AXT, Inc. Announces Long-Term Supplier Agreement with Lumentum

Key Terms

indium phosphide technical

Indium phosphide is a high-performance semiconductor material used to make chips, lasers and detectors that carry and process light and very fast electrical signals. Think of it as a specialized road surface designed for high-speed light traffic—better suited than ordinary silicon for fiber-optic communications, high-frequency electronics and some sensors. Investors care because demand and supply for this material affect companies in telecom, data centers, photonics and semiconductor supply chains, influencing costs, production capacity and technology competitiveness.

wafer substrates technical

Thin, flat pieces of crystalline material—most commonly silicon but also silicon carbide, gallium nitride or other compounds—used as the physical base on which semiconductor chips are built and processed. Like a blank canvas or building foundation, wafer substrates determine how many devices can be made, their performance and manufacturing cost; their size, purity and availability therefore affect production capacity, yields and supply dynamics that matter to investors in chipmakers and suppliers.

capacity reservation financial

A capacity reservation is a contractual agreement where a buyer or customer pays to hold a specific amount of production, storage, service, or infrastructure capacity so it will be available when needed. Think of it like booking and paying for a parking spot or airline seat in advance: it guarantees availability and often involves fixed fees or minimum commitments. For investors, these agreements affect a company’s revenue predictability, cash flow timing, cost structure, and ability to meet demand or scale operations.

shipment credits financial

Shipment credits are accounting or billing adjustments a seller issues that reduce the amount a buyer owes because of items shipped — for example freight allowances, rebates tied to delivery, price adjustments, or credits for damaged or returned goods. They matter to investors because they change reported sales, accounts receivable, and cash flow: frequent or large shipment credits can indicate lower net revenue per shipment, affect profit margins, and influence how sustainable reported sales figures are over time.

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FREMONT, Calif.--(BUSINESS WIRE)-- AXT, Inc. (Nasdaq: AXTI), a leading manufacturer of compound semiconductor substrates, today announced that it entered into a definitive agreement with Lumentum Operations, LLC for the supply and capacity reservation of indium phosphide wafer substrates.

“We are very pleased to announce an agreement with Lumentum and to be a key supplier to their indium phosphide requirements over the coming years,” said Morris Young, chief executive officer of AXT, Inc.

Under the terms of the agreement, AXT has agreed to reserve a minimum annual commitment of indium phosphide by Lumentum for a period beginning upon entry into the agreement, running through December 31^st, 2031, and to support any additional capacity that may be required. In consideration for the reservation of the product capacity, Lumentum has agreed to pay AXT an initial deposit of $43,500,000, due within thirty business days after entry into the agreement, and a second deposit of $43,500,000, with the timing and terms surrounding payment to be subsequently determined during calendar year 2028. The deposits shall be applied as shipment credits towards the purchase of the products, until such deposit is exhausted.

For more details, please see the company’s filings on Form 8-K.

About AXT, Inc.

AXT is a material science company that develops and manufactures high-performance compound and single element semiconductor substrate wafers comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge). The company’s substrate wafers are used when a typical silicon substrate wafer cannot meet the performance requirements of a semiconductor or optoelectronic device. End markets include 5G infrastructure, data center connectivity, passive optical networks, LED lighting, lasers, sensors, power amplifiers for wireless devices and satellite solar cells. AXT’s worldwide headquarters are in Fremont, California where the company maintains sales, administration and customer service functions. AXT has its Asia headquarters in Beijing, China and manufacturing facilities in three separate locations in China. In addition, as part of its supply chain strategy, the company has partial ownership in ten companies in China producing raw materials for its manufacturing process. For more information, see AXT’s website at https://investors.axt.com.

Safe Harbor Statement

This press release contains certain statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, for example, our entry into a definitive agreement with Lumentum, our ability to meet the terms of this agreement, and our ability to meet Lumentum’s future demands and needs for our indium phosphide wafer substrates. Please refer to the company’s filings made with the Securities and Exchange Commission for more information on these and other factors described and captioned “Risk Factors” in the company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and other filings made with the Securities and Exchange Commission. Each of these factors is difficult to predict and many are beyond the company’s control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260729446850/en/

Gary L. Fischer
Chief Financial Officer
gfischer@axt.com

Leslie Green
Green Communications Consulting, LLC
leslie@greencommunicationsllc.com

Source: AXT, Inc.