Trading Statement

IQE PLC
22 December 2006

22 December 2006



IQE plc



Trading Update



IQE ('the Group', AIM: IQE), the leading global outsource supplier of customised
wafer products and outsource wafer services to the semiconductor industry, today
publishes a trading update for the year to 31 December 2006.



The Group has also today in a separate statement published details of its
acquisition of MBE Technology Pte Ltd ('MBE'), a Singapore based manufacturer of
compound epitaxial ('epi') wafers for a total cash consideration of S$23 million
(£7.5 million).



IQE has continued to perform well during the second half of 2006 with the
Group's overall business performing in the line with the Board's expectations.
Demand for the Group's wafer products has continued to be strong across all
sectors of the business.



The weak US dollar has had an impact on revenues, but the natural hedging
derived from a significant proportion of Group costs being in US dollars has
reduced the impact on profitability.



The integration of the former EMD facility, acquired in August 2006, has been
very successful with demand for wireless products in that business exceeding
expectations. The ability to 'multi-source' wireless products from within the
Group is proving to be a major benefit for both IQE and its customers.



The acquisition has also provided IQE with the opportunity to qualify new and
existing customers with additional wireless products and to accelerate
development of its advanced next generation products, such as the BiFET. These
two developments have resulted in some additional costs during H2 2006, but are
expected to significantly benefit the Group moving forward during 2007.



The Group expects to report its preliminary results for the year to 31 December
2006 in March 2007.





Enquiries:

IQE plc  www.iqep.com.
    Dr Drew Nelson, Chief Executive
    Stuart Hall, Chief Finance Officer
    Chris Meadows, Investor Relations

Noble & Company Limited                                     [phone]
    John Llewellyn-Lloyd/ Sam Reynolds



College Hill
    Adrian Duffield/Ben Way                                [phone]








Note to Editors



IQE is a global leader in the manufacture of complex wafer products and
outsourced foundry services to the semiconductor industry.  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, including mobile handsets and wireless infrastructure,
WiFi, 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.



IQE is also a leading global outsource supplier of advanced semiconductor
wafers, with products that cover the whole spectrum of wafer structures,
supported by an innovative outsourced services portfolio that allows the Group
to provide a 'one stop shop' for the wafer needs of the world's leading
semiconductor manufacturers.



These manufacturers 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 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.



Following the MBE acquisition, IQE will employ around 320 people and operate six
manufacturing facilities located in Cardiff (two) and Milton Keynes in the UK,
and 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.



Glossary



BiFET: An RF component comprising two different types of transistor (A Bipolar
Transistor and a Field Effect Transistor) integrated as a single device to allow
smaller component size and better performance.



Epiwafer: A wafer of semiconducting material (made by a crystal growth process
called epitaxy) for use in the manufacture of microelectronic devices.  Two
methods of growing the epitaxial layer on existing silicon or other wafers are
currently used: metal organic chemical vapour deposition (MOCVD) and molecular
beam epitaxy (MBE).  These wafers are typically newer types of semiconductors
comprising some combination of the elements gallium, indium, aluminum, nitrogen,
phosphorus or arsenic.



Semiconductor: A solid whose electrical conductivity can be controlled over a
wide range, either permanently by introducing impurities ('doping') or
dynamically by applying electric fields.  Semiconductor devices with dynamically
controlled conductivity are the building blocks of integrated circuits, such as
microprocessors.  Semiconductors may be elemental materials such as silicon and
germanium, or compound semiconductors which comprise more than one element such
as gallium arsenide or alloys such as silicon germanium or aluminium gallium
arsenide.



Wafer: a thin slice of semiconducting material upon which microcircuits are
constructed.  Wafers are thus of key importance in the fabrication of
semiconductor devices such as integrated circuits.  Typically they are made in
various sizes ranging from 1 inch (25.4 mm) to 11.8 inches (300 mm), and
thicknesses of the approximately 0.5 mm.



RF Components: Components such as amplifiers, receivers, and modulators, which
are designed to operate in the range of the electromagnetic spectrum reserved
for microwave or wireless communications.








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