Re Joint Venture

IQE PLC
15 March 2002



                                           For Immediate Release : 15 March 2002


                                    IQE plc

   Partners with AmberWave for World's First High Volume Production of 200mm
                           Strained Silicon Epiwafers

 - Leading epiwafer foundry, IQE strikes a strategic partnership agreement with
              US based advanced semiconductor IP leader AmberWave.


IQE Silicon Compounds Ltd (IQE-SC), a wholly owned subsidiary of IQE plc (LSE:
IQE.L) the world's leading outsource manufacturer of specialist epitaxial wafers
and services, is pleased to announce a strategic partnership with US based
AmberWave Systems Corporation for the World's first high-volume production of
epiwafers based on AmberWave's proprietary (epsilon)MOSa strained silicon
technology.


Under the terms of the agreement, IQE-SC has become the first licensee of
AmberWave's strained silicon technology for the production of 150mm and 200 mm
wafers. AmberWave's worldwide device licensee base will have immediate access to
IQE's wafers for use in next-generation digital, wireless and optoelectronic
applications.


The partnership addresses the silicon industry's key challenge of minimizing
capital expenditure while simultaneously increasing speed and reducing power in
commercial silicon integrated circuits (ICs).  Historically, as foundries, IDMs
and fabless organizations become limited by the constraints of silicon
technology, the industry is forced to build new fabs at the next-generation
process node (gate length).  According to Pathfinder Research, this endeavor
cost in excess of $62 billion in 2000.  AmberWave's strained silicon technology
uses the cost-effective silicon infrastructure already in place throughout the
industry, so no additional capital investment is necessary.  Working together,
AmberWave and IQE plc offer the silicon industry immediate and cost-effective
access to epiwafers that will increase speed and reduce power in conventional
CMOS, enabling tremendous advancements in digital, wireless and optoelectronic
applications.


Dr. Drew Nelson, President and CEO of IQE plc, commented, 'We are excited to be
working with AmberWave to roll out commercial product based on AmberWave's
strained silicon platform.  As the strained silicon pioneer, AmberWave has
developed and patented a new roadmap for the silicon industry that enhances CMOS
performance without changing the existing silicon infrastructure.  This is the
solution the industry has been searching for, and we're thrilled to work with
AmberWave to deliver it.'


IQE-SC will utilize AmberWave's technology to produce production quantities of
strained silicon wafers that are suitable for high volume, highly integrated
applications, such as today's microprocessors and field programmable gate arrays
(FPGAs).  Growing the kinds of silicon germanium (SiGe) graded layers required
to produce strained silicon typically poses two problems:  1) defect propagation
into the strained silicon layer and 2) surface crosshatch. AmberWave has
overcome these problems by incorporating its intellectual property and knowhow
into the production process.  Chemical mechanical polishing (CMP) in conjunction
with epitaxy is one of the patented techniques that makes possible grading of
the epitaxial layer for strained silicon generations now and in the future.

                                          
'IQE's Silicon Compounds division is Europe's first fully flexible, dedicated
outsource service for silicon based epitaxial structures, and is an ideal
partner for us because it takes our intellectual property position and moves it
into global high-volume production,' said Mark Wolf, President and CEO of
AmberWave Systems.  'Working together, we are committed to providing the global
semiconductor industry with a new silicon roadmap that will speed past the
constraints of current silicon technology.'


Steve Byars, Managing Director of IQE Silicon Compounds sees the strategic
partnership with AmberWave as a significant endorsement of IQE's role as the
leading global outsource supplier of advanced epitaxial structures. 'As
epitaxial technologies continue to emerge as a dominant processing step for next
generation silicon based devices, IQE is well positioned to bring its vast
epiwafer expertise in III-V compounds to the mainstream silicon industry'.


'In short, the unique patented AmberWave process for strained silicon on SiGe
further points towards epitaxial processes playing an increasingly important
role in future electronic and optoelectronic devices. Perhaps of even more
significance, is that this partnership between AmberWave and IQE demonstrates
how businesses are strongly leveraging their IP by embracing the benefits of
outsourcing.'



Notes to Editors:

AmberWave (epsilon)MOSa

AmberWave's (epsilon)MOSa strained silicon technology leverages many years of
advanced materials development at the Massachusetts Institute of Technology as
well as the process, device and circuit experience of AmberWave's brilliant
technical team.  With five issued patents and roughly 100 patent applications
pending, AmberWave's strained silicon technology eliminates the surface quality
and defect problems that plague other strained silicon technologies.  A silicon
layer is grown on top of a graded silicon germanium layer, which is itself grown
on top of a normal silicon substrate.  This thin, top layer of silicon will
modify its lattice structure to conform to the top-most silicon germanium layer,
becoming stretched-or strained-and increasing the mobility of electrons and
holes in the material.  (epsilon)MOSa devices have already exhibited electron
and hole mobility enhancement factors of between 1.5 and 2.2 over conventional
silicon.



Further Reading

An article relating to the AmberWave (epsilon)MOSa technology and the
partnership with IQE will appear in European Semiconductor scheduled to be
published on 18th March.



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
epiwafers to the Semiconductor Industry with manufacturing operations in the UK
and USA. The Silicon Compounds division was established in November 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 focuses on providing 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. More information on the company and its technology can be found at
www.iqep.com.




About AmberWave Systems Corporation

Based in Salem, NH, AmberWave Systems Corporation is a privately held,
venture-financed company that is redefining the silicon roadmap.  Launching from
its strained silicon eMOSTM platform, AmberWave propels its partners beyond the
constraints of current silicon technology to leverage its innovative roadmap for
both today and tomorrow.  Led by a team of engineers and executives combining
more than 95 man years of expertise developing silicon germanium (SiGe)
technology with strategic business know-how, AmberWave is well-positioned to
redefine the silicon roadmap and open the door for future generations of
wireless, electronic and optical applications.  With strong financial support
from Adams Capital, Arch Venture Partners, TeleSoft Partners, Dow Chemical and
The Hillman Company, AmberWave has received almost $50 million in funding.  More
information on the company and its technology can be found at www.amberwave.com.



Media Contacts:

IQE plc: Chris Meadows

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Buchanan Communications Ltd

Tim Thompson/Nicola Cronk

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