AXT, Inc. Announces Formal Application for Subsidiary IPO
January 10 2022 - 11:41AM
AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound
semiconductor substrate wafers, today announced that its wafer
manufacturing subsidiary in China, Beijing Tongmei Xtal Technology
Co., Ltd. (“Tongmei”), has submitted to the Shanghai Stock
Exchange, and the Shanghai Stock Exchange has accepted for review,
a formal application to list Tongmei’s shares in an initial public
offering (“IPO”) on the Shanghai Stock Exchange’s Sci-Tech
innovAtion boaRd (the “STAR Market”).
“This is a significant achievement and an important milestone
for AXT,” said Morris Young, chief executive officer. “We founded
Tongmei back in 1998. Since then, it has grown into a company that
is engaged in the research, development, production and sale of InP
substrates, GaAs substrates, germanium substrates, PBN and other
high-purity materials, which we believe makes it an attractive
offering on the STAR Market. With success in our addressed markets,
strong customer traction, and a number of new applications coming
to market this year and beyond, we have significant momentum
building in our business. If completed, the IPO will provide
proceeds that will be invested in Tongmei to enable us to expand
capacity to capture high-volume opportunities across our portfolio
and develop new products to drive incremental growth and value from
market expansion in 5G, data center expansion, telecommunications
modernization, healthcare monitoring, microLEDs, and more.”
The process of going public on the STAR Market includes several
periods of review and, therefore, is a lengthy process. Tongmei
does not expect to complete the IPO until the second half of 2022.
The process of going public on the STAR Market is complicated and
we have little or no experience in taking a company public in
China. There can be no assurance that this process will be
completed. The listing of Tongmei on the STAR Market will not
change the status of AXT as a U.S. public company. An English
version of the Tongmei preliminary information document has been
furnished under a Form 8-K that has been filed with the Securities
and Exchange Commission.
Update to Q4 2021 GuidanceAXT also announced
that it is increasing its Q4 2021 revenue guidance range to $36–$37
million from its previous guidance of $34–$36 million, which was
provided during its earnings conference call on Oct. 27, 2021. This
change reflects continued momentum in the demand for AXT’s
products, as well as growth in the applications that utilize its
substrates. AXT will announce its full results for the fourth
quarter of 2021 and fiscal year 2021 on Feb. 16, 2022.
“Our expected growth in what is typically a seasonally down
quarter for AXT signifies the expanding opportunities we continue
to see across our portfolio,” added Young. “Over the past several
years, we have laid considerable groundwork to optimize our
business to capture these opportunities and we are pleased to see
our efforts bearing fruit.”
Conference CallAXT will host a conference call
today, Monday, January 10, 2022 at 1:30 p.m. Pacific Time to
discuss the Tongmei IPO filing and opportunity. The conference call
can be accessed at (844) 892-6598 (passcode 1012589). The call will
also be simulcast at www.axt.com. Replays will be available at
(855) 859-2056 (passcode 1012589) until January 10, 2023.
Additional investor information can be accessed at
http://www.axt.com or by calling the company’s Investor Relations
Department at (510) 438-4700.
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 (silicon photonics),
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 http://www.axt.com.
Forward-Looking Statements
The foregoing paragraphs contain forward-looking statements
within the meaning of the Federal securities laws, including, for
example, statements regarding significant momentum building in our
business, the completion of the proposed IPO in the second half of
2022, our ability to benefit significantly from this market
momentum, the completion of the proposed IPO, our expected growth
and the increase in our Q4 2021 revenue guidance range. 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 administrative challenges in satisfying the requirements of
various government agencies in China in connection with the listing
of shares of Tongmei on the STAR Market, continued open access to
companies to list shares on the STAR Market, investor enthusiasm
for new listings of shares on the STAR Market and geopolitical
tensions between China and the United States. Additional
uncertainties and factors include, but are not limited to: actual
market demand and acceptance of 3D sensors, LiDAR or displays
utilizing microLEDs for screen displays in consumer products;
process technology constraints; impurities effecting the quality of
8-inch wafers; our ability to scale up volume at our new sites;
possible environmental restrictions on gallium arsenide; end-user
acceptance of products containing chips or devices fabricated on
our substrates; our ability to bring new products to market;
product announcements by our competitors; the ability to control
costs and improve efficiency; the ability to utilize our
manufacturing capacity; product yields and their impact on gross
margins; possible factory shutdowns as a result of air pollution in
China; COVID-19 or other outbreaks of a contagious disease;
policies and regulations in China 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.
Contacts: Gary
Fischer Chief
Financial
Officer (510)
438-4700
Leslie
Green Green
Communications Consulting,
LLC (650)
312-9060
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