March 20, 2018 / 7:57 AM / a month ago

UPDATE 1-British chipmaker IQE profit rises, sees solid year ahead

(Adds details on wafer sales, segmental and company outlook)

March 20 (Reuters) - Chipmaker IQE Plc, whose technology is used in Apple Inc’s iPhone, posted an 18 percent rise in full-year pretax profit on Tuesday on strong sales of wafer, a semiconductor material, and saw strong growth in the business.

The company said adjusted pretax profit rose to 24.3 million pounds ($34.1 million) for the year ended Dec. 31, from 20.6 million pounds a year earlier.

Cardiff-based IQE produces around 80 percent of the global supply of outsourced ‘epi-wafers’, a type of advanced material used in products from laser hair removal to the 3D-sensing camera in the latest iPhone X.

The wafers, have become vital in the rapidly growing photonics sector, an area of technology that is based on the properties and transmission of photons, such as fibre optics.

The company said it expects a 35-60 percent revenue growth in its photonics business in 2018, while its wireless revenue, which has had flat growth in the last few years, is expected to grow up to 5 percent this year.

Sales of wafers, which make up most of IQE’s revenue, recorded a 21 percent rise at 152.6 million pounds in 2017, while gross margins on wafer sales rose to 24.1 percent from 21.8 percent.

IQE has been facing criticism from short-sellers - who position themselves to gain when share prices fall - surrounding its joint ventures and accounting practices.

The company expects “continuing strong growth” in 2018, it said in a statement.

Revenue rose 16 percent to 154.5 million pounds in 2017. ($1 = 0.7123 pounds) (Reporting By Justin George Varghese in BENGALURU and Alasdair Pal in LONDON; Editing by Amrutha Gayathri and Gopakumar Warrier)

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