Supply chain revamp for IQE lifts British chipmaker

CARDIFF-BASED chipmaker IQE expects new supply chains in Asia to protect it from the fallout of the trade war between the US and China.

The Apple supplier said that it was redeveloping its supply chains around the world following delays caused by Washington’s restrictions on Chinese telecoms giant Huawei.

“This has had an impact on sales volumes for IQE’S products, as global customers adjust to these new supply chain situations and IQE becomes qualified in these new supply chains,” the company said.

IQE operates manufacturing plants outside of China, including factories in the US, Europe, Taiwan and Singapore. It said it had found a “major customer” for chips produced in Taiwan, and had received “significant additional orders” from a smartphone producer in Asia. The deals appeared to soothe investor concerns with shares soaring by a quarter to almost 65p. However, IQE’S share price is still lower than it was in March when it fell after worse than expected results.

Last month, the company warned that 2019 revenues would be millions below estimates.

Drew Nelson, IQE’S chief executive, said at the time that it faced “unprecedented times” as the global semiconductor market endures disruption from political tensions. Dr Nelson had said the breadth of IQE’S product range,

‘It had a major customer for chips produced in Taiwan and significant orders from a smartphone producer’

new materials tech to be introduced and its global manufacturing footprint were “powerful mitigating factors”.

The business initially claimed in May that the sanctions would have a “limited impact on our mid to long-term revenue trajectory” but has since warned of reductions in revenues and sales as a result of the turmoil.