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Investing.com — Shares in IQE (LON:IQE) fell as much as 20% to a two-month low on Monday, after the maker of wafers for silicon chips warned of a slowdown in demand from a chipmaking industry that is still overstocked.
“In the first half of 2023 the Group expects to see some destocking in the wider industry which may impact upon demand from existing customers,” IQE said, deflating some of the optimism around its stock which had built in recent weeks as various industry giants such as Taiwan Semiconductor Manufacturing (NYSE:TSM) and Broadcom (NASDAQ:AVGO) had appeared to weather a slowdown in demand for electronics surprisingly well.
In an update ahead of the publication of its full-year results, IQE said it expects revenue in 2022 to have risen some 8% from £154 million (£1=$1.2206) in 2021. However, that increase will be entirely down to sterling’s weakness during the year: adjusted for foreign exchange swings, revenue was largely flat from 2021, it said. It gave no hint as to the bottom line, which had showed a loss of over £8M after the first six months of the year.
IQE said it “remains confident in its diversification strategy and longer-term growth targets” and said it had made “strong commercial progress” in 2022.
IQE had said in November that it aims to triple its annual revenue by 2027, building on its strength in epitaxial wafers, or epiwafers. It expects global demand for these to rise by some 22% a year to reach a total market size of $4.6B by 2027.
By 05:50 ET (10:50 GMT), IQE stock was down 19.7%, testing its intraday lows again after a brief uptick earlier.
