Скачать или смотреть AXT Inc Q2 2025 Earnings: AI Demand vs. Export Permit Challenges

AXT Inc's Q2 2025 earnings reveal a complex interplay between soaring AI-driven Indium Phosphide (InP) substrate demand and significant geopolitical export permit challenges. Despite a 35% revenue drop year-over-year to $18 million, the company slightly exceeded revised expectations and achieved a remarkable gross margin turnaround from negative to 8.0% GAAP. The backlog of over $10 million in Gallium Arsenide (GaAs) and InP orders awaiting Chinese export permits highlights the regulatory bottleneck impacting revenue conversion.

Management reported a cautious but constructive outlook for Q3 with revenue guidance of $1921 million and improving gross margins into the low to mid-teens. The AI data center upgrade trend to 1.6 terabit speeds is fueling strong domestic InP demand in China, where export permits are not required, doubling Q2 sales compared to Q1. AXT positions itself as a top-two global InP substrate supplier with approximately 40% market share, benefiting from the secular growth driven by AI optics and high-quality low defect density substrates.

The ongoing geopolitical friction, particularly Chinas tightened export controls on gallium, germanium, and indium-related materials since mid-2023 and early 2025, creates uncertainty but also potential upside if permits accelerate. Investors should watch for key catalysts including permit approval pace, the Tangme STAR Market IPO, and policy shifts. AXT's operational improvements, inventory management, and the AI-driven growth narrative offer a cautiously optimistic investment case amid challenging global trade dynamics.

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