IQE is the leading global outsource supplier of customized epitaxial wafers to the semiconductor industry.

Their technology is of most advanced like AFM means Atomic Force Microscopy and moves a minuscule cantilever over an objects surface, a sharp tip passes over dips or rises punched in the surface and reads out digital information. This technology is not going to slow down it is going to speed up and has to replace most existing forms of memory storage by virtue of capacity and size.

The future of nano-technology, these tiny/minute robots would need very small processors and most sure strained silicon could provide these.

The low share price is due to uncertainty as to when the cash will run out, but I don't think this will happen as cash is of 12 to 15M and NAV of 30p, and losses are going to drop on the next 3 month and we could have profits on the Q4 2004.

Latest news from the Chairman were" The Group remains confident that it is in a strong position within the outsourcing market, although the protection of its cash position is paramount.
With a broad product portfolio allowing the customer base to use IQE as a 'one stop shop', a large available production capacity and a strong balance sheet, the Board believes the Group will benefit strongly as the overall semiconductor industry recovers and will continue to strengthen its position as the leading outsource supplier of advanced wafer products to the sector. "

Nearly all the recent results have been encouraging. Q4 accounts are being completed (30th Dec 2002). IQE know where they stand, if things had got worse their would have been a trading statement by now, and with Amberwave (IQE's partner) increasing its Asian presence, this is a bullish trend and a good point to pick up the shares @ 4.25p

Intraday

5 month MA and Indicators

Stock to Watch: IQE
By Edmond Jackson | Tue, 27/09/2011 - 08:30

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

The purchase of 93,800 shares at 26.5p by IQE's (IQE) group business development director, even when fulfilling a commitment as part of his remuneration package, offers some respite to shareholders in this AIM-listed microchip wafer supplier that has seen its price more than halve from 60p since last spring - capitalising the company at just over 130 million.

This is your classic 'high beta' share, one that tends to be more volatile than the market, hence a darling on the way up and curse on the downside. Its fundamentals are attractive, up to a point: IQE's microchips are used by the top tier of smartphones and the company proclaims growing market share over 30%. Its components meet the needs of a wide range of other wireless devices and high-bright LEDs in lighting applications, for example. Increasingly, such customers want to outsource production to specialists like IQE which is now an international operation. You are pressed to find a similar UK small cap with such a quality growth story.

So why such share price volatility? If you appreciate the reasons why, this should help you trade IQE successfully - as this is indeed a potent smaller company to follow.

First, if there is a recession, then various 'must-have' consumer products may become more discretionary items - ie what you can do without when times get tighter. This feeling need not apply even to the majority; what counts in economics is the marginal effect, whether more people are warming to an idea or dropping off. Analysts have predicted continued growth in smartphones which only account for 28% of the total handset market. A recession can still dent people's rate of upgrading phones, however, and I recall analysts' bullish projections for mobile gaming which faltered.

From IQE's figures, first-half 2011 revenue growth was 16% to 38.3 million compared with 54% to 33 million reported a year ago; albeit that in constant currency terms the recent growth was 23%. While this remains very healthy and it was easier to grow fast from a lower base, the market sees a mis-match. IQE's chief executive conceded in his outlook statement: "Our overall upbeat outlook is tempered by recent growing uncertainty in the global economy... potential to impact customers' inventory levels... although we have not seen any evidence of this."

Secondly, IQE is an operationally geared company meaning that changes in revenue get magnified in the bottom line - for example first-half 2011 pre-tax profit rose 28% to 2.8 million compared with pre-tax profit tripling for 2010 as a whole with overall revenue up 38%. That's fine in a benign scenario, but with some commentators talking of a depression if Europe falls apart and spreads financial trouble, it has twigged investors out of this kind of share.

Third, all these changes affect IQE's price-earnings multiple. As demand for smartphones kicked in during 2010, Company REFS shows the P/E multiple averaging 46 times (on an historic basis) and 30 times during 2011. The shares soared from a trading range in the pence teens during early 2010 to near 50p as IQE stood out growth shares generally got harder to find. So there was a scarcity value enhancing the rating. Since then however, the marginal effect of selling by enough experienced investors who know what a recession can do to the ratings of illiquid small caps, has got the upper hand.

Market scepticism

Assuming IQE achieves forecasts for 9-10 million pre-tax profit this year and 11.5-12 million in 2012, at 26p currently the shares are on a prospective P/E of about 15 times falling to near 12. This compares with annual earnings growth projected over 20% for 2011 and 2012, so the market is sceptical it can be achieved and likely being harsh because the normal market size is just 10,000 shares.

There is no dividend, this being a classic growth company reinvesting, so it does put all the emphasis on earning power without a yield prop on the downside.

But this is effectively pricing in a recession and profits warning, even if you suspect one would clip a few more pence off the shares - at least initially. The business development director's buy at 26.5p looks a logical move now the company is out of its closed period, even if he is obliged to.

Downside ought to be limited from here. The shares are below a 65 million placing exactly a year ago at 32p which raised some 20 million amid a small US acquisition, and plans to expand manufacturing capacity, repay debt and strengthen the balance sheet. The trend in cash-at-bank has gone from just 1.4 million at end-June 2010 to 12.5 million at end-December and 6.1 million at end-June 2011. Borrowings are just over 5 million, mainly long-term, with finance costs down to 192,000 against interim operating profit of 3 million. So IQE is in robust shape to deal with a recession if it happens.

Part of the difficulty is separating sentiment from fundamentals.

IQE is the kind of enthusiasts' share, liable to run up and down but even if growth rates do moderate for a while, the company should have an increasingly attractive long-term future as wireless and LEDs become mainstream. Company REFS shows normalised pre-tax profit slipped from about 3 million to 2.4 million from 2008 to 2009, the last downturn - hardly a disaster.

The shares traded down to 4p with the bear market low, and they won't be immune to market maelstrom. But IQE's fundamentals are shaping up well as a long-term stock to watch and trade.

For more information see www.iqep.com.

Share trading with Interactive Investor. Why not use our stock filter to apply different criteria to over 3,700 shares in order to help your investment decisions?

KEEP an EYE

24.875p ( 24.75 / 25p )

after being down for a while is seems now is ready to go places, volume just a bit better than the last couple days

another nice rise today and moving to 29p at close +1.50p

and up to 30p today, certainly oversold earlier

an another good rise this morning to 31.25p +2.25p

Breaking 30 looks promising. In my opinion the shares had more than halfed without good reason.
IQE is one of the most undervalued stocks in the entire market according to some .

         THE FUNNY SIDE OF LIFE

        
I struggle with situations were everything is taken over-seriously,
It is of course important to be serious and respectful to posters,
but they too will benefit from a warm environment rather than a fraught one.

We all have different ideas of humour, so if you are easily offended, please avoid this post.

It had reached a high of 33p during last Friday trading, what a turnaround in 10 days

and 35.50p today

easy to pick up undervalued stock if one knows how.

Undervalued even more today .. shocking.

Inventories is the problem and six month of lower revenue............


IQE revenues hit as customers 'correct inventories'

IQE warns that its second half revenues are likely to be slightly lower than the first six months.

The company - a global supplier of advanced wafer products - said a small number of its major wireless customers had advised that an inventory correction was affecting their forecast short term demand.

IQE says this appears to reflect a combination of some market share shifts between chip companies and the difficult macroeconomic environment.

IQE said the board had taken immediate actions to mitigate the impact on profit and cash.

And it says that as a result of these actions, coupled with improved margins due to a favourable product mix, the board expects EBITDA profit will continue to grow sequentially, both half on half in 2011 and for the full year against 2010.

IQE is an existing supplier to the chip companies that are benefitting from these market share shifts, albeit to a lesser extent.

The group expects that these shifts are only likely to affect IQE's revenues in the short term - Q4 2011 and Q1 2012 - until the qualification of both additional capacity and new products with these customers is complete.

Several qualifications are already in progress and are being accelerated at the customers' request.

CEO Dr Drew Nelson said: "It is clearly disappointing to have to report that inventory corrections by some of our major customers will impact revenues for the fourth quarter of 2011

"We are engaged in increased and accelerated qualification activities which should strengthen our market share across the customer base and help further mitigate individual customer risk.

"One such significant qualification with a major Japanese group has already been completed, whilst others are expected to be complete over the coming three to six months."

AS the broker will say here, " a great buying opportunity. "
Investor's Chronicle puts fair value on the stock at 50p.

This stock has fallen so far it is ridiculous.There is a big rebound on the cards.

Check this news out.

IQE plc
IQE plc : European researchers demonstrate reli...

Cardiff, UK - 10 November 2011: Researchers working on the European Commission
funded Vertically Integrated Systems for Information Transfer (VISIT) programme,
for which IQE produces advanced semiconductor wafers, have demonstrated high
reliability Vertical Cavity Surface Emitting Laser (VCSEL) devices operating at
world record data rates of up to 40 Gbit/s, which is four times faster than the
current single channel (serial) data rate used in commercial systems.

VISIT is an EU funded programme with the remit to focus on strategic, high-value
photonic components and subsystems for scalable economic broadband access and
local area networks. The central objective of the VISIT programme, which start
in October 2008, is the research, development, test and exploitation of system-
enabling optical transmitters having a completely novel design and/or largely
improved functionality as compared to current technology.

The directly modulated VCSEL devices fabricated on material grown by IQE at its
Cardiff facility operate at 850nm, which is the current standard wavelength for
optical fibre applications used in short-reach data communication and storage
area networks.

The new technology increases data throughput by up to 400 times the speed of
current copper Ethernet systems and four times that of the latest optical
technologies. The VISIT researchers demonstrated VCSEL devices operating at data
rates of up to 30 Gbit/s at 85C, and up to 40 Gbit/s at 25C with bit error
ratios of less than 10E-12, which for many data communication applications is
considered "error-free."

The VCSEL devices also demonstrated superb temperature stability in the linear
region of the light power versus current characteristic with a less than 25 W/C
change in emission power for operation below 6 mA at temperatures between 20 to
100C. The peak output power exceeded 8 mW for multi-mode operation and up to 4
mW for single mode operation, all with differential slope efficiencies exceeding
70% at up to 40C.

Multi-mode VCSEL device operation was demonstrated at current densities well
below 10 kA/cm2 which is a critical factor in determining device reliability.
This is expected to greatly improve with the further development of single-mode
VCSELs.

The VISIT team has also produced the first 40 Gbit/s packaged VCSELs, complete
with an OM3 fibre pigtail and a high frequency electrical V-connector for ease
of system-level optical link testing and development.

The prototype VCSEL devices fabricated using new device processing techniques
and device geometries on wafers produced by IQE's optoelectronic facility in
Cardiff, UK, operated reliably at 40 Gbit/s in initial tests, making them
suitable for optical interconnectors as well as for optical fibre networks for
high data rate applications such as data centres.

The next development stage under the VISIT programme will focus on final
directly modulated VCSEL benchmarking and design and processing refinement
including device designs for reliability and manufacturability. The VISIT team
will also work on further improvements in the packaging and testing of optical
transmitter subassemblies.

The VISIT Project is funded by the European Commission Framework 7 Programme
with Project Officer Dr. Michael Hohenbichler. The project is led by Prof. Dr.
Dieter Bimberg of the Technical University of Berlin (Germany), and includes
also the following project partners: IQE (UK), Intel Performance Learning
Solutions Ltd. (Ireland), VI Systems GmbH (Germany), Chalmers University of
Technology (Sweden), The University of Cambridge (UK), University College Cork
via the Tyndall National Institute (Ireland), , Riber S.A. (France),and the A.F.
Ioffe Physical-Technical Institute of the Russian Academy of Sciences (Russia).





CONTACTS:

Technical/Sales: IQE Europe (+44 29 2083 9400)
Andrew Joel
Stephen Phelps

Press: IQE plc (+44 29 2083 9400)
Chris Meadows

Something has set IQE off today, up 3.5, nearly 20%. Anybody know why?

Wish I knew - would like to thinkl it was my prayer mat - looks like ending the day 30% up - lovely jubbly !!

Vague speculation about takeover interest according to the FT

I'm not sure about that. When I had a look it mentioned Jan 13 2011 that these rumours occurred and not 2012 ! At any rate it is up again this morning.

The interesting thing, is the rumours of this time last year occurred when the price was 54 pence, which of course was more than twice the current price.

now up over 40% from yesterday , and still no news. Mind you, why the price fell so far in the first place was a bit of a mystery!

! ! ! = ?

IQE plc : Year end trading update
HUG
Year on year growth in sales and profits

Cardiff, UK, 18 January 2012: IQE plc (AIM: IQE, "IQE" or the "Group"), the leading global supplier of advanced semiconductor wafer products and services to the semiconductor industry, provides a trading update for the year ended 31 December 2011.

Full year revenues for 2011 are expected to exceed £75 million, up from £73 million the previous year. EBITDA is also expected to increase to be not less than £13.7 million. Net debt is expected to be less than £4 million.

Sales grew rapidly in the first half, driven by strong double-digit growth in the Group's wireless and optoelectronics divisions. Growth in wireless sales reflected the increasing adoption and sophistication of portable devices such as smartphones and tablets using Gallium Arsenide ("GaAs") technology, and by the increasing adoption of advanced Gallium Nitride ("GaN") technology in high power wireless applications such as radar and infrastructure. Growth in optoelectronic sales was driven by a wide variety of applications including consumer, industrial and advanced high efficiency solar power applications.

As announced in October, second half sales were adversely affected by inventory corrections in the supply chain related to market share swings amongst a couple of IQE's key customers. These inventory corrections have unwound as expected, and should be fully resolved by the end of the first quarter of 2012.

The Group's long standing strategy to qualify multiple products with multiple customers across the entire supply chain went some way toward offsetting the impact of the market share shifts. As further qualifications complete the future impact of market share shifts will continue to diminish.

New product qualifications have progressed well, with significant milestones now achieved. The Group has successfully qualified its leading edge BiHEMT product with one of the top three Japanese mobile chip manufacturers, which has recently announced a major expansion programme in the smartphone market. Sales under this qualification have started to ramp, and this customer is expected to move into IQE's "top 10" during the second half.

IQE is also in the final stages of qualification of BiHEMT products with two of the leading wireless chip manufacturers globally and expects to ramp into production during the second quarter. In addition, the Group is qualifying a number of next-generation wireless products with a significant number of customers.

IQE's business is also being driven by increasing demand across the Group's other core markets including advanced semiconductor materials for optoelectronic products which continued to enjoy strong growth driven by a range of existing and emerging end market applications which are expected to account for an increased proportion of the Group's 2012 full-year revenues.

Dr Drew Nelson, IQE's Chief Executive, said:

"2011 has been another positive year for the Group, with increased sales and profits to record levels, despite challenging supply chain and macro-economic conditions.

"Our core business of wireless-related products for all forms of mobile communications is performing as expected whilst new and emerging products for consumer, industrial and defence applications are generating demand across all our key markets.

"We have added to our manufacturing capacity during the year and expect to benefit strongly from some significant operational achievements including best in class quality improvements to our products. This will enable improved customer output and increased throughput from our own production tools and lead to continued improvements in operational and financial metrics.

"The Board remains confident that IQE is well positioned to build further on its robust business model and powerful market position to deliver strong growth in 2012 and beyond."

IQE expects to report its preliminary results in late March 2012.

Contacts:


IQE plc (+44 29 2083 9400