Re Contract

IQE PLC
22 November 2000


                         IQE plc

  IQE AND BOOKHAM TECHNOLOGY SIGN EPI WAFER SUPPLY AND
                   SERVICES AGREEMENT

IQE  plc,  the  leading outsource supplier  of  epitaxial
wafers to the Compound Semiconductor Industry, is pleased
to  announce today the signing of a contract with Bookham
Technology  plc  for the provision of specialist  silicon
epitaxy  services. Bookham Technology will initially  sub
contract time on IQE's epitaxy equipment and has  entered
into  agreements to procure dedicated epitaxy  production
at IQE's site to provide for Bookham Technology's rapidly
growing wafer requirements.

The   initial   contract  will  provide  for   production
activities using the combined expertise of both companies
in  their  respective sectors. This  approach  will  help
maximise  the  ability of Bookham Technology  to  rapidly
develop  new  products and transfer  them  directly  into
production,  thereby  minimising  the  critical  time  to
market for their advanced optical component products.

IQE  plc  (LSE  :  IQE;  Easdaq:  IQEP)  is  the  leading
outsource  provider of compound semiconductor epi  wafers
with  production  sites in both  the  UK  and  USA.   Its
customised  epiwafer products and services  are  used  by
many   major  industry  players  in  the  optical   fibre
communications, wireless communications, optical  storage
and consumer products industries.

Bookham  Technology plc (LSE: BHM; Nasdaq: BKHM) designs,
manufactures   and  markets  components  that   integrate
optical  processing  functions on a single  silicon  chip
using  high  volume production methods.   Using  patented
silicon-based  ASOC  technology, the  company's  products
generate,  detect,  route  and  control  light   signals,
allowing   communications  network  providers  to   build
systems with advanced optical processing capabilities  to
help  meet  the growing demands of Internet traffic.  The
company,  which is quoted on Nasdaq and the London  Stock
Exchange, is headquartered in the UK, has offices in  the
US,  France  and Japan and employs some 900 people.   For
the  nine months ended 1 October 2000, revenue was  close
to £14.9 million ($21.9 million).


Dr Drew Nelson, Chairman & CEO of IQE plc, commented 'the
agreement  with Bookham Technology establishes  a  strong
and  highly  complimentary link between two of  the  UK's
leading   companies  in  servicing  the  rapidly  growing
worldwide optical fibre communications industry and  sets
the  scene for an increasingly close relationship between
the two companies. We are very pleased to be linking with
Bookham Technology'.

Dr  Andrew  Rickman, Chairman & CEO of Bookham Technology
added

'We  are pleased to enter into this agreement with IQE,
this  will enable us to accelerate our future development
programmes using our proprietary ASOC technology.'

For further information contact :

IQE plc
Drew Nelson                   Tel :[phone]
Buchanan Communications
Tim Thompson / Nicola Cronk   Tel : [phone]