IQE puts a little Bethlehem in smartphones worldwide

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Photo by Stacy Wescoe: Steve Garber's face is reflected in a sample of the epitaxial wafers IQE manufacture in Bethlehem.
Photo by Stacy Wescoe: Steve Garber's face is reflected in a sample of the epitaxial wafers IQE manufacture in Bethlehem.

With more than 550 employees in 11 countries and more than $230 million in annual revenue, IQE Inc. of Bethlehem isn’t a small startup anymore.

In fact, the company more than doubled in size in the past year thanks to a number of strategic mergers and acquisitions and now has its worldwide corporate headquarters in Cardiff, Wales.

Even with that growth, the company, which got its start through the Ben Franklin Technology Ventures of Northeast Pennsylvania’s Tech Ventures incubator, still has strong ties with the organization that helped it get started.

“Without Ben Franklin, we probably couldn’t have gotten off the ground to be here where we are today,” said Steve Gergar, vice president and general manager of IQE PA, the Bethlehem-based headquarters of the tech company.

Sales operations manager Dave Hartzell, one of the IQE employees who has been with the company since it began in the late 1980s, said Ben Franklin helped it in many ways.

He said business planning and training, funding, offering low-cost office space and setting it up with the right connections were just some of the ways that Ben Franklin helped the company start off on the right foot.

Today the company is poised for continued growth, Gergar said.

He said there is an increasing demand for the company’s product, known as an epitaxial wafer.

Put simply, IQE builds the base that computer chip manufacturers use to grow electrical circuits and create microchips.

“We are enjoying growth because the devices, like smartphones, are becoming more complicated,” Gergar said.

More complicated, he said, means more chips.

Devices that may have had only one or two computer chips in them in the past may have 10 to 14 or more today. That creates a higher demand for the components that are used in making them.

USE IN SOLAR PRODUCTS

An epitaxial wafer created by IQE generally can supply enough material for six to more than a thousand chips, depending on their size. IQE sells the wafers to chip manufacturers at a cost of a couple hundred dollars to more than $20,000, depending on the complexity. IQE manufactures between 70,000 and 75,000 wafers per month.

And while 70 percent of the wafers are sold to companies turning them into parts for smartphone and touchpad devices, some also will go toward optical-device uses, Gergar said.

He also is seeing a growing demand for the use of the wafers in solar products – specifically in the field of concentrated photovoltaic solar devices – or CPV devices – which he calls the “next generation of solar devices” capable of dramatically higher efficiency.

Gergar said the new devices are roughly two to three times as efficient compared to first-generation solar materials made from silicon.

“This is kind of a new business for us,” said Gergar, a business where he sees strong future demand.

“We’re getting a lot of traction with the CPV devices. … It takes up less space and is more efficient,” he said.

NEW OPPORTUNITIES

Preparing for the growth that the company expects is part of the excitement and challenge, Hartzell said.

“I have been here 23 years and it feels like I have worked for six or seven different companies. The main thing is change,” he said.

And the change likely is far from over.

While Gergar said he knows of no immediate plans for any more mergers or acquisitions, which helped grow IQE to its existing size, he said he sees a great deal of organic growth and new opportunities.

But that also puts more pressure on a company – especially in an industry such as computer chip technology where price pressure means prices going down and not up.

“Eleven years, ago these wafers cost four times what they do now,” Gergar said. “We have to be as efficient is possible.

The company isn’t slowing down. Indeed, after 25 years in business, IQE just celebrated the creation of the one-millionth wafer in its South Side Bethlehem facility.

So next time you pick up your smartphone or touch pad – it may just have components that were made here in the Lehigh Valley. And in large part thanks to the support of Ben Franklin Technology Partners.

Stacy Wescoe

Stacy Wescoe

Writer and online editor Stacy Wescoe has her finger on the pulse of the business community in the Greater Lehigh Valley and keeps you up-to-date with technology and trends, plus what coworkers and competitors are talking about around the water cooler — and on social media. She can be reached at stacyw@lvb.com or 610-807-9619, ext. 104. Follow her on Twitter at @morestacy and on Facebook. Circle Stacy Wescoe on .

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