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Investments in Privately-Held Raw Material Companies (Tables)

3 Months Ended

Mar. 31, 2025

Investments in Privately Held Raw Material Companies

As of March 31, 2025, the investments are summarized below (in thousands):


	Investment Balance as of
	March 31,		December 31,		Accounting	Ownership	*
Company	2025		2024		Method	Percentage
Nanjing JinMei Gallium Co., Ltd.	$	592	$	592	Consolidated	** 85.5	%
ChaoYang JinMei Gallium Co., Ltd.		1,820		1,820	Consolidated	** 85.5	%
Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd.		1,346		1,346	Consolidated	** 85.5	%
ChaoYang ShuoMei High Purity Semiconductor Materials Co., Ltd.		3,122		3,122	Consolidated	**** 75.0	%
ChaoYang XinMei High Purity Semiconductor Materials Co., Ltd.		7,331		7,331	Consolidated	*** 58.5	%
	$	14,211	$	14,211

Beijing JiYa Semiconductor Material Co., Ltd.	$	4,995		4,867	Equity	39	%
Xiaoyi XingAn Gallium Co., Ltd.		5,562		5,304	Equity	** 25	%
ChaoYang KaiMei Quartz Co., Ltd.		4,085		3,895	Equity	***** 40	%
	$	14,642	$	14,066

Emeishan Jia Mei High Purity Metals Co., Ltd.		551		551	Fair value	****** 10	%
	$	551	$	551

* These percentages reflect the ownership currently in effect upon the completion of the reorganization in China and the ownership in effect upon the completion of the new capital funding by private equity investors in January 2021.

** In preparation for Tongmei’s application for a listing of shares in an IPO on the STAR Market, in late December 2020 we reorganized our entity structures in China. JinMei and BoYu and their subsidiaries, previously organized under AXT, Inc., were assigned to Tongmei and effectively merged with Tongmei although they retained their own respective legal entity status and are wholly owned subsidiaries of Tongmei. The 33% minority interest stakeholders of BoYu converted their ownership to a 7.59% minority interest in Tongmei. The 8.5% minority interest stakeholders, employees of JinMei, converted their ownership to a 0.38% minority interest in Tongmei. Further, a number of employees, key managers and contributors, purchased a 0.4% minority interest in Tongmei. In 2020, the Investors transferred approximately $48.1 million of new capital to Tongmei. An additional investment of approximately $1.5 million of new capital was funded in early January 2021. Under China regulations these investments must be formally approved by the appropriate government agency and are not deemed to be dilutive until such approval is granted. The government approved the approximately $49 million investment in its entirety on January 25, 2021 at which time the Investors owned a redeemable noncontrolling interest in Tongmei of 7.28%. As of March 31, 2025, Tongmei’s noncontrolling interests and redeemable noncontrolling interests totaled approximately 14.5%. AXT remains the controlling stakeholder of Tongmei and holds a majority of the Board of Director positions of Tongmei.

*** In February 2021, Tongmei signed a joint venture agreement with certain investors to fund ChaoYang XinMei.

**** In April 2022, ChaoYang JinMei signed a joint venture agreement with certain investor to fund a new company, ChaoYang ShuoMei.

***** In April 2022, Tongmei signed a joint venture agreement with certain investors to fund a new company, ChaoYang KaiMei.

****** In May 2023, we sold 15% of our equity investments in Jia Mei to a third party. We now own 10% of Jia Mei and account for it under the fair value method.

Summarized income information

AXT’s minority investment entities are not consolidated and are accounted for under the equity method. The equity investment entities had the following summarized statements of operations information (in thousands) for the three months ended March 31, 2025 and 2024:



	Three Months Ended
	March 31,
	2025		2024
Net revenue	$	8,658	$	8,104
Gross profit	$	1,944	$	3,929
Operating income	$	1,282	$	3,371
Net income	$	971	$	3,138