IQE, which makes semiconductor wafers for chips used in Apple products, said Nelson, 64, will remain CEO until a successor is found and then takeover as the board president.

"Continuing as a board member once the new CEO is in place, he will be able to provide IQE with his expertise and industry knowledge and will remain with the company as a powerful ambassador and advisor," Chairman Phil Smith said.

In a separate statement, IQE said it expects annual revenue to be higher than forecast earlier, helped by military and defence sector orders from a major U.S. customer.

(Reporting by Indranil Sarkar in Bengaluru; Editing by Vinay Dwivedi)