LONDON (Alliance News) - IQE PLC on Friday said the US Huawei Technologies Co Ltd ban could cause short-term order delays but the majority of its technologies and supply chains are unaffected.
Last week, US President Donald Trump signed an executive order effectively banning Huawei from using US technology without governmental approval.
IQE supplies wafer products and materials for use in the semiconductor industry, and supplies its wafers to multiple chip companies, "some of whom supply Huawei". IQE said neither the length of time of the ban nor its implication are known.
At present, the company's maximum risk exposure to the Huawei blacklist is less than 5% of total 2019 annual revenue guidance, although given unknowns surrounding the ban, some uncertainty remains.
IQE said the majority of its technologies and supply chains will not be hurt by the ban but it still "believes it may experience some delay to orders" and could need see adjustments to supplier managed industry levels, largely within its Wireless Business unit.
The company's Photonics and Infrared business units are considered to be "essentially unaffected" by the US ban and the company has left its 2019 guidance unchanged. In total, IQE expects 9% revenue growth at constant currency in 2019 and an adjusted operating margin of more than 10% of revenue. IQE's revenue in 2018 was GBP156.3 million.
IQE Chief Executive Drew Nelson said: "The recent ban on sales of products from US companies to Huawei and its affiliates is a factor completely outside of IQE's control. However, our long-term strategy of supplying as many of the supply chains into all major OEMs as possible, protects IQEs overall supply to a very significant degree.
"As a result, we believe the ban will have a limited impact on our mid to long term revenue trajectory. Indeed, the breadth of IQE's current product range, the new materials technologies being introduced to market over the coming months and years, and IQE's global manufacturing footprint are powerful mitigating factors in dealing effectively with the ongoing changing geopolitical landscape in our industry."
Shares in IQE were down 0.8% at 73.0 pence on Friday morning.
IQE (IQE)
