Update: Moderating wireless, improving margins
IQE’s management has indicated that the wireless inventory destocking that was flagged in Q4 of 2013 is now complete. However, lower smartphone growth, particularly at the high end, and low penetration of the new high-speed 802.11ac Wi-Fi standard has led management to moderate its wireless growth expectations to a single-digit CAGR. Product mix and currency fluctuations also affected revenue in H1, but the strong growth in photonics and the benefit of cost synergies offset the impact on earnings. Additional synergies are expected in H2 so we have maintained our earnings forecasts despite our reduced revenue forecasts.IQE is a holding company. Through its subsidiaries, Co. is engaged in the development, manufacture and sale of semiconductor materials. Co.'s primary business is the manufacture of compound semiconductor wafers or epiwafers using a process called epitaxy. Co.'s primary reporting segments are: Wireless, which covers electronic devices that communicate wirelessly; Photonics, which covers applications that either emit or detect light; Infrared, which uses indium antimonide and gallium antimonide engineered materials that enable high resolution Infrared systems; and CMOS++, which combines the properties of compound semiconductors with silicon.
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