Shares in IQE PLC (AIM:IQE) slid 9% on Monday after the chip materials supplier cut its annual revenue outlook and said it was exploring a potential sale.
The Cardiff-based group, which makes compound semiconductors used in smartphones and defence systems, warned that weakness in handset demand and delays to US defence spending would drag 2025 sales down to between £90 million and £100 million.
That compares with £115 million reported in 2024. Adjusted earnings are expected to range between a £5 million loss and a £2 million profit.
IQE also said it was broadening its ongoing strategic review to include a possible takeover.
Talks are underway with several parties over the sale of its Taiwan operations, which could raise cash to pay down debt and fund investment.
The company confirmed it has received an approach from a potential buyer, but stressed there was no certainty of an offer.
The shares fell 0.78p to 7.82p.