AXT Inc. jumped roughly 10% as investors scrambled to price in what happens when China tightens the spigot on a material the AI industry desperately needs.
The catalyst: indium phosphide, a compound semiconductor substrate that sits at the heart of the optical interconnects powering AI data centers. China’s export control regulations, which took effect on February 4, 2025, now require permits for overseas shipment of InP substrates. And those permits, it turns out, are not arriving on schedule.
A 250% price spike tells the story
Prices for 6-inch InP wafers have surged 250% to around $5,000 since Beijing’s export restrictions kicked in.
AXT and Japan’s Sumitomo Electric together control nearly 80% of the global InP supply. AXT’s primary production unit, Beijing Tongmei Xtal Technology, received its first export permits back in June 2025. But the company continues to face permitting delays stretching into 2026. AXT has called the export permit complications its “most significant challenge.”
