AXT Inc. (AXTI) shares rose more than 10% on Friday. The rally follows reports highlighting potential supply constraints for indium phosphide (InP).
InP serves as a critical component for AI and data center optics. Market attention is currently centered on China’s control over export licenses for the material.
AXT maintains a vertically integrated supply chain in China. The company previously cited these export permits as a significant hurdle to its corporate growth.
Investors anticipate that supply restrictions may trigger higher InP prices or expedited license approvals. AXT reports an InP order backlog surpassing $100 million amid rising AI-driven demand.