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27 July 2006


Analysts back IQE's acquisition strategy

Market analysts at Strategy Analytics believe that IQE's proposed acquisition of Emcore's epitaxial substrate business will increase IQE’s share of the commercial epitaxial substrate market by 77% in 2006, and drive the company to net profitability.

Overall demand for epitaxial substrates will grow 40% year-on-year in 2006 and 30% year-on-year in 2007, Strategy Analytics forecast. However, the analysts believe that IQE must overcome some significant obstacles before it can become the largest commercial supplier of SI GaAs epitaxial substrates.

"Overall, we believe this is a positive move for IQE that will enable the company to increase its share of the commercial SI GaAs epitaxial substrate market and move into profitability," says Asif Anwar, director of the Strategy Analytics GaAs and Compound Semiconductor Technologies service. "We recommend that IQE shareholders pass the resolution approving the placement of IQE shares to raise capital for the EMD acquisition."

"This is a very positive move by IQE," notes Stephen Entwistle, VP of the Strategic Technologies Practice at Strategy Analytics. "However, IQE will still need to overcome several commercial challenges to achieve its target of becoming the world's leading commercial supplier of SI GaAs epitaxial substrates."

Further analysis of the SI GaAs epitaxial substrates market is available in Strategy Analytics' "Markets for SI GaAs Epitaxial Substrates 2005-2010" and its "IQE's Emcore Acquisition can create a One-Stop Shop for Epitaxial Substrates but can they make a Profit?"

See related item

Visit: http://www.strategyanalytics.net

Visit IQE: http://www.iqep.com