing technologies; the cost of manufacturing the
technology; and other factors found in Motorola's filings with the Securities
and Exchange Commission.



***



Media Contacts:
Chris Meadows
IQE plc
[phone]
[e-mail]



Anne Stuessy
Motorola
[phone]
[e-mail]



Tim Thompson/Nicola Cronk
Buchanan Communications
[phone]