Shares in IQE PLC (AIM:IQE) jumped 25% to 9.18p on Monday after the semiconductor materials group said it expects full-year results to come in at the top end of guidance, helped by a pick-up in demand from defence, AI and smartphone markets.
The Cardiff-based company, which makes advanced semiconductor wafers used in everything from data centres to mobile handsets, said trading momentum accelerated in the second half of 2025.
A faster-than-expected release of funding for US military and defence programmes gave results a lift, alongside a rebound in photonics demand and higher wireless sales linked to new handset launches in Asia.
As a result, the company expects to report revenue of around £97 million for 2025, with adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of at least £2 million, a return to profitability driven by better factory utilisation.
Chief executive Jutta Meier said IQE was “well-positioned to enter 2026” thanks to a strong first-quarter order book and ongoing demand across key markets.
The company highlighted improving visibility in its core segments, including consumer mobile, AI-enabled photonics and data centre infrastructure. Wireless demand, which picked up in late 2025, is expected to remain firm in the near term.
IQE said it had also made progress with suppliers and customers to shore up liquidity. Its cash balance stood at £15.6 million at the end of December. The group also received a waiver on fourth-quarter covenant testing from HSBC, its lender, a move it said reflected a “supportive” relationship.
Alongside the trading update, IQE confirmed that talks remain ongoing as part of its ongoing strategic review. The board said it is weighing both full-company offers and interest in specific assets, with the aim of maximising value for shareholders.
While no deal is guaranteed, the board said it was encouraged by the level of inbound interest and the recognition of the group’s underlying value.
The update sparked a sharp rally in the shares, which remain down significantly over the past two years amid sector-wide challenges and weaker end-market demand.