Grant of share options

IQE PLC
27 July 2006


IQE plc


Immediate release


                                      IQE plc

                           (the ''Company'' or ''IQE'')

                               Grant of share options



IQE, the leading global outsource supplier of customised wafer products and
outsource wafer services to the semiconductor industry, is pleased to announce
the grant of options to each of the executive directors of the Company (the 
'Executive Directors') over ordinary shares of 1p each in the Company.  This
follows the Company's announcement on the 20 July 2006 that it has conditionally
agreed to acquire the Electronic Materials Division (''EMD''), the US epi
foundry business from EMCORE Corporation Inc. (NASDAQ listed: EMKR)
(''EMCORE'').  To finance the consideration and ongoing working capital for IQE,
Noble & Company Limited (the Company's Nominated Adviser and Broker) has
conditionally placed 87.5 million IQE shares at 13.75p per share to raise
approximately £12 million (before expenses) (the ''Placing''). The Placing is
conditional upon, inter alia, the passing of a shareholder resolution at an
extraordinary general meeting (''EGM'') to be held on 15 August 2006.


In recognition of the directors' contributions to the business over the last
four years, including bringing the Company back to EBITDA breakeven, taking
substantial reductions in pay and negotiating the acquisition of EMD from
EMCORE, on 14 July 2006 the Company granted further options under its share
option scheme (completely contained within the existing share option scheme
limits) as follows:-

         Name            Number of    Exercise price                    Exercise date
                          options

Dr A W Nelson            5,000,000      13.75p per   As to 1,666,667 shares on the first anniversary of
                                          share      the Placing

                                                     As to 1,666,667 shares on the second anniversary of
                                                     the Placing

                                                     As to 1,666,666 on the third anniversary of the
                                                     Placing

Mr S A Hall              1,500,000      13.75p per   As to 500,000 shares on each of the first, second
                                          share      and third anniversaries of the Placing

Mr H R Williams          1,500,000      13.75p per   As to 500,000 shares on each of the first, second
                                          share      and third anniversaries of the Placing



These options are subject to strong earnings per share (EPS) performance
criteria.
Contacts

IQE plc                                             [phone]
Dr Drew Nelson, President & CEO
Stuart Hall, CFO
Chris Meadows, Investor Relations


Noble & Company Limited                             [phone]
John Llewellyn-Lloyd
Graeme Bayley










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