Recommended by myself as a Strong Buy at 8.00-9.00 pence on 15.10.04
http://www.iqep.com/
Daily Execution Price and Volume


(USA)

Semi Index

!FUNDAMENTALS!NEWS
Preliminary Full Year Results - Tue 22 Mar 2005
IQE plc was formed in May 1999 by the merger of two leading wafer foundries, each with a proven track record in the supply of high quality electronic and optoelectronic materials produced using MBE and MOCVD platforms. We believe that the expertise and experience across a diverse range of materials available from IQE is unparalleled within the compound semiconductor industry.

LATEST NEWS :
RNS Number:8494E
IQE PLC
04 November 2004
IQE secures major outsourcing contract with leading RF component manufacturer
IQE's North American subsidiary, IQE Inc, today announced it has secured a major
outsourcing contract to supply a leading North American RF Component
Manufacturer with epitaxial materials for its RF based components used in mobile
handsets. The agreement, which is effective from 1st November 2004 and is for a
minimum term of two years, renewable annually thereafter, provides for IQE's
Bethlehem site to supply more than 90% of the customer's anticipated demand for
their advanced RF wafer products and is estimated to be worth around US$25
million in revenue to IQE over the initial two year period. As a result of the
agreement, internal wafer manufacture at the customer's site will cease. Both
parties have been working closely together for several years; a relationship
through which IQE has gained a high degree of confidence in its own ability to
service the outsourced epiwafer needs of major manufacturers.

IQE's President & CEO, Drew Nelson said "This agreement with such a prominent
global supplier of RF components for the cellular phone market demonstrates a
clear movement towards the outsourcing model within the compound semiconductor
industry. Their selection of IQE as the primary partner, as a result of our
large and comprehensive production capacity, and low cost structure, endorses
the Company's commitment to the outsource model"

A spokesman for the customer commented: "outsourcing certain products and
services such as the manufacture of our RF epitaxial wafers allow us to
concentrate our efforts on the processes that add significant value to our
product offering within the global, highly competitive RF market place and we
are pleased to build on previous work we have undertaken with IQE. This
agreement will allow us to be one of the most highly cost effective players in
the RF component marketplace"

Tradeshows
IQE actively participates in a wide range of tradeshows, conferences and seminars throughout the World.
IQE will be participating in the following forthcoming trade event:
--------------------------------------------------------------------------------
EVENT LOCATION DATE
--------------------------------------------------------------------------------IEDM 2004 San Francisco, CA 07 Dec 2004
(05 November 2004)
The Company was notified today by Canada Life Limited, that following the
purchase of 2,000,000 ordinary shares of 1 pence each in the Company ("Ordinary
Shares") at 11.6 pence each, Canada Life Marketing Group is now interested in
14,551,156 Ordinary Shares. These Ordinary Shares represent 4.6 per cent. of the
issued share capital of the Company.

(20 October 2004) Scottish Widows Investment Partnership Ltd on
behalf of Lloyds TSB Group plc and its subsidiary companies, that they are
interested in 24,020,662 ordinary shares of 1 pence each in the Company
("Ordinary Shares"). Of this interest, 22,039,762 Ordinary Shares are material
interests, which represent 6.98 per cent of the Company's current issued share
capital.

Director Holdings :
Dr Drew Nelson 26,724,636 (5 Nov 2003)
Dr Michael Scott 26,157,970 (5 Nov 2003)
Martin Lamb 3,775,584 (5 Nov 2003)
Dr Godfrey Ainsworth 1,627,020 (20 Oct 2004).

Buy Note published by House Broker Evolution Beeson Gregory on 04.11.04 :

Evolution Securities 100 Wood Street, London, EC2V 7AN 020 7071 4300
Evolution
SECURITIES
www.evosecurities.com 4 November 2004
IQE (IQE) Buy
Mkt cap: 36m Net cash: 11m Contract win Price/Target: 11p/15p
Breakthrough contract win
IQE has announced that it has won a $25m two year outsourcing deal
with a leading US RF component manufacturer. This is a genuine
breakthrough for IQE it gives us the confidence needed to raise our
target price to 15p
IQE have won a major outsourcing contract with a leading US Radio Frequency
wireless/mobile components company. The contract has a minimum term of
two years and an initial value of $25m. This is one of the four contracts that
management were referring to at the time of the fund raising in November
2004. The other three do not appear to be close to signing at present but the
list of potential customers is still there and management continue to talk to
other parties. This contract win proves that there is a market for wholesale
outsourcing of epitaxy and we expect others to follow but not in the
immediate future.
We estimate the split to be $10m:$15m between year one and year two. The
contract involves the closure of the customer's facilities and because of the
sensitive nature of this the identity of the customer has not been announced.
We are not changing our forecasts. This $10m for the first year is already in our
27.2m revenues estimate for next year. It is worth noting that because the
contract is with an existing customer there is an element of revenue substitution
in this contract. However, this announcement does mean that we are
considerably more comfortable with the forecasts than we were.
If more contracts come through, the revenues should go straight into our
forecasts. We would not expect the other contracts to be as substantial as this
but given the marginal loss/profit scenario we have forecast for next year their
effect on earnings could be significant.
As a result of this announcement we have increased confidence in the forecasts
and so we are increasing our share price target to 15p.
Ian Robertson +44 (0)20 7071 4463 ian.robertson@evosecurities.com EVO Securities is broker to IQE
Year end Sales (m) EBITDA (m) PTP (m) EPS (p) PER (x) Yield (%) EV/Sales (x) Revised?
12/03A 18.8 -11.3 -12.8 -6.2 - - 1.3
12/04E 17.1 -8.3 -9.9 -3.1 - - 1.5 No
12/05E 27.2 0.4 -1.5 -0.5 - - 0.9
21. 75 1 5/1 0/03 LOW 2 .20 11/ 3/0 3 LAST 8 .50 Source: DATASTREAM

IQE plc
AGM Trading Update Statement


IQE plc (IQE), the leading global outsource supplier of customised epitaxial
wafers to the semiconductor industry, is pleased to announce the results of its
AGM, together with an AGM trading update.

At the AGM, held at the Group's offices in Cardiff today, all resolutions were
duly passed. In addition, President and Chief Executive, Dr Drew Nelson,
provided the following trading update to the AGM;


'As anticipated in the annual results statement, revenues for the first half of
2005 will be substantially higher than either the first or second half of 2004.
Overall, unaudited Q1/2005 revenues increased by 20.2% in dollar terms and 15.3%
in sterling terms compared with Q1/2004. This represents the second consecutive
quarter of significant revenue growth since Q3/2004, and we expect this
sequential growth to continue, resulting in revenues for H1/2005 which are
expected to be approximately 20% higher than for H2/2004.


The increased revenues will result in substantially reduced losses and a
reduction in operating cash outflow for H1/2005 compared with previous half
years, although final repayment of some debt and additional working capital
consumption for inventory build-up as part of the large outsource contract,
which was signed late last year, and capital expenditure at Wafer Technology
will increase overall cash outflow in H1/2005 beyond EBITDA. Nevertheless, we
expect the half year cash position to be in-line with our 2005 budget levels.


The wireless sector has continued to be strong for the Group, with the large
outsource contract running to plan and other qualified customers increasing
their demand. Final qualifications, particularly in the Pacific Rim countries,
are coming to conclusion in the next few months, further increasing expected
demand. Output at IQE Inc in H1/2005 has been limited to some extent by
specific routine equipment maintenance programmes, but is expected to continue
to increase throughout H2/2005 as these programmes complete.



Visible laser demand, particularly for industrial applications, has continued to
be strong although this has been offset to some extent by delays to newer
product launches where IQE has become qualified by customers, but their product
takeoff has been slower than they had anticipated. Recent indications are that
these new products, particularly VCSEL based products, are gaining acceptance in
the marketplace and orders are now beginning to come in to reflect the expected
increase in demand. In addition, IQE Europe has made good progress with the
development of a high power DVD product for the booming Read/Write marketplace,
which is currently being evaluated for performance and reliability by some of
our key customers. We therefore expect significant revenue growth from this
division during the coming months.


Quarter on quarter revenue growth at IQE Silicon has been strong, albeit from a
low base, as more customers become qualified and existing customers continue to
ramp up their demand from IQE. Progress on IQE's proprietary strained silicon
development continues well, and it is anticipated that major milestones towards
a final Strained Silicon on Insulator product for the 65nm technology node will
be achieved in the next few months. Additional outsourced product development
programmes on behalf of customers have continued to progress as planned.


Finally, Wafer Technology's business has been slower than anticipated due to
temporary inventory readjustment in the LED marketplace, but excellent progress
has been made in developing improved surface finishes for the higher margin
laser markets, and these are currently under qualification by a number of
customers.


We continue to pursue and seek out further outsource contracts that will benefit
from the economies of scale and technological expertise that IQE Group companies
can offer, and good progress continues to be made in this respect, although the
scale of some of these opportunities necessarily means timing can be somewhat
unpredictable. We also continue to focus on cost control within the various
Group companies to ensure the breakeven revenue points continue to reduce.


As we achieve the expected revenue increases throughout H2/2005, we remain
confident that we will achieve our target of ongoing cash generation on a
monthly basis during this calendar year.'

What a good statement, up 9.5% in one hour... wow.

This is excellent news.. time to top up again, as, if this news is repeated again this yr (along with contract / other good news) it will rocket for sure.
We may even now see RHPS re-rate these as a "buy" from being on their watch list..... good luck all who sail with her..could be a beneficial journey,(imho).

Up 11.5% now & still rising.

Excellent news...time to get in tomorrow

EVO have a note out on their site. Could be an interesting morning.

improving dollar against the pound will also add value. Ive already made a nice profit once on this company im coming back for more!

Agree with you there Kivver

RHPS in their weekly emaial letter yesterday have dropped IQE from their watch list...thet have got this as a sell and dropped it all together saying that IQE will not make their numbers in this current fin yr as too much to do in the 2nd half to make a profit... RPHS have been wrong too many times before ! I'm staying with IQE for the med-long term... there's always next yr! also, it only needs another deal/contract or two and IQE will be even better! so, I'm an IQE believer - for better or worse!

SHARE Magazine has just tipped this in their cover article (Back in the race). I think I will try a flutter myself

daokta... It must be a good sign... but it has'nt done much good to SP yet... we really need a good trading update contract/deals news etc.. for this one to move up.

Recent News :

IQE begins shipping antimonide epitaxial wafers.


26 July 2005


IQE, Inc., Bethlehem, PA, US, has announced that it has begun shipping antimonide based epitaxial wafers, produced using the company's state-of-the-art, molecular beam epitaxy (MBE) platforms. IQE is aggressively pursuing a share of the growing antimonide market.


Antimonide (Sb) based compound semiconductors are emerging as key materials in a number of electronic and optoelectronic applications. Due to their unique band gap and lattice properties, Sb-based materials are particularly attractive for high-frequency, low noise, and low power-consumption electronic devices, as well as for long wavelength emitters and detectors. IQE is seeking to work together with an expanding base of key customers to further develop this market.



IQE has capability to grow a range of heterostructures by MBE using solid source valved Sb-crackers. The use of these systems enables the precise alloy and thickness control required to meet the stringent band gap engineering demands of the Sb-based structures. Integrating antimonide based alloys expands the capabilities of epiwafer structures on GaAs or InP substrates.


Wafer Technology Ltd, another IQE group company, is already firmly established as a leading manufacturer of antimonide substrates (GaSb and InSb) on which advanced epitaxial layers can be produced.



The epiwafer supply of custom-designed antimonide structures is available now and IQE's unparalleled experience in over 17 years of wafer outsourcing means that customers can be sure of a quality product with excellent uniformity and reproducibility.








Contacts:


Sales:

(Epiwafers) Lisa Rosenberg +1 866 473 7266

(Substrates) Mark Furlong +44 19 0821 0444


Media:
Chris Meadows +44 (0)2920 839400

Tradeshows




Forthcoming Events, 2005:


--------------------------------------------------------------------------------
EVENT LOCATION DATE


--------------------------------------------------------------------------------
MIOMD-VII Lancaster, UK 12 Sep 05
NAMBE Santa Barbara, CA 02 Oct 05

HOLY GRAIL

If we get the holy grail of monthly breakeven in the upcoming results, this will be sharply re-rated imo. The current dollar strength must be working wonders for IQE's bottom line.

The Holy Grail of monthly EBITDA breakeven comes closer.

With the results due in just over 2 weeks, I would be surprised if there wasn't a bit of spec money chasing financial good news.

The cost base is in order

The order book is looking very rosy indeed

The semi conductor marketplace is at it's most active for eons

The dollar is being very kind to IQE

There is always the possibility of a groundbreaking deal

T10s will start buying soon in time for results plus i think we will get an other paper tip before results as well, IQE always leak when there is good news coming and it has been a long time coming.

Shares Magazine on 12 August 2005 :

IQE (IQE:AIM)
Sleeping for three years now, it could
be time for IQE to wake up and smell
the profits. The semi-conductor
manufacturer was trading at the dizzy
but ridiculous heights of 500p when it
listed in 2000. Along came the tech
crash and IQE made a spectacular fall
from grace. By the end of 2002, the
shares were practically worthless and
havent traded above 20p since.
However, one thing which has
remained consistent about IQE is its
leading position within the market.
The orders may have dried up, but IQE
remains top of its league.
Only now, something is stirring.
Apparently, in the last two to three
months, both order flow and cash flow
have improved. IQEs cash is now
breaking even - something it hasnt
managed for the last two-and-a-half
years. A very reliable source says that
May and June were months of record
business.
Its next set of results are going to
surprise the market, which has not
gone near IQE for years. Could be
worth getting in while its still dozing.

Summary of 2005

26 July IQE begins shipping antimonide epitaxial wafers
18 July IQE Expertise to chair CS-Mantech 2006
12 July IQE Silicon Compounds WINS Industry Award
08 June IQE Silicon Compounds Short-listed for Materials Award
25 May Result of AGM
13 May In the News: Gaining synergy with strained silicon
28 April In the News: IQE Material used by NASA to build 4 colour infrared camera
22 Mar Preliminary Results for the Year Ended 31 December 2004
26 Jan Trading Update
20 Jan IQEs VCSEL material produces highest power ever for 850nm single-mode device

EVO's Buy Note which came out in November last year :

IQE (IQE) Buy
Mkt cap: 36m Net cash: 11m Contract win Price/Target: 11p/15p
Breakthrough contract win
IQE has announced that it has won a $25m two year outsourcing deal
with a leading US RF component manufacturer. This is a genuine
breakthrough for IQE it gives us the confidence needed to raise our
target price to 15p
IQE have won a major outsourcing contract with a leading US Radio Frequency
wireless/mobile components company. The contract has a minimum term of
two years and an initial value of $25m. This is one of the four contracts that
management were referring to at the time of the fund raising in November
2004. The other three do not appear to be close to signing at present but the
list of potential customers is still there and management continue to talk to
other parties. This contract win proves that there is a market for wholesale
outsourcing of epitaxy and we expect others to follow but not in the
immediate future.
We estimate the split to be $10m:$15m between year one and year two. The
contract involves the closure of the customer's facilities and because of the
sensitive nature of this the identity of the customer has not been announced.
We are not changing our forecasts. This $10m for the first year is already in our
27.2m revenues estimate for next year. It is worth noting that because the
contract is with an existing customer there is an element of revenue substitution
in this contract. However, this announcement does mean that we are
considerably more comfortable with the forecasts than we were.
If more contracts come through, the revenues should go straight into our
forecasts. We would not expect the other contracts to be as substantial as this
but given the marginal loss/profit scenario we have forecast for next year their
effect on earnings could be significant.
As a result of this announcement we have increased confidence in the forecasts
and so we are increasing our share price target to 15p.
Ian Robertson +44 (0)20 7071 4463 ian.robertson@evosecurities.com EVO Securities is broker to IQE
Year end Sales (m) EBITDA (m) PTP (m) EPS (p) PER (x) Yield (%) EV/Sales (x) Revised?
12/03A 18.8 -11.3 -12.8 -6.2 - - 1.3
12/04E 17.1 -8.3 -9.9 -3.1 - - 1.5 No
12/05E 27.2 0.4 -1.5 -0.5 - - 0.9
21. 75 1 5/1 0/03 LOW 2 .20 11/ 3/0 3 LAST 8 .50 Source: DATASTREAM!
--------------------------------------------------------------------------------

EVO had an upper end target price of 15 pence after the contract win announcement last November. I would imagine a new Buy Note will come out after the Half-year results on the 24th with a much higher target price.

An extract from Friday 13 August 2005 edition of Personal & Finance Confidential

"Almost eight months after its last profit warning it is now time to buy IQE. My very reliable city source tells me that both order flow and cash flow have improved over the last three months. IQE's cash position is now breaking even -something it has not managed for the last two and a half years. Word has it that May and June were record months for the business. IQE's interim results are out in September and they will surprise the market."

From the 25th May 2005 AGM statement -

"As anticipated in the annual results statement, revenues for the first half of
2005 will be substantially higher than either the first or second half of 2004.
Overall, unaudited Q1/2005 revenues increased by 20.2% in dollar terms and 15.3%
in sterling terms compared with Q1/2004. This represents the second consecutive
quarter of significant revenue growth since Q3/2004, and we expect this
sequential growth to continue, resulting in revenues for H1/2005 which are
expected to be approximately 20% higher than for H2/2004.


The increased revenues will result in substantially reduced losses and a
reduction in operating cash outflow for H1/2005 compared with previous half
years, although final repayment of some debt and additional working capital
consumption for inventory build-up as part of the large outsource contract,
which was signed late last year, and capital expenditure at Wafer Technology
will increase overall cash outflow in H1/2005 beyond EBITDA. Nevertheless, we
expect the half year cash position to be in-line with our 2005 budget levels


Results are due in on 24th August, and this may be the time to buy in under 10p, as I truly feel the company now has its house in order.