AXT closes opto facility in US for two weeks
While AXT s optoelectronic sales in April were in line with expectations, sales in May decreased significantly. AXT says that its customers have reported a slow-down in demand for products that utilize optoelectronic devices, as a result of the outbreak of sudden acute respiratory syndrome (SARS).
SARS has already had an even more direct effect on AXT; the company was forced to close its LED production facility in China for 10 days in late April after one employee contracted the virus.
The reduction in orders resulting in the temporary plant closure will of course affect AXT s revenue and earnings during the second quarter, but the impact will be partially offset by a reduction in costs as a result of the temporary shut down. To date, AXT s substrate business is performing in line with expectations for the second quarter.
Despite recently receiving ISO9001:2000 certification, AXT s optoelectronics division has been struggling recently. The division s gross margin was negative 13.4% of revenue for the first quarter of 2003, compared to positive 1.7% for the same period in 2002. The decrease was due to declining revenues and a decrease in average selling prices.
AXT s optoelectronics business had revenues of $4.1 million (32.6% of total company revenues) in the first quarter of 2003. This comprised $3.4 million from HB-LEDs, $160,000 from VCSELs and $578,000 from edge-emitting laser diodes.
In its recent quarterly report, AXT said that in order to successfully expand its optoelectronics business, it may seek potential investors.