IQE PLC (AIM:IQE) saw its shares plunge on Thursday as the supplier of compound semiconductor wafer products warned that a reduction in customer orders and forecasts is expected to result in a year-on-year decline of approximately £30mln in reported revenues for H1 2023.
In an update on current trading, the company said that its management's expectations for FY22 results remain in line with the update provided on 16 January 2023, but that since that update, the group has seen an acceleration of the trends anticipated, with weaker demand leading to inventory build-up throughout the supply chain.
Similar trends are evident across the industry, with the US Semiconductor Industry Association (SIA) reporting that global industry sales decreased in January 2023, down 18.5% year-on-year, IQE added.
The company concluded: "This near-term market softness is expected to be temporary and a return to year-on-year growth is anticipated in H2 2023 based on dialogue with our existing customers and our pipeline of new opportunities."
Americo Lemos, CEO of IQE, commented: "The current inventory cycle is temporary. Ours is an industry that has consistently demonstrated growth over many decades. We expect IQE to return to growth in the second half of the year and remain excited about the future as we continue to execute our diversification strategy."
In early morning trading, IQE shares dropped 28.3% lower to 33.50p.