10 March 2023
Inventory build-up throughout supply chain to yield £30m year-on-year drop in IQE’s first-half 2023 revenue
In an update on current trading, epiwafer and substrate maker IQE plc of Cardiff, Wales, UK says that, although it expects results for full-year 2022 to remain in line with the update provided on 16 January, it has since seen an acceleration of the anticipated trends, with weaker demand leading to inventory build-up throughout the supply chain. This reduction in customer orders and forecasts is expected to result in a decline in first-half 2023 revenue of about £30m year-on-year.
Similar trends are evident across the industry, with the US Semiconductor Industry Association (SIA) reporting that global industry sales in January were down 18.5% year-on-year.
This near-term market softness is expected to be temporary, and IQE anticipates a return to year-on-year growth in second-half 2023 based on dialog with its existing customers and its pipeline of new opportunities.
IQE says that it continues to make positive progress towards its strategy as set out at the November 2022 Capital Markets Day, diversifying into high-growth markets including power electronics and micro-LEDs. The firm adds that it has a strong pipeline of strategic and long-term partnerships and new business opportunities that will underpin growth in 2024 and beyond.
“The current inventory cycle is temporary,” believes CEO Americo Lemos. “Ours is an industry that has consistently demonstrated growth over many decades. We expect IQE to return to growth in the second half of the year and remain excited about the future as we continue to execute our diversification strategy.”
IQE expects revenue growth of 7% for first-half 2022
IQE’s full-year 2021 constant-currency revenue down a less-than-expected 7%