What changed in AXT INC's 10-K — 2023 vs 2024
vs
Paragraph-level year-over-year comparison of AXT INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+278 added−260 removedSource: 10-K (2025-03-14) vs 10-K (2024-03-15)
Top changes in AXT INC's 2024 10-K
278 paragraphs added · 260 removed · 220 edited across 1 sections
- Item 1A. Risk Factors+278 / −260 · 220 edited
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
220 edited+58 added−40 removed366 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
220 edited+58 added−40 removed366 unchanged
2023 filing
2024 filing
Biggest changeThe following table represents bank loans as of December 31, 2023 and 2022 (in thousands, except interest rate data): 62 Table of Contents Loan Interest December 31, December 31, Subsidiary Bank Detail Rate Start Date Due Date 2022 2023 Tongmei Bank of China (1) $ 2,108 2.7 % September-22 March-23 $ 2,175 $ - 3,935 4.6 % January-22 January-23 4,059 - 1,405 4.2 % April-22 April-23 1,450 - Bank of China (5) 1,848 3.5 % January-23 January-24 - 1,795 2,184 2.8 % March-23 March-24 - 2,118 376 2.7 % September-23 September-24 - 386 876 3.5 % November-23 November-24 - 876 1,003 3.5 % November-23 November-24 - 1,003 Bank of China (3) 2,911 3.5 % January-23 January-24 - 2,825 Bank of Communications (2) 1,405 3.3 % January-22 January-23 1,450 - 1,405 3.3 % January-22 January-23 1,450 - Bank of Communications (5) 1,450 3.3 % December-22 December-23 1,450 - 1,455 3.3 % January-23 January-24 - 1,414 1,380 3.8 % May-23 May-24 - 1,414 1,373 3.8 % July-23 May-24 - 1,414 China Merchants Bank (5) 4,367 3.7 % January-23 January-24 - 4,235 Bank of Beijing (4) 3,192 4.2 % May-22 May-23 3,292 - 2,290 4.2 % January-23 January-24 - 2,220 3,541 3.2 % June-23 May-24 - 3,626 1,380 3.2 % June-23 February-24 - 1,414 1,414 3.0 % December-23 December-24 - 1,414 Industrial Bank (5) 5,621 4.4 % June-22 June-23 5,798 - 2,811 4.4 % September-22 September-23 2,900 - 2,757 4.3 % June-23 June-24 - 2,825 2,744 4.3 % July-23 July-24 - 2,825 2,744 4.3 % September-23 September-24 - 2,825 NingBo Bank (5) 1,405 4.8 % June-22 June-23 1,450 - 1,405 4.8 % August-22 August-23 1,450 - 1,405 4.8 % September-22 September-23 1,450 - 1,406 4.5 % November-22 November-23 1,450 - 2,900 4.5 % December-22 December-23 2,900 - 2,744 4.2 % August-23 September-24 - 2,820 1,271 4.3 % November-23 November-24 - 1,271 2,825 4.3 % December-23 December-24 - 2,825 Industrial and Commercial Bank of China (5) 5,621 3.2 % September-22 July-23 5,800 - 2,744 3.3 % September-23 September-24 - 2,825 NanJing Bank (5) 2,811 4.3 % September-22 September-23 2,899 - 1,265 4.3 % November-22 November-23 1,305 - 2,752 3.8 % October-23 October-24 - 2,752 BoYu Industrial and Commercial Bank of China (6) 1,450 2.8 % December-22 December-23 1,450 - 1,414 2.7 % December-23 December-24 - 1,414 Bank of China (5) 1,204 2.4 % January-23 January-24 - 849 NingBo Bank (5) 703 4.8 % September-22 March-23 725 - 1,406 3.6 % November-22 May-23 1,450 - 725 4.8 % December-22 June-23 725 - 1,414 3.3 % November-23 May-24 - 1,414 Industrial Bank (5) 688 3.6 % September-23 September-24 - 708 Bank of Communications (5) 1,414 3.0 % November-23 May-24 - 1,414 Loan Balance $ 47,078 $ 52,921 Collateral for the above bank loans and line of credit (1) Baoding Tongmei’s land use rights and all of its buildings located at its facility in Dingxing, China.
Biggest changeThe following table represents Short-term bank loans as of December 31, 2024 and 2023 (in thousands, except interest rate data): Loan Interest December 31, December 31, Subsidiary Bank Detail Rate Start Date Due Date 2024 2023 Tongmei Bank of China (1) $ 1,848 3.5 % January-23 January-24 $ - $ 1,795 2,184 2.8 % March-23 March-24 - 2,118 376 2.7 % September-23 September-24 - 386 876 3.5 % November-23 November-24 - 876 1,003 3.5 % November-23 November-24 - 1,003 Bank of China (2) 2,911 3.5 % January-23 January-24 - 2,825 Bank of China (5) 1,426 2.4 % September-24 September-25 1,370 - 1,370 2.4 % November-24 November-25 1,370 - 685 2.7 % November-24 November-25 685 - Bank of Communications (1) 1,455 3.3 % January-23 January-24 - 1,414 1,380 3.8 % May-23 May-24 - 1,414 1,373 3.8 % July-23 May-24 - 1,414 1,376 3.0 % May-24 May-25 1,370 - 2,480 3.0 % June-24 May-25 2,466 - China Merchants Bank (1) 4,367 3.7 % January-23 January-24 - 4,235 1,386 3.5 % January-24 January-25 1,370 - 692 3.5 % February-24 February-25 685 - 692 3.5 % April-24 April-25 685 - Bank of Beijing (3) 2,290 4.2 % January-23 January-24 - 2,220 3,541 3.2 % June-23 May-24 - 3,626 1,380 3.2 % June-23 February-24 - 1,414 1,414 3.0 % December-23 December-24 - 1,414 3,600 3.0 % March-24 February-25 3,565 - 3,580 3.0 % June-24 June-25 3,565 - Industrial Bank (1) 2,757 4.3 % June-23 June-24 - 2,825 2,744 4.3 % July-23 July-24 - 2,825 2,744 4.3 % September-23 September-24 - 2,825 2,851 3.9 % September-24 September-25 2,740 - 2,679 3.9 % October-24 October-25 2,679 - 1,440 3.2 % November-24 November-25 1,440 - NingBo Bank (1) 2,744 4.2 % August-23 September-24 - 2,820 1,271 4.3 % November-23 November-24 - 1,271 2,825 4.3 % December-23 December-24 - 2,825 1,647 4.3 % January-24 January-25 1,630 - 1,258 4.3 % May-24 March-25 1,255 - 1,822 3.9 % November-24 November-25 1,822 - 550 3.9 % December-24 December-25 550 - Industrial and Commercial Bank of China (1) 2,744 3.3 % September-23 September-24 - 2,825 2,851 3.3 % September-24 September-25 2,740 - NanJing Bank (1) 2,752 3.8 % October-23 October-24 - 2,752 China Citic Bank (1) 2,752 2.9 % June-24 June-25 2,740 - 2,851 2.9 % July-24 July-25 2,740 - 1,426 2.9 % September-24 September-25 1,370 - Agricultural Bank of China (1) 1,235 2.6 % November-24 November-25 1,235 - 137 2.6 % December-24 December-25 137 - BoYu Industrial and Commercial Bank of China (4) 1,414 2.7 % December-23 December-24 - 1,414 Industrial and Commercial Bank of China (1) 1,426 2.8 % September-24 September-25 1,370 - Bank of China (1) 1,204 2.4 % January-23 January-24 - 849 1,145 2.3 % September-24 September-25 1,096 - 274 2.4 % December-24 December-25 274 - NingBo Bank (1) 1,414 3.3 % November-23 May-24 - 1,414 Industrial Bank (1) 688 3.6 % September-23 September-24 - 708 1,370 2.7 % November-24 November-25 1,370 - Bank of Communications (1) 1,414 3.0 % November-23 May-24 - 1,414 274 3.0 % May-24 May-25 274 - NanJing Bank (1) 1,370 2.8 % December-24 December-25 1,370 - Loan Balance $ 45,963 $ 52,921 65 Table of Contents Collateral for the above bank loans and line of credit (1) Not collateralized.
In 2023, the total includes impairment charges of $1.9 million. The last time the companies accounted for under the equity method of accounting contributed a loss was 2019 with a loss of $1.9 million. Intense competition in the markets for our products could prevent us from increasing revenue and achieving profitability. The markets for our products are intensely competitive.
The 2023 total includes impairment charges of $1.9 million. The last time the companies accounted for under the equity method of accounting contributed a loss was 2019 with a loss of $1.9 million. Intense competition in the markets for our products could prevent us from increasing revenue and achieving profitability. The markets for our products are intensely competitive.
In the future, if our manufacturing operations were closed for a significant period or we experience difficulty in shipping our products, we could lose revenue and market share, which would depress our financial performance and could be difficult to recapture.
In the future, if our manufacturing operations were closed for a significant period or we experience difficulty in shipping our products, we could lose revenue and market share, which would depress our financial performance and could be difficult to recapture.
In the second half of 2022 companies began to realize they had too much inventory and entered into the “inventory correction” period. Our consolidated revenue had reached $39.7 million in the first quarter of 2022. In the third quarter of 2023 our revenue had declined to $17.4 million.
In the second half of 2022 companies began to realize they had too much inventory and entered into the “inventory correction” period. Our consolidated revenue had reached $39.7 million in the first quarter of 2022. In the third quarter of 2023 our revenue declined to $17.4 million.
The PRC central government may also exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our common stock.
The PRC central government may also exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our common stock.
This has been problematic in the past and, therefore, we instituted a foreign currency hedging program dealing with yen which has historically mitigated the gains and losses caused by fluctuations in the exchange rates. Joint venture raw material companies in China bring certain risks. Since our consolidated subsidiaries and all of our joint venture raw material companies operate in China, their activities could subject us to a number of risks associated with conducting operations internationally, including: ● import and export restrictions; ● unexpected changes in regulatory requirements that may limit our ability to manufacture, export the products of these companies, sell into particular jurisdictions or impose multiple conflicting tax laws and regulations; ● the imposition of tariffs, trade barriers and duties; 36 Table of Contents ● difficulties in managing geographically disparate operations; ● difficulties in enforcing agreements through non-U.S. legal systems; ● political and economic instability, civil unrest or war; ● terrorist activities that impact international commerce; ● difficulties in protecting our intellectual property rights, particularly in countries where the laws and practices do not protect proprietary rights to as great an extent as do the laws and practices of the United States; ● new or changing laws and policies affecting economic liberalization, foreign investment, currency convertibility or exchange rates, taxation or employment; ● new or changing PRC regulations and policies regarding data security and oversight by the CAC of our consolidated subsidiaries and all of our joint venture raw material companies; and ● nationalization of foreign-owned assets, including intellectual property.
This has been problematic in the past and, therefore, we instituted a foreign currency hedging program dealing with yen which has historically mitigated the gains and losses caused by fluctuations in the exchange rates. 36 Table of Contents Joint venture raw material companies in China bring certain risks. Since our consolidated subsidiaries and all of our joint venture raw material companies operate in China, their activities could subject us to a number of risks associated with conducting operations internationally, including: ● the imposition of tariffs, trade barriers, export restrictions and duties; ● import and export restrictions; ● unexpected changes in regulatory requirements that may limit our ability to manufacture, export the products of these companies, sell into particular jurisdictions or impose multiple conflicting tax laws and regulations; ● difficulties in managing geographically disparate operations; ● difficulties in enforcing agreements through non-U.S. legal systems; ● political and economic instability, civil unrest or war; ● terrorist activities that impact international commerce; ● difficulties in protecting our intellectual property rights, particularly in countries where the laws and practices do not protect proprietary rights to as great an extent as do the laws and practices of the United States; ● new or changing laws and policies affecting economic liberalization, foreign investment, currency convertibility or exchange rates, taxation or employment; ● new or changing PRC regulations and policies regarding data security and oversight by the CAC of our consolidated subsidiaries and all of our joint venture raw material companies; and ● nationalization of foreign-owned assets, including intellectual property.
Our quarterly and annual revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including: ● inventory corrections within the technology sector; ● our ability to develop, manufacture and deliver high quality products in a timely and cost-effective manner; ● unforeseen disruptions at our new sites; ● disruptions in manufacturing if air pollution, or other environmental hazards, or outbreaks of contagious diseases causes the Chinese government to order work stoppages; ● fluctuation of our manufacturing yields; ● decreases in the prices of our or our competitors’ products; ● fluctuations in demand for our products; ● the volume and timing of orders from our customers, and cancellations, push-outs and delays of customer orders once booked; ● decline in general economic conditions or downturns in the industry in which we compete; ● expansion of our manufacturing capacity; ● expansion of our operations in China; ● limited availability and increased cost of raw materials; 40 Table of Contents ● costs incurred in connection with any future acquisitions of businesses or technologies; and ● increases in our expenses, including expenses for research and development.
Our quarterly and annual revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including: ● inventory corrections within the technology sector; ● our ability to develop, manufacture and deliver high quality products in a timely and cost-effective manner; ● unforeseen disruptions at our new sites; ● disruptions in manufacturing if air pollution, other environmental hazards, or outbreaks of contagious diseases causes the Chinese government to order work stoppages; ● fluctuation of our manufacturing yields; 40 Table of Contents ● decreases in the prices of our or our competitors’ products; ● fluctuations in demand for our products; ● the volume and timing of orders from our customers, and cancellations, push-outs and delays of customer orders once booked; ● decline in general economic conditions or downturns in the industry in which we compete; ● expansion of our manufacturing capacity; ● expansion of our operations in China; ● limited availability and increased cost of raw materials; ● costs incurred in connection with any future acquisitions of businesses or technologies; and ● increases in our expenses, including expenses for research and development.
By the terms of the Series A preferred stock, so long as any shares of Series A preferred stock are outstanding, neither the Company nor any subsidiary of the Company shall redeem, repurchase or otherwise acquire any shares of common stock, unless all accrued dividends on the Series A preferred stock have been paid.
By the terms of the Series A preferred stock, so long as any shares of Series A preferred stock are outstanding, neither the Company nor any subsidiary of the Company shall redeem, repurchase or otherwise acquire any shares of common stock, unless all accrued dividends on the Series A preferred stock have been paid.
We monitor our investments for impairment and record reductions in carrying value when events or changes in circumstances indicate that the carrying value may not be recoverable.
We monitor our investments for impairment and record reductions in carrying value when events or changes in circumstances indicate that the carrying value may not be recoverable.
We may not be successful in implementing new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource-intensive than originally anticipated. Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes. Delayed sales, lower margins or lost customers could adversely affect our financial results and reputation.
We may not be successful in implementing upgrades, new systems and transitioning data, which could cause business disruptions and be more expensive, time consuming, disruptive and resource-intensive than originally anticipated. Such disruptions could adversely impact our ability to fulfill orders and interrupt other processes. Delayed sales, lower margins or lost customers could adversely affect our financial results and reputation.
Our industry is characterized by high demand and intense competition for talent, and the turnover rate can be high. We compete for qualified management and other personnel with other specialty material companies and semiconductor companies. Our employees could leave the Company with little or no prior notice and would be free to work for a competitor.
Our industry is characterized by high demand and intense competition for talent, and the turnover rate can be high. We compete for qualified management and other personnel with other specialty material companies and semiconductor companies. Our employees could leave with little or no prior notice and would be free to work for a competitor.
Additionally, it is possible that our business could be adversely impacted by retaliatory trade measures taken by China or other countries in response to existing or future tariffs, which could cause us to raise prices or make changes to our operations, which could materially harm our business, financial condition and results of operations.
Additionally, it is possible that our business could be adversely impacted by further retaliatory trade measures taken by China or other countries in response to existing or future tariffs, which could cause us to raise prices or make changes to our operations, which could materially harm our business, financial condition and results of operations .
Portions of our information technology infrastructure might also experience interruptions, delays or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time, which may have a material impact on our business.
Portions of our information technology infrastructure might also experience interruptions, delays or cessations of service or produce errors in connection with upgrades, systems integration or migration work that takes place from time to time, which may have a material impact on our business.
Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments, and accounts receivable. We invest primarily in money market accounts, certificates of deposits, corporate bonds and notes, and government securities.
Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash, restricted cash, cash equivalents, short-term investments, and accounts receivable. We invest primarily in money market accounts, certificates of deposits, corporate bonds and notes, and government securities.
Shutdowns or underutilizing our manufacturing facilities may result in declines in our gross margins. ● Enhanced trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business. ● If China places restrictions on freight and transportation routes and on ports of entry and departure this could result in shipping delays or increased costs for shipping. ● Our international operations are exposed to potential adverse tax consequence in China. ● Our gross margin has fluctuated historically and may decline or increase due to several factors.
Shutdowns or underutilizing our manufacturing facilities may result in declines in our gross margins. ● Escalating trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business. ● If China places restrictions on freight and transportation routes and on ports of entry and departure this could result in shipping delays or increased costs for shipping. ● Our international operations are exposed to potential adverse tax consequence in China. ● Our gross margin has fluctuated historically and may decline or increase due to several factors.
However, even with our hedging program, we still experience losses on foreign exchange from time to time. Interest Rate Risk Cash and cash equivalents earning interest and certain variable rate debt instruments are subject to interest rate fluctuations.
However, even with our hedging program, we still experience losses on foreign exchange from time to time. Interest Rate Risk Cash, restricted cash and cash equivalents earning interest and certain variable rate debt instruments are subject to interest rate fluctuations.
We also refer you to Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 49 Table of Contents Revenue Recognition and Sales Returns We manufacture and sell high-performance compound semiconductor substrates including indium phosphide, gallium arsenide and germanium wafers, and our consolidated subsidiaries sell certain raw materials, including high purity gallium (6N and 7N Ga), pyrolytic boron nitride (pBN) crucibles and boron oxide (B2O3).
We also refer you to Note 1 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K. 51 Table of Contents Revenue Recognition and Sales Returns We manufacture and sell high-performance compound semiconductor substrates including indium phosphide, gallium arsenide and germanium wafers, and our consolidated subsidiaries sell certain raw materials, including high purity gallium (6N and 7N Ga), pyrolytic boron nitride (pBN) crucibles and boron oxide (B2O3).
Production of the intended product was scheduled to begin in 2025. While there may be other end users, this particular cancellation is the loss of a potentially high-volume sales opportunity.
Volume production of the intended product was scheduled to begin in 2025. While there may be other end users, this particular cancellation was the loss of a potentially high-volume sales opportunity.
The 883,000 shares of Series A preferred stock issued and outstanding as of December 31, 2023 are valued at $3,532,000 and are non-voting and non-convertible preferred stock with a 5.0% cumulative annual dividend rate payable when declared by our Board of Directors, and a $4.00 per share liquidation preference over common stock that must be paid before any distribution is made to the holders of our common stock.
The 883,000 shares of Series A preferred stock issued and outstanding as of December 31, 2024 are valued at $3,532,000 and are non-voting and non-convertible preferred stock with a 5.0% cumulative annual dividend rate payable when declared by our Board of Directors, and a $4.00 per share liquidation preference over common stock that must be paid before any distribution is made to the holders of our common stock.
If actual uncollectible accounts differ substantially from our estimates, revisions to the estimated allowance for credit losses would be required, which could have a material impact on our financial results for the future periods. 50 Table of Contents Warranty Reserve We maintain a warranty reserve based upon our claims experience during the prior twelve months and any pending claims and returns of which we are aware.
If actual uncollectible accounts differ substantially from our estimates, revisions to the estimated allowance for credit losses would be required, which could have a material impact on our financial results for the future periods. 52 Table of Contents Warranty Reserve We maintain a warranty reserve based upon our claims experience during the prior twelve months and any pending claims and returns of which we are aware.
We account for the cumulative year to date dividends on the Series A preferred stock when calculating our earnings per share. 47 Table of Contents Comparison of Stockholder Return Set forth below is a line graph comparing the annual percentage change in the cumulative total return to the stockholders of the Company on our common stock with the CRSP Total Return Index for the Nasdaq Stock Market (U.S.
We account for the cumulative year to date dividends on the Series A preferred stock when calculating our earnings per share. 49 Table of Contents Comparison of Stockholder Return Set forth below is a line graph comparing the annual percentage change in the cumulative total return to the stockholders of the Company on our common stock with the CRSP Total Return Index for the Nasdaq Stock Market (U.S.
As of December 31, 2023, we do not have any outstanding purchase orders that will incur a penalty if canceled by the Company. Recent Accounting Pronouncements Recent accounting pronouncements are detailed in Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K. Item 7A.
As of December 31, 2024, we do not have any outstanding purchase orders that will incur a penalty if canceled by the Company. Recent Accounting Pronouncements Recent accounting pronouncements are detailed in Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K. Item 7A.
Assets held for sale are carried at the lower of carrying value or estimated net realizable value. We had no “Assets held for sale” or any impairment of long-lived assets on the consolidated balance sheets as of December 31, 2023 and 2022. Stock-Based Compensation We account for stock-based compensation in accordance with ASC Topic 718, Stock-based Compensation .
Assets held for sale are carried at the lower of carrying value or estimated net realizable value. We had no “Assets held for sale” or any impairment of long-lived assets on the consolidated balance sheets as of December 31, 2024 and 2023. Stock-Based Compensation We account for stock-based compensation in accordance with ASC Topic 718, Stock-based Compensation .
During 2015, we repurchased approximately 908,000 shares at an average price of $2.52 per share for a total purchase price of approximately $2.3 million under the stock repurchase program. No shares were repurchased during 2023 or 2022 under this program. As of December 31, 2023 and 2022, approximately $2.7 million remained available for future repurchases under this program, respectively.
During 2015, we repurchased approximately 908,000 shares at an average price of $2.52 per share for a total purchase price of approximately $2.3 million under the stock repurchase program. No shares were repurchased during 2024 or 2023 under this program. As of December 31, 2024 and 2023, approximately $2.7 million remained available for future repurchases under this program, respectively.
Companies) and the RDG MidCap Technology Index for the period commencing December 31, 2018 and ending December 31, 2023. Pursuant to SEC rules, our performance graph must include both a broad market equity index and a published industry or line-of-business index (or a self-constructed peer index) in addition to our common stock.
Companies) and the RDG MidCap Technology Index for the period commencing December 31, 2018 and ending December 31, 2024. Pursuant to SEC rules, our performance graph must include both a broad market equity index and a published industry or line-of-business index (or a self-constructed peer index) in addition to our common stock.
In addition, our employees could be exposed to chemicals or other hazardous materials at our facilities and we may be subject to lawsuits seeking damages for wrongful death or personal injuries allegedly caused by exposure to chemicals or hazardous materials at our facilities. Litigation is inherently uncertain and while we would expect to defend ourselves vigorously, it is possible that our business, financial condition, results of operations or cash flows could be affected in any particular period by litigation pending and any additional litigation brought against us.
In addition, our employees could be exposed to chemicals or other hazardous materials at our facilities and we may be subject to lawsuits seeking damages for wrongful death or personal injuries allegedly caused by exposure to chemicals or hazardous materials at our facilities. 44 Table of Contents Litigation is inherently uncertain and while we would expect to defend ourselves vigorously, it is possible that our business, financial condition, results of operations or cash flows could be affected in any particular period by litigation pending and any additional litigation brought against us.
During 2013 and 2015, we repurchased shares of our outstanding common stock. As of December 31, 2015, the Series A preferred stock had cumulative dividends of $2.9 million and we include such cumulative dividends in “Accrued liabilities” in our consolidated balance sheets . No shares were repurchased during 2023, 2022 and 2021 under this program.
During 2013 and 2015, we repurchased shares of our outstanding common stock. As of December 31, 2015, the Series A preferred stock had cumulative dividends of $2.9 million and we include such cumulative dividends in “Accrued liabilities” in our consolidated balance sheets . No shares were repurchased during 2024, 2023 and 2022 under this program.
If we, or any of our partially owned supply chain companies, fail to comply with applicable regulations, we could be subject to substantial liability for clean-up efforts, personal injury, fines or suspension or be forced to close or temporarily cease our operations, and/or suspend or terminate the development, manufacture or use of certain of our products, the use of our facilities, or the use of our real property, each of which could have a material adverse effect on our business, financial condition and results of operations.
If we, or any of our partially owned supply chain companies, fail to comply with applicable regulations, we could be subject to substantial liability for clean-up efforts, personal injury, fines or suspension or be forced to close or temporarily cease our operations, and/or suspend or terminate the development, 43 Table of Contents manufacture or use of certain of our products, the use of our facilities, or the use of our real property, each of which could have a material adverse effect on our business, financial condition and results of operations.
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of our internal control over financial reporting as of December 31, 2023 based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Our products are manufactured using complex crystal growth and wafer processing technologies, and the number of usable wafer substrates we produce can fluctuate as a result of many factors, including: ● poor control of furnace temperature and pressure; ● impurities in the materials used; ● contamination of the manufacturing environment; ● quality control and inconsistency in quality levels; ● lack of automation and inconsistent processing requiring manual manufacturing steps; ● substrate breakage during the manufacturing process; and ● equipment failure, power outages or variations in the manufacturing process.
Our products are manufactured using complex crystal growth and wafer processing technologies, and the number of usable wafer substrates we produce can fluctuate as a result of many factors, including: ● poor control of furnace temperature and pressure during crystal growth; ● impurities in the materials used; 22 Table of Contents ● contamination of the manufacturing environment; ● quality control and inconsistency in quality levels; ● lack of automation and inconsistent processing requiring manual manufacturing steps; ● substrate breakage during the manufacturing process; and ● equipment failure, power outages or variations in the manufacturing process.
Share-based awards granted include stock options and restricted stock awards. We utilize the Black-Scholes option 52 Table of Contents pricing model to estimate the grant date fair value of stock options, which requires the input of highly subjective assumptions, including estimating stock price volatility and expected term.
Share-based awards granted include stock options and restricted stock awards. We utilize the Black-Scholes option 54 Table of Contents pricing model to estimate the grant date fair value of stock options, which requires the input of highly subjective assumptions, including estimating stock price volatility and expected term.
The following are some examples of these provisions: ● the division of our Board of Directors into three separate classes, each with three-year terms; ● the right of our Board of Directors to elect a director to fill a space created by a board vacancy or the expansion of the board; ● the ability of our Board of Directors to alter our amended and restated bylaws; and ● the requirement that only our Board of Directors or the holders of at least 10% of our outstanding shares may call a special meeting of our stockholders.
The following are some examples of these provisions: ● the division of our Board of Directors into three separate classes, each with three-year terms; 41 Table of Contents ● the right of our Board of Directors to elect a director to fill a space created by a board vacancy or the expansion of the board; ● the ability of our Board of Directors to alter our amended and restated bylaws; and ● the requirement that only our Board of Directors or the holders of at least 10% of our outstanding shares may call a special meeting of our stockholders.
These provisions prohibit us from engaging in any business combination with any interested stockholder (a stockholder who owns 15% or more of our outstanding voting stock) for a period of three years following the time that such stockholder became an interested stockholder, unless: ● 66 2 / 3 % of the shares of voting stock not owned by the interested stockholder approve the merger or combination, or 41 Table of Contents ● the Board of Directors approves the merger or combination or the transaction which resulted in the stockholder becoming an interested stockholder.
These provisions prohibit us from engaging in any business combination with any interested stockholder (a stockholder who owns 15% or more of our outstanding voting stock) for a period of three years following the time that such stockholder became an interested stockholder, unless: ● 66 2 / 3 % of the shares of voting stock not owned by the interested stockholder approve the merger or combination, or ● the Board of Directors approves the merger or combination or the transaction which resulted in the stockholder becoming an interested stockholder.
We may also use a portion of the net proceeds to acquire, license or invest in complementary products, technologies or businesses. On May 17, 2022, the SEC declared the registration statement effective. Cash from operations could be affected by various risks and uncertainties, including, but not limited to those set forth below under Item 1A. “Risk Factors” above.
We may also use a portion of the net proceeds to acquire, license or invest in complementary products, technologies or businesses. On May 17, 2022, the SEC declared the registration statement effective. Cash from operations could be affected by various risks and uncertainties, including, but not limited to those set forth below under Item 1A.
Our raw material companies experience selling price volatility and purchase price volatility in acquiring base materials. We consolidate the results of two of these raw material companies, and any reduction in their gross margins could have a significant, adverse impact on our overall gross margins.
Our raw material companies experience selling price volatility and purchase price volatility in acquiring base materials. We consolidate the results of several of these raw material companies, and any reduction in their gross margins could have a significant, adverse impact on our overall gross margins.
Income Taxes We account for income taxes in accordance with ASC topic 740, Income Taxes (“ASC 740”), which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities.
Income Taxes We account for income taxes in accordance with ASC Topic 740, Income Taxes , which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities.
Net cash used in operating activities of $8.8 million for 2022 was primarily comprised of net change in operating assets and liabilities of $35.2 million, gain on equity method investments of $6.0 million offset in part by our net income of $18.7 million, adjustment of non-cash items of depreciation and amortization of $8.1 million, stock-based compensation of $4.0 million, return of equity method investments (dividends) of $1.6 million, and amortization of 59 Table of Contents marketable securities premium of $0.1 million.
Net cash used in operating activities of $8.8 million for 2022 was primarily comprised of net change in operating assets and liabilities of $35.2 million, gain on equity method investments of $6.0 million offset in part by our net income of $18.7 million, adjustment of non-cash items of depreciation and amortization of $8.1 million, stock-based compensation of $4.0 million, return of equity method investments (dividends) of $1.6 million, and amortization of marketable securities premium of $0.1 million.
We believe that we do not require any permissions or approvals from the CSRC or other PRC central government authorities to complete a public offering of securities in the U.S. because we are a Delaware corporation with our principal corporate office in Fremont, California and the PRC laws and regulations that govern the listing of securities on a U.S. securities exchange apply to PRC companies.
We believe that we do not require any permissions or approvals from the CSRC or other PRC central government authorities to complete a public offering of securities in the U.S. because we are a Delaware corporation 32 Table of Contents with our principal corporate office in Fremont, California and the PRC laws and regulations that govern the listing of securities on a U.S. securities exchange apply to PRC companies.
We are subject to the risks arising from adverse changes and uncertainty in domestic and global economies.
We are subject to the risks arising from adverse changes and uncertainty in domestic and global economies and policies.
Properties Our principal properties as of March 12, 2024 are as follows: Square Location Feet Principal Use Ownership Fremont, CA 19,467 Administration Operating lease, expires November 2028 Beijing, China 141,524 Production and Administration Owned by AXT / Tongmei DingXing, China 193,621 Production Owned by AXT / Tongmei Kazuo, China 528,390 Production Owned by AXT / Tongmei Kazuo, China 75,703 Production and Administration Owned by Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd.* Tianjin, China 146,012 Production and Administration Owned by Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd., * Kazuo, China 190,597 Production Owned by ChaoYang JinMei Gallium Ltd.,* * Raw material companies consolidated in our consolidated financial statements.
Properties Our principal properties as of March 14, 2025 are as follows: Square Location Feet Principal Use Ownership Fremont, CA 19,467 Administration Operating lease, expires November 2028 Beijing, China 141,524 Production and Administration Owned by AXT / Tongmei DingXing, China 193,621 Production Owned by AXT / Tongmei Kazuo, China 528,390 Production Owned by AXT / Tongmei Kazuo, China 75,703 Production and Administration Owned by Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd.* Tianjin, China 146,012 Production and Administration Owned by Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd., * Kazuo, China 190,597 Production Owned by ChaoYang JinMei Gallium Ltd.,* * Raw material companies consolidated in our consolidated financial statements.
The listing of Tongmei on the STAR Market will not change the status of AXT as a U.S. public company. There can be no assurances that Tongmei will complete its IPO in 2024 or at all.
The listing of Tongmei on the STAR Market will not change the status of AXT as a U.S. public company. There can be no assurances that Tongmei will complete its IPO in 2025 or at all.
The processes by which o ur management committee on cybersecurity is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents include regular communication and reporting from our IT manager, alerts and warnings through the use of technological tools and software and the results of cybersecurity systems testing from a third-party consultant. 45 Table of Contents Our Chief Financial Officer provides briefings to our Board of Directors and the Audit Committee regarding the Company’s cybersecurity risks and activities, including cybersecurity systems testing, activities of third parties, and the like.
The processes by which o ur management committee on cybersecurity is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents include regular communication and reporting from our IT manager, alerts and warnings through the use of technological tools and software and the results of cybersecurity systems testing from a third-party consultant. Our Chief Financial Officer provides briefings to our Board of Directors and the Audit Committee regarding the Company’s cybersecurity risks and activities, including cybersecurity systems testing, activities of third parties, and the like. 46 Table of Contents Item 2.
The market price of our common stock could be adversely affected as a result of anticipated negative impacts of these executive or legislative actions upon, as well as negative investor sentiment towards, companies with operations in China that are listed in the United States, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating performance. IV.
The market price of our common stock could be adversely affected as a result of anticipated negative impacts of these executive or legislative actions upon, as well as negative investor sentiment towards, companies with operations in China that are listed in the United States, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating performance. 39 Table of Contents IV.
As of December 31, 2023 and 2022, the net change in fair value from the placement of the hedge to settlement at each month end during the quarter had a de minimis impact to the consolidated results.
As of December 31, 2024 and 2023, the net change in fair value from the placement of the hedge to settlement at each month end during the quarter had a de minimis impact to the consolidated results.
However, we may not be able to identify additional complementary joint 29 Table of Contents venture opportunities or, even once opportunities are identified, we may not be able to reach agreement on the terms of the business venture with the other investment partners. Further, geopolitical tensions and trade wars could result in government agencies blocking such new joint ventures.
However, we may not be able to identify additional complementary joint venture opportunities or, even once opportunities are identified, we may not be able to reach agreement on the terms of the business venture with the other investment partners. Further, geopolitical tensions and trade wars could result in government agencies blocking such new joint ventures.
If SOI or new silicon-based technologies gain more widespread market acceptance, or are used in more applications, our sales of specialty material-based substrates could be reduced and our business and operating results could be significantly and adversely affected. Our gross margin has fluctuated historically and may decline due to several factors.
If SOI or new silicon-based technologies gain more widespread market acceptance, or are used in more applications, our sales of specialty material-based substrates could be reduced and our business and operating results could be significantly and adversely affected. 20 Table of Contents Our gross margin has fluctuated historically and may decline due to several factors.
On October 27, 2014, our Board of Directors approved a stock repurchase program pursuant to which we may repurchase up to $5.0 million of our outstanding common stock. These repurchases can be made from time to time in the open market and are funded from our existing cash balances and cash generated from operations.
On October 27, 2014, our Board of Directors approved a stock repurchase program pursuant to which we may repurchase up to $5.0 million of our outstanding common stock. These repurchases can be made from time to time in the 62 Table of Contents open market and are funded from our existing cash balances and cash generated from operations.
As of December 31, 2023 the net change in fair value from the placement of the hedge to settlement at each month end during the quarter had a de minimis impact to the consolidated results.
As of December 31, 2024 the net change in fair value from the placement of the hedge to settlement at each month end during the quarter had a de minimis impact to the consolidated results.
Additionally, in the second half of 2016, manufacturers producing and selling passive optical network devices known as EPONs and GPONs experienced a slowdown in 24 Table of Contents demand resulting in surplus inventory on hand. The slowdown persisted until late in 2017. This resulted in a slowdown of sales of our InP substrates used in the PON market.
Additionally, in the second half of 2016, manufacturers producing and selling passive optical network devices known as EPONs and GPONs experienced a slowdown in demand resulting in surplus inventory on hand. The slowdown persisted until late in 2017. This resulted in a slowdown of sales of our InP substrates used in the PON market.
There is no assurance that any changes effected by us will result in sufficient cost reductions to allow us to reduce the price of our products to remain competitive or improve our gross margins. 26 Table of Contents The loss of one or more of our tier one substrate customers would significantly hurt our operating results.
There is no assurance that any changes effected by us will result in sufficient cost reductions to allow us to reduce the price of our products to remain competitive or improve our gross margins. The loss of one or more of our tier one substrate customers would significantly hurt our operating results.
The total investment targeted by AXT in Kazuo is approximately $15 million in value, assets and capital. 64 Table of Contents Purchase Obligations with Penalties for Cancellation In the normal course of business, we issue purchase orders to various suppliers. In certain cases, we may incur a penalty if we cancel the purchase order.
The total investment targeted by AXT in Kazuo is approximately $15 million in value, assets and capital. Purchase Obligations with Penalties for Cancellation In the normal course of business, we issue purchase orders to various suppliers. In certain cases, we may incur a penalty if we cancel the purchase order.
Our customers are not obligated to purchase a specified quantity of our products or to provide us with binding forecasts of product purchases. In addition, our customers may reduce, delay or cancel orders. In the past, we have experienced a slowdown in bookings, significant push-outs and cancellation of orders from customers.
Our customers are not obligated to purchase a specified quantity of our products or to provide us with binding forecasts of product purchases. 26 Table of Contents In addition, our customers may reduce, delay or cancel orders. In the past, we have experienced a slowdown in bookings, significant push-outs and cancellation of orders from customers.
A recent example of a cyclical downcycle took shape in the second half of 2022 and has continued into 2024. Early in its history, COVID began to impact supply chains resulting in shortages. As a result, in 2021 and into 2022 almost all companies purchased more inventory than they needed as a safety precaution.
A recent example of a cyclical downcycle took shape in the second half of 2022. Early in its history, COVID began to impact supply chains resulting in shortages. As a result, in 2021 and into 2022 almost all companies purchased more inventory than they needed as a safety precaution.
We believe that our 42 Table of Contents internal, non-patented proprietary process technology methods, systems and processes are a valuable and critical element of our intellectual property. We must establish and maintain safeguards to avoid the theft of these processes. Our ability to establish and maintain a position of technology leadership also depends on the skills of our development personnel.
We believe that our internal, non-patented proprietary process technology methods, systems and processes are a valuable and critical element of our intellectual property. We must establish and maintain safeguards to avoid the theft of these processes. Our ability to establish and maintain a position of technology leadership also depends on the skills of our development personnel.
President’s Working Group on Financial Markets issued recommendations for actions that can be taken by the executive branch, the SEC, the PCAOB or other federal agencies and department with respect to Chinese companies listed on U.S. stock exchanges and their independent registered public accounting firms, in an effort to protect investors in the United States.
President’s Working Group on Financial Markets issued recommendations for actions that can be taken by the 38 Table of Contents executive branch, the SEC, the PCAOB or other federal agencies and department with respect to Chinese companies listed on U.S. stock exchanges and their independent registered public accounting firms, in an effort to protect investors in the United States.
Under the HFCA Act, our securities may be prohibited from trading on the Nasdaq Global Select Market or other U.S. stock exchanges if we are determined to be a Commission-Identified 38 Table of Contents Issuer for three consecutive years, and this ultimately could result in our common stock being delisted. Furthermore, on June 22, 2021, the U.S.
Under the HFCA Act, our securities may be prohibited from trading on the Nasdaq Global Select Market or other U.S. stock exchanges if we are determined to be a Commission-Identified Issuer for three consecutive years, and this ultimately could result in our common stock being delisted. Furthermore, on June 22, 2021, the U.S.
If we are unable to improve utilization levels at our facilities during periods of decreased demand and correctly manage capacity, the fixed 20 Table of Contents expense levels will have an adverse effect on our business, financial condition and results of operations.
If we are unable to improve utilization levels at our facilities during periods of decreased demand and correctly manage capacity, the fixed expense levels will have an adverse effect on our business, financial condition and results of operations.
Our Board of Directors has the authority to issue up to 800,000 shares of preferred stock in addition to the outstanding shares of Series A preferred stock and to determine the price, rights, preferences and privileges of those shares without any further vote or action by the stockholders.
Our Board of Directors has the authority to issue up to 1,117,000 shares of preferred stock in addition to the outstanding shares of Series A preferred stock and to determine the price, rights, preferences and privileges of those shares without any further vote or action by the stockholders.
In June 2021, we received a dividend of $774,000, from one of our equity investments, Xiaoyi XingAn Gallium Co., Ltd. (“Xiaoyi XingAn”). In June 2022, July 2022 and August 2022, we received a dividend of $1.3 million from BoYu, $1.5 million from Xiaoyi XingAn and $0.1 million from one of our equity investments, JiYa Semiconductor Material Co. Ltd. (“JiYa”), respectively.
In June 2022, July 2022 and August 2022, we received a dividend of $1.3 million from BoYu, $1.5 million from one of our equity investments, Xiaoyi XingAn Gallium Co., Ltd. (“Xiaoyi XingAn”) and $0.1 million from one of our equity investments, JiYa Semiconductor Material Co. Ltd. (“JiYa”), respectively.
We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or 44 Table of Contents conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
Interest expense, net increased in 2022 as compared to the same period in 2021, primarily due to lower investment balances in 2022 and increased borrowings in 2022.
Interest expense, net increased in 2023 as compared to the same period in 2022, primarily due to lower investment balances in 2023 and increased borrowings in 2023.
For the years ended December 31, 2023, 2022 and 2021, the aggregate dividends paid to us, directly or to an intermediate entity within our corporate structure, by our PRC subsidiaries and PRC raw material joint ventures were approximately $4.3 million, $2.9 million and $774,000, respectively.
For the years ended December 31, 2024, 2023 and 2022, the aggregate dividends paid to us, directly or to an intermediate entity within our corporate structure, by our PRC subsidiaries and PRC raw material joint ventures were approximately $2.4 million, $4.3 million and $2.9 million, respectively.
Our financial performance can be hurt if there are unfavorable financial results in any of our raw material companies. The raw material companies in our vertically integrated supply chain have historically made a positive contribution to our financial performance.
Our financial performance can be adversely affected if there are unfavorable financial results in any of our raw material companies. The raw material companies in our vertically integrated supply chain have historically made a positive contribution to our financial performance.
The PRC central government may also seek to significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless.
The PRC central government may also seek to significantly limit or completely hinder our ability to offer 34 Table of Contents or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless.
We may be unable to manufacture our products and would then be unable to meet customer orders except from finished goods inventory on hand. As a result, our revenue could be adversely impacted, 37 Table of Contents and our relationships with our customers could suffer, impacting our ability to generate future revenue.
We may be unable to manufacture our products and would then be unable to meet customer orders except from finished goods inventory on hand. As a result, our revenue could be adversely impacted, and our relationships with our customers could suffer, impacting our ability to generate future revenue.
Total rent expenses under these operating leases charged to cost of revenue were approximately $285,000, $303,000 and $296,000 for the years ended December 31, 2023, 2022 and 2021, respectively, primarily related to the nitrogen system at our facility in Dingxing.
Total rent expenses under these operating leases charged to cost of revenue were approximately $275,000, $285,000 and $303,000 for the years ended December 31, 2024, 2023 and 2022, respectively, primarily related to the nitrogen system at our facility in Dingxing.
The Company may choose not to hedge certain foreign exchange exposures for a variety of reasons, including but not limited to accounting 65 Table of Contents considerations and the prohibitive economic cost of hedging particular exposures.
The Company may choose not to hedge certain foreign exchange exposures for a variety of reasons, including but not limited to accounting considerations and the prohibitive economic cost of hedging particular exposures.
The aggregate redemption amount is approximately $49 million. Tongmei submitted its IPO application to the Shanghai Stock Exchange, and it was formally accepted for review on January 10, 2022. The Shanghai Stock Exchange approved the IPO application on July 12, 2022. On August 1, 2022, the CSRC accepted for review Tongmei’s IPO application.
The aggregate redemption amount is approximately $49 million. Tongmei submitted its IPO application to the Shanghai Stock Exchange, and it was formally accepted for review on January 10, 2022. The Shanghai Stock Exchange approved the IPO application on July 12, 2022. On August 63 Table of Contents 1, 2022, the CSRC accepted for review Tongmei’s IPO application.
Since we perform all of our manufacturing operations in China, terrorist activity or threats against U.S. owned enterprises are a particular concern to us. 30 Table of Contents III.
Since we perform all of our manufacturing operations in China, terrorist activity or threats against U.S. owned enterprises are a particular concern to us. III.
Therefore, our revenue growth depends significantly on the expansion of our international sales and operations. All of our manufacturing facilities and most of our suppliers are also located outside the United States.
Therefore, our revenue growth depends significantly on the expansion of our international sales and operations. 35 Table of Contents All of our manufacturing facilities and most of our suppliers are also located outside the United States.
If there is a renewed surge of the COVID-19 pandemic in cities in which our PRC subsidiaries and PRC joint ventures are located, the Chinese government may require these companies to close again.
If there is a renewed surge of the COVID-19 pandemic or of other contagious diseases in cities in which our PRC subsidiaries and PRC joint ventures are located, the Chinese government may require these companies to close again.
Impairment of Investments We classify marketable investments in debt securities as available-for-sale debt securities in accordance with Accounting Standards Codification (“ASC”) Topic 320, Investments—Debt Securities . All available-for-sale debt securities with a quoted market value below cost (or adjusted cost) are reviewed in order to determine whether the decline is other-than-temporary.
Impairment of Investments We classify marketable investments in debt securities as available-for-sale debt securities in accordance with ASC Topic 320, Investments—Debt Securities . All available-for-sale debt securities with a quoted market value below cost (or adjusted cost) are reviewed in order to determine whether the decline is other-than-temporary.
We have in the past experienced quality problems with our China manufactured products. Our previous quality problems caused us to lose market share to our competitors as some of our customers reduced their orders until our wafer surface quality was as good and as consistent as that offered by our competitors.
We have in the past experienced quality problems with our products. Our previous quality problems caused us to lose market share to our competitors as some of our customers reduced their orders until our wafer surface quality was as good and as 37 Table of Contents consistent as that offered by our competitors.
If one or more of our key suppliers is required to close for an extended period, we might not have enough raw material inventories to continue manufacturing operations. In addition, travel restrictions between China and the U.S. were disrupted and this impacted our efficiency.
If one or more of our key suppliers is required to close for an extended period, we might not have enough raw material 33 Table of Contents inventories to continue manufacturing operations. In addition, during COVID-19, travel restrictions between China and the U.S. were disrupted and this impacted our efficiency.
Revenue from customers in Taiwan decreased in 2023 by 69.9%, primarily due to lower demand for InP wafer substrates and GaAs wafer substrates used in wireless applications, partially offset by increased demand for Ge wafer substrates.
Revenue from customers in Taiwan decreased in 2023 by 69.9%, primarily due to lower demand for InP wafer substrates and GaAs wafer substrates used in 57 Table of Contents wireless applications, partially offset by increased demand for Ge wafer substrates.
Gross margin in 2023 was 17.6% as compared to 36.9% in 2022. The decrease in gross profit is attributed to lower revenue resulting in fixed costs being spread over less units and an unfavorable change in product mix. Gross profit increased $4.7 million in 2022 as compared to 2021.
Gross margin in 2023 was 17.6% as compared to 36.9% in 2022. The decrease in gross profit is attributed to lower revenue resulting in fixed costs being spread over less units and an unfavorable change in product mix.
At quarter end and year end any foreign currency hedges not settled are netted on the consolidated balance sheet and consolidated balance sheet, respectively, and classified as Level 3 assets and liabilities.
At quarter end and year end any foreign currency hedges not settled are netted on the consolidated balance sheet and consolidated balance sheet, respectively, and classified as Level 3 assets and 67 Table of Contents liabilities.
If the companies are accounted for under the equity method, then these changes can result in a reduction in Equity in Income of Unconsolidated Joint Venture Companies. In 2023 and 2022, the companies accounted for under the equity method of accounting contributed a gain of $1.9 million and $6.0 million, respectively, to our consolidated financial statements.
If the companies are accounted for under the equity method, then these changes can result in a reduction in Equity in Income of Unconsolidated Joint Venture Companies. In 2024 and 2023, the companies accounted for under the equity method of accounting contributed a gain of $3.4 million and $1.9 million, respectively, to our consolidated financial statements.
Short-term investments and long-term investments are comprised of money market accounts, certificates of deposit, corporate bonds and notes, and government securities. As of December 31, 2023, we and our consolidated joint ventures held approximately $42.0 million in cash and investments in bank accounts outside the United States.
Short-term investments and long-term investments are comprised of money market accounts, certificates of deposit, corporate bonds and notes, and government securities. As of December 31, 2024, we and our consolidated joint ventures held approximately $24.8 million in cash and investments in bank accounts outside the United States.
Equity in Income of Unconsolidated Joint Venture Companies 2022 to 2023 2021 to 2022 Years Ended Dec. 31 Increase Increase 2023 2022 2021 (Decrease) % Change (Decrease) % Change ($ in thousands) Equity in income of unconsolidated joint ventures $ 1,884 $ 5,957 $ 4,409 $ (4,073) (68.4) % $ 1,548 35.1 % % of total revenue 2.5 % 4.2 % 3.2 % Equity in income of unconsolidated joint ventures is the aggregate net income (loss) from our minority-owned supply chain joint venture companies that are not consolidated.
Equity in Income of Unconsolidated Joint Venture Companies 2023 to 2024 2022 to 2023 Years Ended Dec. 31 Increase Increase 2024 2023 2022 (Decrease) % Change (Decrease) % Change ($ in thousands) Equity in income of unconsolidated joint ventures $ 3,439 $ 1,884 $ 5,957 $ 1,555 82.5 % $ (4,073) (68.4) % % of total revenue 3.5 % 2.5 % 4.2 % Equity in income of unconsolidated joint ventures is the aggregate net income (loss) from our minority-owned supply chain joint venture companies that are not consolidated.
… 238 more changes not shown on this page.