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

IQE shares soar on Kopin Corporation acquisition
Thu 10 Jan 2013

IQE - IQE

Latest Prices
Name Price %
IQE 34.75p +18.80%

FTSE AIM 100 3,303 +0.77%
FTSE AIM All-Share 735 +0.66%
Technology Hardware & Equipment 1,039 +3.44%

LONDON (SHARECAST) - UK semiconductor materials maker IQE gained on news it had agreed to buy a unit of Kopin Corporation to enhance its product line in wireless.

Shares soared 19.66% to 35.00p after the company said it would acquire compound semiconductor epiwafer manufacturing business Kopin Wireless for $75m.

Kopin Wireless manufactures heterojunction bipolar transistor materials which are used in power amplifiers, a key wireless component in mobile devices.

IQE expects earnings to increased on the back of the acquisition this year. In a trading update the company projected 2012 revenues of up to £88m with earnings before interest, tax, depreciation and amortisation up to £17m and net debt of approximately £15.5m.

Drew Nelson, Chief Executive Officer of IQE, said: "This acquisition is our third key transaction in the past 12 months. It significantly enhances our scale and provides us with a highly complementary product line in the wireless space.

"The transaction marks another major step forward in our risk mitigation strategy, whilst significantly boosting our wireless market share. At the same time, it delivers excellent opportunities for additional business growth, particularly in Taiwan and from there into the Asian semiconductor market.”

IQE to showcase at the London Innovators and Investors Forum

It is our pleasure to invite you to attend the forthcoming Innovators & Investors Forum on the 29th January 2013 at the Business Design Centre, London. This will be an exclusive invitation only event organised by Shares Magazine and Cenkos Securities.

As an active private investor, we are sure you would appreciate this unique opportunity to receive privileged access to 30 diverse, forward thinking and energetic technology companies at a single event.

Many of the exhibiting companies are currently involved in some very exciting projects in an effort to drive future growth, and development within their industries.

The event will be supported with an extensive conference program, including keynote speakers and company presentations.

We sincerely hope you are able to attend and that you find the experience both profitable and enlightening. Companies represented include:

1Spatial
Avanti Communications
Bango
Bond International Software Group
Brady
CML Microsystems
Corac
Cyan Holdings
eg Solutions
Energetix Group
eServGlobal
Forbidden Technologies
Fusion IP
Globo
incadea
InternetQ
IQE
KBC Advanced Technologies
Netcall
Optimal Payments
Plastics Capital
Probability
Quindell Portfolio
StatPro Group
WANdisco


Event time: 12.30pm to 5.30pm

Complimentary refreshments and luncheon provided

To register for this event please click here


CONFERENCE AGENDA AS AT 09.01.13
(To be updated once presentation speakers are confirmed)

12:30 Registration & Lunch

14:00 Keynote speaker - Richard Penny, Senior Fund Manager - Legal and General

14:15 Shares Magazine presentation - Russ Mould, Editorial Director

14:30 Company presentation - David Richards, President & CEO - WANdisco

14:45 Company presentation - Henrik Bang, CEO - Netcall

15:00 Company presentation - Marcus Hanke, CEO - 1Spatial

15:15 Company presentation - tbc

15:30 Coffee Break

16:00 Company presentation - Stephen Blundell, CFO - eServGlobal

16:15 Company presentation - David Baynes, CEO - Fusion IP

16:30 Company presentation - Stephen Streater, CEO - Forbidden Technologies

16:45 Company presentation - Charles Cohen, CEO - Probability

17:00 Company presentation - Simon Smith, Non-Executive Director - Cyan Holdings

17:15 Close

This agenda is subject to change and alterations

For further information, please visit our events page

Shares in IQE

(IQE: 33p), a global supplier of advanced wafer products to the semiconductor industry, soared 14 per cent after the company announced the acquisition of the compound semiconductor epiwafer manufacturing business of Nasdaq-quoted Kopin Corporation (NAS: KOPN). This is a strategically smart deal as it significantly extends IQE's market share and leadership in wireless industry supply; adds Skyworks Solutions, which has a long standing supply agreement with Kopin Wireless, to the customer base; and brings in a Taiwanese manufacturing facility to boost IQE's global manufacturing footprint and provide the business with a strong position to access the growing Asian semiconductor market.

To finance the $75m (£47m) consideration IQE has placed around 8.8 per cent of its enlarged share capital with institutions at 29p a share to raise £16.5m, and has agreed a new $40m (£25m) banking facility with HSBC to fund the balance of the purchase price. Importantly, given the structure of the deal and the fact that $15m of the consideration is deferred for three years, existing shareholders are not being diluted. In fact, the acquisition is expected to boost EPS from the 2013 financial year onwards and generate annual cost savings of at least £7m from 2014.

To put this into perspective, for the year ending 31 December 2012, IQE’s chief executive Drew Nelson expects “revenue to be in the range of £87m to £88m and cash profits of between £16m to £17m.” Kopin Wireless generated cash profits of $7.5m (£4.7m) in the first nine months of 2012, so the £7m of costs savings are material for a business making combined annual cash profits in the order of £23m. Bear in mind, too, that analysts had been predicting strong EPS growth for IQE over the next couple of years even before earnings upgrades which are likely to follow in the next few days to factor in the Kopin acquisition.

Previously, analysts expected EPS to increase from 1.6p in 2012 to between 2.2p and 2.7p in 2013, rising again to 3.2p next year, but these estimates will now have to be materially upgraded. It’s worth pointing out, too, that IQE’s finances are very comfortable as December 2012 year-end net debt of £15m only represented proforma gearing of around 18 per cent of shareholders funds of over £85m. Post the acquisition I estimate that net debt of £40m would account for around 36 per cent of IQE’s shareholder funds of £110m.

This heady growth rate and the positive drivers in the epiwafer market were the main reason I suggested buying the shares at 31.5p ('Tech that and rally', 19 Oct 2012) and reiterated that advice at 28.5p (Happy Capital returns 17 December 2012). At the current price, IQE is only rated on a 2013 forward PE ratio of 12.2 before imminent earnings upgrades. For a business that has potential to double EPS over the next two financial years, this is a very attractive rating and I continue to rate the shares a very strong trading buy. My original target price of 38p to 40p is likely to prove conservative.

IQE plc : Completion of Acquisition of Kopin Wi...
HUG


Cardiff, UK, 16 January 2013: IQE plc (AIM:IQE, "IQE" or the "Group"), the leading global supplier of advanced semiconductor wafer products and services to the semiconductor industry, announced on 10 January 2013 the acquisition of the compound semiconductor epiwafer manufacturing business ("Kopin Wireless") of Kopin Corporation, Inc. (the "Acquisition"). The Company is delighted to confirm that it has now completed the Acquisition.

IQE: Investec shifts target price from 23p to 25p and still recommends to sell.


Sold my holding

Given as a buy in todays' Shares. - Target 59 p.

A good deal of buying interest this morning and now through key resistance level at 35.

18 month high

One good RNS and its next stop 60p following Shares article

OFT investigation of Kopin purchase!

How long does this take, and what is the likely scenario ?

the more you think about it the less credibility this oft news has to it, there is no way iqe board went ahead with this buy of kopin without doing some serious checks including what if anything the oft may think, i expect iqe will put out some sort of retort shortly in diplomatic language to the effect that they have no case to answer

Has there been news that I have missed - massive drop ! However, its time to hold tight which is confirmed by the number of buys going on - they cant all be wrong surely.

I have heard nothing, but hope to hear something from IQE.

Agreed - MMs are no doubt pushing IQE for a statement. Best it is not delayed too long.
Is long term for me anyway

Certainly, and the fact that 70% of the trades were buys. Did you note the late buy of 5 million shares ?

US giant Qualcomm, the world's leading supplier of chips for mobile phones, said it would enter IQE's radio frequency market.

Qualcomm introduced a new silicon-based radio frequency chip which could threaten IQE's product base, sending shares in the UK company down 4.75p to 28.75p in heavy trading volumes. Analyst Eoin Lambe at Liberum Capital said:


Importantly for IQE Qualcomm's solution is based on silicon (CMOS) while to date most of the radio frequency chips in mobile phones have relieved on IQE's epi wafers. This is obviously negative for IQE. Qualcomm has not released any detailed specifications at this point. Speaking to IQE, they believe that Qualcomm will initially target the low end of the Chinese smartphone market while most of the value is at the high end. No change to numbers but may dampen sentiment towards IQE.


He kept his buy recommendation on IQE, however, as did Vijay Anand at Espirito Santo:


We believe [Qualcomm's] silicon-based product primarily targets the low-end handset market which we estimate accounts for only 5%-6% of IQE's revenues. To the extent that silicon has inherent physical limitations versus compound semiconductors, we believe that Qualcomm's move is unlikely to have a material impact on IQE.

Broker views

22 Feb IQE PLC Liberum Capital Buy 28.75 target 40.00 Reiterates
22 Feb IQE PLC Espirito Santo Execution Noble Buy 28.75 target 55.00

After the sharp drop during the last week, recomendations are appearing >>>>>

Steve Moore: IQE Buying Opportunity

Shares in IQE plc (LSE: IQE) were trading at more than 35p last week before falling back to close the week at 28.75p – where they trade now. There are reasons why the shares were sold off but I do not regard them as valid reasons and I believe that investors now have a great opportunity to buy into a cracking long term growth story at a great price. Snap it up quickly. IQE is the free share tip for Monday here on onefreesharetip.com

The major root cause of the sell off looks to have been US-based Qualcomm announcing a silicon-based product which it claims will be able to support 3G and LTE (4G) phones as well as the low-end phones such solutions have been primarily limited to. They have been limited thus as compound semiconductors, as focused on by IQE, offer inherent efficiency, noise, insertion loss and resistance advantages over silicon whilst also having shorter, less expensive design cycles. Moreover, the Qualcomm offering is a generic, off-the-shelf one - unlikely to appeal to the mid- and high-end of the market where differentiation is a key aspect and IQE’s customers customise for handset manufacturers.

It therefore seems likely that the new Qualcomm offering is set for the low-end of the smartphone market and IQE’s house broker, Espirito Santo, notes “the low-end handset market… we estimate accounts for only 5-6% of IQE’s revenues” and that “it is worth remembering that a high-end smartphone has 4-6x higher GaAs (semiconductor) content versus a low end phone”.

Fellow brokerage, Canaccord, has today emphasised “we make no changes to our forecasts… we believe the 13% share decline is an overreaction”.

There is also an Office of Fair Trading review of IQE’s recent acquisition of the compound semiconductor epiwafer manufacturing business, Kopin Wireless to consider. However, although this looks look an attractive deal for IQE, the shares look great value even without Kopin.

With earnings per share forecast to rise to 2.2p+ this year and comfortably more than 3p in calendar 2014 ( without Kopin but potentially closer to 4 with) and, as a rare UK technological leader with significant, particularly intellectual property-based, barriers to entry and serving global growth markets, a premium (15x +) earnings multiple continues to look fairly justifiable here. This suggests a target price of 45p if (as is unlikely) the deal is blocked but 60p if it goes through. Either way at 28.75p the shares are a buy.

Proverbs 26:11