8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 8, 2004

AXT, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-24085	94-3031310
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4281 Technology Drive
Fremont, California  94538

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:  (510) 683-5900

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

The following information is being “furnished” in accordance with General Instruction B.2. of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

On October 8, 2004, AXT, Inc. (the “Company”) issued a press release, which included preliminary results of total revenue, gross margins and losses per share for the quarter ended September 30, 2004. The release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.

Item 2.06. Material Impairments

In connection with the preparation of the financial results for the quarter ended September 30, 2004, the company concluded that an approximate $2.1 million charge due to excess and obsolete inventory would be included in the results for the quarter.  The impairment was primarily attributable to certain orders not obtained for the products built, of which $1.6 million is deemed obsolete, and a decrease in projected inventory consumption compared to inventory on hand, of which $0.5 million is deemed excess.

Item 8.01. Other Events

On October 8, 2004 the Company also announced in the press release attached hereto as Exhibit 99.1 and incorporated herein by reference a tentative settlement of its litigation with Sumitomo Electric Industries, Inc..

Item 9.01. Financial Statements and Exhibits

(c)Exhibits

99.1Press release issued by registrant on October 8, 2004.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AXT, INC.
Date: October 8, 2004	By:	/s/ WILSON W. CHEUNG
		Wilson W. Cheung
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated October 8, 2004

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EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

Contacts:

Wilson W. Cheung

Chief Financial Officer

(510) 683-5900

AXT Tentatively Settles with Sumitomo Electric Industries, Ltd. on Global Intellectual
Property Cross-Licensing Agreement

Company Announces Preliminary Results for Q304

FREMONT, Calif., October 8, 2004 - AXT, Inc. (Nasdaq: AXTI), a leading manufacturer of compound semiconductor substrates, today announced that it has reached a tentative settlement of its litigation with Sumitomo Electric Industries, Ltd. (SEI), which includes a global intellectual property cross-licensing agreement.  AXT expects to finalize this agreement in the fourth quarter of 2004, subject to Board of Directors approval from AXT and SEI.  AXT will record a charge of approximately $1.4 million in the quarter ended September 30, 2004 in connection with this settlement.

The company expects to report total revenue between $8.3 million and $8.5 million in the quarter ended September 30, 2004, with gross margins between negative 25 percent and negative 27 percent, and losses per share between $0.21 and $0.23, subject to the auditors’ quarterly review.  The decrease in gross margin is primarily attributable to the approximately $1.4 million charge in connection with the settlement, and approximately $2.1 million inventory charge due to excess inventory and obsolescence.

The company will host a conference call to announce its third quarter results on October 20, 2004 at 1:30 p.m. PST. The conference call can be accessed at (785) 424-1051; the conference ID is AXT. The call will also be simulcast on the Internet at www.axt.com. Replays will be available at (402) 220-1548 until October 27, 2004. Financial and statistical information to be discussed in the call will be available on the company’s website immediately prior to commencement of the call. Management’s accompanying script will be available on the company’s website immediately after the call through October 20, 2005. Additional investor information can be accessed at http://www.axt.com or by calling the company’s Investor Relations Department at (510) 683-5900.

About AXT, Inc.

AXT is a leading producer of high-performance compound semiconductor substrates for the fiber optics and communications industries. The company’s proprietary Vertical Gradient Freeze (VGF) crystal growth technology produces low-defect, semi-insulating and semi-conducting gallium arsenide, indium phosphide and germanium wafers. For more information, see AXT’s website at http://www.axt.com. The Company can also be reached at 4281 Technology Drive,

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Fremont, California 94538 or by calling (510) 683-5900. AXT is traded on the Nasdaq National Market under the symbol AXTI.

Safe Harbor Statement

The foregoing paragraphs contain forward-looking statements within the meaning of the Federal Securities laws, including statements related to the tentative settlement with Sumitomo Electric Industries, Ltd., and its estimated income statement charge, total revenue, gross margins, losses per share, and inventory valuation charges for the quarter. Such forward-looking statements are based upon specific assumptions subject to uncertainties and factors relating to the company’s operations and business environment, which could cause actual results of the company to differ materially from those expressed or implied in the forward-looking statements contained in the foregoing discussion. Such uncertainties and factors include: executing final agreements with Sumitomo, including the intellectual property cross-licensing agreement, any adjustments that may be required in the estimated income statement charges, total revenue, gross margins, losses per share, inventory valuation charges, overall conditions in the markets in which we compete, market acceptance and demand for our products, the impact of competitive products and pricing, and other factors as set forth in the Company’s Form 10-K and other filings made with the Securities and Exchange Commission, all of which are difficult to predict and some of which are beyond the company’s control. The company does not undertake any obligation to update publicly any forward-looking statement, either as a result of new information, future events or otherwise.

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