IQE reported a 43% rise in first-half revenue to £64.6 million, helped by demand for AI infrastructure, wireless products and defense applications. The semiconductor-materials supplier still recorded a £12.6 million pretax loss.
The Cardiff-based company’s September 7 results cover the six months ended June 30, 2026. Revenue was £45.3 million a year earlier, when its reported pretax loss was £18.3 million.
Adjusted EBITDA rose to £6 million from a £0.4 million loss. This measure excludes interest, tax, depreciation, amortization and selected other charges. Depreciation and amortization spread the cost of assets over their useful lives. Positive adjusted EBITDA does not establish that a company is profitable after all those costs.
IQE attributed stronger margins to busier factories and a higher share of photonics sales. Photonics uses light to transmit information or detect objects. That division’s revenue rose 45% to £38.5 million, with US defense funding releases contributing alongside AI demand. Wireless sales increased 40% to £26 million.
The materials behind data-center connections
IQE works near the beginning of the chip supply chain. Its epitaxy process grows extremely thin crystalline layers on a wafer, a flat base used in semiconductor manufacturing. The choice and arrangement of those layers determine how the material behaves electrically and optically.
Customers then process these wafers into devices. Some become parts of lasers or light detectors used in communications equipment. IQE’s product portfolio spans several materials, each suited to different tasks, including wireless connections, sensing, displays and power electronics.
One material is indium phosphide, a compound semiconductor made from indium and phosphorus. IQE supplies wafer structures for lasers and detectors based on this material. These devices help send and receive the light signals carried through fiber-optic networks.
AI servers need to exchange large amounts of information. Optical connections move that information between pieces of equipment using light. A transceiver combines a transmitter and receiver, converting between the electrical signals used by electronics and the optical signals traveling through fiber.
Nvidia’s networking documentation describes these devices connecting AI systems to network switches and linking switches together. More computing capacity creates demand for the connections around it, as well as for processors. Our earlier coverage of Nvidia’s revenue growth follows the processor side of that spending.
Orders and customer trials are at different stages
On July 14, IQE announced a $14 million, multi-year production order from an unnamed technology customer. Manufacturing is planned at its Newport facility. The announcement linked the order to AI and data-center applications, including demand for high-performance storage technologies.
The dollar amount is the value of an order spanning several years, not revenue earned in the first half. IQE did not identify the customer, so the announcement cannot establish a direct supply relationship with Nvidia.
A separate September 3 agreement with Quintessent covers six-inch gallium arsenide wafers for quantum dot lasers, a type of semiconductor laser. Those wafers will support customer sampling, when prospective customers evaluate a product before wider adoption.
The companies say the technology can reduce power consumption and simplify manufacturing for optical connections. Those benefits remain company claims. The agreement advances customer trials; it does not announce a completed rollout across commercial data centers.
More capacity and the full-year forecast
IQE plans to convert existing equipment in the second half to increase indium phosphide capacity. Using existing tools makes equipment conversion, customer requirements and production quality central to its expansion.
Our reporting on Fabrinet’s growth and cash flow examined another part of optical manufacturing: assembling and testing products while financing expansion. Both stories show how higher demand brings decisions about manufacturing capacity and the money needed to fund it.
IQE maintained its full-year forecast of revenue growth above 30% and adjusted EBITDA in the low teens of millions of pounds.
