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FREMONT, CA - AXT, Inc. (NASDAQ:AXTI), a manufacturer of semiconductor substrates with a market capitalization of $87 million, announced today that its subsidiary, Beijing Tongmei Xtal Technology Co., Ltd. ("Tongmei"), has obtained the necessary permits to resume the export of indium phosphide substrates to select customers. This development follows the Chinese government’s implementation of export controls on several materials, including indium, on February 4, 2025. The news has contributed to AXT’s strong performance, with the stock rising over 13% in the past week, according to InvestingPro data.
Tongmei was granted the initial export permits by the Ministry of Commerce of the People’s Republic of China. The permits are essential for the company to continue supplying its international customers with indium phosphide, a critical material used in high-performance semiconductor applications. InvestingPro analysis reveals that while AXT maintains strong liquidity with a current ratio of 1.99, the company faces challenges with weak gross profit margins of 17.2%.
Beijing Tongmei Xtal Technology is a key player in the development and manufacturing of compound and single element semiconductor substrate wafers, including indium phosphide (InP), gallium arsenide (GaAs), and germanium (Ge). With headquarters in Beijing, China, Tongmei operates manufacturing facilities across three locations within the country and maintains partial ownership in joint ventures producing raw materials for its substrates.
The news comes as AXT, Inc. seeks to navigate the complexities of international trade regulations that affect the exportation of dual-use materials, which have both civilian and military applications. The company’s ability to fulfill customer orders and deliver products remains subject to these regulatory requirements.
AXT, Inc. has not provided specific guidance on the financial impact of the resumed exports. However, the company’s statements in the SEC filing indicate a forward-looking perspective, with the expectation of continuing to serve its customer base under the new regulatory framework. With the next earnings report scheduled for July 23, 2025, investors seeking deeper insights can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research reports, which cover over 1,400 US stocks.
The information disclosed in this article is based on the recent SEC filing by AXT, Inc. and does not constitute financial advice or promotional material. The company has highlighted that the forward-looking statements in the filing are subject to various risks and uncertainties, and actual results may differ materially. AXT, Inc. has not committed to updating any forward-looking statements as a result of new information or future events.
In other recent news, AXT Inc . reported its first-quarter 2025 financial results, revealing a significant miss in both earnings per share (EPS) and revenue compared to analyst expectations. The company reported an EPS of -$0.19, which was below the expected -$0.05, while revenue reached $19.4 million, falling short of the anticipated $23.85 million. This underperformance is attributed to challenges such as export restrictions from China and yield issues with gallium arsenide wafers. Despite these setbacks, AXT Inc. anticipates a recovery in gross margins by the second quarter of 2025, projecting revenue between $20 million and $22 million. In corporate governance developments, AXT Inc.’s stockholders approved a new equity incentive plan aimed at attracting and retaining skilled employees and executive officers. Additionally, Christine Russell was re-elected as a Class III director for a three-year term. The company also ratified the appointment of BPM LLP as its independent registered public accounting firm for the fiscal year ending December 31, 2025. These updates provide insight into AXT Inc.’s ongoing strategic and financial maneuvers amidst a challenging market environment.
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