AXT Inc. (AXTI) shares closed up 18% at $95.97 on Monday, August 17. A Taipei industry report triggered the rally by highlighting a record-breaking shortage of indium phosphide (InP) substrates. These components are critical for high-speed optical transceivers used in data centers and AI infrastructure.
InP wafer prices are expected to increase by more than 10% in the fourth quarter. This projected hike represents the largest price increase on record for the material.
AXT operates as a leading global producer of InP substrates. The supply crunch is expected to directly improve the company's revenue and margins.
The company previously reported record InP revenue during the second quarter. Current market demand now outpaces AXT's ability to expand production capacity.