British chip components maker IQE on Wednesday reported gains in its order book due to stronger demand for its wafers amid an AI boom and said it was growing market share in China, driving shares sharply higher.
Shares in the Cardiff, Wales-headquartered firm climbed more than 30% to 26 pence, topping gains across all stocks in London.
The company specialises in ‘epi-wafers’ used in products from laser hair removal to facial recognition sensors in Apple’s iPhones.
In a bid to capitalize on the artificial intelligence (AI) frenzy that has gripped the semiconductor industry, IQE has been investing in systems to enable more efficient transfer of data in data centres, which are vital to generative AI applications.
CEO Americo Lemos told Reuters that AI and “gen AI in particular” was one of the major trends driving growth. He also flagged growth in demand for components used in energy-intensive AI infrastructure, in which the company is also active.
The company’s order book for the remainder of the first half is growing and it expects to see this improve through 2024, it said.
IQE swung into an adjusted core profit of 4.3 million pounds ($5.5 million) last year, beating analysts’ forecasts by 10%, as a supply glut began to wane and customer demand picked up – a trend it expects to see throughout the year.
Lemos said growing market share in China is part of what fuelled recovery in the second half of last year and into 2024.
“We have made significant progress in the China space in the wireless because that’s where we see near-term growth,” he said.
Lemos also said growth was supported by an “unprecedented level” of government and companies being pulled into semiconductor manufacturing and pouring billions of dollars into the sector.
Analysts expect IQE’s revenue for the year through Dec. 31, 2024 to be in the range of 133.7 million pounds to 153.7 million pounds and adjusted core profit between 11.1 million pounds and 16.6 million pounds, according to a company-supplied consensus.
The company expects to report results within estimates. Business was “not affected in any material way” at IQE’s Taiwan facility due to the massive April 3 earthquake, Lemos said.
(Reporting by Anchal Rana in Bengaluru; Editing by Sherry Jacob-Phillips and Jan Harvey)
