Investment summary

IQE’s full-year trading update signals that profit will be slightly ahead of downgraded forecasts. Signs of demand stabilisation and positive progress with new customer qualifications should drive a recovery in wireless market share into H2. Our estimates for 2012 and beyond have not been significantly changed and could be undemanding if the recovery comes through smoothly.

Last updated on 19/01/2012

Industry outlook

Peer results since the warning suggest the economic slowdown was a larger influence on the weakness than previously thought. An equally consistent message across peers was confidence in the underlying demand fundamentals for RF semis, with growth in smartphones, tablets and LTE all expected to contribute to robust double-digit market growth. With substantially less stock in the supply-chain than in 2008/2009, the destocking phase is likely to less prolonged this time around and the bounce back less significant.

Last updated on 09/12/2011