IQE Plc, a company that that claims to be the world’s leading independent producer of compound semiconductors, plans a listing on the Easdaq exchange in an IPO that will value the outfit in the range of $155m to $200m. The company was formed by the transatlantic merger of Pennsylvania-based QED and UK-based EPI and combined figures show they produced net profit of $1.2m on revenue of $25.2m last year.
Though more expensive than silicon, compound semiconductors are used in a wide variety of applications, including optical fiber communication systems, wireless communication and mobile phones. At half the weight of silicon, it finds a ready market in satellite communications. But the epitaxy process of laying numerous layers of compound semiconductors onto crystal substrates is difficult and yields can fall as low at 50%.
IQE says that independent researchers have estimated the market for its type of products was worth $550m last year and is expected to grow to $1.2bn by 2002. The company’s main competitors are the inhouse operations of big chipmakers like Motorola, though with companies anxious for the security of second sourcing, it claims that its customer list includes 85% of the world’s top thirty compound semiconductor manufacturers.
Around four million shares will be sold with current city estimates putting the price between $11 and $14 a share. Proceeds will be used to support increased production needs and cut debts.
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