© Reuters.
By Geoffrey Smith
Investing.com — Shares of IQE (LON:) fell as much as 20% on Monday to a two-month low, after the maker of silicon chip wafers warned of slowing demand from an industry of chip manufacturing that still has excess stock.
“In the first half of 2023, the Group expects to see destocking across the broader industry, which may affect demand from existing customers,” IQE said, deflating some of the optimism around its shares that had built up. in recent weeks as several industry giants such as Taiwan Semiconductor Manufacturing (NYSE:) and Broadcom (NASDAQ:) seemed to weather a slowdown in demand for electronics surprisingly well.
In an update ahead of full-year results release, IQE said it expects revenue in 2022 to be up 8% from £154 million (£1 = $1.2206) in 2021. However, that increase it is entirely due to weakness. During the year: Adjusted for exchange rate fluctuations, revenue was virtually flat from 2021, he said. He gave no clue as to the final result, which had shown a loss of more than £8m after the first six months of the year.
IQE said it “remains confident in its diversification strategy and long-term growth targets” and said it had made “strong business progress” in 2022.
IQE had said in November that it aims to triple its annual revenue by 2027, leveraging its strength in epitaxial wafers, or epiwafers. It expects global demand for these to increase by 22% a year to reach a total market size of $4.6B by 2027.
At 05:50 ET (10:50 GMT), shares of IQE were down 19.7%, retesting their intraday lows after a brief rally earlier.
