Trading Update

IQE plc (AIM: IQE, "IQE" or the "Group"), the leading global supplier of compound semiconductor wafer products and advanced material solutions, provides a trading update for the year ending 31 December 2024.

Revenue for the Full Year 2024 is expected to be broadly flat year-on-year, resulting in around £115m. In line with the rest of the industry, we are continuing to see a slower than anticipated recovery in key sectors driven by weak consumer demand in end markets. The group expects this to result in an Adjusted EBITDA of at least £5m.

Strategic Review

The Board remains confident in IQE's long-term prospects because of the Group's leading position in providing advanced compound semiconductors across several market verticals and to a base of global marque customers. The Board believes there is significant value in IQE that is not currently reflected in its market capitalisation. Consequently, IQE announces today that it will be conducting a comprehensive strategic review of its asset base to ensure that it has a strong capital position to further invest in its core operations (the "Strategic Review"). The Board believes there is a significant market opportunity in IQE's core operations and remains focused on reducing its cost structure for profitable growth, servicing its customers and maximising value for shareholders.

In the first instance, IQE will broaden its options in relation to the proposed IPO of its Taiwan operations to include all strategic options, including a full sale. The Board has retained Lazard to advise on the Strategic Review. The Strategic Review will be overseen by IQE's Board of Directors, with input from key stakeholders.

Proposed Financing

The Group is in the process of negotiating a proposal from Lombard Odier, its largest shareholder, regarding short-term financing to help IQE navigate the ongoing market softness. Lombard Odier's willingness to extend up to c.£15 million via a convertible loan note with a conversion price of 15p per share (the "Proposed Financing") is a strong demonstration of Lombard Odier's confidence in the embedded value within the Group. The Group intends to consult with its other major shareholders regarding the Proposed Financing following this announcement.

The Group also continues to have a constructive dialogue with HSBC, and the Directors do not foresee the need to raise further equity should these ongoing discussions progress as expected.

Mark Cubitt, Executive Chair of IQE, commented:

"The impact of the slow pace of recovery in the semiconductor industry can be seen across the sector and is reflected in our revenue expectations for FY24. Looking ahead, the strategic review, including the broader assessment of options for our Taiwan operations, will ensure we have a strong capital base to continue investing in our core business and support IQE's long-term strategy. We remain committed to delivering maximum value for our shareholders and serving our customers. We are confident in IQE's long-term prospects and inherent value."

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