Product Launch

IQE PLC
21 August 2001


                                  21 August 2001



     IQE and ESM announce programme to qualify volume SiGe BiCMOS process

IQE Silicon Compounds Ltd, a wholly owned subsidiary of IQE plc, is pleased to
announce a programme with European Semiconductor Manufacturing Limited (ESM)
of Newport, South Wales, to qualify a volume SiGe process which will be used
in the production of ESM's 0.35um SiGe BiCMOS foundry process.



In order to bridge the price/performance gap between silicon and gallium
arsenide devices for a wide range of emerging consumer products, SiGe has
become the strategic focus for many semiconductor manufacturers worldwide.
Initial applications include high performance wireless and broadband,
including third generation (3G) handsets, BluetoothTM, local area networks
such as HyperLAN, wired fiber-based networks, direct broadcast satellite
communications and automobile radar systems.



Steve Byars, Managing Director of IQE Silicon Compounds Ltd commented 'The
formation of close working relationships with our customers is the cornerstone
of IQE's philosophy. This collaboration with ESM serves as an excellent
example of the way in which IQE, as a foundry service provider with many years
epitaxial growth experience, can integrate seamlessly with existing device
manufacturing facilities to add value to the overall manufacturing process'.



Director of Technology and Strategic Marketing at ESM, Dr Richard Joy, said: '
Through our customer focused business excellence program, ESM is committed to
achieving world class cycle times, fast customer response times and quality
assurance. ESM's close proximity to the new Epi facility at IQE in South Wales
fits well with this strategy and we are delighted to be working with the
company on the development of a 0.35um SiGe BiCMOS process.'


Notes for Editors:


About IQE

IQE Silicon Compounds Ltd is a wholly owned subsidiary of IQE plc (LSE: IQE.L,
NASDAQ EUROPE: IQEP), the leading global outsource supplier of advanced
epi-wafers to the Semiconductor Industry with manufacturing operations in the
UK and USA. The Silicon Compounds division was established in August 2000 at a
brownfield site in Cardiff, UK to offer Europe's first fully flexible,
dedicated outsource services for silicon based epitaxial structures. In
addition to the range of state of the art ASM CVD epitaxial structure
deposition reactors, the facility in Cardiff includes a class 1 cleanroom
equipped with the very latest in wafer preparation and characterization tools.
The Silicon Compounds business unit focusses on providing provide a high
quality, sub-contract epitaxial deposition service, specializing in high
technology inter-layer epitaxial films, principally for Silicon Germanium
(SiGe) and high-end Bi-CMOS semiconductor processes







About ESM



European Semiconductor Manufacturing Limited (ESM), based in Newport, UK, ESM
is one of the leading independent semiconductor foundries in Europe.  Its
customers are fabless semiconductor companies and Integrated Device
Manufacturers who supply the wireless, smart power, broadband, Internet and
consumer markets.  The company specialises in analog and mixed-signal process
technologies, including BiCMOS, High Voltage, Antifuse and PowerMOSFET, and
operates a state-of-the-art eight-inch facility as well as a six-inch
manufacturing facility.  ESM supports the US through its wholly-owned
subsidiary European Semiconductor Manufacturing Inc. which has offices in
Silicon Valley.



Contacts:


IQE:  Steve Byars on 02920 839 400 email or visit our website at
      [e-mail]

ESM:  Sian Cummins on 01633 810121. e-mail: [e-mail] or visit
      our website at www.esm-semi.co.uk

Buchanan Communications:
      Tim Thompson/Nicola Cronk 020 7466 5000