AXT builds RF GaAs substrate capacity
AXT has grown its market share in semi-insulating GaAs substrates to 20 percent, and will expand its 6-inch crystal growth capacity by 27 percent to accommodate continued share gains.
The expansion will be the main focus of AXT s $6 million anticipated capital expenditure for 2008, and is due to be completed sometime in the third quarter.
“We are making tremendous progress in market share gains,” said Phil Yin, the CEO of the Fremont, California, headquartered company. “In 2007 alone we added ten new semi-insulating customers. Strategy Analytics predicts our market share will increase to 29 percent in 2008, up from just 3 percent in 2005.”
In 2007 this momentum helped AXT to profits of $5.3 million, up from $0.86 million in 2006, although this figure includes $3.3 million gained by trading Finisar shares.
The final quarter of 2007 brought the substrate maker $17.6 million in revenues, which it expects to repeat or slightly exceed in the first quarter of 2008.
RF-focused semi-insulating GaAs will bring growth thanks to ongoing expansion of the handset market as well as market share gains, but AXT expects key developments in the company's other product lines too.
Customers see the light
Last year, AXT's sales of semiconducting GaAs for use in LED manufacture increased by 37 percent. 2007 also saw the company close in on regaining a major North American solid state lighting customer it had not done business with for years.
“We are very pleased to report that initial qualification indicated positive device results,” Yin said. “With additional testing of our material we expect to obtain official vendor approval and expect production release in late Q2 or early Q3.”
The firm is also expecting newly developed liquid-encapsulated Czochralski GaAs growth facilities to be online late in 2008 or early in 2009. This will enable the company to grow substrates for the LED market more profitably and rapidly than with its existing vertical gradient freeze method.
Highlighting the growth prospects of AXT s germanium business, Yin again quoted Strategy Analytics, citing its prediction of 350 percent compound annual growth rates for concentrator photovoltaics through to 2012.
AXT is in qualification with four European companies and has three photovoltaic cell manufacturing customers who are demanding germanium substrates for volume production. Yin anticipates that the full demand from these ramps will be experienced during the second half of this year "“ and could be a sign of things to come for the firm.
“If we think long term, we view that our germanium customers will be a big, big contributor to our revenues,” Yin said.
“We estimate our germanium business "“ which is basically solar - if you re looking out three to five years might equal or even surpass our GaAs business. We won't be surprised if it does.”