News: Suppliers
29 May 2026
IQE’s full-year 2025 revenue falls 17.6%, as 40% drop in wireless outweighs 15% growth in photonics
For full-year 2025, epiwafer and substrate maker IQE plc of Cardiff, Wales, UK has reported revenue of £97.3m, down 17.6% on 2024’s £118m.
Wireless revenue fell by 40% from 2024’s £67.3m to £40.1m, reflecting uncertain macroeconomic conditions in first-half 2025 and softness in mobile handset demand, with some end-customer requirements met from existing inventory.
Photonics revenue grew by 15% from 2024’s £49.9m to £57.1m, driven by funding releases for certain US military and defence programs in second-half 2025 and continued growth in AI and data-center-related markets.
CMOS++ revenue fell from 2024’s £863,000 to £65,000, as activities in this sector have now ceased, following the closure of IQE’s silicon manufacturing site in South Wales.
“We were encouraged to see market conditions improve in the second half of the year. This reflected a positive trajectory in key sectors including photonics for AI and data centers, aerospace & defence, and wireless products for consumer electronics,” comments CEO Jutta Meier.
Due to the lower revenue base and the under-utilization of manufacturing assets and capacity, adjusted EBITDA (earnings before interest, tax, depreciation and amortization) more than halved from 2024’s £8.1m (7% margin) to £3.2m (3% margin).
However, reflecting the impact of working capital movements, reported net cash flow from operations rose from 2024’s £1.3m to £8.1m.
Cash capital expenditure on property, plant and equipment (PP&E) was £5.1m to support IQE’s strategic gallium nitride (GaN)-related capacity investment into the power electronics and advanced display (micro-LED) markets and other high-growth sectors.
Cash and cash equivalents rose during 2025 from £4.7m to £15.7m. Adjusted net debt rose from £18.8m to £31.5m.
Fundraise
On 28 May, IQE completed a financing that raised gross proceeds of £81m. This included a £45m strategic investment from MACOM Technology Solutions Inc (£30m of equity and £15m in new non-interest-bearing convertible loan notes, in exchange for entering into long-term supply agreements) plus a £23m redemption and reinvestment of convertible loan notes by existing noteholders, as well as a £13m placing and retail offer of new ordinary shares.
The net proceeds will be used to repay IQE’s existing revolving credit facility debt with HSBC Bank, and support working capital requirements and ongoing strategic investment.
After completing the fundraise and repaying the revolving credit facility with HSBC Bank, IQE will receive net cash inflows of £27.9m.
“The £81m fundraise from key partners is a transformational investment for IQE, giving us the balance sheet strength to invest in our future growth, while maintaining our global asset base,” says Meier.
“IQE is uniquely positioned as a critical enabler of the world’s fastest-growing technology ecosystems. In particular, accelerating demand for our indium phosphide (InP) solutions supporting data-center and AI markets is expected to be a material growth driver throughout 2026 and beyond,” says Meier.
“Taken together, a stronger IQE, coupled with favourable market conditions directly benefitting the business, gives me great confidence for the future.”
Full-year 2026 revenue to grow by over 20%
IQE says that trading in first-quarter 2026 has been in line with management expectations, with strong demand across all core segments. In particular, it is seeing accelerated demand for its InP solutions, which support optical photonics products for data-center and AI infrastructure. IQE expects this to be a material growth driver throughout 2026 and beyond.
IQE is also seeing ongoing strength in aerospace & defence markets, as well as vertical-cavity surface-emitting laser (VCSEL) and wireless products supporting the consumer smartphone industry.
Revenue for full-year 2026 is expected to exceed 20% growth year-on-year, with strong order book visibility into second-half 2026. This is expected to result in a high-single-digit to low double-digit adjusted EBITDA.
Business update
Developments in IQE’s market segments are described as follows.
Connect — accelerated demand across the customer base due to rapid growth in AI-driven hyperscale data centers, alongside mobile handsets, infrastructure and defence:
- Multiple tier-1 InP photonics design wins position IQE for future volume production in next-generation optical interconnect markets for data centers.
- Secured multiple development orders with leading global technology customers developing ultra-fast GaN-on-Si micro-LED solutions to address critical data-center network bottlenecks.
- Continued strong demand for GaN RF products across terrestrial, satellite and defence radar platforms, driving further orders for mission-critical sensing applications.
- GaN RF infrastructure qualifications for use in high-power space communications networks, including satellite internet constellation platforms (low-Earth-orbit satellites, LEOS), are progressing simultaneously.
- Secured new design wins for 5G mobile handset power amplifier applications, with potential for adoption across multiple future device generations and platforms.
Sense — strengthened position in advanced sensing platforms, with strong commercial and strategic momentum across mobile, automotive safety, infrared imaging and defence applications:
- Qualified and commenced production ramp of second-generation 3D sensing VCSEL products for a leading global smartphone platform, reinforcing position in premium consumer devices.
- Secured volume production orders for automotive-qualified VCSEL products with a leading global optical sensing solutions provider, supporting in-cabin driver safety monitoring systems.
- Long-wavelength infrared (LWIR) products qualified for production at a tier 1 customer, supporting a demand ramp across autonomous vehicle, defence and advanced imaging applications.
- Increasing demand for large-diameter (6- and 8-inch) gallium antimonide GaSb-based epiwafers from defence customers, enabling more cost-effective production of ultra-high-resolution infrared sensors.
Display — progressed technological capabilities and customer engagement in next-generation micro-LED display ecosystems targeting future consumer devices:
- Expanded partnership and renewed development supply agreement with a leading multi-national consumer in advanced micro-LED AR/VR displays, with programs progressing towards early-stage production.
- Delivered 8-inch RGB (red, green and blue) epitaxy for silicon integration, expanding customer qualifications and supporting new consumer micro-LED display opportunities.
- Launched advanced epitaxy capabilities through functional wafer-surface coatings, providing customers with a single step to integrate GaN micro-LEDs into silicon foundry manufacturing flows.
Power — establishment of long-term strategic foundations and strengthening global supply chains in next-generation GaN power to meet rising demand across data centers, space and aerospace:
- Progressing qualification of GaN-on-Si power epitaxy for next-generation AI and hyperscale data-center power supply applications.
- Development of GaN power devices for space and aerospace applications, including lighter, more efficient and radiation-resistant power management circuits.
- Expanding foundry partner ecosystem to broaden geographic reach and strengthen supply chain flexibility.
Operational updates
Operational developments are cited as:
- a continued focus on fiscal discipline and tight controls over discretionary spending;
- ongoing portfolio optimization to ensure existing asset base is fully focused on value creation across core customers and technologies;
- operational excellence driving yield improvements and manufacturing efficiencies;
- global site optimization program continuing, with the exit from the silicon site in South Wales completed in second-half 2025, following the cessation of manufacturing operations in Q1/2025.
Board update
As expected following IQE’s completion of its Strategic Review, Mark Cubitt has returned to the role of non-executive chair and Harmesh Suniara has stepped down from the board as the representative of Lombard Odier, which does not intend to nominate an alternate representative.
IQE’s board has approved the nominations of MACOM’s chief operating officer Robert Dennehy and vice president David O’Carroll as non-executive directors, subject to the completion of customary Nomad due diligence.
IQE intends to appoint a permanent chief financial officer in due course.
IQE completes £81m fundraising
IQE extends multi-year strategic supply agreement with Lumentum
