IQE : Annual Report & Accounts 2022

Annual Report & Accounts 2022

As the world's leading compound semiconductor supplier with a global footprint, we are critical enablersofthedigitalworld.

Highlights

Revenue

£167m

2021: £154m

Net operating loss

£(73)m

2021: £(20)m

Adjusted EBITDA

£23m

2021: £19m

Adjusted net debt

£(15)m

2021: £(6)m

Capital expenditure

£9m

2021: £15m

The nature and description of alternative performance measures are included in Note 5 on page 125. Adjusted net debt is defined on page 98.

Our vision

Our mission

Our vision is to deliver the most advanced compound semiconductor solutions to our customers.

Our mission is to be at the forefront of technology to help address global challenges and enable the next wave of innovation.

Contents

1. Strategic Report	2
Our business at a glance	2
Our investment case	12
Chairman's statement	14
Chief Executive Officer's statement	16
Value chain	20
Business model	22
Market review	24
Strategy	26
2022 performance review	30
Financial review	32
Stakeholder engagement	36
Section 172	37
Responsible business	38
Risk management	50
Viability statement	56

2. Corporate Governance	58
Board of Directors	58
Chairman's Governance overview	60
Audit & Risk Committee Report	65
Nominations Committee Report	70
Remuneration Committee Report	71
Directors' Remuneration Policy	73
Directors' Remuneration Report	79
ESG Committee Report	85
Directors' Report	86
Statement of Directors' responsibilities	88
3. Financial Statements	89
Independent Auditor's Report to the	89
members of IQE plc
Financial Statements	98
Glossary	158
Investor information	160

IQE Annual Report and Accounts 2022

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Our business at a glance
Who we are	What we do
IQE is the world's only	IQE offers compound
pure play compound	semiconductor
semiconductor provider	manufacturing services
with a global footprint,	that deliver powerful
strategically positioned	enabling technologies
to enable the next wave	that change how we live
of innovation. We can	and work. We understand
service our customers in	that in an intelligently
their geographies with	connected world,
our three-continent	the megatrends of the
manufacturing footprint,	future will require the
offering world-class	advanced performance
technology, flexibility and	characteristics of
supply chain security.	compound semiconductors.

Our global footprint

We are uniquely positioned for security and scalability.

Europe Newport

Cardiff

Milton Keynes

North	Washington
America Massachusetts
	Pennsylvania
	North Carolina
Asia	Taiwan

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Our growth potential

We are focused on enabling key capabilities within growth markets.

+ Read more about our strategy for growth on page 28

Strategic report

Connect Sense Power Display

We live in an interconnected digital world where connectivity is no longer optional. From mobile handsets and 5G communications infrastructure, to smart devices in our homes and cars, IQE's connect products enable high- performance wireless communication.

The connected digital world has become intelligent. The global sensing market is forecast to grow significantly in the coming years, driven by the need for smart connected devices to be able to detect and communicate with the world around them. With a stellar 3D sensing pedigree, IQE is focused on enabling healthcare wearable devices, LiDAR for autonomous vehicles and industrial automation.

Power is fundamental to	Display technologies
the digital world and for	have undergone
everyday life. Compound	significant
semiconductors will be	transformation as
needed to address the	consumers and industry
world's power	demand richer,
challenges, such as	immersive display
climate change, as their	experiences. IQE is well
performance	placed to deliver
advantages result in	MicroLED solutions that
more efficient power	offer improved
usage. Power electronics	performance and lower
is a growth market	power consumption. We
driven by demand for	are proud to work with
electric vehicles, smart	our key strategic
power grids and efficient	partners to deliver the
consumer applications,	future of display.
which will be necessary
to achieve Net Zero.

Our future

We have ambitious growth plans.

Increase revenue	Over	Capacity growth of
3xby	30%	3x
2027	adjusted EBITDA margin by 2027	possible within current footprint

IQE Annual Report and Accounts 2022

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