23 February 2010


AXT’s Q4/2009 sales up year-on-year

For 2009, AXT Inc of Fremont, CA, USA, which manufactures gallium arsenide, indium phosphide and germanium substrates and raw materials, has reported revenue of $55.4m, down 24% from 2008’s $73.1m. Although gross margin rose from 24.6% to 25.1%, net loss increased from $689,000 to $1.9m.

However, for fourth-quarter 2009, revenue was $17.8m, up 6% on $16.8m in Q3 and 14% on $15.6m a year ago (contrasting with Q3 being down year-on-year).

This growth has been driven by raw materials sales almost tripling from Q3’s $1m to $2.8m (though still only just over half the $5.3m a year ago). Germanium (Ge) substrate revenue also rose slightly from $1.8m to $1.9m (almost triple the $684,000 a year ago).

In contrast, gallium arsenide (GaAs) revenue fell 5% from Q3’s $13.3m to $12.6m (though this is up 38% on $9.1m a year ago). Indium phosphide (InP) revenue fell 25% from Q3’s $688,000 to $513,000 (though still up 8% on $473,000 a year ago).

Operating expenses have been cut from $4.1m a year ago and $3.7m in Q3/2009 to $3m (contributing to full-year expenses falling from $18m in 2008 to $15.5m in 2009). “Our successful restructuring efforts and ongoing manufacturing efficiency improvements, coupled with stronger-than-expected raw materials revenue, resulted in solid financial results that were ahead of our expectations,” comments CEO Morris Young. Net income improved to $2.8m, compared with $2.1m in Q3 and a loss of $2.4m a year ago.

“Our qualifications with new and returning customers continued to progress well, as we have committed increased funding to our engineering and customer support efforts,” says Young. “We are also seeing positive long-term trends in each of our key markets that are likely to support our growth in 2010 and beyond,” he adds. “AXT is well positioned to accommodate this increasing demand with minimal capital requirements, and we believe that our unique structure will further separate our capabilities from our competitors as all of these markets develop.”

For first-quarter 2010, AXT expects the positive demand environment for substrates to offset normal seasonality to yield revenue of $17.8–18.5m (flat to up 4% on Q4/2009).

See related items:

AXT wins 5-year Ge substrate contract from AZUR SPACE

AXT’s opto-related revenues to grow at 15-20% annually, forecasts analysts

AXT grows 28% as end markets continue recovery

Young takes over as AXT sees improving market conditions

AXT’s sales halve as GaAs inventories burn off

AXT’s revenue falls 13%, as GaAs sales drop by a third

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