Contract Extension

26 June 2008

IQE plc

IQE wins contract extension as sole supplier to major US wireless
component manufacturer.

IQE plc (AIM: IQE) ("IQE" or the  "Group') is pleased to announce
that its Pennsylvania based business unit has been awarded a
multi-year contract extension as sole supplier of GaAs based pHEMT
epi-wafers to a major US wireless component manufacturer. The
contract extension, which is with an existing IQE customer, is valued
at approximately US $20 million in revenue over the next two years
and is a long term agreement designed to support the customer's
planned growth over the coming years. The contract also extends the
coverage of IQE's range of other products.

The GaAs based pHEMT epi-wafers are manufactured using the Group's
advanced Molecular Beam Epitaxy (MBE) tools and provide the enabling
technology for mobile handsets and other wireless communication
devices.

Steve Gergar, VP and General Manager of IQE's Bethlehem PA business
said:
"The extension of this contract by a major player in the RF/wireless
components arena demonstrates a great deal of confidence in IQE's
ability to support its customers, particularly during periods of high
growth."

Dr Drew Nelson, President and Group CEO added:
"IQE's continued status as sole supplier to one of the world's
leading wireless components manufacturer shows the growing commitment
by the industry towards outsourcing and confirms the strength of
IQE's business model. It is also testament to the quality of service
provided by IQE over the last few years and strength of relationship
that the customer feels confident in extending their business with
IQE."




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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