AXT-Tongmei, a subsidiary of AXT Inc., has finalized a three-year contract with Coherent to develop and provide 6-inch indium phosphide water substrates. The arrangement is designed to support the expansion of AXT’s production capabilities at its Beijing facility during the period from 2026 through 2028. Company officials state that this expansion aims to improve the firm's standing in the market.
As part of the deal, Coherent has provided a prepayment of approximately $22.29 million. These funds are designated for future purchases of water substrates. The company indicated that this financial support will help maintain liquidity while securing Coherent’s commitment to procurement throughout the duration of the agreement.
The contract includes specific conditions for termination. If Coherent does not meet minimum order requirements, the prepayment becomes non-refundable, and AXT retains the right to end the agreement. Conversely, should AXT fail to meet its capacity commitments for more than six months, Coherent is entitled to terminate the contract and receive a refund for any portion of the prepayment that remains unused.
In a separate corporate development, AXT has appointed Tracy Liu to its board of directors. The company described this move as a step to strengthen its governance structure and support its focus on strategic development and risk management.
AXT Inc. is a material science firm that develops and manufactures semiconductor wafer substrates, including indium phosphide, gallium arsenide, and germanium. Further details regarding the specific volume of substrates or the long-term financial impact of this agreement were not provided in the source material.
