IQE says Huawei ban may cause delay to some orders for its semiconductor wafers
, the global supplier of advanced wafer products to the semiconductor industry, on Friday updated investors on the implications to the company of the US ban on sales to Huawei.
IQE said the majority of its tech and supply chains were not affected by the ban, but that it may experience some delay to orders, and have to adjust supplier managed inventory levels, mostly in its Wireless Business Unit.
The photonics and Infrared Business Units is “essentially unaffected”, the company said.
IQE said that it has supply relationships with multiple non-US customers, from the component (chip) to the original equipment manufacturer (OEM) level.
The company estimated that the maximum risk exposure was less than 5% of its total FY 2019 revenue guidance and left its full year guidance unchanged.
It is not clear how long the ban on sales to Huawei will remain in force.
Shares were trading 3.74% lower in the afternoon on Friday at 71.1p
Dr Drew Nelson, Chief Executive of IQE, said: “The recent ban on sales of products from US companies to Huawei and its affiliates is a factor completely outside of IQE’s control. However, our long-term strategy of supplying as many of the supply chains into all major OEMs as possible, protects IQEs overall supply to a very significant degree. As a result, we believe the ban will have a limited impact on our mid to long term revenue trajectory.”
He added: “Indeed, the breadth of IQE’s current product range, the new materials technologies being introduced to market over the coming months and years, and IQE’s global manufacturing footprint are powerful mitigating factors in dealing effectively with the ongoing changing geopolitical landscape in our industry."
Some hedgefunds have bearish views for the company’s outlook, with Coltrane Asset Management holding a 4.02% short position according to FCA short position disclosures.
Odey Asset Management also has a 1.31% short, and JP Morgan holds a 0.78% short in the £557 million market cap AIM listed company.
The stock price has been subject to tumultuous swings, seeing lows of 55p and highs of 117p in the past year.
Owners include T Rowe Price, American asset management firm who hold over $1 Trillion in AUM, as well as OppenheimerFunds and Schroders.
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