News

3 August 2009

 

Young takes over as AXT sees improving market conditions

Compound semiconductor substrate vendor AXT has posted total sales of $13.1m for the second quarter of 2009, up from $7.7m in the first quarter.

Morris Young, who recently returned to his former position as CEO of the California-headquartered company, said that market conditions had improved significantly since the start of the year, with inventory in the GaAs supply chain now largely cleared.

Sales of GaAs substrates specifically doubled to $10.1m compared with the first quarter, although they remain substantially lower than that seen during the same period of 2008.

Orders for germanium wafers also rebounded strongly, reaching $1.2m in the second quarter thanks to production orders from a newly qualified customer in Europe.

Young, who co-founded AXT back in 1986 and served as CEO between 1989 and 2004, said: “Our qualification efforts in both gallium arsenide and germanium substrates have been very successful and we are pleased with our increasing diversification in these areas.”

The improving revenue picture delivered a much-improved bottom line, with AXT posting a net loss of only $1.3m in the second quarter, down from $5.5m in the preceding three months.

Sales of InP wafers also increased sequentially, from $0.49m to $0.68m, but despite the improving environment, AXT declined to issue revenue guidance for the rest of the year.

One problem area that remains for AXT is its raw materials business, located largely in China. Young said that this was the one part of the supply chain where excess inventories were yet to clear. “[They] are not expected to recover until later in 2009,” he said.

As a result, sales of raw materials dropped sequentially, from $1.5m to $1.0m, and are much lower than the $4.9m figure seen during the equivalent period of 2008.

See related items:

AXT appoints Young as CEO

AXT’s sales halve as GaAs inventories burn off

AXT’s chairman & CEO Yin steps down

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

Search: AXT GaAs GaAs substrate InP Germanium

Visit: www.axt.com

The author Michael Hatcher is a freelance journalist based in Bristol, UK.