AXT reduces Q3 revenue guidance from $24.5-26m to $19.6-20m

AXT Inc of Fremont, CA, USA – which makes gallium arsenide (GaAs), indium phosphide (InP) and germanium (Ge) substrates and raw materials – has reduced its guidance for third-quarter 2019 revenue from $24.5-26m (given on 24 July) to $19.6-20m (down from $24.8m in Q2/2019 and $28.6m in Q3/2018). The cut is attributed to a weaker-than-expected demand environment (particularly in data-center connectivity and LED applications) as well as lower-than-forecasted raw materials revenue.

“Coming into Q3, we saw early signs of an improvement in the demand environment, as projected by our customers. But the orders did not materialize during the quarter,” says CEO Morris Young. “While we do believe that all of our key markets are positioned for a return to growth, visibility is poor. The ongoing geopolitical and global economic environment has created near-term uncertainty in terms of the timing of the recovery,” he adds.

“Despite the disappointing shortfall in the third quarter, we remain confident about the many trends that are expected to drive growth in our business, such as the ongoing build-out of passive optical networks (PONs), hyperscale data-center upgrade, 5G telecommunications, LED lighting for an array of applications, as well as a number of emerging opportunities in healthcare monitoring, VCSELs [vertical-cavity surface-emitting lasers], and more,” Young continues.

“As we navigate a difficult near-term demand environment, we remain highly focused on the successful completion of the relocation of our manufacturing facilities in China, and on strengthening our business and driving greater efficiencies in our model.”

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Tags: AXT GaAs substrate InP Germanium

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