UK’s IQE comments on US Entity List

The Bureau of Industry and Security (BIS) has, as most of you know by now, added Huawei Technologies and 68 of its affiliates to the “Entity List” maintained by the Department. IQE wishes to clarify its potential exposure to this rapidly evolving situation, as it supplies epitaxial wafers to multiple chip companies in global supply chains, some of whom supply Huawei. The situation involving the ban is dynamic and it is not clear at this time how long it will remain in force or what the full implications will be. However, IQE believes it is in a strong position to adjust to the possible consequences and scenarios resulting from this in a positive manner, the company writes in an update. The company states that it has supply relationships with multiple non-US customers – across all product lines – so it is well placed to adapt to mid to long-term share shifts at both the component and the OEM level. The says that the majority of its technologies and supply chains are not affected by the ban. In the short-term, IQE believes it may experience some delay to orders and the potential for adjustment of supplier managed inventory levels, predominantly in its Wireless Business Unit. The Photonics and Infrared Business Units are essentially unaffected. The company has been engaging across its customer base in recent days specifically on this subject and estimates that its current maximum risk exposure to this matter is less than 5% of total FY 2019 revenue guidance.