24 January 2012

AXT to establish second substrate-making facility in China

AXT Inc of Fremont, CA, USA, which makes gallium arsenide, indium phosphide and germanium substrate and raw materials, has agreed with the Administrative Commission of Tianjin Economy and Technology Development Zone to establish a second manufacturing facility in Tianjin, China. The arrangement provides AXT with land use rights for about 32 acres of industrial land in Yixian Scientific and Industrial Park to construct a compound semiconductor substrate manufacturing facility that would be completed in phases by 2017.

AXT has committed to a $12.5m investment in the construction of the facility over the next two years in exchange for land use rights, enterprise and individual income tax rebates, employee hiring and development subsidies, and other benefits. The facility should provide AXT with substantial substrate manufacturing capacity expansion, complementing its current 190,000 square foot facility in Beijing.

“We are very pleased for the opportunity to begin planning our future expansion in such a vibrant and dynamic area of China,” says CEO Morris Young. “While our current facility in Beijing continues to provide us with ample capacity to grow our business for the next 18-24 months, we believe that a second manufacturing facility in Tianjin will provide us with additional capacity for many years to come, particularly in light of positive trends in the demand for wireless devices, the proliferation of LEDs, and the adoption of photovoltaic technology,” he adds.

“The positive financial considerations of this arrangement, coupled with what we believe to be our longer-term capacity needs, provide compelling incentives to proceed with our expansion plans at this time,” continues Young. “This arrangement allows us to begin planning for growth and redundancy in our business in a measured and incremental way that is suitable both to the current economic conditions and the sizeable opportunity ahead.”

Tags: AXT GaAs GaAs substrate InP Germanium

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