One of Wales’ leading tech businesses, IQE, could be sold as part of a strategic review.
The Cardiff-based global supplier of compound semiconductor wafer products and advanced material solutions, IQE, has confirmed its potential sale after extending the scope of a review, advised by Lazard, that had initially focused on seeking to offload its Taiwan business.
It has now confirmed it is in receipt of an approach for the entire business, although stressing there can be “no certainty either that an offer will be made nor as to the terms of any offer, if made.”
It comes as the IQE, in a trading update for 2025, said that is continues to experience weakness in wireless markets, largely as a result of softness in mobile handset sales, and this is expected to persist through 2025.
In addition, it said delays to federal funding cycles in US military and defence sectors are resulting in the deferral of orders into 2026.
IQE, whose wafers are used in products such as the iPhone said: “The board continues to believe there is a significant market opportunity for IQE 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 is now expanding the scope of the previously announced strategic review to also incorporate the potential sale of the company and is seeking buyers.”
On the potential sale of its Taiwanese business IQE, if concluded, it is expected that the proceeds from such sale will be used to fully repay the group’s revolving credit Facility with HSBC Bank and convertible koan Notes issued in March 2025, as well as providing IQE with cash to invest in its core operations.
Jutta Meier, chief executive IQE, said: “We have updated our expectations for the full year to adjust for the deferral of certain contracts in our wireless and photonics segments.
"This is a result of continued global and macro uncertainty which has impacted the unwinding of customer inventory levels pre-built in 2023 and 2024, the sale of new mobile handsets and the release of budgetary spending across the US military and defence sector.
"Looking ahead, while the strategic review remains ongoing I am encouraged by the progress we are making and remain confident in our ability to unlock value for all of our stakeholders.”
In the trading updated IQE said full year revenues for 2025 are expected to be between £90m to £100m, resulting in an adjusted Ebitda position of between £5m to £2m. Half year revenues expected to be at least £44m with an £(0.4)m adjusted Ebidta.
In a broker’s note Panmure Liberum maintain a share buy position, but dropped its targets from 24p a share to 20p. IQE’s current share price is under 8p.
The note added: “he scope to the strategic review has been increased to include the sale of whole company, and they are seeking buyers. IQE is in receipt of an approach from a potential offeror at the time of his announcement. There can be no certainty either that an offer will be made nor as to the terms of any offer, if made.
"The potential sale of the Taiwanese business is progressing with multiple parties, and it is expected, if successful, that the proceeds will leave the business in net cash position.
"The company is managing the current cash position very carefully. While we are very cognizant of the binary nature of these potential discussions, we retain a buy rating and lower our target price of 20p, to reflect our reduced estimates."
IQE will report its interim results on September 23.
