AXT Shifts Expansion Funding With Lumentum Supply Pact
The agreement calls for a $43.5 million initial deposit within 30 business days.
AXT Inc. (AXTI), a semiconductor-wafer substrate maker, shifted its indium phosphide expansion toward customer-backed capacity funding under a long-term agreement with Lumentum.
The supply and capacity-reservation pact runs through Dec. 31, 2031, and could provide AXT with as much as $87 million in deposits. Both deposits will be applied as credits against future substrate shipments.
The announcement marked a change from AXT's earlier plans to finance capacity growth through equity. The company proposed a stock offering in April after completing a capital raise in December, while the Lumentum arrangement tied funding directly to reserved customer demand.
AXT provided no current-quarter revenue, margin, earnings or guidance figures with the announcement, replacing the financial-results disclosures included in its prior quarterly releases with details of the contract.
The latest available trajectory showed pressure from Chinese trade restrictions. First-quarter 2025 revenue fell 23% sequentially to $19.4 million, while GAAP gross margin swung to negative 6.4% from 17.6% in the preceding quarter.
The company attributed that margin decline to a 58% sequential reduction in indium phosphide sales, lower yields on semi-insulating gallium arsenide wafers and under-absorbed factory overhead. Its GAAP net loss widened to $8.8 million, or $0.20 a share, from $5.1 million, or $0.12 a share, in the prior quarter.
Those export constraints remained visible in AXT's fourth-quarter 2025 outlook, which had called for revenue of $22.5 million to $23.5 million, roughly 6% to 10% below the year-earlier period because China issued fewer indium phosphide export permits than expected. The Lumentum pact secured a longer demand horizon, while AXT left its near-term financial picture undisclosed.