AGM Statement

20 years and still innovating

IQE plc (AIM: IQE, "IQE" or the "Group"), the leading global supplier
of advanced semiconductor  wafer products and  wafer services to  the
semiconductor industry,  held  its  annual general  meeting  at  10am
today, at which  all resolutions  were duly passed.  The Chairman  of
IQE, Dr Godfrey Ainsworth made the following statement:

"I am pleased  to report that  IQE is making  strong progress. As  we
stated in  our half  year trading  update last  Thursday, the  strong
first quarter growth reported in  March has continued throughout  the
second quarter.  The Board  anticipates that the Group's  performance
will be ahead  of market  expectations, with first  half revenues  of
around £30 million and EBITDA (before exceptional items) of at  least
£3.3 million.

"The rapidly growing demand for our products is being fuelled in part
by a number  of significant  factors in  the wireless  communications
marketplace. Firstly, the advanced  features, higher performance  and
low power  consumptions  that  are  enabled by  the  use  of  gallium
arsenide mean that the volume of our products being used in  handsets
and other wireless devices is  growing substantially faster than  the
overall handset market.

"Secondly, the growth in wireless communications in emerging  markets
is driving additional demand for feature rich handsets with  advanced
features and efficiencies  made possible by  our products.   Thirdly,
competing technologies and  protocols are  being consolidated  within
hardware by  building  multiple  components  in  handsets  to  enable
greater compatibility between new and emerging wireless standards.

"This week marks the 20th anniversary  of the creation and launch  of
IQE - this is a tremendous achievement.

"At the time IQE came into  being in 1988, many of today's  high-tech
products behind which  the company provides  the enabling  materials,
were either emerging technologies or  had not yet been imagined.  The
world-wide-web was in its  infancy and communications were  dominated
by voice  traffic rather  than  data but  the anticipated  growth  in
communications during the '90s  drove the advancement  of a range  of
fibre optic technologies.

"CDs were taking  over from vinyl  discs for recorded  music but  the
technology for the same to happen  with video in the form of  Digital
Versatile Discs (DVD) was still several years away.

"Mobile phones  were  becoming available  but  were not  the  elegant
devices with which we are now  so familiar. During the late '80s  and
early '90s, the functionality and efficiency of mobile telephony made
it difficult  for  some  commentators  to see  a  future  for  mobile
communications for ordinary  voice calls let  alone for data,  music,
photography, video and entertainment.

"Video on  demand through  cable or  satellite was  evolving but  was
limited by  the  technologies available  at  the time  and  satellite
navigation was limited to the realms of science fiction.

"IQE  has  played  an  important  role  in  providing  the   enabling
technology behind many  of the  technologies that we  today take  for
granted.   Many  of  today's  high  technology  products  have   been
developed and produced  by major  blue-chip, multinational  companies
using IQE's wafers and  during the  last twenty years IQE has been  a
key driver  in  promoting  and  providing  a  highly  cost  effective
outsourcing business model for  the specialist provision of  advanced
semiconductor materials, as an  alternative to in house  manufacture.
This has been an  outstanding success and  many early customers  have
now switched totally to the wafer outsource model. "During the  '90s,
the rapid expansion of  the fibre optic market  was a key driver  for
the Group. IQE embarked on  an ambitious expansion programme to  keep
up with demand and  this was financed through  funds raised from  its
IPO in May  '99. Strong  demand continued  through to  2001 when  the
"dot-com" bubble  burst  and  it  became  apparent  that  there  were
considerable excess inventories throughout the supply chain.

"Since  the  technology  crash  in  2001  IQE  has  deliberately  and
successfully diversified  its  product  range  and  has  limited  its
exposure to single technology nodes by  focussing on a wide range  of
high growth potential markets.  Over the last  few years the  Company
has grown  both  organically  and through  selected  acquisitions  to
become the leading player in advanced semiconductor materials. During
the same  period,  the  industry  has  matured  and  is  increasingly
embracing the  "Asset-Lite" outsource  business  model that  IQE  has
always promoted.

"IQE's primary product range focuses  on RF components that are  used
in mobile communications devices  and wireless applications, but  its
core technology also enables a  range of other products that  include
lasers for  CD/DVD  players  and  recorders,  printers,  copiers  and
emerging  laser  projection  devices.   And  demand  for  fibre-optic
products which were part of our original core competency is now  also
returning.

"IQE continues to be innovative and is working with its customers  on
exciting  emerging  technologies  including  low  power,  ultra  high
brightness light sources and  high efficiency solar cells.   Concerns
over climate change  and oil costs  rising to more  than $140  barrel
provide renewed  urgency in  bringing these  new technologies  in  to
volume production.  Over the next five years it is expected they will
provide market opportunities for IQE  which could dwarf our  existing
wireless business.

"IQE's 20  years  of  experience  as  a  global  leader  in  advanced
semiconductor materials uniquely places the  Group as the partner  of
choice in  providing the  core enabling  technologies behind  a  wide
range of future generation products.

"The advanced semiconductor materials in which IQE specialises are an
essential component in  ultra-high brightness  light emitting  diodes
(UHB-LEDs), which are rapidly replacing incandescent lighting in many
areas from automotive applications through to industrial,  commercial
and residential lighting.

"Our   advanced   materials    also   form   the    very   core    of
concentrator-photovoltaic (C-PV) solar cells which offer the  highest
efficiencies  for  converting  solar  energy  into  electricity.  The
optoelectronic properties that our materials offer are already  being
developed for  use  in next  generation  technologies such  as  image
sensing, video  projection,  games  consoles  and  a  host  of  other
applications  that  will   transform  our  world   over  the   coming
years.

"Many of the Group's senior management team have provided the company
with leadership during  the last  twenty years including  one of  the
co-founders, Drew  Nelson.   We continue  to  expand the  company  by
bringing on line additional capacity at several locations to meet the
continuing, increasing demand.

"Although no one knows what the digital age will bring over the  next
20 years, the Board is confident  that the continuing buoyant  market
conditions and  our robust  strategy will  ensure that  we remain  on
course to  deliver  strong growth  in  revenues and  profits  in  the
current financial year."


Contacts:

IQE plc ([phone])
Drew Nelson
Phil Rasmussen
Chris Meadows

College Hill ([phone])
Adrian Duffield
Kate Norton

Noble & Company Limited (+ 44 20 7763 2200)
John Llewellyn-Lloyd
Sam Reynolds

Panmure Gordon (UK) Limited ([phone])
Aubrey Powell
Ashton Clanfield


NOTE TO EDITORS
IQE is the leading global supplier of advanced semiconductor wafers
with products that cover a diverse range of applications, supported
by an innovative outsourced foundry services portfolio that allows
the Group to provide a 'one stop shop' for the wafer needs of the
world's leading semiconductor manufacturers.

IQE uses advanced crystal growth technology (epitaxy) to manufacture
and supply bespoke semiconductor wafers ('epi-wafers') to the major
chip manufacturing companies, who then use these wafers to make the
chips which form the key components of virtually all high technology
systems. IQE is unique in being able to supply wafers using all of
the leading crystal growth technology platforms.

IQE's products are found in many leading-edge consumer,
communication, computing and industrial applications, including a
complete range of wafer products for the wireless industry, such as
mobile handsets and wireless infrastructure, Wi-Fi, WiMAX, base
stations, GPS, and satellite communications; optical communications,
optical storage (CD, DVD), laser optical mouse, laser printers &
photocopiers, thermal imagers, leading-edge medical products,
barcode, high efficiency LEDs and a variety of advanced silicon based
systems.

The manufacturers of these chips are increasingly seeking to
outsource wafer production to specialist foundries such as IQE in
order to reduce overall wafer costs and accelerate time to market.

IQE also provides bespoke R&D services to deliver customised
materials for specific applications and offers specialist technical
staff to manufacture to specification either at its own facilities or
on the customer's own sites. The Group is also able to leverage its
global purchasing volumes to reduce the cost of raw materials. In
this way IQE's outsourced services, provide compelling benefits in
terms of flexibility and predictability of cost, thereby
significantly reducing operating risk.

IQE operates six manufacturing facilities located in Cardiff (two)
and Milton Keynes in the UK; in Bethlehem, Pennsylvania and Somerset,
New Jersey in the USA; and Singapore. The Group also has 11 sales
offices located in major economic centres worldwide.

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