Issue of Equity

IQE PLC
10 August 2006

IQE plc

10 August 2006

                                    IQE plc

                            (the 'Company' or 'IQE')

                                    Placing



IQE, the leading global outsource supplier of customised wafer products and
outsource wafer services to the semiconductor industry, is pleased to announce
that it has conditionally raised approximately £12 million (before expenses)
through a placing of 87,500,000 new ordinary shares at 13.75p per share ('New
Ordinary Shares') (the 'Placing').



The proceeds of the Placing will be utilised for working capital and to acquire
Electronic Materials Division, the US epi foundry business from EMCORE
Corporation Inc. (NASDAQ listed: EMKR) for a total consideration of $16 million.



The Placing is conditional upon the passing of a resolution ('Placing Resolution
') by the Company's shareholders at an extraordinary general meeting (''EGM'')
to authorise the allotment of the New Ordinary Shares and to disapply
pre-emption rights to enable the directors of IQE (the 'Directors') to allot the
New Ordinary Shares for cash to persons other than current shareholders in the
Company. The Directors have convened the EGM at which shareholders will be asked
to consider and, if thought fit, pass the Placing Resolution and certain other
resolutions. The Placing is also conditional, inter alia, on admission (''
Admission'') of the New Ordinary Shares to trading on AIM, a market operated by
London Stock Exchange plc (the ''London Stock Exchange'') ('AIM') (which is the
market on which the Company's existing issued ordinary shares are admitted to
trading) occurring by no later than 31 August 2006. The New Ordinary Shares are
equivalent to approximately 21.6 per cent. of the Company's enlarged ordinary
share capital following Admission and the Placing Price represents a discount of
approximately 6.8 per cent. to the closing mid-market price of an existing
issued ordinary share of 14.75 p on 19 July 2006, the latest practicable date
prior to the posting of the Notice of Extraordinary General Meeting .



Application has been made for the admission of the New Ordinary Shares to
trading on AIM. The shares will rank pari passu with the existing ordinary
shares of the Company. Dealings in the New Ordinary Shares are expected to
commence on 16 August 2006.





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






                      This information is provided by RNS
            The company news service from the London Stock Exchange