Photonics Stars At IQE
IQE has reported 2016 Revenues which were up 16% to £132.7mm, profit up 17% to £22.1m, cash generation up 7.1% to £22.5 million, and a capex of £19 million.
“IQE delivered a strong set of results in 2016, with revenues up 16%, PBT up 17%, and EPS up 15%," says IQE CEO Dr Drew Nelson. “Revenues were up in all key markets: wireless, photonics and InfraRed. Photonics continues to be the star of the show with 43% year on year growth in sales, and a CAGR of more than 35% over the past three years. This is being driven by VCSEL and InP technologies which enable a broad range of applications from fibre optic communication, to advanced sensors, and industrial processes."
“InfraRed sales were up 19% with a number of notable contract wins during 2016," adds Nelson, “this division has gone from strength to strength, with good technological and commercial progress. Our largest division, Wireless, also performed well, with revenues up 15%."
Wafer sales also grew 19% with photonics revenues up 43% to £22.8 million, wireless revenues up 15% to £91.3 million and infra-red revenues up 19% to £10.6 million.
License income of £6.7 million was higher than expected, but lower than the 2015 figure of £8 million.
The new cREO technology delivered some early wins, including delivering a step change in GaN on Silicon technology (the elimination of “parasitic channel"), and engagement in development programmes for advanced RF filter applications.
A key customer is engaged in end market qualification using IQE’s GaN on Silicon material, signifying that this technology is close to commercialisation.
There were significant contract wins in InfraRed, and progress in a number of development programmes.
Positive market dynamics, including increasing M&A and sector investment, reflect the increasing focus on compound semiconductors as a critical enabling technology to major growth themes, including high speed communication, the “internet of things", big data, advanced medical technology, energy efficiency, and autonomous vehicles.
The UK Joint Venture was a catalyst to securing c.£300 million of funding towards the continued development of a UK CS Cluster, and the Singapore JV has been selected as a partner in a major programme for CS on silicon technology.
“Our focus on building a strong IP portfolio reflects our vision of global leadership across a range of markets as advanced semiconductor materials become an increasingly important enabler of a wide range of electronics applications," says Nelson.