New Contract

IQE PLC
04 November 2004

FOR IMMEDIATE RELEASE              4 November 2004


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



  IQE secures major outsourcing contract with leading RF component manufacturer



IQE's North American subsidiary, IQE Inc, today announced it has secured a major
outsourcing contract to supply a leading North American RF Component
Manufacturer with epitaxial materials for its RF based components used in mobile
handsets. The agreement, which is effective from 1st November 2004 and is for a
minimum term of two years, renewable annually thereafter, provides for IQE's
Bethlehem site to supply more than 90% of the customer's anticipated demand for
their advanced RF wafer products and is estimated to be worth around US$25
million in revenue to IQE over the initial two year period. As a result of the
agreement, internal wafer manufacture at the customer's site will cease. Both
parties have been working closely together for several years; a relationship
through which IQE has gained a high degree of confidence in its own ability to
service the outsourced epiwafer needs of major manufacturers.



IQE's President & CEO, Drew Nelson said 'This agreement with such a prominent
global supplier of RF components for the cellular phone market demonstrates a
clear movement towards the outsourcing model within the compound semiconductor
industry. Their selection of IQE as the primary partner, as a result of our
large and comprehensive production capacity, and low cost structure, endorses
the Company's commitment to the outsource model'



A spokesman for the customer commented: 'outsourcing certain products and
services such as the manufacture of our RF epitaxial wafers allow us to
concentrate our efforts on the processes that add significant value to our
product offering within the global, highly competitive RF market place and we
are pleased to build on previous work we have undertaken with IQE. This
agreement will allow us to be one of the most highly cost effective players in
the RF component marketplace'







For further information please contact:


IQE plc:                                      [phone]
Drew Nelson, President & Chief Executive      
Chris Meadows, Investor Relations Manager     
Steve Gergar, General Manager, IQE Inc         [phone]


Buchanan Communications :                     [phone]
Tim Thompson / Nicola Cronk





Notes to Editors:



About IQE: IQE is a leading outsource supplier of customised epitaxial wafers
and compound semiconductor substrates to the global semiconductor industry.
Materials produced by the Group operate at the forefront of technology,
typically in high speed electronics and optical systems for a diverse range of
devices including those used for data/audio/visual storage, optical
communications, wireless and RF devices and systems as well as an increasing
range of automotive, medical and industrial applications.








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