IQE

IQE is a global outsource supplier of advanced wafer products, including customized 'epitaxial wafers' (IQE-Epitaxy basics, 2009) as well as wafer foundry services to the semiconductor industry. The company primarily operatesin the UK, Europe and the US.The company is headquartered in Cardiff, the UK and employs about 290 people. Since IQE is organized as coorporation, the firm is owned by the stockholders who shares in the business.

Corporate Structure

AS any other cooprtion business structure, IQE's stockholders are reperesented by 'board of directors' (Richard A. Brealey, 2003, PP. 4). The Board has delegated specific responsibilities to the following committees (IQE-Group and Structure Management, 2009):

• Executive Committee
• Audit Committee
• Remuneration Committees

The coopration structure a has also manegement team which is made up of highly skilled and exprienced proffesionals .

Basic salary is determined by reference to individual responsibilities, performance and external market data. The diagram below indicates that Chief Executive Officer is the highest paid because he is in charge of total manegement of the company and he runs the company at the highest level.



Business Model

IQE intends to focus on high volume and fast growth commercial market such as wireless communications, mobile and satellite. This helps the company to win Top competitor like Kopin Corporation and to lead global market of epiwafers. IQE plc is engaged in the manufacture of advanced semiconductor materials. Its products include (Datamonitor-Company Profile, 2008):

• Epitaxial wafers
• Optoelectronic semiconductors
• Electronic compound semiconductors

The Company is a supplier of these semiconductor wafer products in three market segments:

The market in which IQE predominantly operates is the wireless sector which accounts for around 75% of the group’s revenues. IQE’s wireless customers include many of the world’s largest chip manufacturers who use IQE’s wafers to produce advanced chips and integrated circuits for a diverse range of current and next generation technology applications including all forms of wireless and satellite communication systems, comprising mobile phone handsets and base stations, PDAs, global positioning systems e.t.c.

The wirelessindustry continues to grow extremely rapidly driven by increasing mobile handset sales because there is a huge demand for faster, more sophisticated handsets. They use more Gallium wafers to produce these handsets. Because of this fact, mobile handset market is the key driver for IQE’s wireless business.
IQE manufactures optoelectronic which are advanced materials with electronic and optical properties ranging from infra-red, through the visible range and into ultra-violet.These materials are used in a wide range of components from lighting and displays to audio, video and data storage as well as office, industrial and automotive applications and high efficiency solar cells. And They account for approximately 20% of the group’s revenues.

Increasing demand for high-efficiency solar cells provide great opportunities for optical and photovoltaic materials over the coming years. so optoelectronic materials account for more revenues in the future.

IQE offers silicon-based epitaxial services to wafer fabrication plants worldwide, which account forapproximately 5% of the group’s revenues.It has won a number of key outsourcing contracts to provide its core products and epi-wafer services.The significance of this is that increased customer demand for higher performance electronic devicesis prompting chip manufacturers to turn to materials solutions to push the limits of standard silicon and epitaxy based processes are the key to enhancing the performance of silicon. So the company is focussing on adding the higher value products as the production demand for these continues to increase.

Market Value

Despite difficult economic conditions for the year 2008, the Cardiff-headquartered Stock Market-listed company saw turnover rise from £50.1m in 2007 to £60.5m. Uderlying operating profit was up almost to £4m(2007:£0.6m). A few days ago,IQE's share price was up 71% to 6p (WalesOnline - Business - Business News - IQE, Para.1 & Para. 2). The growth is principally driven by high speed wireless communications and 3G mobile devices. And devices have huge demand on market so company remains on course to deliver strong growth in both sales and profits for the next four years.

CONCLUSION

To deliver strong growth in both sales and profits and to compete the market, the company should implement the long and short term strategy that consists of cost reductions and investment in infrastructure, coupled with the development of an exciting range of new products.

Reference

1. IQE-Epitaxy basics, IQE plc (2009), from http://www.iqep.com/epitaxy/
2. IQE-Group and Structure Management, IQE plc (2009), from http://www.iqep.com/investor-structure/committees.asp
3. Datamonitor-Company Profile, IQE plc(2008) from http://www.datamonitor.com/
4. WalesOnline - Business - Business News - IQE sees its shares from http://www.walesonline.co.uk/business-in-wales/business-news/2009/03/25/iqe-sees-its-shares-soar-after-21-increase-in-revenue-91466-23222073/
5. Professor Richard A. Brealey, Principle of Cooperate Finance, McGraw-Hill/Irwin, New York, 2003.