Cardiff-based IQE has posted an improvement in both revenue and profit for the year to 31 December 2011.
The company, which supplies wafer products and services to the semiconductor industry, recorded a 4 per cent rise in revenue to £72.7m. Pre-tax profits were 9 per cent up at £6.9m.
This is despite two of its "major" customers undergoing inventory corrections late in the year that impacted upon its growth.
Corrections will continue into the first quarter of 2012, the company said, but orders are expected to grow and enable further growth for the remainder of this year.
Dr Drew Nelson, IQE chief executive, said: "New product qualifications have progressed very well, with newly qualified products now ramping into production and other qualifications nearing completion.
"Furthermore, our capacity expansion programme remains on track, which is providing customers with a high degree of confidence in IQE as a key supplier as they keep their allocation of supplier shares under review."