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IQE skirts controversy as joint-venture set to shine in product launch
IQE announced on Thursday that its joint-venture company The Compound Semiconductor Centre (CSC) is to have a key role in the launch of a new line of detectors for broadband applications.
CSC, IQE's collaboration with Cardiff University, will work with partner ICS to launch the new product line of high speed InGaAs-InAIAs PIN and APD detectors, which work with superfast broadband fibre optic applications.
IQE said: "This provides the first example of the effectiveness of the CSC JV business model, and further announcements are expected in due course from some of CSC's other industry, academic and development partners."
The news comes after IQE faced accusations about the accounting methods used in connection with CSC in reports published by short-sellers ShadowFall and later from fellow US short-seller Muddy Waters earlier this month, with Muddy Waters describing IQE's accounting as "possibly designed to deceive investors".
The reports specifically focused on the relationship between IQE and CSC, with Muddy waters speculating that CSC was a shell company being used to shift losses off IQE's books.
Cardiff-based IQE, which has supplied compound semiconductors for the latest Apple iPhone's 3D camera sensors, dismissed the accusations from what it branded "misleading" reports.
Thursday's news seems to have bolstered confidences in IQE after the controversies, as broker N+1 Singer said CSC's upcoming work with ICS is "proof of why IQE set up these JVs in the first place and they are starting to deliver business".
Analysts at Canaccord recently visited CSC and said it "looks set to be a significant player in the South Wales compound semiconductor cluster that is being enthusiastically supported by the UK government, as it attempts to bring manufacturing jobs back to the UK".
As of 1128 GMT, IQE's shares were up 4.14% at 120.80p and a smidgen above their exponential 200-day moving average at 216p.