AXT, Inc. Announces the Successful Completion of the Supply Guarantee Program

Source: AXT, Inc.

For 2001 Total Revenue Under Contract Reaches $91.6 Million

Fremont, CA. AXT, Inc. (Nasdaq: AXTI), a leading manufacturer of compound semiconductor substrates and opto-electronic devices, today announced the successful completion of its Supply Guarantee Program for 2001. In September, 2000, AXT, Inc. announced the availability of a Supply Guarantee Program for its strategic substrate customers. As part of this program, participating customers were assured that they would receive an agreed supply of wafers at predetermined delivery dates and prices. Program participants made partial, advance non-refundable payments to AXT. In turn, AXT allocated a portion of its substrate capacity to the Supply Guarantee Program. Since the introduction of the program, AXT has received very favorable feedback from its customers. To date, AXT has reached agreements with nine customers for the purchase of gallium arsenide and indium phosphide wafers totaling $91.6 million over 2001. In order to ensure that it can meet its commitments to participating customers, AXT will not accept new customers into the program during 2001, but will sell substrates under short-term purchase contracts, or agreements with no prepayment.

"AXT s Supply Guarantee Program represents our strong commitment to our customers and has been very positively received since its inception in the third quarter 2000," said Morris Young, president and CEO. "The success of the program reflects the continued growth of the substrate market, driven by the strong demand in fiber optics, wired and wireless communications, and light-emitting devices. It also reflects the confidence that our customers have in their businesses and in AXT. We believe that the supply of high-quality substrates will continue to be tight in 2001. We are pleased to support our strategic customers substrate requirements for the year and believe that the value of the contracts under this program is a good indicator of our own ability to deliver continued revenue and profit expansion."

About AXT, Inc.

AXT designs, develops, manufactures and markets high-performance compound substrates for the fiber optics and communications industries. The company s proprietary Vertical Gradient Freeze (VGF) crystal growth technology produces low-defect, semi-insulating and semi-conducting gallium arsenide, indium phosphide and germanium wafers. AXT is also a leading producer of light-emitting diodes (LEDs), such as blue, cyan and green LEDs, for the display and lighting industries, and vertical cavity surface emitting lasers (VCSELs) for the fiber optics industry and diodes for laser pointers. For more information, see AXT s website at www.axt.com. The company can also be reached at 4281 Technology Drive, Fremont, California 94538 or by calling 510-683-5900. AXT is traded on the Nasdaq National Market under the symbol AXTI.

Safe Harbor

This press release may contain forward-looking statements regarding the future direction of the company and its Supply Guarantee Program. Forward-looking statements address matters that are subject to a number of risks and uncertainties, including but not limited to: unpredictable fluctuations in our operating results due, among other factors, to our customers being unable to fulfill their obligations under the Supply Guarantee Program; the expansion of our China operations which may be costlier or take more time than expected; the limited availability and increased cost of critical raw materials, particularly gallium and arsenic, where we depend on a limited number of suppliers; the timing, volume, and pricing of orders from customers; an inability to expand our manufacturing capacity to meet demand for our products; failure to achieve anticipated sales of our new HB LED and VCSEL products; potential slowdowns in the wireless handset and fiber optics markets which may cause our customers to reduce or delay orders of our products; if we do not comply with environmental and other regulations we may incur large fines and delays in manufacturing our products; and if we experience frequent electrical power outages our production could be reduced and we may incur costs related to interrupted productions runs. Reference is made to AXT s filings with the Securities and Exchange Commission, including AXT s Form 10-K for the year ended December 31, 1999 and its Form 10-Qs filed for each of the subsequent quarters, and to AXT s Form S-3, for further discussion of risks and uncertainties regarding AXT s business.

Contact: Don Tatzin of AXT, Inc Tel: 510-683-5900 or Leslie Green of Stapleton Communications Inc. Tel: 650-470-4222 for AXT, Inc.