IQE rockets after securing new manufacturing plant in US

IQE, the Cardiff-based supplier of semiconductor wafers, has agreed to takeover the in-house manufacturing facilities of American firm RF Micro Devices (RFMD).

IQE, the Cardiff-based supplier of semiconductor wafers, has agreed to takeover 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%.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

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

MoneyWeek

MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.