12 April 2018

AXT lowers Q1 revenue forecast from $26-27m to $24-24.5m after China government-ordered factory shutdown days

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AXT Inc of Fremont, CA, USA – which makes gallium arsenide (GaAs), indium phosphide (InP) and germanium (Ge) substrates and raw materials – has lowered its first-quarter 2018 revenue forecast from $26-27m to $24-24.5m, due to government-ordered mandatory factory shutdowns in Beijing caused by severe air pollution that occurred late in the quarter. From 27 February to 31 March more than 300 manufacturing companies were intermittently shut down for a total of ten days (30% of the calendar days in this period).

“We were disappointed that air quality conditions in Beijing triggered mandatory shutdowns late in the quarter, which prevented AXT from meeting our guidance expectations,” says CEO Morris Young. “We were working hard to narrow the gap but the last week of March alone had three shutdown days,” he adds.

“The demand environment, however, remains solid as AXT substrates continue to perform well, particularly in applications where customer requirements are most stringent,” continues Young. “We are optimistic about our business opportunity in 2018, and believe we are well-positioned to take advantage of positive trends in a number of applications, including high-end LED lighting, infrared and other sensors requiring low-EPD [etch-pit density] wafers, passive optical networks, data-center connectivity and satellite solar cells.”

AXT also says that it has completed the first phase of facilitization of its new manufacturing facility in Dingxing, China (about 90 miles south of its Beijing factory) and is progressing well on its staged relocation.

“We have installed wafer processing equipment and have produced initial wafers at this site that can be used for qualification,” Young says. “With the continued solid execution by our team, we are on schedule with our plans and pleased with our progress to date,” he adds. “This new technically advanced facility gives us the opportunity to plan our business for our next stage of growth and to support the longer-term capacity requirements of our customers.”

Full first-quarter 2018 financial results will be announced on 25 April.

See related items:

AXT’s Q4/2017 revenue grows a more-than-expected 30% year-on-year, driven by InP and Ge

AXT’s Q1 revenue exceeds original guidance after faster-than-expected recovery from fire

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