IQE’s chip components are in high demand due to the boom in artificial Intelligence.
In an update released yesterday, the company said that its order book of wafers was growing and would likely continue to grow. This sparked a jump in share price by 28.8 percent, or 5 3/4p.
IQE reported that it had increased its market share in China – a major market – as its losses before tax fell to £28.8million in the year to the end December. Revenue fell by 31 percent to £115.3 from £167.5.
The company said that sales were affected by the downturn of the industry in the first three-quarters of the year. However, there has been a “gradual improvement in market dynamics” and in customer demand in the past three months. IQE’s order book is “strengthening” despite global economic uncertainties.
The company was founded in 1989 and floated in London on Aim’s junior market at the heights of the dotcom bubble in 1999. IQE has 670 employees across nine manufacturing sites located in Britain, America, Taiwan, and Singapore. It is part of a South Wales cluster of semiconductor companies that also includes Microchip, SPTS Technologies, and Newport Wafer Fab.
The “wafers”, which IQE produces, are crystallized in a process known as epitaxy. They form the basis of compound semiconductors that are used in smartphones cameras and sensors. Compound semiconductors are a combination of two or more elements that creates a compound capable of achieving unique functions, which goes beyond the silicon used in simpler microchips. Apple never publicly acknowledges that IQE was a major component of its facial recognition technology.
Semiconductors, the brains behind modern electronics are used in everything from wind turbines to mobile phones. The shortages during the pandemic caused factories to close, and long queues for laptops. This made people aware of their importance.
The company launched a product used in artificial intelligence data centers, an area of significant growth as the hype surrounding the technology does not seem to be waning.
Americo Lemos 57, IQE CEO, stated that “AI, and “gen AI” in particular, was one of the major trends driving growth. He also highlighted the growth in demand for energy-intensive AI Infrastructure, which is an area in which IQE is also involved.
“We expect this growth to continue in the new year as we pursue our maintain-and-diversify strategy. Lemos stated that we are well positioned to capitalize on the unprecedented investment in the semiconductor industry and seize the growth opportunities provided by technology megatrends such as AI and electric vehicles.
Pandemics have exposed the fragility and complexity of semiconductor supply chain, and China’s threats against Taiwan, as well as natural disasters that have struck the country, a key player in this sector, has raised concerns over their availability.
In order to become more independent in the field of microchips, governments invest. America invests $50 billion into its microchip industry. The European Union has allocated more than €43billion to promote its own supplies.
Lemos, a member of the UK Government’s industry advisory panel, has urged for greater support to be given in the chip manufacturing sector.