AXT, Inc. Resumes Substrate Production at Its Beijing Manufacturing Facility
March 20 2017 - 7:30AM
AXT, Inc. (NasdaqGS:AXTI), a leading manufacturer of compound
semiconductor substrates, today announced that it has resumed wafer
processing production of all substrate types, including indium
phosphide (InP), gallium arsenide (GaAs) and germanium (Ge), at its
manufacturing facility in Beijing, China, following an electrical
fire on March 16, 2017.
As previously reported, the fire caused no
damage to indium phosphide crystal growth or wafer production. In
addition, the company’s 6-inch gallium arsenide and germanium
crystal growth furnaces were not damaged by the fire, and there is
no damage to the electrical supply supporting these 6-inch crystal
growth furnaces. The electrical power supply supporting 2-inch,
3-inch and 4-inch gallium arsenide and germanium crystal growth was
damaged. The company’s custom-designed furnaces enable it to rotate
key furnace hardware between different growth diameters. The
company plans to use some of the 6-inch furnace capacity for
2-inch, 3-inch and 4-inch diameter gallium arsenide and germanium
crystal growth production.
In addition to rotating diameter sizes, the
company has sufficient redundancy in furnaces and plans to move
furnaces within the plant to an area designated for crystal growth
expansion. Power can then be connected and the company can
restore the smaller diameter crystals to full production. The
company believes it can return to full production during the second
quarter. Further, to meet immediate customer demand, staged
inventory of smaller diameter crystalline ingots will be moved to
wafer processing.
AXT’s wafer processing production area,
including its clean room, is housed in a facility across the street
from the building in which the electrical short circuit fire
occurred, and was not affected by this event. Further, as it
previously announced, no structural damage occurred to the building
in which the fire took place.
“I am thankful that no injuries occurred and
that the damage to our facilities was considerably less than we
initially believed,” said Morris Young, chief executive officer.
“Further, I am grateful to local authorities for their timely
response and assistance. We remain convinced about our business
opportunities and are deeply committed to supporting the
requirements of our customers through this process.”
About AXT, Inc.
AXT designs, develops, manufactures and distributes
high-performance compound and single element semiconductor
substrates comprising indium phosphide (InP), gallium arsenide
(GaAs) and germanium (Ge) through its manufacturing facilities in
Beijing, China. In addition, AXT maintains its sales,
administration and customer service functions at its headquarters
in Fremont, California. The company’s substrate products can
be used primarily in fiber optic communications, 3-D sensing, solar
cell, lighting display applications and wireless communications.
Its vertical gradient freeze (VGF) technique for manufacturing
semiconductor substrates provides significant benefits over other
methods and enabled AXT to become a leading manufacturer of such
substrates. AXT has manufacturing facilities in China and, as part
of its supply chain strategy, has partial ownership in ten
companies in China producing raw materials. For more information,
see AXT’s website at http://www.axt.com.
Safe Harbor Statement
The foregoing paragraphs contain forward-looking
statements within the meaning of the Federal securities laws,
including, our expectations with respect to returning to full
production and our business opportunities. These forward-looking
statements are based upon assumptions that are subject to
uncertainties and factors relating to the company’s operations and
business environment, which could cause actual results to differ
materially from those expressed or implied in the forward-looking
statements contained in the foregoing discussion. These
uncertainties and factors include but are not limited to: the
timing of our ability to restart production; possible restrictions
placed on us by government agencies; possible reactions from
customers; overall conditions in the markets in which the company
competes; global financial conditions and uncertainties; policies
and regulations in China; market acceptance and demand for the
company’s products; the impact of factory closures, or other
events causing delays by our customers on the timing of sales of
our products; our ability to control costs; our ability to utilize
our manufacturing capacity; product yields and their impact on
gross margins; and other factors as set forth in the company’s
annual report on Form 10-K, quarterly reports on Form 10-Q and
other filings made with the Securities and Exchange
Commission. Each of these factors is difficult to predict and
many are beyond the company’s control. The company does not
undertake any obligation to update any forward-looking statement,
as a result of new information, future events or otherwise.
Gary Fischer
Chief Financial Officer
(510) 438-4700
AXT (NASDAQ:AXTI)
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