Slide 1: AXT Presentation
Morris S. Young AXT Chief Executive Officer Presentation Raymond Low Chief Financial Officer Jan 2013
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking information about the Company ’ s business and financial outlook. Forward-looking information addresses matters that are subject to risks and uncertainties. In addition to the risks associated with developing complex technology, the Co
Slide 3: Brief Synopsis
Brief Synopsis AXT is a substrate provider for the fast-growing smartphone, Light Emitting Diode (LED) and Compound Photo Voltaic (CPV) solar cell industries We are a low-cost manufacturer based in China We have a differentiated capability in Vertical Gradient Freeze (VGF) technology We aim
Slide 4: Compound Semiconductor Value Chain
Compound Semiconductor Value Chain Wireless Ga As HB LEDs Ge Photo pBN voltaics (Crucible) Raw Substrates Epi-layer Epi-layer + Devices Systems Materials AXT, INC. 2013 4
Slide 5: Product And Market Applications
Product And Market Applications % of AXT Growth Rate Market Size AXT Share Target Share Product Market Revenue 2012/2016 2012/2016 2012 2016 GaAs Handset 27% CAGR 10% $140M / $205M 17% 28% Gallium Arsenide LED, Lasers 31% CAGR 12% $160M / $252M 17% 25% InP Indium Fiber Optics 7% CAGR 15% $52M / $91M
Slide 6: GaAs Semi-Insulating (S.I.) Substrate
GaAs Semi-Insulating (S.I.) Substrate Smartphones are projected to grow >25% CAGR through 2016, while early projections of the latest item, phone tablets are expected to surpass smartphones in 3-5 years Smartphones and phone tablets will need 4-6 x GaAs content versus voice-only phones 3G, 3G+
Slide 7: GaAs S.I. Substrate Competitive Landscape
GaAs S.I. Substrate Competitive Landscape GaAs substrates still dominate the wireless PA/switch market 4 suppliers in GaAs SI substrates: AXT, 2 in Japan, 1 in Germany Healthy secular trends may lead to increased opportunity in 2013 AXT has ongoing qualifications to expand its customer/reven
Slide 8: GaAs Semi-Conducting (S.C.) Substrate
GaAs Semi-Conducting (S.C.) Substrate GaAs makes red and yellow LEDs Applications are very diverse and include: traffic lights, automobile instrumentation, automobile tail lights, cell phone backlighting, signage, display, printers/copy machines, remote controls, novelty products, direct lit LED
Slide 9: GaAs S.C. Substrate Competitive Landscape
GaAs S.C. Substrate Competitive Landscape 4 suppliers in GaAs SC substrates: AXT, 2 in Japan, 1 in China Two successful qualifications at major LED customers began contributing to revenue in Q1 2012 Strong price pressure may lead to large volume increase We have also expanded our markets to
Slide 10: Ge and InP Substrate Business
Ge and InP Substrate Business Germanium (Ge) Majority of Ge requirements are for the satellite solar cell market AXT is qualified through epitaxial device houses that supply the US, European, Russian and Chinese satellite solar cell market. CPV terrestrial solar cell market is poised to begin
Slide 11: Total Market Opportunity
Total Market Opportunity 700 700 644 600 576 91 600 515 79 500 97 500 460 69 86 60 400 76 400 $ Millions 67 251 300 225 300 200 179 200 200 100 186 205 100 154 169 0 0 2013 2014 2015 2016 SI GaAs SC GaAs Ge InP Total AXT, INC. 2013 Source: Strategy Analytics and Management estimates 11
Slide 12: Joint Ventures Provide Additional Value and Market Advantages
Joint Ventures Provide Additional Value and Market Advantages Five JV operations established between 1999 – 2001 - Supplies critical raw materials Ga, As, Ge, PBN, B2O3 Gives insight into pricing trends and provides volume guarantees Provides gross margin protection during periods of significa
Slide 13: AXT's Compelling Business Model
AXT’s Compelling Business Model Key material supplies to fast growing materials market Low cost in labor, facilities, raw material Expansive capacity to gain market share VGF technology, AXT pioneered with 26 years experience JVs provide advantages in capacity, pricing visibility, ability
Slide 14: Financial Overview
AXT, Inc. Financial Overview AXT, INC. 2013 14
Slide 15: Statement Of Operations
Statement Of Operations (In millions – except margins and EPS) Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Revenue $28.3 $21.2 $23.5 $25.2 $20.8 Gross Profit $12.2 $7.8 $8.2 $7.5 $5.5 Gross Margin 43.2% 36.9% 34.9% 29.8% 26.3% Net Income $6.5 $2.6 $1.6 $1.3 $0.9 Diluted EPS $0.19 $0.08 $0.05 $0.04 $0.03 Note – Re
Slide 16: Balance Sheet
Balance Sheet (in millions) 2009 2010 2011 Q1 ‘12 Q2 ’12 Q3 ’12 Cash and $35.4 $41.0 $40.6 $46.1 $47.1 $51.4 investments Net Acct. Receivable $15.4 $23.1 $18.0 $16.6 $22.4 $16.9 Net Inventory $27.7 $36.0 $46.0 $42.0 $40.9 $39.9 Total Assets $107.9 $140.6 $162.5 $162.3 $167.7 $166.1 Total Debt/Credit
Slide 17: Thank You!
mS = = > a gf gf VGF STRENGTH. PERFORMANCE. INNOVATION. AXT, INC. 2013 ,