IQE sees increase in orders

IQE, which supplies wafers for the world’s largest chipmakers, said it had seen the first indication that orders were resuming, sending its shares up 70 per cent.

The south Wales-based group said there were signs that the industry-wide reductions of inventories was coming to an end after a slow first quarter and forecast demand would pick up in the coming months.

Drew Nelson, chief executive, said chipmakers, who use the wafers in smartphones, needed to rebuild their inventory levels. “It’s not all our customers but the majority are ordering again.”

He also forecast that growth would accelerate in the second half of 2009.

IQE provides the material for many of the world’s biggest chipmakers by supplying Gallium arsenide-based (GaAs) wafers, which improve the performance of high speed data services on smartphones. A 3G enabled iPhone for example contains 4 GaAs wafers, whereas an older 2.5G phone would contain only two.

The widespread adoption of wireless mobile devices such as smartphones and netbooks helped IQE report revenues for the year to December 31 up 21 per cent at £60.5m.

However, pre-tax losses widened from £862,000 to £1.3m after a £2.4m charge for relocating operations in Singapore and £1.4m for cutting staff. Losses per share were 0.32p compared with 0.20p previously.

IQE shares rose 2½p to 5¾p by mid-afternoon on Tuesday.