IQE plc: Trading Update
Summary by AI BETAClose X
IQE plc
Cardiff, UK
12 January 2026
Trading Update
- Positive H2 2025 trading momentum
- Demand driven by military and defence, AI, data centre and handset markets
- Strong Q1 2026 order book with improved visibility
IQE plc (AIM: IQE, "IQE" or the "Group"), the leading global supplier of compound semiconductor wafer products and advanced material solutions, today provides a trading update for the full year ending 31 December 2025.
The Group saw strong trading momentum in H2 2025 due to faster than expected funding releases for some US military and defence programmes, previously anticipated for 2026. IQE also experienced higher than forecast photonics demand in the period, reflecting continued growth in AI and data centre markets, and increased sales of wireless products tied to new handset introductions which benefitted the Group's Taiwan operations.
This is expected to result in a performance at the upper end of the previously announced FY 2025 forecast range[1], with revenue of c.£97m resulting in an adjusted EBITDA position of at least £2.0m due to improved operating leverage as capacity utilisation improves.
Additionally, good progress has been made with stakeholders including customers and suppliers to improve near-term liquidity and working capital, resulting in a cash position of £15.6m as at 31 December 2025.
The Group's banking facilities provided by HSBC Bank plc are subject to certain covenant tests. IQE has received a waiver from HSBC in relation to Q4 2025 EBITDA covenant testing, a reflection of the established and supportive relationship with the bank.
Current Trading
IQE enters 2026 with a strong Q1 order book, reflecting improved demand visibility across core segments including consumer mobile, data centre and AI-related photonics markets. The momentum in wireless demand observed in Q4 2025 is expected to continue, supported by existing customers and recent platform wins.
Growth in data centre deployments and AI-enabled compute, alongside ongoing strength in consumer mobile is also supporting increased demand for the Group's photonics products.
Strategic Review
The Board is negotiating non-binding offers for the Group as a whole in addition to separate bids for certain other Group assets with a view to maximising shareholder value. The Board is encouraged by the level of interest received and the recognition of the intrinsic value of the Group and its component parts. Given the nature of such discussions there can be no certainty which, if any, of the these will progress to a completed deal.
Jutta Meier, Chief Executive Officer of IQE, commented:
"I am pleased to report a positive second half of trading for IQE in 2025. Coupled with a strong Q1 order book and sustained demand across key end markets, the Company is well-positioned to enter 2026.
We continue to advance our Strategic Review and I am encouraged by the progress we are making. I remain confident in the opportunity ahead for the Company and look forward to updating the market in due course."
Contacts:
IQE plc
+44 (0) 29 2083 9400
Mark Cubitt
Jutta Meier
Amy Barlow
Peel Hunt (Nomad and Joint Broker)
+44 (0) 20 7418 8900
Ben Cryer
Kate Bannatyne
Adam Telling
Lazard (Financial Adviser)
+44 (0) 20 7187 2000
Cyrus Kapadia
Keiran Wilson
Alexander Fiallos
Deutsche Numis (Joint Broker)
+44 (0) 20 7260 1000
Simon Willis
Hugo Rubinstein
Iqra Amin
Headland Consultancy (Financial PR)
+ 44 (0) 20 38054822
Andy Rivett-Carnac: +44 (0) 7968 997 365
Chloe Francklin: +44 (0)78 3497 4624
ABOUT IQE
IQE is the leading global supplier of advanced compound semiconductor wafers and materials solutions that enable a diverse range of applications across:
· Smart Connected Devices
· Communications Infrastructure
· Automotive and Industrial
· Aerospace and Security
As a scaled global epitaxy wafer manufacturer, IQE is uniquely positioned in this market which has high barriers to entry. IQE supplies the global market and is enabling customers to innovate at chip and OEM level. By leveraging the Group's intellectual property portfolio including know-how and patents, it produces epitaxy wafers of superior quality, yield and unit economics.
IQE is headquartered in Cardiff UK, with employees across manufacturing locations in the UK, US and Taiwan, and is listed on the AIM Stock Exchange in London.
The person responsible for arranging the release of this announcement on behalf of IQE is Jutta Meier, Chief Executive Officer.
IMPORTANT NOTICES
Lazard & Co., Limited ("Lazard"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (the "FCA"), is acting exclusively as financial adviser to IQE and no one else in connection with the Strategic Review and will not be responsible to anyone other than IQE for providing the protections afforded to clients of Lazard nor for providing advice in relation to the Strategic Review or any other matters referred to in this announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this announcement, any statement contained herein or otherwise.
Peel Hunt LLP ("Peel Hunt"), which is authorised and regulated in the United Kingdom by the FCA and is a member of the London Stock Exchange, is acting for IQE in connection with the Strategic Review and will not be acting for any other person (including a recipient of this document) or otherwise be responsible to any person for providing the protections afforded to clients of Peel Hunt or for advising any other person in respect of the P Strategic Review or any transaction, matter or arrangement referred to in this document. Peel Hunt's responsibilities as IQE's nominated adviser and broker under the AIM Rules for Nominated Advisers are owed solely to the London Stock Exchange and are not owed to IQE or to any Director or to any other person in respect of the Strategic Review.
Numis Securities Limited (trading as "Deutsche Numis") ("Deutsche Numis"), which is authorised and regulated in the United Kingdom by the FCA, is acting as Joint Broker to IQE and will not be acting for any other person (including a recipient of this document) or otherwise be responsible to any person for providing the protections afforded to clients of Deutsche Numis or for advising any other person in respect of the Strategic Review or any transaction, matter or arrangement referred to in this document.
DISCLAIMER
Neither the information nor any opinion contained in this announcement constitutes an inducement or offer to purchase or sell, or a solicitation of an offer to purchase or sell, any securities or other investments in IQE or any other company by IQE or any of its affiliates, or the solicitation of any vote or approval, in any jurisdiction. Any offer, if made, will be made solely by certain offer documentation, which will contain the full terms and conditions of any offer, including details of how it may be accepted. This announcement does not consider the investment objective, financial situation, suitability or the particular need or circumstances of any specific individual who may access or review this announcement and may not be taken as advice on the merits of any investment decision. This announcement is not intended to provide the sole basis for evaluation of, and does not purport to contain all information that may be required with respect to, any potential investment in IQE. Any person who is in any doubt about the matters to which this announcement relates should consult an authorised financial adviser or other person authorised under the UK Financial Services and Markets Act 2000.
DISTRIBUTION
Not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of that jurisdiction. The distribution of this announcement in certain countries other than the United Kingdom and the availability of any offer to shareholders of IQE who are not resident in the United Kingdom may be restricted by the laws of relevant jurisdictions, and any persons who access it and are subject to the laws of any jurisdiction other than the United Kingdom or shareholders of IQE who are not resident in the United Kingdom are required to inform themselves about and to comply with any such restrictions of relevant jurisdictions. IQE disclaims all responsibility where persons access this announcement in breach of any law or regulation in the country of which that person is a citizen or in which that person is residing or is domiciled.
PUBLICATION OF THIS ANNOUNCEMENT
In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available, subject to certain restrictions relating to persons resident in restricted jurisdictions, at https://www.iqep.com, by no later than 12:00pm (London time) on the business day following this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
APPENDIX
Directors' confirmation
The directors of IQE confirm that, as at the date of this announcement, the profit forecast remains valid and that it has been properly compiled on the basis of the assumptions set out below and that the basis of accounting used is consistent with IQE's existing accounting policies.
Basis of preparation
The profit forecast is based on IQE's current internal unaudited consolidated accounts for the 12-month period ended 31 December 2025. The profit forecast has been compiled on the basis of the assumptions set out below.
The basis of the accounting policies used in the profit forecast is consistent with the existing accounting policies of the IQE group.
Assumptions
The profit forecast has been prepared on the basis referred to above and subject to the principal assumptions set out below. The profit forecast is inherently uncertain and there can be no guarantee that any of the assumptions listed below will occur and/or if they do, their effect on IQE's results of operations, financial condition or financial performance may be material. The profit forecast should be read in this context and construed accordingly.
The directors of IQE have made the following assumptions in respect of the financial year ending 31 December 2025:
Assumptions within IQE's control or influence:
(a) no material change to the existing strategy or operation of IQE's business, including the business or operating model;
(b) no material adverse change to IQE's ability to meet customer, supplier and partner needs and expectations based on current practice;
(c) no material unplanned asset disposals, merger and acquisition or divestment activity conducted by or affecting the IQE group;
(d) no material change to the present management of the IQE group; and
(e) no material change in capital allocation policies of the IQE group.
Assumptions outside of IQE's control or influence
(a) no material effect from changes to existing prevailing macroeconomic, fiscal / inflationary conditions in the markets or regions in which the IQE group operates;
(b) no material adverse change to IQE's market environment, including in relation to consumer demand or competitive environment;
(c) no material adverse events that have a significant impact on IQE's major partners or suppliers;
(d) no material changes of the value of pound sterling above the average foreign exchange rates that have applied during the 12-month period ended 31 December 2025;
(e) no material adverse events that would have a significant impact on the IQE group, including (but not limited to) information technology/cyber infrastructure;
(f) no material new litigation or regulatory investigations, and no material unexpected developments in any existing litigation or regulatory investigation, each in relation to any of IQE's operations, products or services; and
(g) no material change in legislation, taxation or regulatory requirements impacting IQE's operations, expenditure or its accounting policies.
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