IQE (GB:IQE), a supplier of Apple’s (AAPL) wafer products used in the iPhone’s facial recognition sensor, is mulling the possible sale of the company. This came after the British semiconductor material firm revised downward its annual earnings forecast due to lower demand for mobile phones.
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At the close of trading in the UK on Monday, the company’s shares were down 9.07% to 7.82 pence, marking one of its lowest performances in many years. The wafer maker, which is based in Cardiff in the UK, also runs manufacturing bases in the U.S. and Taiwan.
IQE Cuts Earnings Guidance
IQE said its business of selling components that enable wireless communication was feeling the pinch of reduced consumer demands for mobile phones—a development it expects to continue for the rest of the year. Shrinking demand adds to tariff pressure from the U.S. government on the semiconductor industry.
Now, the company is looking to reduce its debt burden and move some of its production to the U.S. to reduce the impact of tariffs on its business. This comes as the Donald Trump administration continues to deploy tariffs as a tool to force foreign companies to establish more manufacturing bases and commit more investments in the United States.
The company is already engaging in initial discussions on the sale of the company with possible buyers. Furthermore, IQE said its previous arrangement to offload its Taiwanese operations remains active.
About the revised earnings, IQE now expects to either earn about $2.7 million (£2 million) in profit or lose about $6.8 million (£5 million). Previously, the company had anticipated a profit of between $10 million (£7.4 million) and $13.5 million (£10 million).
Similarly, IQE cut down on its annual revenue expectation—initially, the company hoped to make between $155 million (£115.1 million) and $166 million (£123 million). However, the company now expects about $121 million (£90 million) to $135 million (£100 million) due to delays in contracts for its wireless and photonics businesses.
Is IQE a Good Share to Buy?
Turning to Wall Street, IQE has no consensus ratings by analysts on TipRanks.
However, TipRanks’ Al Stock Analyst gives the IQE stock a Neutral rating, with a score of 47. This comes with a price target of 9.50 pence, which is a 21.48% potential upside from its current price.
