Chip manufacturer IQE is seriously considering a potential sale—news that jolted markets, sending its stock down 12% in early trading. The driver: weak smartphone market demand, a "black swan" that has crushed the firm’s earnings expectations.
As an Apple supplier, IQE provides wafers for iPhone facial recognition sensors and leads in compound semiconductor wafer manufacturing. Yet the global smartphone market is stuck in a slump: IDC’s July data showed Q2 2024 sales growth plummeted to just 1%. IQE noted, "Wireless market performance remains sluggish due to weak phone sales—a trend expected to last until 2025."
IQE has taken action: it previously planned to shift some production to the U.S. to cut debt and offset high semiconductor tariffs. But financial pressure has worsened. Its core profit forecast now ranges from a £5M loss ($6.75M) to £2M profit—far below the earlier £7.4M-£10M target. Annual revenue is projected at £90M-£100M, well short of the prior £115.1M-£123M estimate. This marks a sharp drop from 2024’s £8.1M core profit and £118M revenue.
Facing challenges, IQE is overhauling strategy: it’s expanding evaluations to include a sale, with one undisclosed firm already approaching. It’s also advancing talks to sell its Taiwan (China) business.
ICgoodFind： this highlights how smartphone demand swings hit upstream firms—and signals a possible new round of semiconductor industry consolidation, with resources shifting to leaders.
