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(Sharecast News) - Semiconductor wafer and advanced material specialist IQE announced its results for the year ended 31 December on Wednesday, alongside announcing an expansion of its partnership with Advanced Wireless Semiconductor Company (AWSC).
The AIM-traded firm described a challenging market environment in 2023, marked by a 31% decrease in revenue to £115.3m.
That decline was primarily attributed to factors including high inventory levels, delays in 5G infrastructure deployment, and weak demand impacting 3D sensing.
Despite those challenges, IQE managed to maintain a positive EBITDA margin through decisive cost reduction measures.
Its adjusted EBITDA fell to £4.3m for the year, from £23.4m in 2022, due to the underutilisation of its manufacturing capacity, while its reported operating loss narrowed to £25.8m from £73m.
Strategically, IQE said it focussed on maintaining and growing its position in the connect and sense markets, while diversifying into power and display markets.
That involved efforts such as protecting existing wireless business, expanding customer bases, and deploying GaN power capacity to serve global power electronics markets.
"I am pleased with the resilience of the business and dedication of our people despite 2023 being a particularly challenging year for the semiconductor industry," said chief executive officer Americo Lemos.
"As forecast, IQE returned to double digit growth in the second half over the first, and additionally took strategic actions to reshape our cost base as part of our ongoing commitment to improving margins and profitability."
Lemos said the company made "good progress" against its diversification strategy following its investment into GaN capacity, with new customer design wins in the power electronics and automotive sectors.
"Buoyed by the ongoing industry recovery, IQE is well positioned within the global value chain to deliver sustainable growth and capture opportunities in 2024 and beyond."
IQE also announced on Wednesday that it had expanded its partnership with AWSC through a multi-year supply agreement.
Under the agreement, IQE said it would supply AWSC with Gallium Arsenide (GaAs) wafers for the production of smartphone power amplifier devices.
The devices were intended for tier one China-based OEMs within the Android ecosystem, targeting a market poised for growth following a period of inventory build-up.
"IQE is expanding its wireless addressable market into the Android ecosystem," Americo Lemos said of the partnership.
"We are delighted with our successful partnership with AWSC and look forward to continuing as a trusted partner and growing our business together."
Looking ahead, IQE anticipated continued recovery in the global semiconductor industry, with positive signs seen in the second half of 2023 carrying into the first quarter of 2024.
The company said it remained committed to driving efficiencies, improving margins, and executing its growth and diversification strategy.
At 0938 BST, shares in IQE were up 25% at 25p.
Reporting by Josh White for Sharecast.com.
