News: Suppliers
9 September 2026
IQE first-half 2026 revenue up 43% year-on-year, driven by AI data-center infrastructure, advanced sensing, wireless and defence
Epiwafer and substrate maker IQE plc of Cardiff, Wales, UK has reported greater-than-expected revenue of £64.6m for first-half 2026, up 43% from £45.3m in first-half 2025, supported by strong demand across all of the firm’s core segments.
Wireless revenue grew by 40% from £18.6m to £26m, reflecting market share gains and increased sales of wireless mobile connectivity solutions across newly qualified customer platforms.
Photonics revenue grew by 45% from £26.6m to £38.5m, driven by a combination of funding releases for certain US military and defence programs plus continued growth in AI- and data-center-related markets.
Growth across core markets is driving profitability. “This reflects the strong momentum we are seeing across AI-driven data-center infrastructure, advanced sensing, wireless and defence applications, alongside improved operational execution and a more favourable product mix,” says CEO Jutta Meier. “We have demonstrated our ability to capture long-term growth opportunities across these critical markets, underpinned by a number of key supply agreements,” she adds. Change in the customer engagement model has resulted in a high volume of supply agreements being signed since the conclusion of the firm’s strategic review, providing strong future order visibility and optimized utilization.
Together with a more favourable product mix resulting from a higher proportion of Photonics sales, gross margin expansion was driven by increased utilization of manufacturing assets and capacity across the group.
Reflecting the combination of a higher revenue base and improved gross margins, adjusted EBITDA was £6m in first-half 2026, compared with first-half 2025’s –£0.4m.
Net cash flow from operations has fallen from £3.6m to £1.2m, as a result of increased revenue and adjusted EBITDA, partially offset by a working capital outflow of £4m and restructuring and strategic review costs of £2.4m.
Cash capital expenditure (PP&E) was £1.1m (roughly level with first-half 2025’s £1m), reflecting a continued prudent approach to capital expenditure, says the firm.
Following the conclusion of the firm’s strategic review and receipt of the proceeds of fundraising a strategic investment from customer MACOM Technology Solutions Inc of Lowell, MA, USA and other existing shareholders, total cash and cash equivalents were £41.6m at end-June 2026, up from £17m at end-June 2025. Adjusted net cash was £30.2m at end-June 2026, compared with adjusted net debt of £23.5m at end-June 2025.
Market update
IQE lists the following developments during first-half 2026 in its key markets:
- AI and data centers
- Strong indium phosphide (InP) demand is driving volume growth, complemented by qualifications in gallium arsenide (GaAs)-based new optical interconnect technologies for AI and data-center markets.
- Development and sampling of gallium nitride on silicon (GaN-on-Si) micro-LED epitaxy with partners serving hyperscalers for high-bandwidth, energy-efficient data transfer in AI data centers.
- Qualification of GaN-on-Si power epitaxy for use in high-efficiency AI and data-center power supply units.
- Consumer electronics
- Launch of next-generation 3D sensing VCSEL technologies for future premium consumer devices, enabling enhanced sensing capabilities and supporting new smartphone form factors.
- Continued strong progress in multiple micro-LED epitaxy programs, achieving key development milestones and supporting future customer qualification activities for augmented reality and next-generation display applications.
- Advancing programs for wearable sensing applications through collaboration with ecosystem partners, supporting progression from technology development towards future production opportunities.
- Aerospace and defence
- Continued expansion of the GaN RF pipeline through new product qualifications and design-in activity across terrestrial, satellite including low Earth orbit (LEO), and defence radar platforms.
- Expanded IQE’s global infrared customer base by securing multiple production orders and qualification opportunities across new geographies.
- Communications infrastructure
- Strong progress with GaN-on-SiC qualifications for mobile base-station infrastructure serving high-frequency and high-power RF networks.
- Diversification of HBT technology into high-frequency consumer connectivity applications, including WiFi 7.
- Automotive and industrial
- Achieved qualification and full-rate production of long-wavelength infrared and dual-band products for multiple tier-1 customers, supporting growth in autonomous vehicles, defence and advanced sensing applications.
- Actively expanding our US-based foundry partner ecosystem, broadening our geographic reach and securing global supply chains for 100V and 650V technology nodes.
Existing capacity to be converted to meet increased InP demand
Following July’s trading update and upgraded full-year 2026 guidance - raising its forecast for revenue growth from more than 20% to over 30%, resulting in low-teens £m adjusted EBITDA — IQE says that it has continued to see strong momentum in second-half 2026, which is expected to support growth through the remainder of 2026 and beyond.
IQE also sees potential for upside opportunities in optical communications for data-center and AI infrastructure, underpinned by recently signed supply agreements. Existing tooling is hence to be converted to increase indium phosphide capacity in second-half 2026.
Operational highlights
IQE says that it continues to prioritize efficiency and operational excellence, and is already seeing improvements in yield and production outputs across its sites. To drive further progress and strengthen operational oversight, Matthew Geen was appointed as chief operating officer.
Move to Main Market
IQE has announced its intention to apply for its ordinary shares to be admitted to trading on the Main Market of the London Stock Exchange. The board expects the move to enhance the firm’s investor profile, broaden access to institutional capital, improve liquidity in its shares and support inclusion in FTSE indices. IQE is targeting admission in first-half 2027.
IQE’s greater-than-expected £64m first-half 2026 revenue driven by InP demand
IQE’s full-year 2025 revenue falls 17.6%, as 40% drop in wireless outweighs 15% growth in photonics
