Article Excerpt:
TWST: What is AXT?Dr. Yin: AXT is a 20 year old company that manufactures compound semiconductor substrates including gallium arsenide (GaAs), germanium (Ge) and indium phosphide (InP), and pBN (pyrolytic boron nitride) crucibles and parts for MBE applications. AXT was the first to commercialize the use of Vertical Gradient Freeze (VGF) technology for manufacturing compound semiconductor substrates. One of our Founders, Dr. Morris Young, developed the technology and has since become the gold standard in the industry. We also offer a suite of raw material products through our five joint venture operations. We are the first in our industry to have such an offering, making us the only compound semiconductor substrate company that is fully integrated, having its own supply of critical raw materials.
TWST: Would you describe the markets that you sell your product into?
Dr. Yin: As I mentioned, we are a supplier of compound semiconductor
materials to the compound semiconductor industry. This includes both
semi-conducting and semi-insulating gallium arsenide substrates '
ranging in size from two inches to six inches. We also supply indium
phosphide substrates from two to six inches and germanium substrates
from two to four inches. We are positioned very well because our
markets are growing. Semi-insulating gallium arsenide substrates are
used in electronic applications, primarily power amplifiers and switches
for cell phones. This market is growing at a healthy pace. For
instance, in 2005, approximately 800 million handsets were sold. This
number is expected to grow to approximately 1 billion by 2010. Also, the
content of gallium arsenide substrates in each handset is growing
because of the consumer demand for increased functionality. The
capability to have Internet access, music downloads, cameras etc. on a
phone necessitates the use of devices that can operate at higher speeds
and consume less power. From a semi-conducting standpoint, the
application is mainly for light emitting diodes ' LEDs. We are also
positioned very well because the LED market is growing at a very rapid
pace. These products are used in everything from automobile panel
lighting to cell phone and TV backlighting, signage, and street and
traffic lights. But the application that we are really monitoring
closely is the development of white light using LEDs for general
illumination. Eventually, if the costs can become competitive to
fluorescent and incandescent lighting, LEDs could replace traditional
lighting with solid-state lighting using LEDs. LEDs produce a cleaner,
more environmentally friendly light, using less energy and lasting
significantly longer than a typical incandescent or fluorescent bulb, on
the order of 50,000 hours. So it's a pretty exciting market. Also, we
are watching the market for germanium substrates very closely because we
believe that it could be a strong driver of our revenues over the next
several years. The shortage of polysilicon for photovoltaic
applications, specifically for solar cells, has caused manufacturers to
turn to germanium as the material of choice both for space and
terrestrial applications. I think we are positioned very well because we
are the only company to produce germanium using VGF technology and
because we have our own source of germanium raw materials through one of
our joint ventures. We have been qualified and are already shipping
production volumes to the Tianjing Institute Number 18 in China, a
government-funded institution. We are also in qualification with three
other customers. Two are in the United States and one is in Europe '
again, for the same applications. The US customers are both funded by
the government. So we see a great opportunity there.
Tickers included in this excerpt: AXTI
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