IQE, the Cardiff-based maker of compound semiconductor wafers, expects revenue to grow by more than 20% in 2026, betting that surging AI data-centre demand for its light-carrying materials will pull it clear of a bruising year.
The upgrade landed on 21 July alongside full-year results that showed just how far the company has to climb. Revenue for 2025 fell 18% to £97.3m, down from £118.0m, while adjusted EBITDA dropped 60% to £3.2m, a margin of roughly 3%.
The rebound case rests on indium phosphide, the substrate behind the optical transceivers that wire AI clusters together, and on tightening Chinese export controls that have made IQE’s Western supply harder to replace.
The split inside the business was stark. Photonics revenue, which spans data-centre networking and defence work, rose 15% to £57.1m, while the wireless division that supplies chips for smartphone sensors slid 40% to £40.1m as handset demand stayed soft and customers ran down inventory.
The 💜 of EU techThe latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!Much of the photonics strength came from the US, where faster releases of military and defence funding lifted orders through the year.
