AXT Subsidiary Agrees to Equity Financing of Up to About $545 Million

AXT, Inc. (AXTI) announced Oct. 28 that its majority-owned Beijing Tongmei Xtal Technology Co., Ltd. (Tongmei) agreed to private equity financing of approximately $285 million to $545 million for manufacturing expansion and other operating needs.

AXT and Tongmei entered into the agreements Oct. 27. The investment is expected to close in December 2026, subject to customary closing conditions, and completion is not assured.

The proceeds are intended to expand Tongmei's indium phosphide manufacturing capacity and support its principal business operations, capital expenditures and general working capital. The plan also includes capacity increases at AXT's raw-material companies in China.

Separately, AXT agreed to subscribe for 342,998,797 Tongmei shares for the renminbi equivalent of $400 million. AXT makes compound semiconductor substrates and has previously been covered for its potential exposure to China's demand for optics and faster networks.