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27 November 2006


AXT founder Morris Young plans retirement

Twenty years after founding GaAs, InP and germanium substrate manufacturer AXT Inc of Fremont, CA, USA in 1986, Dr Morris S. Young, chief technology officer since 2005, has decided to retire at the end of 2006 at the age of 61. However, he will continue to serve on the board of directors. Young was chief executive officer from 1989 to 2004 and chairman from 1998 to 2004.

“Young is a visionary technologist, a pioneer of the gallium arsenide industry and the person most responsible for the early growth and success of AXT,” says chairman Jesse Chen. Young pioneered vertical gradient freeze (VGF) technology as the foundation of AXT’s business. VGF has been used for the production of lower-defect substrates, and has become the technology of choice for the GaAs industry, AXT claims. “The growth and core foundation of the company is the direct result of his hard work and technical abilities,” adds CEO Phil Yin.

“We are pleased that Dr Young will continue to consult with AXT on matters as needed,” adds Chen. “I believe the company has a very bright future,” says Young. “With its core technology, strategic investments in joint ventures, and new management team, I believe AXT is positioned for continued strong growth.”

AXT has manufacturing facilities in China and invests in five Chinese joint ventures producing raw materials.

* On 14 September, tax authorities in the People's Republic of China (PRC) announced their intention to impose customs duties on certain raw materials, including gallium and arsenic, and to reduce or eliminate refunds of value-added taxes on these materials.

After a modified announcement from the authorities on 22 November, the effect is that AXT's China joint ventures will no longer receive a refund of value-added tax for exports of gallium or arsenic, including certain shipments to AXT’s China subsidiary that are treated as exports under PRC tax regulations.

However, the joint ventures sell only a portion of their gallium in transactions that are considered to be exports, and none of those JVs currently export arsenic. Therefore, under the new guidance, AXT believes that its consolidated financial results will not be materially affected by the impending tax changes.

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