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

Shares in IQE jumped 34.3 per cent to 11.75p after the semiconductor components group secured a major outsourcing contract with a leading North American components manufacturer, esitmated to be worth $25m over two years.

http://feeds.bignewsnetwork.com/?sid=ea07724c2f0973ed

Review of Today :

Level 2 closing at 2 v 2 with EVO and KLWT on the bid and WINS and MLSB on the offer.

Large buys will continue to come into next week as long as the KLWT on the bid and WINS on the offer combination continues...as things stand thats how the way it is so more large buy orders that need to be filled are in the pipeline.

All profit taking : more like loss taking out of the way today which is very good with the price obviously holding onto its gains from yesterday.

Here comes another large buy : 250,000 T BUY comes through at 12.25 pence.

KLWT picked up 2 million shares today :

500,000 T BUY came through at 12.00 pence
250,000 T BUY came through at 12.25 pence

KLWT stil have 1.25 million shares for someone.

Here comes another : 250,000 O BUY comes through at 12.25 pence.

1 Million bought by someone now today : KLWT have 1 million shares left now for someone.

Here comes another : 250,000 VW BUY comes through at 12.25 pence

Someone has bought 1.25 million shares now today : KLWT have 750,000 shares left for someone.

Now does anyone else remember the shanigans by WINS this morning...constantly bringing the offer to 12.25 and 12.50 pence. The above buys was the reason as to why.

I'd lay odds on press comment at the weekend and a further rise next week - this is due to reach mid teens before too long, as it's a good company with (strange in these times) a board who tell it like it is.
They've been honest when trading wasn't going well. Now they're saying it is going well. They also say they've been progressing towards orders with a number of far eastern customers. They also say they're targetting ebitda break-even on a month-by-month basis by their year end. Given the order this week and the attention that has brought, and the positive statement that accompanied it, why would anyone except an extremely short term trader want to get out of these?

MMs picked up 2 million shares at 11.50-12.00 pence and sold them at 12.00-12.25 pence....that's how it works...the MMs made their profit as well. Now another question with a 1.25 million buy order in the background at fixed prices how the hell can the price go pass those prices that the buy order is fixed at without them buys being filled first.

As I said earlier WINS and KLWT combination closed like that on Level 2...so as long KLWT stay alone on the bid and WINS alone on the offer - it means more larger buys are in the pipeline.

News out Today :

The 2 million buy yesterday at 11.61 pence was Canada Life Limited (see below) :

RNS Number:8998E
IQE PLC
05 November 2004


IQE plc ("the Company"

Holding in the Company





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.



05 November 2004



This information is provided by RNS
The company news service from the London Stock Exchange

END
HOLUUGACGUPCURA

Another nice day for the US Markets :

Blue chips end higher in third straight day of gains

NEW YORK (AFX) -- Blue chips ended higher Friday to put in their best weekly
gain since March 2003 and the Nasdaq turned higher for the year for the first
time in four months, boosted by a clear-cut election result, a decline in oil
prices and a glowing October employment report. The Dow Jones Industrial Average
rose 72 points to an unofficial close of 10,387 to end up around 3.6 percent on
the week. The Nasdaq Composite Index climbed 16 points, to 2,039, with the
tech-rich gaining 3.2 percent on the week. The S&P 500 Index gained for the
ninth straight session in a row to end the week at a 2 1/2 year high. The broad
gauge was up 4.43 points, at 1,166.10.
This story was supplied by CBSMarketWatch. For further information see
www.cbsmarketwatch.com.

Chip Sector becoming HOT again :

Nvidia, the world's biggest maker of computer-graphics chips, increased $2.27 to $17.68. The 15 percent gain was the second-largest in the S&P 500. Third-quarter net income rose to 15 cents a share on revenue of $515.6 million, the company said. Analysts expected profit of 9 cents a share on sales of $509.2 million, according to the average forecast in a survey by Thomson Financial.

An index of 19 chipmakers climbed 1.4 percent for the biggest increase among 24 groups in the S&P 500. Intel Corp., the world's biggest maker of semiconductors, added 30 cents to $23.18. Texas Instruments Inc., the No. 1 maker of mobile-phone processors, climbed 39 cents to $24.65.

Talking of chips for handsets:

Nokia issued a trading update yesterday:
it forecast a 10% rise in global handset sales volumes in the coming year. The companys current market share is around 33%.

"In 2004, China will produce 18.5 billion chips, which will account for only 22.1 percent of its domestic demand. In 2002, the country produced 9.6 billion chips, which accounted for just 21.5 percent of domestic demand, according to the research firm"

dd Nov 2nd

http://www.eet.com/semi/news/showArticle.jhtml?articleId=51202503

I have read threw the new thread it is very good Sue.

Thanks John...I'm sure the next four months will be very prosperous leading up to the full year results in March 2005.

Ramp alert !

A spokesman for the unnamed customer said:...

http://tinyurl.com/3t3z5

The key thing about Thursday's RNS announcement is that it validates the outsourcing model which is central to IQE's strategy. Here is an excerpt from the article in above link:

IQE's chief executive, Drew Nelson, said the new deal endorsed the company's strategy.

"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," he said. "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."

I feel our glory days are ahead of us we have the technology in place just now to steal a march on our competitors and the continued research with the help of government funding is going to put us in the forefront some exciting developments in the years to come.

Re : Government Funding

18M nanotechnology cash from UK government shared by Taylor Hobson, IQE, Applied Multilayers, University of Huddersfield, and NPL

06 Sep 2004

IQE is part of a UK consortium alongside Taylor Hobson and Applied Multilayers, who are to take part in a new, UK government project to develop new nano metrology technologies with a share of an 18million UK government grant to fund research and product development. Other partners include: National Physical Laboratory, Teddington, and The Centre for Precision Technologies at The University of Huddersfield.

The UK-based consortium has been awarded funding in excess of 1 million for Semiconductor and Optical Layer Analysis and Definition using Interference Microscopy (SOLADIM). The aim of the programme is to help develop measurement techniques and international specifications for surface texture measurement of epitaxial wafers and thin film coatings.

The project will be co-ordinated by the lead partner, Taylor Hobson, who will provide the Talysurf CCI non-contact measurement solutions for the demanding applications of IQE and Applied Multilayers. The Talysurf CCI is the enabling technology that will allow the establishment of international standards for nano-surface roughness.

The grants are part of the Governments drive to help companies, research organisations, and universities exploit potential applications for new technology so that the UK can be a technology leading country. It is estimated that the global market for nano technology could be $1 trillion within the next decade.

http://www.iqep.com/news/news_sep_06_04.htm

"It is estimated that the global market for nano technology could be $1 trillion within the next decade".

News on nano technology :

Memories may mark early beachhead for nanotech

By Rick Merritt
EE Times
November 05, 2004 (10:36 AM EST)

SAN JOSE, Calif. Nanotechnology is moving forward on many fronts with semiconductor memories expected to be one of its first major beachheads in electronics.

That was the conclusion of a day-long conference sponsored by market watcher Semico Research Corp. here Thursday (Nov. 4). "We think nanotech represents the next phase of Moore's Law, and it is creating an interdisciplinary renaissance," said Steve Jurvetson, managing director at Draper, Fisher Jurvetson (Menlo Park, Calif.). Since 2000, the venture capital firm has invested about $80 million in some 20 companies broadly in the field.

"It is hard to think of an industry that won't be revolutionized by nanotech in the next 50-100 years, including everything from agriculture on out," he said in a keynote here.

Jurvetson defined nanotech as anything working at 100 nm and below in the area where life sciences, materials science and electronics come together. "This is at the nexus of the sciences," he added.

Nanotech startups range from developers of basic materials and tools to suppliers of novel thermal management technologies and optoelectronics components. Several players are queuing up to deliver novel nanotech memories by 2007.

"In electronics, memory is the first place nanotech plays out in a big way," said Jurvetson.

LSI Logic is developing an embedded memory for its ASICs using the carbon nanotube based technology from startup Nantero Inc. (Woburn, Mass). LSI believes it could use the technology to embed more than 30-Mbits fast memory on an integrated cellphone processor, the current embedded memory limit due to power leakage and yield problems with conventional memories, said Norm Armour, vice president of LSI's fab operations in Gresham, Ore.

"It's a couple years out bit it looks very promising. The promises of single-wall nanotubes are almost too good to be true," said Armour.

Bob Merritt, Semico's vice president of emerging technologies, said by 2007 several companies will deliver nanotech-based nonvolatile memories with SRAM-like speeds and DRAM-like densities. The parts especially when combined on-chip with high performance logic could offer dramatic new capabilities to wireless devices, microprocessors, ASICs and a range of fabless semiconductor makers.

"We foresee a new paradigm of performance well beyond what could be forecasted by Moore's Law," said Merritt.

Indeed, current memories were architected with PCs in mind, while today's high volume cellphones stack DRAM, SRAM and flash die in an effort to meet their memory needs, said Avo Kanadjian, vice president of marketing for Nantero that plans to sample Mbit-class memories in 2005.

"The performance of ASICs and SOCs are definitely limited by the performance of DRAM and flash," he said.

For its part, Axon Technologies Corp. (Tempe, Ariz.) said it will deliver a very low power nonvolatile DRAM as a discrete chip by early 2007. "If we don't have a new memory out I that time frame we will miss the bus and be doomed," said Michael Kozicki, chief technology officer and founder of Axon.

Freescale Semiconductor Inc. is sampling its magnetic RAM in Mbit densities now. It expects users to qualify discrete parts starting next year for applications replacing battery-backed SRAM and flash/SRAM combinations, said Saied Tehrani, Freescale's director of MRAM.

"The need for a new memory architecture is very real. This is something all semiconductor manufacturers are currently looking at," said Salvatore Coffa, a director of research at STMicroelectronics focused on optoelectronic and post-silicon technologies.

ST is working on a variety of nanotech-based components including opto-couplers, DNA microarrays and LED replacements that could offer more tightly focused light beams and lower costs than today's products. The company is also working with a European consortium on polymer electronics based on nanotech that could deliver KHz range devices at very low costs.

Other areas where nanotech will start to have a significant impact in the next three to five years include solar cells and novel battery types such as fuel cells, said Jurvetson.

http://www.eet.com/semi/news/showArticle.jhtml;jsessionid=FGPCL1W51QTQCQSNDBESKHA?articleId=52200086

For newcomers this is a useful article which describes the pros and cons of epiwafer outsourcing. The pink bits are the bits that IQE does.

http://www.compoundsemi.co.uk/White%20Paper_%20III-V%20outsourcing.pdf

Compound Semiconductors Online Website :

IQE Scores $25M RF Epiwafer Outsource Contract
November 4, 2004...IQE's North American subsidiary, IQE Inc. of Bethlehem, Pennsylvania USA has announced that it has secured an outsourcing contract to supply a leading North American RF Component Manufacturer with MBE-grown epitaxial materials for the customer's RF based components used in mobile handsets. The agreement, which has just gone into effect, and is for a minimum term of two years, and is estimated to represent $25 million in projected revenue for IQE for those initial two years. The contract amounts to supplying more than 90% of the customers anticipated demand for their advanced RF wafer products. The unnamed customer has been working with IQE for years and their second source contract is deemed to be a positive sign of a definitive upswing for IQE, a company currently with a total of approximately 200 employees, and a good sign for the international RF epiwafer foundry houses in general.

IQE's President & CEO, Drew Nelson remarked on the occasion of announcing the contract that, "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."

http://www.compoundsemi.com/news/

"their second source contract is deemed to be a positive sign of a definitive upswing for IQE"...they've already had one contract from the company who they've just announced the contract with before.

That sentence is not included in our RNS. Definitive upswing for IQE - nice.

Price should continue upwards -EVO stick glue will be surprised again if IQE announce another contract win very soon as its clear that this great win of last week took them by surprise.The main thing is that the outlook for IQE is bouyant and last time they gave an upbeat outlook this went from 8p to 20p+ and there is more reason for this to happen again as the recent contract win clearly shows that they will win more contracts .ARM HOLDINGS and other related chip companies have beaten city forecasts due to this very reason (greater sales and outlook better).

Cheers suehelen you have been very busy, Shares mag should give you a ring and do an update. They said buy, then sell, and i thought to myself they some times get it wrong and there must have been something there in the first place. a GREAT GAMBLE BY ME.

Afternoon Kivver, maybe we may get a new write up printed in Thursday's issue with a buy rating....fingers crossed. With no doubts from themselves this time round as well.

Background on Canada Life Limited :

RNS Number:7307R
IQE PLC
05 November 2003

IQE plc ("the Company")
Holding(s) in Company

The Company was today notified by Canada Life Limited that, following the
Company's placing and open offer announced on 7 October 2003 ("Placing and Open
Offer"), Canada Life Marketing Group is now interested in 12,551,156 ordinary
shares of 1p each in the Company ("Ordinary Shares"), representing 4.0 per cent.
of the issued share capital of the Company.

-------Canada Life Limited bought 12,551,156 shares in the fundraising this time last year at 15.00 pence....they have held onto all the shares over the year and with this encouraging contract win announced on Thursday they bought another 2 millions shares on Thursday to take their holding to 14,551,156 Ordinary Shares.

It seems that Canada Life Limited have got a lot of faith in IQE and won't be reducing their holding at these prices but are actually looking to increase their holding at these prices and are taking a long term view with these. And why shouldn't they, there is no reason why these cannot get to the 1.00-1.50 levels over the next 18 months.