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IQE announces Singapore site closure as part of global consolidation strategy

IQE plc (AIM: IQE, “IQE” or the “Group”), the leading supplier of advanced compound semiconductor wafer products and material solutions to the global semiconductor industry, today announces it has taken the decision to close the Group’s Singapore site by mid-2022. The site has been part of the IQE Group since 2006 and manufactures epiwafers for photo detectors and radio frequency applications using Molecular Beam Epitaxy (MBE).

The closure is aligned to the Group’s strategy of consolidating operations into strategic sites with superior economies of scale and production flexibility. IQE will transfer the expertise, IP and assets from Singapore to the Group’s Taiwan and North Carolina sites. This follows the announcement of the closure of the Pennsylvania site and consolidation into North Carolina by 2024.

In combination, these actions create an optimised footprint to pursue mass-production opportunities for wafers manufactured by MBE including long-wavelength Photonics and advanced RF applications for 5G.

IQE is liaising closely with the Group’s key customers in Asia to manage the transition and anticipates no material impact on revenue guidance for FY21 as a result of this closure. Year-on-year revenues for FY22 will reduce by circa £3m due to the transition. However, annualised cash savings post closure of circa £4.8m will be generated from a combination of operational costs savings and a reduction in lease liabilities that are expected to have a favourable annualised income statement impact of circa £1m. Exceptional cash closure costs of circa £2.5m are anticipated to be incurred in decommissioning the site and migrating capability.

Tim Pullen, Chief Financial Officer of IQE, commented:

“IQE’s breadth of operations across Europe, USA and Asia are a source of significant competitive advantage. By focussing investment in strategic sites within each of these regions and consolidating the Group’s footprint, we will optimise our ability to generate growth from differentiated technologies, whilst reducing costs and increasing gross margins.

I would like to recognise the outstanding contribution of IQE’s highly skilled team in Singapore. We are committed to ensuring a smooth transition for both our staff and our customers.”
CT Bureau

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