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Apple supplier IQE explores new Asian supply chains

UK chipmaker IQE has reassured investors and customers that it expects new supply chains in Asia to shield it from the impact of any escalating trade war between the US and China.

The Cardiff-based manufacturer, whose customers include Apple, said that it is redeveloping its supply chains around the world in response to delays caused Washington’s restrictions on Chinese tech giant Huawei. 

“This has had an impact on sales volumes for IQE’s products, as global customers adjust to these new supply chain situations and IQE becomes qualified in these new supply chains,” the company announced

New orders

IQE operates manufacturing plants outside of China and has plants in the US, Europe, Taiwan and Singapore and specialises in advanced wafer products for the semiconductor industry.

The company said that new Asia-centric supply chains for heterojunction bipolar transistors – used as power amplifiers in mobile phone handsets, Wi-Fi hotspots and other wireless devices had won it a “major customer” in Asia for its Taiwan output and it had also received “significant additional orders” from a smartphone producer in Asia.

Wayne Johnson, executive vice-president of global development, wireless and emerging products, said: “These new qualifications for Asian supply chains reflect the strength of IQE's global manufacturing footprint, our leading product portfolio and our ability to quickly respond to the rapidly changing supply chain dynamics.

“We look forward to significantly increasing both the volume and breadth of products we are able to provide to these new Asia-centric supply chains, including products under currently development such as filters and high-performance switches.”

The deals appear to have bolstered the company’s share price, which had fallen 38% since March, when it missed its earnings forecast. Last month IQE warned that revenues for the 2019 financial year would miss estimates die to a bigger than anticipated impact on the industry’s supply chains caused by US restrictions on Huawei.

The company’s chief executive, Andrew Nelson, said at the time that the firm faces “unprecedented times” as the global semiconductor market faces disruption from geopolitical tensions.

IQE had previously stated in May that sanctions would have a “limited impact on our mid to long term revenue trajectory” but subsequently warned of reduced revenues and sales as a result of trade tensions.

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