IQE to Conduct Strategic Review Amid Challenging Market Conditions

British semiconductor wafer maker IQE, a key supplier for Apple’s facial recognition technology in iPhones, has announced plans to initiate a strategic review of its assets as it grapples with a sluggish recovery in the semiconductor industry. The company, which produces the epi-wafers used in Apple’s facial recognition sensors, stated it would consider selling its Taiwan operations entirely after initially planning an IPO for the unit while retaining control.

IQE has faced significant headwinds, including heightened U.S.-China tensions and a growing focus on supply chain security, which have exacerbated the challenges of a slow sector recovery. The company warned that its 2024 revenue is expected to remain flat at around £115 million, a stark contrast to earlier forecasts that predicted growth. In light of these conditions, IQE aims to “further optimize operations, restructuring, and right-sizing [its] business,” according to a spokesperson.

Shares in IQE dropped 15 percent following the announcement, hitting their lowest point in over 15 years. The company’s financial struggles were compounded last month by the sudden departure of CEO Americo Lemos, with Chief Financial Officer Jutta Meier stepping in to lead the company through this transition period. While IQE now anticipates a full-year adjusted core profit of at least £5 million, analysts had forecast approximately £12.5 million, reflecting the company’s underperformance against market expectations.

IQE’s pivotal role in supplying Apple with technology for its facial recognition systems underscores its importance in the broader tech ecosystem. The company’s epi-wafers are crucial components in the vertical-cavity surface-emitting lasers (VCSELs) used in iPhone Face ID systems, making it a vital part of Apple’s supply chain. However, with peers such as Skyworks Solutions and Qorvo also reporting soft quarters, IQE’s struggles highlight the broader challenges facing the semiconductor industry. The outcome of the strategic review, including the potential sale of its Taiwan operations, will be closely watched as the company seeks to stabilize its position and navigate a turbulent market environment.

Source: Reuters

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November 18, 2024 – by the ID Tech Editorial Team