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2 September 2009


Orders return to pre-recession levels at IQE

Global epiwafer foundry IQE plc has reported a sharp recent increase in orders, with senior managers now expecting a strong financial performance in the second half of 2009.

According to the UK-headquartered company’s latest trading outlook, orders have returned to pre-recession levels in the past couple of months, following the so-called 'de-stocking' period during which III-V device makers sought to protect themselves from the unfolding economic crisis. With that period now seemingly over, IQE’s orders have been ticking up strongly since May.

In first-half 2009, IQE's sales showed the impact of the de-stocking exercise – with revenues diving to £21.4m ($34.6m) from the figure of £30.2m registered in first-half 2008.

That translated to an operating loss of £0.8m, although the impact of the global slump on IQE’s bottom line was mitigated after some significant cost-cutting measures.

In particular, IQE’s has kept a very tight rein on capital expenditure, which fell from £3.4m in the first six months of 2008 to only £0.7m in the opening half of 2009. It also reduced staff numbers significantly at the onset of the recession in late 2008.

CEO Drew Nelson highlighted the impact that the smartphone market, which has so far proved resilient to the recession, has had on the renewed demand for GaAs-based epiwafers. “Our core smartphone market has recovered quickly and is now growing rapidly as phones become more connected and multi-functional.”

More smartphones means more GaAs-based semiconductor content and, according to a recent forecast from the market analyst company Parks Associates, there will continue to be strong demand. The firm’s Harry Wang predicts that annual shipments of smartphones like the Blackberry, Apple’s iPhone, and Palm's new ‘Pre’ handset will grow at a compound annual rate close to 20%, reaching 310m units by 2013. That is more than double the current figure of 130m, suggesting that a lot more GaAs epiwafers will be needed to meet market demand over the next few years.

IQE's targeting of device makers focused on the smartphone market should be helped by its latest recruit. Walter Wohlmuth, who has just been hired as IQE's director of new technologies in the USA, was previously at TriQuint Semiconductor and RF Micro Devices, two of the world's biggest manufacturers of cellphone power amplifiers.

At TriQuint, Wohlmuth helped to pioneer the development of GaAs BiFET devices, one of the technologies that is benefiting strongly from the growing demand for high-end mobile handsets.

With more recent experience in the photovoltaics sector at First Solar, Wohlmuth will also be responsible for expanding IQE's solar cell business in the US and Canada.

IQE has reported ‘excellent’ progress in the development of III-V solar cells, claiming that its customers are now achieving record photovoltaic efficiencies with its epitaxial materials.

See related items:

IQE sees sharp order pick up in May-June as destocking ends

IQE reports 20% growth in 2008, despite Q4 inventory reductions

Search: IQE Epiwafers Substrates


The author Michael Hatcher is a freelance journalist based in Bristol, UK.