IQE to close its manufacturing site in Singapore

The site has been part of the IQE Group since 2006 and manufactures epiwafers for photo detectors and radio frequency applications using Molecular Beam Epitaxy (MBE). In a press release IQE states that the closure is aligned to the group’s strategy of consolidating operations into strategic sites, which will have superior economies of scale and production flexibility. IQE says it will transfer the expertise, IP and assets from Singapore to its Taiwan and North Carolina sites. The move follows the company's previous announcement to close its Pennsylvania site and consolidate it into its site in North Carolina by 2024. IQE says that these actions create an optimised footprint to pursue mass-production opportunities for wafers manufactured by MBE including long-wavelength Photonics and advanced RF applications for 5G. IQE is liaising closely with the Group’s key customers in Asia to manage the transition and anticipates no material impact on revenue guidance for FY21 as a result of this closure. Year-on-year revenues for FY22 is expected to reduce by circa GBP 3 million due to the transition. However, annualised cash savings post closure of circa GBP 4.8 million will be generated from a combination of operational costs savings and a reduction in lease liabilities. The actual closure is expected to incur costs of circa GBP 2.5 million. "IQE’s breadth of operations across Europe, USA and Asia are a source of significant competitive advantage. By focussing investment in strategic sites within each of these regions and consolidating the Group’s footprint, we will optimise our ability to generate growth from differentiated technologies, whilst reducing costs and increasing gross margins," says Tim Pullen, Chief Financial Officer of IQE, in the press release. "I would like to recognise the outstanding contribution of IQE’s highly skilled team in Singapore. We are committed to ensuring a smooth transition for both our staff and our customers."