News: Suppliers
12 January 2026
IQE reports strong second-half 2025 demand, driven by military & defence, AI, data center and handset markets
In a trading update for full-year 2025, epiwafer and substrate maker IQE plc of Cardiff, Wales, UK says it saw strong trading momentum in second-half 2025 due to faster-than- expected funding releases for some US military and defence programs, previously anticipated for 2026.
IQE also experienced higher-than-forecasted photonics demand in the period, reflecting continued growth in AI and data-center markets, and increased sales of wireless products tied to new handset introductions which benefitted the group’s Taiwan operations.
This is expected to result in revenue of about £97m, at the upper end of the previously announced full-year 2025 forecast range of £90–100m. Due to improved operating leverage as capacity utilization improves, this should result in an adjusted EBITDA position of at least £2m, exceeding the forecast of between –£5m to +£2m.
Additionally, good progress has been made with stakeholders including customers and suppliers to improve near-term liquidity and working capital, resulting in a cash position of £15.6m as at end-2025.
IQE’s banking facilities provided by HSBC Bank plc are subject to certain covenant tests. IQE has received a waiver from HSBC in relation to Q4/2025 EBITDA covenant testing, reflecting the established and supportive relationship with the bank.
Current trading
IQE says that it enters 2026 with a strong first-quarter order book, reflecting improved demand visibility across core segments including consumer mobile, data-center and AI-related photonics markets. The momentum in wireless demand observed in Q4/2025 is expected to continue, supported by existing customers and recent platform wins.
Growth in data-center deployments and AI-enabled compute, alongside ongoing strength in consumer mobile, is also supporting increased demand for IQE’s photonics products.
Strategic Review
The board is negotiating non-binding offers for IQE as a whole in addition to separate bids for certain other group assets with a view to maximizing shareholder value. The board says that it is encouraged by the level of interest received and the recognition of the intrinsic value of the group and its component parts. However, given the nature of such discussions there can be no certainty which, if any, of these will progress to a completed deal.
“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 firm is well positioned to enter 2026,” says CEO Jutta Meier. “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.”
IQE extends multi-year strategic supply agreement with Lumentum
