MARKET REPORT: Semiconductor maker IQE loses around a quarter of its value as it admits global chip shortage has hit profits

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The IQE lost nearly a quarter of its value as it shook the market with dire forecasts.

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The semiconductor wafer-maker said it was being hit from all directions as global chip shortages, falling demand for new mobile phones, currency movements and a slow, stop-start rollout of 5G infrastructure knocked the business down. .

IQE said in a trading update that profits are expected to fall 40 per cent this year to around £18 million and sales are expected to fall 15 per cent to £152 million.


Profit Alert: IQE said it was being hit by global chip shortages, falling demand for new mobile phones, currency movement and a slow, stop-start rollout of 5G.

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IQE does not make chips. Rather, the AIM-listed conglomerate creates wafers that are then used as the basis for semiconductors that are critical to products such as phones — including the Apple iPhone — and mobile network infrastructure.

The warning from IQE comes as smartphone makers and companies in other industries place fewer orders for high-tech kits as they grapple with shipping and freight constraints.

Russ Mold, investment director at AJ Bell, said: ‘The current movements have something to do with the weak numbers.

Stock Watch – MyHealthchecked

Investors piled into MyHealthChecked as it launched two COVID home testing services for travelers.

The Cardiff-based company launched a rapid antigen test and a verification service for people who are double-jerked and arriving in England from a non-red list country.

This will be followed by a fit-to-fly rapid test for those leaving the UK next week.

The tests can be arranged online. The AIM-listed group said NHS professionals would confirm the results of the swabs.

Shares of MyHealthChecked jumped 13.17 per cent, or 0.27p, to 2.32p. Its stock has risen nearly a fifth so far this year.

But the real blow is lower than expected global sales of 5G mobile telecom infrastructure and emerging signs of a slowdown in demand in the smartphone market, which may be related to supply chain disruptions and chip supply constraints elsewhere.

Shares in the Cardiff-based group fell 24.4 per cent, or 12.3p, to 38.1p.

Another firm that suffered heavy losses was Genus, which fell to the bottom of the FTSE 250 leaderboard after issuing a profit warning.

Livestock breeders warned that a volatile pig market in China means annual earnings will be ‘slightly’ lower than previously forecast. Genus breed animals after analyzing their DNA to make the toughest herds possible. It supplies pig and cow breeding stock to China.

The country’s pig market has driven a rise and fall in the results of the genus over the years, as an outbreak of African swine fever that killed millions in 2019. Its stock closed 10 percent lower, from 524p to 4726p.

At the other end of the scale, shares of Intertek told investors that revenue rose — albeit modestly, at 2.2 percent — in the four months to October.

Intertek is one of the lesser-known companies on the FTSE 100. It provides testing, inspection and certification of goods in industries ranging from chemicals and food to transportation and construction.

The group says companies are now investing more in quality assurance. Its stock rose 6 per cent, or 310p, to 5470p.

Intertek helped keep the FTSE 100 in the black, with the blue-chip index up 0.27 per cent to end 19.63 points higher at 7286.32.

In contrast, the FTSE 250 fell 0.23 per cent or 54.55 points to end at 23167.06.

European markets were shaken by the fresh Covid outbreak that is gaining momentum on the continent.

France’s CAC was marginally red while Germany’s DAX fell 0.4 percent as the World Health Organization said another 700,000 deaths could occur in the region.

Airline shares fell in early trade as uncertainty over the winter holidays across the continent – but companies including EasyJet (up 0.3 percent, or 1.6p, to 557p), British Airways owner IAG (0.9 percent, or 1.3) p, from 152.8p) and Wizz Air (1.2 percent, or 52p, up 4352p) rose by the end of the day.

Elsewhere, AIM-listed vet group CVS said it was still benefiting from the lockdown pet boom.

The company has started its fiscal year well – sales are up 14 per cent in the first four months. It has over 500 veterinary practices in the UK, Ireland and the Netherlands.

But the bumper sales numbers were hit by the challenges of the employees. Veterinarian vacancies now stand at 9.2 percent – a slight increase from 8.8 percent.

These staff shortages could be what dragged CVS shares 1.9 percent lower, down 45p, to 2380p.


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