Shares of AXT Inc. climbed more than 17% on Monday after the semiconductor manufacturer announced a new commercial partnership with Coherent Inc. The company disclosed that it had signed a three-year supply agreement with the optical components maker.
Under the terms of the deal, AXT’s subsidiary, AXT-Tongmei, will be responsible for developing and supplying 6-inch indium phosphide water substrates to Coherent. The financial arrangement includes a prepayment from Coherent to AXT, though the specific amount of that payment was not detailed in the announcement.
The stock movement reflects market reaction to the news of the expanded commercial relationship between the two firms. AXT operates through various subsidiaries to produce semiconductor materials, while Coherent focuses on laser and photonics solutions. The new contract establishes a multi-year supply chain for specific substrate materials.
Details regarding the exact volume of substrates to be delivered or the specific pricing structure beyond the prepayment were not provided in the initial disclosure. It remains unclear how this agreement will impact AXT’s quarterly financial results or long-term production capacity. Further information on the technical specifications of the substrates or the timeline for initial deliveries has not yet been released.
AXT continues to expand its portfolio of semiconductor products through its various business units. The company’s stock performance on Monday highlights investor interest in its recent commercial developments. Coherent has been active in securing supply chains for its optical and laser products. The partnership marks a significant step in the ongoing collaboration between the two entities in the semiconductor and photonics sectors.
