IQE is negotiating a proposal for short-term financing to navigate market softness. Credit: T. Schneider/Shutterstock.

IQE, a UK-based supplier of compound semiconductor wafer products, has initiated a strategic review of its asset base.  

The company aims to ensure a strong capital position to further invest in its core operations.  

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IQE specialises in advanced semiconductor materials, supplying wafers for telecommunications, electronics, and energy applications, enabling technologies such as 5G and IoT. 

IQE’s review will explore various strategic options, including the potential sale of its Taiwan operations. 

The board of IQE believes there is “significant” value in the company that is not currently reflected in its market capitalisation.  

With the strategic review, the company hopes to maximise shareholder value by focusing on reducing costs and servicing customers effectively.  

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Lazard has been retained to advise on the review, which will be overseen by IQE’s Board of Directors. 

In its trading update for the year ending 31 December 2024, IQE anticipates revenue to remain flat year-on-year at approximately £115m ($145.17m).  

The company cites weak consumer demand in key sectors as a factor contributing to the slower recovery in the market. 

It expects this to result in an Adjusted EBITDA of at least £5m. 

Furthermore, IQE is negotiating a proposal from its largest shareholder, Lombard Odier, for short-term financing to navigate market softness.  

Lombard Odier is willing to extend up to £15m via a convertible loan note with a conversion price of 15p per share, the company said.   

IQE plans to consult with other major shareholders regarding this financing proposal. 

IQE executive chair Mark Cubitt said: “The impact of the slow pace of recovery in the semiconductor industry can be seen across the sector and is reflected in our revenue expectations for FY24.  

“Looking ahead, the strategic review, including the broader assessment of options for our Taiwan operations, will ensure we have a strong capital base to continue investing in our core business and support IQE’s long-term strategy.”