IQE PLC (AIM:IQE) reported wider losses but improved trading in the second half of last year as it also announced the completion of its £81 million fundraising, which sees US semiconductor company Macom take a strategic stake.
The AIM-listed company, which supplies compound semiconductor wafer products used in telecoms, defence and consumer electronics, reported revenue of £97.3 million for the 2025 calendar year, down 18% from £118 million a year earlier. Adjusted EBITDA fell 60% to £3.2 million, while pre-tax losses widened to £37 million.
Wireless revenue fell 40% to £40.1 million amid weaker smartphone demand and customer inventory overhangs but photonics revenue rose 15% to £57.1 million, helped by demand linked to AI data centres and US defence programmes.
IQE said conditions improved during the second half and momentum had continued into the current year.
The company expects revenue growth of more than 20% in 2026, supported by demand for the photonics division's indium phosphide products used in optical interconnects for AI infrastructure.
With the completion of its previously announced fundraising, admission of 332.2 million new shares is expected on 1 June.
The fundraising, which included a £45 million strategic investment from Macom, made up of £30 million in equity and £15 million in convertible loan notes, is designed to strengthen its balance sheet and support future growth in artificial intelligence and data centre markets for the photonics division.
Chief executive Jutta Meier said the fundraising was “a transformational investment for IQE, giving us the balance sheet strength to invest in our future growth”.
The company is in the process of appointing two Macom executives to its board as non-executive directors.