AXT Announces Purchase of New Manufacturing Facility in Dingxing, China

FREMONT, Calif., Sept. 12, 2017 (GLOBE NEWSWIRE) -- AXT, Inc. AXTI, a leading manufacturer of compound semiconductor substrates, today announced that it has completed the purchase of its new manufacturing facility in the city of Dingxing in the People's Republic of China.  Dingxing, located in the province of Hebei and under the jurisdiction of the prefecture-level city of Baoding, is approximately a 90-minute drive south of the company's current Beijing location.

The new site, which features ample space for expansion, currently has three existing buildings, which comprise approximately 140,000 sq. feet of manufacturing space, and 50,000 sq. feet designated for offices and dormitories. The existing structures will enable the company to move more quickly to production.  AXT has already begun to prepare the site for gallium arsenide substrate manufacturing, and is planning for a staged relocation of its gallium arsenide equipment and personnel throughout 2017 and 2018, pursuant to its relocation plan. Initial qualification substrates are expected to be available in the fourth calendar quarter of 2017.  The company expects to have production-level quantities from both its current site in Beijing and the new Dingxing site for a period of time, and then gradually increase production volume at the new site.

AXT has acquired a total of approximately 18.8 acres and expects to increase manufacturing capacity at the new location as needed to meet customer requirements. In addition, AXT will continue to evaluate the potential timing of relocation of its indium phosphide and germanium substrate manufacturing, which is expected to remain at the Beijing facility while the relocation of its gallium arsenide business is completed.

"Securing the location of our new facility is a positive step for AXT," said Morris Young, CEO. "We have worked closely and collaboratively with both local and central government authorities in China to fulfill the government's request for the relocation of our gallium arsenide production, while ensuring that we can continue to serve the needs of our customers and support the growth of our business.  This step underscores the desire of all parties involved to make our relocation a success.  I want to thank the city officials of Dingxing and Baoding for welcoming AXT to this site."

Young continued, "With its relative close proximity to our current facility, its existing manufacturing space, and its room for expansion, we believe our new location positions us for both a successful and efficient relocation of our gallium arsenide business, as well as the expansion of our capacity as current and emerging applications for our technology increase customer demand. Our goal is to make our new location a world-class manufacturing facility and a showcase of our capabilities for customers and investors."

Wilson Lin, chief operating officer, said, "Our dedicated manufacturing and operations teams have been working diligently over the past year to prepare for a smooth and efficient transition for our customers. We are committed to supporting their requirements from our current location, while providing an efficient qualification process and transition plan for the new facility. I am confident that we have a highly skilled team in place, and the deep executive experience and oversight to ensure our success."

About AXT, Inc.

AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge) through its manufacturing facilities in Beijing, China.  In addition, AXT maintains its sales, administration and customer service functions at its headquarters in Fremont, California.  The company's substrate products are used primarily in lighting display applications, wireless communications, fiber optic communications and solar cell applications. Its vertical gradient freeze (VGF) process technology for manufacturing semiconductor substrates provides significant benefits over other methods and enabled AXT to become a leading manufacturer of such substrates. AXT has manufacturing facilities in China and invests in joint ventures in China producing raw materials. For more information, see AXT's website at http://www.axt.com.

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, statements about the timing of the availability of qualification substrates, the timeline for the relocation of our China manufacturing operations, our ability to add capacity if applications for our technology increase demand and the capability of our teams to transition into the new facility. These forward-looking statements are based upon assumptions that are subject to uncertainties and factors relating to the company's operations and business environment, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. These uncertainties and factors include but are not limited to: the ability to secure permits in a timely manner; the ability to engage service providers; overall conditions in the markets in which the company competes; global financial conditions and uncertainties; policies and regulations in China; market acceptance and demand for the company's products; the impact of factory closures or other events causing delays by our customers on the timing of sales of our products; our ability to control costs, our ability to utilize our manufacturing capacity; product yields and their impact on gross margins; and other factors as set forth 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.

Contact:
Gary Fischer
Chief Financial Officer
(510) 438-4700 

Leslie Green
Investor Relations
(650) 312-9060