Trading Statement

IQE PLC
09 July 2007

IQE plc



First Half Trading Update



IQE plc (AIM: IQE, 'IQE', 'the Group'), the leading global supplier of advanced
semiconductor wafer products and wafer services to the semiconductor industry,
is providing a trading update for the first half ended 30 June 2007.



As anticipated at the time of the Group's preliminary results on 28 March 2007,
the flat start to trading in January and February has been followed by
increasingly strong trading throughout the remainder of the half year.  Monthly
revenue has increased throughout the period, with the consequence that the Board
anticipates overall revenues for the half year to be slightly above market
forecasts of £22.5m.  As a result of the Group's strong operational gearing,
EBITDA performance for the half year will be substantially higher than analysts'
current forecast of a broadly breakeven EBITDA.  This result has been achieved
despite the continued and increasing weakness of the dollar against Sterling.



Other key achievements for the half year have been:



Both MBE Technology Pte ('MBET') and IQE RF (formally EMD), acquired in 2006,
have integrated very well into the Group and have performed ahead of management
expectations. By gaining exposure to the wireless power amplifier market through
IQE RF, and exposure to the Asia Pacific markets through MBET, the product and
customer reach of IQE has been substantially enhanced.  This is especially true
in the global wireless communications marketplace, which now accounts for
approximately 75% of overall Group revenue.



Fixed costs within the Group have remained flat during the half year and
operating margins slightly ahead of analysts' forecasts demonstrating the
strength of IQE's business model.



The Group ended the half year with positive cash and has strengthened its
financial position by putting into place £5 million of overdraft facilities to
ensure working capital needs do not constrain future growth.



Dr Drew Nelson, IQE's Chief Executive, said:



'As a result of the acquisitions made during 2006 and strong focus on the
rapidly growing wireless communications marketplace, IQE has started to deliver
on its strategy and expected financial benefits.  Demand for our products is
being fuelled by both the growth in wireless volumes (mobile phones, Wi-Fi,
WiMAX, GPS, direct broadcast TV and Bluetooth) and significantly, the continued
trend to higher speed, feature rich devices.  Recent upgrades to the overall
handset market for both 2007 and 2008, the major portion being for high end
replacement  phones, bodes well for strongly increasing demand for Gallium
Arsenide based power amplifier and switch products.



'The Board is confident that current strong market conditions and the Group's
robust strategy have positioned the Group to achieve continued growth.'



IQE expects to announce its half year results to 30 June 2007 on 22 August 2007.



Contacts:


IQE plc :
Drew Nelson, President & Chief Executive Officer             [phone]
Phillip Rasmussen, Chief Finance Officer
Chris Meadows, Investor Relations Executive

Noble                                                        [phone]
John Llewellyn-Lloyd/Matthew Hall

College Hill :
Adrian Duffield/Ben Way                                      [phone]


NOTE TO EDITORS



IQE is the leading global supplier of advanced semiconductor wafers, with
products that cover the whole spectrum of wafer structures, 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 employs around 320 people and 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 nine sales
offices located in major economic centres worldwide.



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