IQE plc has raised £81 million, including substantial strategic investment from a US semiconductor firm, as revenue falls and losses deepen.
The Cardiff-based company is a supplier of compound semiconductor wafer products and advanced material solutions.
Following the conclusion of a strategic review, IQE announced a £45m strategic investment from MACOM Technology Solutions Inc. in the form of £30m of equity and £15m in new non-interest bearing convertible loan notes.
Concurrently, IQE and MACOM also entered into long-term supply agreements while the latter’s COO Robert Dennehy and vice president David O’Carroll will be appointed as non-executive directors of IQE.
“The company has entered into a side letter with the investor pursuant to which the investor will have limited consent rights,” IQE said.
IQE intends to appoint a permanent CFO in due course.
The remainder of the fundraise comprised a £23m redemption and reinvestment of convertible loan notes by existing noteholders, as well as a £13m placing and retail offer.
Following the completion of the fundraise and the repayment of the group’s revolving credit facility with HSBC Bank, IQE will receive net cash inflows of £27.9m.
For the year ended 31st December 2025, revenue dropped almost 18% to £97.3m. Adjusted EBITDA plummeted 60% to £3.2m, with adjusted loss before tax growing from £22.3m in the prior year to £27.9m in 2025.
The firm said photonics revenue of £57.1m was an increase of 15% year-on-year, driven by funding releases for certain US military and defence programmes in H2 2025 and continued growth in AI and data centre-related markets.
However wireless revenue of £40.1m was down 40% year-on-year, reflecting uncertain macroeconomic conditions in the first half of the year and softness in mobile handset demand.
Cash and cash equivalents were £15.7m as at 31st December 2025, with adjusted net debt of £31.5m (FY 2024: £18.8m).
Jutta Meier, CEO of IQE, commented: “We were encouraged to see market conditions improve in the second half of the year. This reflected a positive trajectory in key sectors including photonics for AI and data centres, aerospace and defence, and wireless products for consumer electronics.
“The £81m fundraise from key partners is a transformational investment for IQE, giving us the balance sheet strength to invest in our future growth, while maintaining our global asset base.
“IQE is uniquely positioned as a critical enabler of the world’s fastest-growing technology ecosystems. In particular, accelerating demand for our Indium Phosphide (InP) solutions supporting data centre and AI markets is expected to be a material growth driver throughout 2026 and beyond.
“Taken together, a stronger IQE, coupled with favourable market conditions directly benefitting the business, gives me great confidence for the future.”
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