British chipmaker CML Microsystems has warned on ‘subdued’ demand for semiconductors and delays to construction of new facilities as it posted a rise in sales.

The Essex-based business, which develops mixed-signal, RF and microwave semiconductors for communications firms and  operations in Cambridge, UK and California, USA, said planned upgrades to facilities in the US had been hit by planning difficulties and higher costs.

“There have been disappointing delays in obtaining local US government building permits that are needed to unlock efficiency improvements and cost reductions,” CML said, adding it had incurred “elevated costs relating to those delays with additional expenses stretching into the second half [of the financial year].”

But the business, which was founded in 1968 and has had a presence in North America since the 1990s, told UKTN it was not concerned by the prospect of tariffs imposed in European exports to the US following the election of president Donald Trump.

“We have testing facilities in Asia, in the US and in the UK,” managing director Chris Gurry said.

“We believe we’re going to be okay but if we needed to be fleet of foot and rearrange things slightly, I think we’re well-positioned to do that for a business of our size.

“It’s really about where the product originates from…and we could certainly be quite nimble in terms of where our products originate from.”

The company posted a 18% rise in sales to £12.5m for the six months to end September. Pre-tax profits slipped from £1.9m to £0.8m over the period. The firm reconfirmed its previous dividend of 5p.

“Industry-wide challenges remain in the short term, but expansion into microwave, millimetre wave and broadcast radio sectors underway and the Group remains well positioned as conditions improve,” the firm said.

CML said it was its intention to “dispose of all surplus land and property that is outside of its operational needs.” That includes the sale of excess land at its Essex Headquarters site, Oval Park, for which it obtained planning permission last year and from which it expects to make a significant profit compared to the purchase price.

The company’s shares fell 8% to 234p in early trade in London. The stock has fallen by around a third since the start of the year.

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