AI and defence demand for chips sends IQE shares soaring
Shares in semiconductor giant IQE surged 25 per cent to 9.18p on Monday morning, after the wafer supplier said it expects its full year results to hit the upper end of its guidance, thanks to a recovery in AI and defence-related demand.
The Cardiff-based company now forecasts 2025 revenue of around £97m, and adjusted earnings of at least £2m.
Its return to profitability is proof of a big turnaround from earlier on in the year, when the firm struggled with weak wireless markets and delays in federal funding across the pond.
The group announced it is currently negotiating “non-binding offers” for the group as a whole, alongside separate bids for specific assets.
While the board cautioned that there is no certainty of a deal, it did note that the level of interest reflects a “recognition of intrinsic value” of the firm’s intellectual property, and manufacturing scale.
Defence and AI
IQE reported that “faster than expected” funding releases for US military and defence programs provided a big lift to its second-half performance.
These orders, previously anticipated for 2026, were supplemented by a rebound in photonics demand, driven by the expansion of AI data centres.
The group also benefited from a recovery in its Taiwan operations, where sales of wireless products rose in tandem with new smartphone launches.
The company confirmed that the group enters 2026 with a “strong Q1 order book” and improved visibility across its core segments.
The rally in IQE’s share price, which has almost doubled in the last 30 days, comes as the board progresses with its strategic review.
“We continue to advance our strategic review and I am encouraged by the progress we are making. I remain confident in the opportunity ahead for the company and look forward to updating the market in due course”, said Jutta Meier, chief executive.
To support its liquidity during the review process, IQE shored up its balanced sheet with a cash position of £15.6m as of year-end, and secured a waiver from its lender, HSBC, for its fourth quarter earnings tests.