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AXT Acquires Automated Equipment from Hitachi Metals

FREMONT, CA -- (Marketwired) -- 10/29/15 -- AXT, Inc. (NASDAQ: AXTI), a leading manufacturer of compound semiconductor substrates, today announced that it has acquired highly automated processing and cleaning equipment for GaAs substrates from Hitachi Metals.

The highly tuned production line includes automated equipment for wax mounting/demounting, edge grinding, wafer sawing, polishing and cleaning. In addition, AXT licensed from Hitachi Metals associated technical information and applicable patents intended to enable AXT to use the equipment in full production. The equipment has been uninstalled in Japan and shipped to AXT's production facility in Beijing, China where it is currently being installed. SCIOCS, the related spin-off from Hitachi Metals, will assist in the installation and optimization process. This production line is ideally suited for 4" and 6" GaAs and InP manufacturing processes and AXT intends to supply such GaAs substrates to SCIOCS and other customers.

"This acquisition comes at a time when AXT is making a concerted effort to invest in automated manufacturing equipment to increase sales of its InP substrates and 6" semi-insulating GaAs substrates," said Dr. Morris Young, AXT's chief executive officer. "We plan to leverage the automation and manufacturing technology acquired to further enhance our product quality and consistency. We are highly appreciative of the multi-faceted partnership between the two companies."

The terms of the acquisition are not being disclosed. However, it is not expected to have a meaningful impact on the cost of operations going forward.

About AXT, Inc.
AXT designs, develops, manufactures and distributes high-performance compound and single element semiconductor substrates comprising gallium arsenide (GaAs), indium phosphide (InP) and germanium (Ge) through its manufacturing facilities in Beijing, China. In addition, AXT maintains its sales, administration and customer service functions at its headquarters in Fremont, California. The company's substrate products are used primarily in lighting display applications, wireless communications, fiber optic communications and solar cell. Its vertical gradient freeze (VGF) technique for manufacturing semiconductor substrates provides significant benefits over other methods and enabled AXT to become a leading manufacturer of such substrates. AXT has manufacturing facilities in China and invests in joint ventures in China producing raw materials. For more information, see AXT's website at

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal securities laws, including, for example, statements regarding the installation, use and benefits of the acquired equipment and technical information. 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: overall conditions in the markets in which the company competes; efficient and accurate installation and utilization of the acquired equipment and technical information, policies and regulations in China; market acceptance and demand for the company's products; the impact of factory closures or other events causing delays by our customers on the timing of sales of our products; our ability to control costs, our ability to utilize our manufacturing capacity; product yields and their impact on gross margins; 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.

Gary Fischer
Chief Financial Officer
(510) 438-4700

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

Source: AXT, Inc.