The contract, according to IQE will last five years and should generate $2 million in revenues for the company in the first year. The chip manufacturer is said to be migrating all of its future devices to epi based substrates with the deal potentially generating over $10 million in revenues for IQE over the term of the contract.

"This important contract win once again clearly demonstrates our customers' confidence in the quality and service of the outsource model provided by IQE," stated Dr Drew Nelson, IQE plc CEO. "As a result of this service they are able to compete extremely effectively in their target markets. As epi based production becomes a dominant part of this new customer's product range, they will benefit even more significantly in the future, a key consideration in their decision to have IQE solely responsible for this critical part of their process."

The company announced separately to investors that it had incurred extra costs in securing the several new deals to enable a fast track qualification period, with the company recording a loss for the year. The company now expects around $15 million in revenues from just one of its major new contracts in 2006.