Trading Statement

IQE PLC
20 July 2006


IQE plc


Embargoed for release until 7:01am UK time on 20 July 2006


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

                                Trading update



IQE, the leading global supplier of customised wafer products and outsource
wafer services to the semiconductor industry, is pleased to provide a trading
update ahead of the formal first half preliminary results due to be presented on
30 August 2006.

Commenting on trading Dr Drew Nelson, IQE President & CEO said 'Trading has
continued in line with our pre Annual General Meeting Trading Update released on
30 May 2006. During Q2, the overall business has continued to grow strongly. The
detailed half year results are still to be finalised, although the Directors
expect 2006 H1 revenues to be in the region of £14.5 million, an increase of
£3.3 million (up 30%) on H2 2005 and an increase of £4.8millon (up 50%) on H1
2005. All of IQE's four business units have grown during the first half of 2006,
particularly the wireless division, IQE Inc, located in the US, and  IQE Silicon
in the UK. Both the optical and substrate businesses have also grown
significantly, and are both set to grow even more strongly in the second half.
The EBITDA breakeven point of the Group has remained around the £30 million
revenue region.'

'IQE has today also announced its intent to purchase the Electronics Material
Division (EMD) of EMCORE Corporation for $16 million, through the placing of new
shares (''the Placing'').  EMD is a leading provider of power amplifier products
used throughout the wireless industry in both handsets and infrastructure. The
addition of EMD's products, employees and intellectual property will clearly
enhance IQE's position as the leading player in the epitaxial foundry industry.
EMD's current and next generation products are extremely complementary to IQE's
product base and its customer base will increase IQE's customer reach to a broad
spectrum of world class RF manufacturers.  With both MOCVD and MBE wireless
platforms, as well as a diverse range of MOCVD based optical products, IQE will
be able to offer its customers the broadest and most advanced range of
technologies and products in the semiconductor industry. '

Chairman, Dr Godfrey Ainsworth added 'The acquisition of EMD is a perfect fit
for IQE. The Board is confident that IQE's existing cash resources together with
the further capital provided through the Placing will provide sufficient funds
not only for the acquisition but for working capital to support the business and
its growth expectations over the next 12 months.'


Contacts

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


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