July 21, 2006 – Emcore Corp., a provider of compound semiconductor-based components and subsystems, has agreed to sell its electronic materials and device division to IQE plc, a Cardiff, Wales-based provider of compound and epitaxial semiconductor wafers and substrates, for $16 million. The deal includes inventory, fixed assets, and intellectual property. IQE will fund the purchase through issuance of additional shares and a planned financing round expected to be closed next month.

Emcore has been narrowing its focus on broadband infrastructure, solar power, and highly integrated products after a decade of developing RF materials, and realized it needed to find a better home for the materials unit, according to COO Scott Massie. The sale of the Somerset, NJ-based division will lower Emcore’s cost base and improve gross margins, as well as enable a consolidation of operations in New Mexico and California, he added.

IQE was formed in 1999 by the merger of two epitaxial wafer companies supplying electronic and optoelectronic materials produced using metal organic chemical vapor deposition (MOCVD) and molecular beam epitaxy (MBE) equipment platforms. Emcore’s materials unit uses MOCVD technology to produce both GaAs- and GaN-based transistor wafers, for use in power amplifiers and switches in GSM, CDMA multiband wireless handsets, WiMAX, Wi-Fi, cellular handsets, and in wireless LAN applications.

“EMD’s current and next generation products are extremely complementary to IQE’s product base and its customer base will increase IQE’s customer reach to a broad spectrum of world class RF manufacturers,” stated Drew Nelson, IQE president and CEO.

IQE reports preliminary 1H06 sales were about GBP 14.5 million, a 30% increase from 2H05 and 50% higher than a year ago.