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Recovering AXT to add more 6-inch GaAs capacity

Total sales shoot up 22 percent sequentially, thanks to rapid customer qualifications and capacity constraints at rival vendors for 6-inch semi-insulating GaAs.

Substrate vendor AXT has seen a sharp upturn in sales revenue thanks to the buoyant cell-phone handset market and returning customers.

Reflecting on what he described as an "excellent quarter" for the Californian company, CEO Phil Yin said that capacity constraints among its rival vendors had allowed AXT to maintain high average selling prices and post total sales of $10.4 million in the quarter that ended June 30 - up 22 percent sequentially.

Most of that increase was due to strong sales ($8.1 million) of semi-insulating and semiconducting GaAs substrates for RFIC and LED applications respectively.

Sales of InP substrates were also up, thanks to a US government contract, while a new customer in Germany boosted revenue from germanium wafers.

"There is very strong demand for semi-insulating GaAs material and we have seen a volume ramp at several customers," said Yin. Citing 6-inch substrates as a particular area where the company's rivals are capacity-constrained, the CEO added that AXT had just increased its 6-inch capacity by 50 per cent.

But thanks to strong market conditions and order visibility from its returning customer base, AXT now plans to add an extra 40 percent in 6-inch capacity within the next nine months.

In addition, AXT's joint-venture companies, which supply it with raw materials and equipment such as germanium and PBN crucibles, are all increasing capacity too.

As a result of the various capacity expansions, AXT has hired nearly 50 more employees, mostly to work in its production facility in China.

Now 20 years old and an eight-year veteran of the stock market, AXT will have the honor of ringing the closing bell at the NASDAQ exchange on August 9.

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