AXT agrees to private equity financing for subsidiary Tongmei of up to $545 million

On October 27, 2026, Tongmei, a majority-owned subsidiary of AXT, and AXT, as Tongmei's controlling shareholder, entered into a share subscription agreement, a supplemental agreement and a redemption support agreement. The counterparties include BNK-B3 HK Holdings Limited, a Hong Kong entity managed by an Asia asset manager, and certain institutional investors, including an affiliate of an existing customer.

AXT said the investment is to take place in one or more closings. AXT said the closing of the minimum amount is expected to occur in December 2026, subject to customary conditions including receipt of required filings from governmental authorities.

AXT agreed to subscribe for 342,998,797 ordinary shares of Tongmei for the RMB equivalent of $400 million on or before the closing of the transactions. AXT said Tongmei intends to use the proceeds to expand manufacturing capacity for its indium phosphide semiconductor substrates, expand its principal business operations, fund capital expenditures and provide general working capital.

AXT said it expects to own approximately 73.40% of Tongmei after the transaction, assuming the maximum amount is invested, and to continue consolidating Tongmei in its financial statements.

According to the filing, the share subscription agreement terminates if closings for the minimum amount have not occurred by December 20, 2026, though the parties agreed to reasonably consider an extension if required approvals from governmental authorities are still pending. AXT said there is no assurance that the investors will invest the maximum amount or that any closing will occur.