AXT Secures $87M in Fresh Capital to Ramp Up Indium Phosphide Production

AXT Inc. (AXTI) just locked in a solid funding round—the semiconductor equipment maker is pushing through with a public offering of roughly 7.10 million shares priced at $12.25 each. That’s translating to about $87 million in gross proceeds, with the deal expected to wrap up around December 30.

Here’s what makes this move interesting: the company handed underwriters a 30-day call option to buy an additional 1.06 million shares at the same price. If they go all-in, total proceeds could hit approximately $100 million. That’s a decent war chest for what AXT has in mind.

Where’s the Money Actually Going?

The bulk of this capital is earmarked for one clear objective—ramping up manufacturing capacity at Beijing Tongmei Xtal Technology, AXT’s subsidiary. The push is specifically aimed at boosting production volume for indium phosphide substrates destined for global markets. Given how crucial indium price trends have been for substrate economics, this expansion could be well-timed. Whatever’s left over will flow into R&D initiatives and general operational needs.

Market’s Initial Take

In pre-market action, AXTI shares dipped 15.42%, trading around $13.01 on Nasdaq—a slight pullback despite the capital infusion announcement. Early movers might be digesting the dilution angle, though the strategic focus on indium phosphide production capacity expansion suggests management sees solid demand ahead in the compound semiconductor space.

Disclaimer: This analysis reflects market observations and does not necessarily represent official positions of any exchange.