29th March 2022 

IQE plc

(“IQE” or the “Group”)


Cardiff, UK

29 March 2022

Strong operational progress in 2021

Strategic realignment a priority for 2022

IQE plc (AIM:  IQE, "IQE" or the "Group"), the leading supplier of compound semiconductor wafer products and advanced material solutions to the global semiconductor industry, announces its results for the full year ended 31 December 2021.

Americo Lemos, Chief Executive Officer of IQE, said:

“In my first few months I have been very impressed by the quality of IQE’s people, technology and customers. As the only global outsourced epitaxy provider and a leader in our field, IQE is uniquely placed to capitalise on major technological trends while navigating a challenging external environment.

To secure this growth, we must first build a commercial engine that is orientated to our end markets, focussed on our customers and aligned with our technology innovation. My vision is to grow IQE through multiple strategic and long-term customer relationships. We will be developing this strategy more fully during 2022 and I look forward to communicating further in due course.”

FY 2021 Financials


FY 2021

FY 2020


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Capital investment (PP&E)





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*   All figures £’m excluding diluted and adjusted diluted EPS.

** Adjusted Measures: Alternative performance measures are disclosed separately after a number of adjusted non-cash, one-off or non-operational items where it is deemed necessary by the Directors to do so to provide further understanding of the financial performance of the Group. Adjusted items are material items of income or expense that have been shown separately due to the significance of their nature or amount as detailed in note 4.

*** Net debt excludes IFRS16 lease liabilities.

The following highlights of the full year results are based on these adjusted profit measures, unless otherwise stated.

Operational Highlights

  • Global site optimisation programme
    • Consolidation of US MBE production at IQE’s larger and more scalable North Carolina site following the closure of Pennsylvania site in 2024
    • Closure of IQE’s Singapore site by mid-2022 realising c.£4.8m per annum of cash savings as part of our MBE consolidation plan
    • Completion of the acquisition of minority interests in IQE Taiwan Corporation in December 2021
  • Business development progress
    • Long-term strategic collaboration agreement signed with GlobalFoundries® in Q4 2021 to develop vital GaN on Si technologies for mobile and wireless infrastructure applications
    • Multi-year strategic partnership signed in Q3 2021 with a major semiconductor foundry to develop epiwafers for 5G small cells in Asia
  • Technology development
    • Expansion of VCSEL portfolio with turnkey IQVCSEL™ product line, with initial deliveries made to multiple customers
    • Achievement of key power and reliability milestones for IQDN-VCSEL™ technology for advanced sensing applications at longer wavelengths on 150 mm GaAs substrates, relevant to future LiDAR technologies
    • Scaling of VCSEL on Ge technology (IQGeVCSEL) to 200 mm, enabling a step-change in industry economics in support of broader adoption of 3D sensing
  • Business transformation progress
    • Business systems and process transformation programme commenced to provide a consistent, agile and scalable platform for business growth, including strategic IT transformation agreement entered into with Critical Manufacturing

Strategic perspectives and Outlook

Looking ahead, the Group is completing a full review of strategy under new CEO, Americo Lemos. The refreshed strategy for the Group will be completed and communicated in H2 and will be focussed on the key principles of:

  • Placing customers at the centre of everything we do
  • Taking a markets/products based approach
  • Maintaining our technology innovation leadership
  • Capturing greater value through long term and strategic agreements
  • Scaling while optimising our global footprint

Operations remain resilient in 2022 to the challenging macro-economic and geopolitical backdrop. The Group continues to monitor and work to mitigate potential headwinds in global semiconductor supply chains.

In 2022 the Group will focus on building a platform for growth to deliver further progress in 2023 and beyond. The Group is confident this refreshed strategy will enable a multi-year cycle of growth, driven by the macro trends of 5G, IoT and the Metaverse, as the global economy and semiconductor markets recover from current risks and disruption.

Overall, the Group expects to grow revenues by a low single digit % in 2022 (at constant currency), with growth weighted towards H2. At this level, the Group anticipates a similar adjusted EBITDA margin % to 2021 (at constant currency). Capital expenditure of £10-15m is expected on PP&E and £6-8m on capitalised intangibles relating to development costs and IT transformation.

Group Trading Performance

Group revenue for FY 2021 was down 13% to £154.1m (FY 2020: £178.0m). The Group experienced a FX headwind of c.£10.6m affecting GBP revenue on a reported basis, with the majority of revenues being earned in USD. On a constant currency basis, Group revenue was down 7% at £165m, in line with the November 2021 trading update of £164m.

Wireless revenue of £83.2m (FY 2020: £94.2m) was down 12% year-on-year on a reported basis and down 6% on a constant currency basis. Strong growth in demand for wafers used in 5G handsets and WiFi 6 routers, resulted in an increase of 19% year-on-year for Wireless GaAs. This growth was offset by a reduction in demand for GaN wafers used in 5G infrastructure, with revenue down by 49% year-on-year. After a strong performance for GaN in 2020 resulting from the initial wave of 5G mMIMO base station deployments, particularly in Asia, delays to further global deployments were experienced in 2021. A multi-year replacement cycle is still anticipated for 5G infrastructure, including strong anticipated GaN content.

Photonics revenue of £68.1m (FY 2020: £81.6m) was down 17% year-on-year on a reported basis and down 11% on a constant currency basis. VCSEL revenue for 3D sensing applications was down by 19% as a result of smaller chip sizes. The Group maintained strong market share in its key supply chain and remains well positioned for future product evolutions. Delays were experienced in certain aerospace and security orders, with Infrared revenues down 8% year-on-year. This represents a change in phasing, with no anticipated loss of market share. InP and other revenues were up by 16%, predominantly due to strength in datacom and telecom markets as well as new growth areas of sensing.

CMOS++ revenue of £2.8m (FY 2020: £2.2m) was up by 28% year-on-year, adding scale to the Group’s Si epitaxy operation which is important to the integration of compound semiconductors on silicon.

Group Adjusted EBITDA of £18.7m (FY 2020: £30.1m) on a reported basis is equivalent to £25.0m on a constant currency basis. The constant currency EBITDA margin of 15% was in line with the November 2021 trading update of c.15% margin. The year-on-year fall in margin is predominantly related to the Group’s operational gearing. The Group plans to improve its profitability going forward through a global site optimisation programme and growing margins by achieving higher volumes and hence economies of scale at its strategic site locations.

A Reported Operating Loss of £20.0m (FY 2020: (£5.5m)) is derived as a result of the trading performance and a number of one-off exceptional items (see below), with an adjusted operating loss of £6.5m (FY 2020: £5.4m profit).

Net cashflow from operations of £18.9m (FY 2020: £35.5m) representing 96% conversion of Adjusted EBITDA, resulting in a net debt position (excluding lease liabilities) of £5.8m as at 31 December 2021 (FY 2020: net cash of £1.9m). The Group renewed a $35m revolving credit facility with HSBC in December 2021 and had a cash position as at 31 December 2021 of £10.8m.

Capital expenditure of £15.1m on PP&E (FY 2020: £5.0m) in line with the November trading update of £14-17m, focussed on the deployment of additional tools to meet growing demand for 5G handset and WiFi 6 products in Taiwan. The Group continues to invest in research and development with technology capitalisation of £3.3m of intangible assets (FY 2020: £5.4m).

Adjustments to Reported Items

In order to focus the business, longer term developments such as cREO® and Photonic Quasi Crystal are being de-prioritised in the short term to focus our development programmes on market driven solutions. IQE will retain the technology, capability and IP enabling redeployment if and when appropriate.

  • An exceptional intangible asset impairment charge of £7.4m has been recognised within the Reported Operating Loss. This comprises a non-cash impairment charge of £4.7m related to cREO® development costs and patents, following a decision to pause development activities on this technology until a commercial opportunity arises, in line with the markets based approach set out in our strategic priorities.
  • A non-cash impairment charge of £2.7m has also been recognised for Quasi Photonic Crystal (QPC) and Diffusers, following a similar decision to suspend development activities.

Exceptional restructuring costs of £3.7m have been recognised in respect of site closures that are part of the Group’s global site optimisation programme.

  • Restructuring costs of £0.7m (2020: £0.2m) relate to the previously announced closure of the Group’s manufacturing facility in Pennsylvania, USA. The Group’s MBE activities in Pennsylvania will be consolidated into the North Carolina site by 2024.
  • Restructuring costs of £3.0m (2020: £nil) relate to the previously announced closure of the Group’s manufacturing facility in Singapore. The Singapore site will be closed by mid-2022 and will result in £4.8m of annualised cash cost savings.

The Group has also recognised a non-cash Share Based Payments charge of £1.7m (FY 2020: £0.3m) and CEO transition costs of £0.7m (FY 2020: £nil). Excluding these exceptional charges totalling £13.5m, the Group has recorded an Adjusted Operating Loss in FY 2021 of £6.5m (FY 2020: £5.4m profit).

Results Presentation

IQE will present the FY 2021 Results via webcast at 9:00am UK time today, 29 March 2022. If you would like to view this webcast, please register by using the below link and following the instructions:        



IQE plc
+44 (0) 29 2083 9400
Americo Lemos
Tim Pullen
Amy Barlow

Peel Hunt LLP (Nomad and Joint Broker)
+44 (0) 20 7418 8900
Edward Knight
Paul Gillam
James Smith

Citigroup Global Markets Limited (Joint Broker)
+44 (0) 20 7986 4000
Christopher Wren
Peter Catterall

Headland Consultancy (Financial PR)
+ 44 (0) 20 38054822
Andy Rivett-Carnac: +44 (0) 7968 997 365
Marta Parry-Jones: +44 (0) 7884 742 400



IQE is the leading global supplier of advanced compound semiconductor wafers and materials solutions that enable a diverse range of applications across:

  • handset devices
  • global telecoms infrastructure
  • connected devices
  • 3D sensing

As a scaled global epitaxy wafer manufacturer, IQE is uniquely positioned in this market which has high barriers to entry. IQE supplies the whole market and is agnostic to the winners and losers 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 c. 685 employees across nine manufacturing locations in the UK, US, Taiwan and Singapore, and is listed on the AIM Stock Exchange in London.