Chipmaker IQE considers sale as shares slide on lowered earnings guidance

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(Reuters) – Chipmaker IQE is considering a potential sale of the company, it said on Monday as it cut annual earnings forecasts on an expected softening demand for mobile handsets, sending the Apple supplier’s shares down 12% in early trade.

IQE, which supplies the wafer products used in the iPhone’s facial recognition sensor, has sought to cut debt and move some production to the U.S. to offset hefty levies on semiconductors that have weighed on electronics demand and hurt chipmakers.

Data from research company IDC in July showed global smartphone sales growth slowed to only 1% in the second quarter.

“The group has continued to experience weakness in wireless markets, largely as a result of softness in mobile handset sales, and this is expected to persist through 2025,” IQE said.

Shares of the British company slid to a more than 16-year low, down 11.2% at 7.64 pence by 0738 GMT.

IQE, which has manufacturing sites in the U.S., Britain and Taiwan, also said it was expanding an ongoing review to include the potential sale of the company, adding that it had been approached by an undisclosed party without providing further details.

The company said its previously disclosed plans for a disposal of its Taiwan operations remain in progress and it has begun talks with potential buyers.

IQE forecast an overall core earnings range between a loss of 5 million pounds ($6.75 million) and a profit of 2 million pounds, compared with previous guidance of profit between 7.4 million pounds and 10 million pounds.

Annual revenue is expected to reach between 90 million pounds and 100 million pounds, down from its previous forecast of 115.1 million to 123 million pounds, citing contract delays in its wireless and photonics operations.

Last year IQE made core profit of 8.1 million pounds on revenue of 118 million pounds.

($1 = 0.7403 pounds)

(Reporting by Raechel Thankam Job in Bengaluru; Editing by Rashmi Aich and David Goodman)