AXT has finalized a Master Development and Supply Agreement with Coherent to provide 6-inch indium phosphide wafer substrates over a three-year period. The contract, which became effective on June 25, 2026, and was signed on June 26, 2026, is designed to scale the company’s indium phosphide wafer capacity and secure long-term customer demand.
As part of the arrangement, Coherent provided a prepayment of $22,288,500. This financial commitment is linked to AXT’s obligation to maintain specific capacity levels and its planned expansion of production facilities in Beijing between 2026 and 2028. The funds are intended to support the development and supply of the specified wafer substrates throughout the duration of the pact.
The agreement includes specific provisions regarding the refundability of the prepayment. Coherent retains the option to request a refund for any unused portion of the funds if they remain unutilized upon the expiration or termination of the contract. However, if Coherent fails to meet minimum order quantities, the unused balance becomes nonrefundable, and AXT gains the right to terminate the agreement.
Conversely, AXT is subject to termination if it fails to meet its capacity commitment for more than six consecutive months. In such a scenario, any unused portion of the prepayment must be refunded to Coherent. The terms outline a structured framework for both parties to manage capacity risks and supply obligations over the three-year term.
The details of this transaction were disclosed in an SEC filing by AXT Inc. Further specifics regarding the exact volume of wafers to be supplied or the detailed timeline of the Beijing expansion were not provided in the available documentation.
