Wafer maker IQE warns of 40% profit hit from supply crunch

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Nov 24 (Reuters) – Chip parts provider IQE (IQE.L) projected on Wednesday a 40% plunge in its annual core profit, because the British agency’s smartphone-making purchasers place fewer orders as a consequence of supply chain points, driving its shares 20% decrease.

The warning from IQE, which makes semiconductor wafers for chips utilized in Apple (AAPL.O) merchandise, comes as smartphone makers and different firms globally grapple with supply chain points, together with a scarcity of semiconductor chips.

“In the immediate term, broader semiconductor market shortages have softened demand in some supply chains but we believe these effects to be temporary,” mentioned interim Executive Chairman Phil Smith in a press release.

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IQE expects 2021 adjusted core profit of about 18 million kilos ($24.1 million) and income of 152 million kilos, in contrast with 30.1 million kilos and 178 million kilos, respectively, a yr earlier.

IQE had mentioned in September its adjusted core profit could be much like prior-year ranges on a relentless forex foundation.

The firm, which additionally sells photonics merchandise, mentioned gross sales in that division too had been under expectations, seemingly including additional strain on newly appointed Chief Executive Americo Lemos. learn extra

Shares of the know-how agency fell as a lot as 21.4% to a greater than 17-month low of 39.60 pence in morning commerce.

($1 = 0.7477 kilos)

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Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sherry Jacob-Phillips and Uttaresh.V