AXT, Inc. Announces Formal Application for Subsidiary IPO

PVTIME – AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrate wafers, today announced that its wafer manufacturing subsidiary in China, Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), has submitted to the Shanghai Stock Exchange, and the Shanghai Stock Exchange has accepted for review, a formal application to list Tongmei’s shares in an initial public offering (“IPO”) on the Shanghai Stock Exchange’s Sci-Tech innovAtion boaRd (the “STAR Market”).

“This is a significant achievement and an important milestone for AXT,” said Morris Young, chief executive officer. “We founded Tongmei back in 1998. Since then, it has grown into a company that is engaged in the research, development, production and sale of InP substrates, GaAs substrates, germanium substrates, PBN and other high-purity materials, which we believe makes it an attractive offering on the STAR Market. With success in our addressed markets, strong customer traction, and a number of new applications coming to market this year and beyond, we have significant momentum building in our business. If completed, the IPO will provide proceeds that will be invested in Tongmei to enable us to expand capacity to capture high-volume opportunities across our portfolio and develop new products to drive incremental growth and value from market expansion in 5G, data center expansion, telecommunications modernization, healthcare monitoring, microLEDs, and more.”

The process of going public on the STAR Market includes several periods of review and, therefore, is a lengthy process. Tongmei does not expect to complete the IPO until the second half of 2022. The process of going public on the STAR Market is complicated and we have little or no experience in taking a company public in China. There can be no assurance that this process will be completed. The listing of Tongmei on the STAR Market will not change the status of AXT as a U.S. public company. An English version of the Tongmei preliminary information document has been furnished under a Form 8-K that has been filed with the Securities and Exchange Commission.

Update to Q4 2021 Guidance
AXT also announced that it is increasing its Q4 2021 revenue guidance range to $36–$37 million from its previous guidance of $34–$36 million, which was provided during its earnings conference call on Oct. 27, 2021. This change reflects continued momentum in the demand for AXT’s products, as well as growth in the applications that utilize its substrates. AXT will announce its full results for the fourth quarter of 2021 and fiscal year 2021 on Feb. 16, 2022.

“Our expected growth in what is typically a seasonally down quarter for AXT signifies the expanding opportunities we continue to see across our portfolio,” added Young. “Over the past several years, we have laid considerable groundwork to optimize our business to capture these opportunities and we are pleased to see our efforts bearing fruit.”

Conference Call
AXT will host a conference call today, Monday, January 10, 2022 at 1:30 p.m. Pacific Time to discuss the Tongmei IPO filing and opportunity. The conference call can be accessed at (844) 892-6598 (passcode 1012589). The call will also be simulcast at Replays will be available at (855) 859-2056 (passcode 1012589) until January 10, 2023. Additional investor information can be accessed at or by calling the company’s Investor Relations Department at (510) 438-4700.