For third-quarter 2012, , CA, USA has reported revenue of $20.8m, down 17.5% on $25.2m last quarter and down 26.5% on $28.3m a year ago.
Gallium arsenide (GaAs) substrate revenue was $12.9m, down 13% on $14.9m last quarter and 31% on $18.7m a year ago. Indium phosphide (InP) substrate revenue was $1.6m, up 23% on $1.3m last quarter and slightly above the $1.5m a year ago. Germanium (Ge) substrate revenue has fallen further, from $3m a year ago and $2.4m last quarter to $2m. Raw materials sales were $4.3m, down on $6.5m last quarter and $5.1m a year ago.
Gross margin has fallen further, from 43.2% a year ago and 29.8% last quarter to 26.3%, due largely to lower selling prices of raw gallium, as well as the lower tonnage sold, and lower volumes of sales in GaAs substrates in both the wireless market and the LED market.
“The compound semiconductor substrate market is currently experiencing a correction, largely driven by weaker demand and a moderate amount of excess inventory in the channel,” says president & CEO Morris Young.
Although up from $4.2m a year ago, operating expenses of $4.8m were down slightly from $4.9m last quarter. Net income has fallen further, from $6.5m a year ago and $1.3m last quarter to $0.9m. Nevertheless, during the quarter, cash and cash equivalents rose from $31.3m to $35.5m.
“Our solid execution over the last many quarters is allowing us to weather the current down cycle, and we are using this time to support significant qualifications that are still ongoing and to focus our resources on strategic geographies and applications that are likely to benefit AXT in the future,” says Young. “We view improving market conditions, new customer qualifications and a bottoming of raw material pricing as key catalysts for our growth in the coming year and beyond.”
