Epitaxial wafer firm IQE has said trading in the first half of the year has been above expectations.

In a trading update the company said that although trading in January and February had been flat, the rest of the half year had seen strong growth. Revenues of some £22.5m for the interim period was forecast by the firm, which is slightly above market expectations.

EBITDA (earnings before interest, tax, depreciation and amortisation) will be “substantially higher than analysts’ current forecast of a broadly breakeven EBITDA”, said the company.

“Demand for our products is being fuelled by both the growth in wireless volumes (mobile phones, WiFi, WiMAX, GPS, direct broadcast TV and Bluetooth) and significantly, the continued trend to higher speed, feature rich devices,” said Drew Nelson, chief executive of IQE.

“Recent upgrades to the overall handset market for both 2007 and 2008, the major portion being for high end replacement phones, bodes well for strongly increasing demand for Gallium Arsenide based power amplifier and switch products,” he added.

Recent acquisitions have added to the company’s performance. The acquisition from EMD of the business now called IQE RF has taken the firm into the wireless power amplifier market and the acquisition of MBE Technology has given the firm a route to the Asia Pacific markets.

Interim results are due on August 22.