IQE rockets after securing new manufacturing plant in US

6th Jun 2012 08:18

IQE, the Cardiff-based supplier of semiconductor wafers, has agreed to take over the in-house manufacturing facilities of American firm RF Micro Devices (RFMD).The deal produced a big boost in IQE's share price on Wednesday; by 08:42 the stock had risen 15.8%.In essence, IQE will receive, but not pay for, a 150,000-square foot facility in North Carolina which is already set up to make the wafers which are used in things like smartphones and sat-nav equipment.In return, IQE will provide discounts on contracts for RFMD, which needs the wafers for the microchips it manufacturers. It's easier for RFMD to outsource the manufacturing than do it in-house because the unit costs come down and the speed of delivery increases.Dr Drew Nelson, the President and Chief Executive of IQE said of the deal: "This landmark agreement with RFMD, one of the true global leaders in the wireless semiconductor industry, provides us with a significant step up in our manufacturing capacity, bringing substantial financial and scale benefits to the group. This is a clear win-win for both organisations."BS