British semiconductor firm IQE has posted another annual operating loss. Revenue slumped as it grappled with headwinds in the semiconductor market.

On Wednesday, the AIM-listed company reported a £25.8m operating loss for last year, compared with £73m in 2022. The latter figure was “significantly impacted” by a £62.7m non-cash goodwill impairment, the firm said.

IQE’s revenue sunk 31 per cent to £115.3m last year from £167.5m in 2022. Its adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) fell 82 per cent to £4.3m from £23.4m.

The company pinned the weaker performance on “a reduction in sales volumes and underutilisation of manufacturing capacity“.

It added that revenue for its Wireless business was hit by high inventory levels and delays to 5G infrastructure deployment, while its Photonics arm was also impacted by weak demand and a slowdown in Asian telecom infrastructure programmes.

The firm also revealed that it reduced staff numbers by 10 per cent last year in a bid to cut costs, adding that it would “continue to drive efficiencies in order to improve margins and profitability”.

IQE said there were “increasingly positive signs that the global semiconductor industry is recovering from what has been an unprecedented cyclical downturn in terms of both its extent and duration”.

The firm added that it returned to double-digit growth, as forecast, in the second half of last year and was continuing to see recovery into 2024 as inventory levels begin to normalise and customer demand rebounds.

Chief executive Americo Lemos said on Wednesday: “I am pleased with the resilience of the business and dedication of our people despite 2023 being a particularly challenging year for the semiconductor industry.”

He added: “Buoyed by the ongoing industry recovery, IQE is well positioned within the global value chain to deliver sustainable growth and capture opportunities in 2024 and beyond.”