AXT, Inc. announced its majority-owned subsidiary, Beijing Tongmei Xtal Technology Co. (Tongmei), has withdrawn its initial public offering (IPO) application from the Shanghai STAR Market. The company now plans to pursue a listing on the Hong Kong Stock Exchange, shifting its strategic focus to its indium phosphide (InP) business to meet demand from AI data center applications. The withdrawal triggers a potential financial obligation related to prior investments.
Key Details
- Strategic Pivot: Tongmei is pivoting from a gallium arsenide (GaAs) focus for the STAR Market to an indium phosphide (InP) focus for a new Hong Kong Stock Exchange listing application, citing growing demand for high-speed data transmission in AI.
- Triggered Redemption Right: The withdrawal gives eleven private equity funds the right to have their combined investment of RMB 324.4 million (approx. US$49 million) redeemed at the original investment amount.
- Financial Position: AXT has stated it is in discussions with the funds and has sufficient capital to fully redeem the investments if required.