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News Article

AXT completes purchase of Chinese facility


Company is planning staged relocation of its GaAs equipment and personnel throughout 2017 and 2018

AXT, a manufacturer of compound semiconductor substrates, 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 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 GaAs substrate manufacturing, and is planning for a staged relocation of its GaAs 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 InP 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 GaAs 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 GaAs 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."

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