AXT Inc. has entered into a three-year Master Development and Supply Agreement with Coherent Corp, receiving a prepayment of $22,288,500. The deal, which became effective on June 25, 2026, establishes AXT as a committed supplier of 6-inch indium phosphide wafer substrates to the technology company.
Under the terms of the contract, Coherent’s advance will be applied against future product purchases. The funds remain refundable to Coherent if they are entirely unused by the end of the agreement, unless Coherent fails to meet minimum order quantities, in which case the remaining balance becomes nonrefundable. Conversely, AXT retains the right to terminate the arrangement and keep the funds if Coherent does not fulfill its minimum order requirements.
Coherent also holds the ability to terminate the pact and seek a refund of any unused prepayments if AXT fails to meet its capacity commitment for more than six consecutive months. This structure balances the financial risk between the two parties, ensuring that both suppliers and buyers have clear obligations and remedies.
AXT plans to utilize the prepayment to expand its manufacturing capacity for these specific products at its Beijing facility. The expansion is scheduled to take place over the period from 2026 through 2028. This capacity increase is intended to support the demand generated by the new supply agreement.
The transaction was disclosed in an 8-K filing with the Securities and Exchange Commission. The filing classifies the event as the entry into a material definitive agreement and includes financial statements and exhibits related to the contract. Investors may look to periodic reports covering periods after June 30, 2026, for details on revenue recognition and fulfillment of the agreement.
