IQE plc : Trading Update

IQE plc



Cardiff,  UK. 26 October  2011: IQE plc  (AIM: IQE,  "IQE" or  the "Group"), the
leading  global supplier  of advanced  wafer products  and wafer services to the
semiconductor industry, provides an update on 2011 trading.

A small number of IQE's major wireless customers have advised that an inventory
correction is affecting their forecast short term demand.  This appears to
reflect a combination of some market share shifts between chip companies and the
difficult macroeconomic environment.

As a consequence, the Board anticipates that second half revenues are likely to
be slightly lower than those for the first half and has taken immediate actions
to mitigate the impact on profit and cash. As a result of these actions, coupled
with improved margins due to a favourable product mix, the Board expects EBITDA
profit will continue to grow sequentially, both half on half in 2011 and for the
full year against 2010.

IQE is an existing supplier to the chip companies that are benefitting from
these market share shifts, albeit to a lesser extent.  The Group expects that
these shifts are only likely to impact IQE's revenues in the short term - Q4
2011 and Q1 2012 - until the qualification of both additional capacity and new
products with these customers is complete.  Several qualifications are already
in progress and are being accelerated at the customers' request.

Beyond this short term destocking, the outlook continues to be positive. The
wireless market continues to be driven by increasing smartphone adoption and
increasing wireless chip content. The Group's opto electronics business has been
unaffected and continues to enjoy strong growth driven by a range of emerging
end market applications.  This underpins the Board's confidence in the Group's
growth prospects for 2012 and beyond.

Dr Drew Nelson, IQE Chief Executive, said:

"It is clearly disappointing to have to report that inventory corrections by
some of our major customers will impact revenues for the fourth quarter of
2011.

"We are engaged in increased and accelerated qualification activities which
should strengthen our market share across the customer base and help further
mitigate individual customer risk.  One such significant qualification with a
major Japanese group has already been completed, whilst others are expected to
be complete over the coming three to six months."




Contacts:

 IQE plc                           [phone]

 Drew Nelson

 Phil Rasmussen

 Chris Meadows


 Espirito Santo Investment Bank   + 44 (0) 20 7456 9191

 Richard Crawley

 James Bromhead


 College Hill                      [phone]

 Adrian Duffield

 Kay Larsen



There will be an analyst conference call at 8.00am - please contact Lucy Moseley
at [e-mail] or on telephone [phone] for details.







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Source: IQE plc via Thomson Reuters ONE

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