Shares in Cardiff-headquartered technology company IQE surged by around 25% in early trading after it released an encouraging update on its financial performance and confirmed it is in discussions with potential suitors.
Strong Second Half Performance Exceeds Forecasts
The global supplier of advanced semiconductor wafers reported that trading in the second half of 2025 was stronger than initially anticipated. This momentum has continued into the new year, supported by a robust order book for the first quarter.
IQE attributed the improved performance to several key factors. These included faster-than-expected funding releases for certain US military and defence programmes, which had been forecast for 2026. The company also experienced higher-than-forecast demand for its photonics products, driven by continued growth in artificial intelligence and data centre markets. Furthermore, increased sales of wireless products linked to new smartphone launches provided a boost to its operations in Taiwan.
As a result, the firm expects its full-year 2025 results to be at the upper end of its previous forecast range. It anticipates revenue of approximately £97 million, leading to an adjusted EBITDA of at least £2 million.
Takeover Talks and Shareholder Value Focus
In a significant development, IQE's board confirmed it is negotiating non-binding offers for the entire group. Separate bids for certain other group assets are also being considered, with the aim of maximising value for shareholders.
The company stated it is "encouraged by the level of interest received," which it says recognises the intrinsic value of both the group and its individual parts. However, it cautioned that there can be no certainty as to whether any of these discussions will lead to a completed deal.
Chief Executive Dr Jutta Meier said: "I am pleased to report a positive second half of trading for IQE in 2025. Coupled with a strong Q1 order book and sustained demand across key end markets, the company is well-positioned to enter 2026." She added that the strategic review is advancing and she remains confident in the company's future opportunities.
Financial Position and Market Reaction
IQE also reported progress in managing its near-term liquidity, finishing the year with a cash position of £15.6 million as of 31 December 2025. The company has received a waiver from its bank, HSBC, in relation to an EBITDA covenant test for the fourth quarter of 2025, citing a supportive relationship.
Following the trading statement, IQE's beleaguered share price rallied sharply, climbing around 25% to just over 9 pence. Broker Panmure Liberum maintained its 'buy' rating on the stock, with a share price target of 20 pence.
