(Reuters) - Cardiff-based IQE Plc expects new supply chains in Asia to provide significant orders, the supplier of semiconductor wafer to Apple Inc said on Tuesday, sending its shares up more than 13%.
The company had warned last month that 2019 revenue would miss forecasts, blaming a bigger-than-expected hit on the industry’s supply chain from U.S. restrictions on China’s Huawei.
The contract wins helped soothe investors nerves around the tech supplier, and IQE shares rose 13.5% to 58.6 pence on Tuesday.
The company’s shares have already lost 38% since March, when it missed its own 2018 core earnings forecast, hurt by weak demand for smartphones.
IQE said then it had seen a reduction in forecasts from several chip customers in its wireless and photonics units, hitting anticipated revenues for those businesses.
The company, however, said on Tuesday supply chains were being redeveloped across the globe and cited three new deals as evidence it was progressing in Asia .
“This has had an impact on sales volumes for IQE’s products, as global customers adjust to these new supply chain situations and IQE becomes qualified in these new supply chains,” the company said.
(GRAPHIC: IQE defies trade war hit with Asian contract wins - tmsnrt.rs/2Odjxzs)
IQE, which has also been hit by a global slowdown in demand, said it had got orders from a major customer in Asia for new Asia-centric supply chains, for a type of transistor.
The company also won additional orders from a second Asian customer, while its Singapore operation won a new customer for transistors used in wireless devices and networks.
“Collectively, these deals demonstrate IQE’s ability to jump on the newly emerging (in response to trade-war) Asia-centric supply chains,” Peel Hunt analysts said, adding the contract wins were green shoots in a new Asia-focused supply chain.
IQE’s contract wins come as AMS AG, which supplies Apple with sensors for its face recognition technology, forecast strong revenue and profit growth in the third quarter.
Taiwan Semiconductor Manufacturing Co Ltd, the world’s largest contract chipmaker and Apple supplier, also forecast robust demand for 5G chips driving a stronger second-half.
Reporting by Noor Zainab Hussain in Bengaluru; Editing by Shounak Dasgupta and Keith Weir