IQE enters 2026 with a strong first-quarter order book reflecting improved demand visibility across core segments including consumer mobile, data-center and AI-related photonics markets, with growth in data-center deployments and AI-enabled compute supporting increased demand for photonics products. The Board is negotiating non-binding offers for the Group as a whole in addition to separate bids for certain other Group assets with a view to maximising shareholder value.
Cyborg Score Rationale
The company achieved revenue of c.£97m with adjusted EBITDA of at least £2.0m in 2025 due to improved operating leverage as capacity utilisation improves. However, the company faced profitability challenges and required covenant waivers from its banking partner, offsetting positive momentum in high-growth markets like AI and defense.
Top Insights
IQE saw strong trading momentum in second-half 2025 due to faster-than-expected funding releases for some US military and defence programs, previously anticipated for 2026.
IQE experienced higher than forecast photonics demand in the period, reflecting continued growth in AI and data centre markets, and increased sales of wireless products tied to new handset introductions which benefitted the Group's Taiwan operations.
IQE received a waiver from HSBC in relation to Q4/2025 EBITDA covenant testing, reflecting the established and supportive relationship with the bank.
Strategic review underway with formal sale process including multiple bidders for company assets and potential whole-company acquisition.
Named Competitors
RF & Photonics Semiconductors — Competing chipmaker for wireless/RF applications
Gallium Nitride Wafers — GaN epitaxy and power semiconductor materials