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

By Reuters

<div> <p> -Chip components supplier <span class="caps">IQE</span> projected on Wednesday a 40% plunge in its annual core profit, as the British firm’s smartphone-making clients place fewer orders due to supply chain issues, driving its shares 20% lower.</p> <p>The warning from <span class="caps">IQE</span>, which makes semiconductor wafers for chips used in Apple products, comes as smartphone makers and other companies globally grapple with supply chain issues, including a shortage of semiconductor chips.</p> <p>“In the immediate term, broader semiconductor market shortages have softened demand in some supply chains but we believe these effects to be temporary,” said interim Executive Chairman Phil Smith in a statement.</p> <p><span class="caps">IQE</span> expects 2021 adjusted core profit of about 18 million pounds ($24.1 million) and revenue of 152 million pounds, compared with 30.1 million pounds and 178 million pounds, respectively, a year earlier.</p> <p><span class="caps">IQE</span> had said in September its adjusted core profit would be similar to prior-year levels on a constant currency basis.</p> <p>The company, which also sells photonics products, said sales in that division too were below expectations, likely adding further pressure on newly appointed Chief Executive Americo Lemos.</p> <p>Shares of the technology firm fell as much as 21.4% to a more than 17-month low of 39.60 pence in morning trade.</p> <p>($1 = 0.7477 pounds)</p> </div>