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AXT, Inc. Announces Milestone Customer Site Qualification

New GaAs Production Site Expands Capabilities and Increases Capacity

FREMONT, Calif., March 31, 2020 (GLOBE NEWSWIRE) -- AXT, Inc. (AXTI), a leading manufacturer of compound semiconductor wafer substrates, today announced that one of its largest gallium arsenide (GaAs) wafer substrate customers has formally qualified the company’s new gallium arsenide wafer processing facilities.

“Among the customers now qualified on the new gallium arsenide manufacturing line, we are pleased to announce that one of our largest gallium arsenide customers has qualified our new manufacturing sites for volume production,” said Morris Young, chief executive officer. “This Tier-1 customer has among the highest quality, safety and environmental standards in its industry. Its confirmation is an important milestone for AXT’s manufacturing relocation, and will enable us to meaningfully ramp production from our new locations to meet our customers’ needs over the coming quarters.”

During the fourth quarter of 2019, AXT transferred its gallium arsenide crystal growth ingot production to its new manufacturing facility in Kazuo, a city approximately 250 miles from Beijing. Wafer processing for gallium arsenide was relocated to its new manufacturing facility in Dingxing, a city approximately 75 miles from Beijing. AXT began offering wafers from Dingxing for customer qualification in 2019, and began customer site qualifications later that year.

“Our new manufacturing sites are optimized for best-practice manufacturing techniques, and we have installed state-of-the-art equipment. Both are designed to meet and exceed the current rigorous safety and environmental standards in China,” Young continued. “We now have capacity in place to meet today’s demand for a wide variety of high-end applications, with ample space to expand as demand increases and new applications come to market. I am proud of the teamwork and dedication of our entire AXT team, making this significant accomplishment possible. We are now well positioned to push our technology to new levels of performance required by current emerging applications, and to engage the marketplace with confidence and enthusiasm.”

AXT began manufacturing its gallium arsenide substrate wafers in the Tongzhou district of Beijing, China in 2000. In 2015, the Beijing city government selected Tongzhou for its new municipal headquarters. Along with many other businesses asked to relocate their manufacturing lines in order to create room and upgrade the district, AXT was instructed to relocate its gallium arsenide manufacturing line.

About AXT, Inc.

AXT is a material science company that develops and manufactures high-performance compound and single element semiconductor substrate wafers comprising indium phosphide (InP), gallium arsenide (GaAs) and germanium (Ge).   The company’s substrate wafers are used when a typical silicon substrate wafer cannot meet the performance requirements of a semiconductor or optoelectronic device.  End markets include 5G infrastructure, data center connectivity (silicon photonics), passive optical networks, LED lighting, lasers, sensors, power amplifiers for wireless devices and satellite solar cells.  AXT’s worldwide headquarters are in Fremont, California where the company maintains its sales, administration and customer service functions.   AXT has manufacturing facilities in China and, as part of its supply chain strategy, has partial ownership in ten companies in China producing raw materials. For more information, see AXT’s website at http://www.axt.com.

Safe Harbor Statement 

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, statements regarding the ability to meaningfully ramp production from our new locations to meet our customer’s needs over the coming quarters, having capacity and space that can meet the market demand, our ability to meet and exceed safety and environmental standards in China and our ability to push our technology to new levels of performance. These forward-looking statements are based upon assumptions that are subject to uncertainties and factors relating to the company’s operations and business environment, which could cause actual results to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. These uncertainties and factors include but are not limited to: the timing and receipt of significant orders; the cancellation of orders and return of product; emerging applications using chips or devices fabricated on our substrates; end-user acceptance of products containing chips or devices fabricated on our substrates; our ability to bring new products to market; product announcements by our competitors; the ability to control costs and improve efficiency; the ability to utilize our manufacturing capacity; product yields and their impact on gross margins; possible factory shutdowns as a result of air pollution in China or COVID-19; tariffs and other trade war issues; the financial performance of our partially owned supply chain companies; policies and regulations in China and other factors as set forth in the company’s Annual Report on Form 10-K, quarterly reports on Form 10-Q and other filings made with the Securities and Exchange Commission. Each of these factors is difficult to predict and many are beyond the company’s control. The company does not undertake any obligation to update any forward-looking statement, as a result of new information, future events or otherwise.

Contacts:
                        Gary Fischer
                        Chief Financial Officer
                        (510) 438-4700

                        Leslie Green               
                        Green Communications Consulting, LLC
                        (650) 312-9060