AXT (AXTI) 10-Q 4 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 01, 2018
Document and Entity Information
Entity Registrant Name	AXT INC
Entity Central Index Key	1,051,627
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		39,438,267
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2018

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 39,189,000	$ 44,352,000
Short-term investments	15,195,000	20,032,000
Accounts receivable, net of allowances of $515 and $527 as of March 31, 2018 and December 31, 2017	21,347,000	22,778,000
Inventories	51,122,000	45,840,000
Prepaid expenses and other current assets	6,704,000	7,519,000
Total current assets	133,557,000	140,521,000
Long-term investments	12,511,000	12,576,000
Property, plant and equipment, net	58,763,000	46,530,000
Other assets	11,476,000	11,573,000
Total assets	216,307,000	211,200,000
Current liabilities:
Accounts payable	12,049,000	11,445,000
Accrued liabilities	9,190,000	11,149,000
Total current liabilities	21,239,000	22,594,000
Other long-term liabilities	329,000	289,000
Total liabilities	21,568,000	22,883,000
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock Series A, $0.001 par value; 2,000 shares authorized; 883 shares issued and outstanding as of March 31, 2018 and December 31, 2017 (Liquidation preference of $6.9 million and $6.8 million as of March 31, 2018 and December 31, 2017)	3,532,000	3,532,000
Common stock, $0.001 par value; 70,000 shares authorized; 39,438 and 39,413 shares issued and outstanding as of March 31, 2018 and December 31, 2017	39,000	39,000
Additional paid-in capital	232,212,000	231,679,000
Accumulated deficit	(51,962,000)	(54,837,000)
Accumulated other comprehensive income	5,846,000	3,407,000
Total AXT, Inc. stockholders' equity	189,667,000	183,820,000
Noncontrolling interests	5,072,000	4,497,000
Total stockholders' equity	194,739,000	188,317,000
Total liabilities and stockholders' equity	$ 216,307,000	$ 211,200,000

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Accounts receivable, allowances for doubtful accounts	$ 515	$ 527
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	883,000	883,000
Preferred stock, shares outstanding (in shares)	883,000	883,000
Preferred stock, liquidation preference	$ 6,861	$ 6,819
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	70,000,000	70,000,000
Common stock, shares issued (in shares)	39,438,000	39,413,000
Common stock, shares outstanding (in shares)	39,438,000	39,413,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 24,419	$ 20,616
Cost of revenue	14,846	14,328
Gross profit	9,573	6,288
Operating expenses:
Selling, general and administrative	4,222	3,793
Research and development	1,420	1,124
Total operating expenses	5,642	4,917
Income from operations	3,931	1,371
Interest income, net	142	98
Equity in loss of unconsolidated joint ventures	(334)	(933)
Other (expense) income, net	(215)	48
Income before provision for income taxes	3,524	584
Provision for income taxes	334	159
Net income	3,190	425
Less: Net (income) loss attributable to noncontrolling interests	(315)	240
Net income attributable to AXT, Inc.	$ 2,875	$ 665
Net income attributable to AXT, Inc. per common share:
Basic (in dollars per share)	$ 0.07	$ 0.02
Diluted (in dollars per share)	$ 0.07	$ 0.02
Weighted-average number of common shares outstanding:
Basic (in shares)	38,941	34,210
Diluted (in shares)	40,364	35,624

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 3,190	$ 425
Other comprehensive income, net of tax:
Change in foreign currency translation gain, net of tax	2,816	475
Change in unrealized loss on available-for-sale investments, net of tax	(117)	(123)
Total other comprehensive income, net of tax	2,699	352
Comprehensive income	5,889	777
Less: Comprehensive (income) loss attributable to noncontrolling interests	(575)	185
Comprehensive income attributable to AXT, Inc.	$ 5,314	$ 962

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2018	Mar. 31, 2017
Cash flows from operating activities:
Net income		$ 3,190	$ 425
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,070	1,140
Amortization of marketable securities premium		43	27
Impairment charge on equity investee			313
Stock-based compensation		467	312
Realized gain on sale of available-for-sale securities			(77)
Loss from equity method investments, net		334	620
Changes in operating assets and liabilities:
Accounts receivable		1,686	(3,156)
Inventories		(4,553)	1,065
Prepaid expenses and other current assets		993	318
Other assets		(64)	246
Accounts payable		334	1,424
Accrued liabilities	[1]	(2,096)	(1,373)
Other long-term liabilities, including royalties		191	(211)
Net cash provided by operating activities		1,595	1,073
Cash flows from investing activities:
Purchases of property, plant and equipment		(11,849)	(268)
Purchases of available-for-sale securities		(9,938)	(21,716)
Proceeds from sales of available-for-sale investments		14,680	8,970
Net cash used in investing activities		(7,107)	(13,014)
Cash flows from financing activities:
Proceeds from issuance of common stock and options exercised, net of issuance costs		66	32,675
Dividends paid by joint ventures to their minority shareholders			(465)
Net cash provided by financing activities		66	32,210
Effect of exchange rate changes on cash and cash equivalents		283	91
Net increase (decrease) in cash and cash equivalents		(5,163)	20,360
Cash and cash equivalents at the beginning of the period		44,352	36,152
Cash and cash equivalents at the end of the period		$ 39,189	$ 56,512
[1]	* Dividend accrued but not paid by one of our consolidated subsidiaries of $552 and $503 was included in accrued liabilities as of March 31, 2018 and 2017, respectively.

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) $ in Thousands	Mar. 31, 2018USD ($)subsidiary	Dec. 31, 2017USD ($)	Mar. 31, 2017USD ($)subsidiary
CONDENSED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Number of consolidated joint ventures | subsidiary	1		1
Dividends accrued but not paid by joint ventures | $	$ 552	$ 533	$ 503

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2018
Basis of Presentation
Basis of Presentation	Note 1. Basis of Presentation The accompanying condensed consolidated financial statements of AXT, Inc. (“AXT,” the “Company,” “we,” “us,” and “our” refer to AXT, Inc. and all of its consolidated subsidiaries) are unaudited, and have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly this interim quarterly financial report does not include all disclosures required by accounting principles generally accepted in the United States of America. In the opinion of our management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial position, results of operations and cash flows of AXT and our consolidated subsidiaries for all periods presented. Certain reclassifications have been made to prior periods’ financial statements to conform to the current period presentation. These reclassifications did not result in any change in previously reported net income or total assets. Our management has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ materially from those estimates. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results to be expected in the future or for the full fiscal year. It is recommended that these condensed consolidated financial statements be read in conjunction with our consolidated financial statements and the notes thereto included in our 2017 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 9, 2018. The condensed consolidated financial statements include the accounts of AXT, our wholly-owned subsidiaries, Beijing Tongmei Xtal Technology Co., Ltd., Baoding Tongmei Xtal Technology Co., Ltd. and Chaoyang Tongmei Xtal Technology Co., and our majority-owned, or significantly controlled subsidiaries, Beijing JiYa Semiconductor Material Co., Ltd., Nanjing JinMei Gallium Co., Ltd. and Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd. All significant inter‑company accounts and transactions have been eliminated. Investments in business entities in which we do not have controlling interests, but have the ability to exercise significant influence over operating and financial policies (generally 20-50% ownership), are accounted for by the equity method. We have seven companies accounted for by the equity method. For subsidiaries that we consolidate, we reflect the portion we do not own as noncontrolling interests on our condensed consolidated balance sheets in stockholders' equity and in our condensed consolidated statements of operations.

Investments and Fair Value Meas

Investments and Fair Value Measurements	3 Months Ended
	Mar. 31, 2018
Investments and Fair Value Measurements
Investments and Fair Value Measurements	Note 2. Investments and Fair Value Measurements Our cash and cash equivalents consist of cash and instruments with original maturities of less than three months. Our investments consist of instruments with original maturities of more than three months. As of March 31, 2018 and December 31, 2017, our cash, cash equivalents and investments are classified as follows (in thousands): March 31, 2018 December 31, 2017 Gross Gross Gross Gross Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair Cost Gain (Loss) Value Cost Gain (Loss) Value Classified as: Cash $ 39,189 $ — $ — $ 39,189 $ 43,610 $ — $ — $ 43,610 Cash equivalents: Certificates of deposit 1 — — — — 742 — — 742 Total cash and cash equivalents 39,189 — — 39,189 44,352 — — 44,352 Investments (available-for-sale): Certificates of deposit 2 7,340 — (41) 7,299 7,099 — (24) 7,075 Corporate bonds 20,576 — (169) 20,407 25,602 — (69) 25,533 Total investments 27,916 — (210) 27,706 32,701 — (93) 32,608 Total cash, cash equivalents and investments $ 67,105 $ — $ (210) $ 66,895 $ 77,053 $ — $ (93) $ 76,960 Contractual maturities on investments: Due within 1 year 3 $ 15,288 $ 15,195 $ 20,056 $ 20,032 Due after 1 through 5 years 4 12,628 12,511 12,645 12,576 $ 27,916 $ 27,706 $ 32,701 $ 32,608 1. Certificates of deposit with original maturities of less than three months. 2. Certificates of deposit with original maturities of more than three months. 3. Classified as “Short-term investments” in our condensed consolidated balance sheets. 4. Classified as “Long-term investments” in our condensed consolidated balance sheets. We manage our investments as a single portfolio of highly marketable securities that is intended to be available to meet our current cash requirements. Certificates of deposit and corporate bonds are typically held until maturity. Corporate equity securities have no maturity and may be sold at any time. Our holding of corporate equity securities consists of common stock of GCS Holdings, Inc. (“GHI”) (previously Global Communication Semiconductors, Inc.), a Taiwan publicly-traded company. We began classifying GHI as an available-for-sale security in the second quarter of 2015 when we determined that there was sufficient trading volume in the exchange for the stock to be deemed readily marketable. D uring the three months ended March 31, 2017, we sold the remainder of our GHI stock and our cash proceeds from sales of available-for-sale investments were $125,000. Our cost was $48,000 and our gross realized gain from sales of available-for-sale investments was $77,000. There were no GHI transactions in the three months ended March 31, 2018. As of March 31, 2017, we no longer hold any GHI stock. The gross unrealized losses related to our portfolio of available-for-sale securities were primarily due to changes in interest rates and market and credit conditions of the underlying securities. We have determined that the gross unrealized losses on our available-for-sale securities as of March 31, 2018 are temporary in nature. We periodically review our investment portfolio to identify and evaluate investments that have indications of possible impairment. Factors considered in determining whether a loss is temporary include the magnitude of the decline in market value, the length of time the market value has been below cost (or adjusted cost), credit quality, and our ability and intent to hold the securities for a period of time sufficient to allow for any anticipated recovery in market value. A portion of our investments would generate a loss if we sold them on March 31, 2018. The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2018 (in thousands): In Loss Position In Loss Position Total In < 12 months > 12 months Loss Position Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of March 31, 2018 Value (Losses) Value (Losses) Value (Losses) Investments: Certificates of deposit $ 4,935 $ (35) $ 2,344 $ (6) $ 7,279 $ (41) Corporate bonds 13,153 (107) 7,254 (62) 20,407 (169) Total in loss position $ 18,088 $ (142) $ 9,598 $ (68) $ 27,686 $ (210) The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2017 (in thousands): In Loss Position In Loss Position Total In < 12 months > 12 months Loss Position Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of December 31, 2017 Value (Loss) Value (Loss) Value (Loss) Investments: Certificates of deposit $ 3,994 $ (16) $ 2,342 $ (8) $ 6,336 $ (24) Corporate bonds 25,533 (69) — — 25,533 (69) Total in loss position $ 29,527 $ (85) $ 2,342 $ (8) $ 31,869 $ (93) Investments in Privately-held Companies We have made strategic investments in private companies located in China in order to gain access at a competitive cost to raw materials that are critical to our substrate business (see Note 7). The investment balances for all of these companies, including minority investments indirectly in privately-held companies made by our consolidated subsidiaries, are accounted for under the equity method and included in “Other assets” in the condensed consolidated balance sheets and totaled $9.7 million and $9.8 million as of March 31, 2018 and December 31, 2017, respectively. As of March 31, 2018, there were seven companies accounted for under the equity method. There were no impairment charges in the three months ended March 31, 2018. The three months ended March 31, 2017 include an impairment charge of $313,000 for one of the gallium companies. During the first quarter of 2017, management determined that it was unlikely that this company would recover from the difficult pricing environment and we had written the investment down to zero. Fair Value Measurements We invest primarily in money market accounts, certificates of deposits, corporate bonds and notes, and government securities. Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“ASC 820”), establishes three levels of inputs that may be used to measure fair value. Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets of the asset or identical assets. Level 2 instrument valuations are obtained from readily-available, observable pricing sources for comparable instruments. Level 3 instrument valuations are obtained from unobservable inputs in which there is little or no market data, which require us to develop our own assumptions. On a recurring basis, we measure certain financial assets and liabilities at fair value, primarily consisting of our short-term and long-term investments. The type of instrument valued based on quoted market prices in active markets include our money market funds, which are generally classified within Level 1 of the fair value hierarchy. Other than corporate equity securities which are based on quoted market prices and classified as Level 1, we classify our available-for-sale securities including certificates of deposit and corporate bonds as having Level 2 inputs. The valuation techniques used to measure the fair value of these financial instruments having Level 2 inputs were derived from bank statements, quoted market prices, broker or dealer statements or quotations, or alternative pricing sources with reasonable levels of price transparency. We place short-term foreign currency hedges that are intended to offset the potential cash exposure related to fluctuations in the exchange rate between the United States dollar and Japanese Yen. We measure the fair value of these foreign currency hedges at each month end and quarter end using current exchange rates and in accordance with generally accepted accounting principles. At quarter end any foreign currency hedges not settled are netted in “Accrued liabilities” on the condensed consolidated balance sheet and classified as Level 3 assets and liabilities. As of March 31, 2018, 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. There were no changes in valuation techniques or related inputs in the three months ended March 31, 2018. There have been no transfers between fair value measurements levels during the three months ended March 31, 2018. The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis in accordance with ASC 820 as of March 31, 2018 (in thousands): Quoted Prices in Significant Active Markets of Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs March 31, 2018 (Level 1) (Level 2) (Level 3) Assets: Cash equivalents and investments: Certificates of deposit $ 7,299 $ — $ 7,299 $ — Corporate bonds 20,407 — 20,407 — Total $ 27,706 $ — $ 27,706 $ — The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis in accordance with ASC 820 as of December 31, 2017 (in thousands): Quoted Prices in Significant Active Markets of Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs December 31, 2017 (Level 1) (Level 2) (Level 3) Assets: Cash equivalents and investments: Certificates of deposit $ 7,817 $ — $ 7,817 $ — Corporate bonds 25,533 — 25,533 — Total $ 33,350 $ — $ 33,350 $ — Items Measured at Fair Value on a Nonrecurring Basis Certain assets that are subject to nonrecurring fair value measurements are not included in the table above. These assets include investments in privately-held companies accounted for by the equity or cost method (See Note 7). There were no impairment charges in the three months ended March 31, 2018. The three months ended March 31, 2017 include an impairment charge of $313,000 for one of the gallium companies. During the first quarter of 2017, management determined that it was unlikely that this company would recover from the difficult pricing environment and we had written the investment down to zero. Except as mentioned, we did not record other-than-temporary impairment charges for the remainder of these investments during the three months ended March 31, 2018 and 2017.

Inventories

Inventories	3 Months Ended
	Mar. 31, 2018
Inventories:
Inventories	Note 3. Inventories The components of inventories are summarized below (in thousands): March 31, December 31, 2018 2017 Inventories: Raw materials $ 25,626 $ 23,554 Work in process 23,805 20,135 Finished goods 1,691 2,151 $ 51,122 $ 45,840 As of March 31, 2018 and December 31, 2017, carrying values of inventories were net of inventory reserves of $13.7 million and $13.3 million, respectively, for excess and obsolete inventory and $322,000 and $291,000, respectively, for lower of cost or net realizable value reserves.

Property, Plant and Equipment,

Property, Plant and Equipment, Net	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment, Net
Property, Plant and Equipment, Net	Note 4. Property, Plant and Equipment, Net The components of our property, plant and equipment are summarized below (in thousands): March 31, December 31, 2018 2017 Property, plant and equipment: Machinery and equipment, at cost $ 45,954 $ 44,549 Less: accumulated depreciation and amortization (42,217) (40,845) Building, at cost 33,635 32,461 Less: accumulated depreciation and amortization (12,234) (11,501) Leasehold improvements, at cost 5,715 5,539 Less: accumulated depreciation and amortization (4,538) (4,288) Construction in progress 32,448 20,615 $ 58,763 $ 46,530 As of March 31, 2018, the balance of construction in progress was $32.4 million of which $22.8 million was related to our buildings in our new Dingxing and Chaoyang locations, $5.6 million was for manufacturing equipment purchases and $4.0 million was from our construction in progress for our other consolidated subsidiaries. As of December 31, 2017, the balance of construction in progress was $20.6 million, of which, $14.8 million was for our buildings in our new Dingxing location, $3.6 million was for manufacturing equipment purchases not yet placed in service, and $2.2 million was for our construction in progress at our other consolidated subsidiaries.

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2018
Accrued Liabilities
Accrued Liabilities	Note 5. Accrued Liabilities The components of accrued liabilities are summarized below (in thousands): March 31, December 31, 2018 2017 Preferred stock dividends payable $ 2,901 $ 2,901 Accrued compensation and related charges 2,058 3,205 Advances from customers 1,061 924 Dividends payable by consolidated joint ventures 552 533 Current portion of royalty payments 431 575 Accrued income taxes 375 270 Accrued professional services 251 570 Other tax payable 215 395 Other personnel related costs 213 230 Accrued product warranty 117 133 Other accrued liabilities 1,016 1,413 $ 9,190 $ 11,149

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2018
Related Party Transactions
Related Party Transactions	Note 6. Related Party Transactions In August 2011, our consolidated joint venture, Beijing JiYa Semiconductor Material Co., Ltd. (“JiYa”), entered into a non-interest bearing note agreement in the amount of $1.6 million for a loan to one of its equity investment entities. The original term of the loan was for two years and ten months with three periodic principal payments required. After various amendments to the terms of the note, in December 2013, the parties agreed to delay all principal repayment until December 2017. In December 2016, we determined that this receivable was in substance an investment and began re-classifying this long term loan from “Related party notes receivable – long-term” to “Other assets” in our consolidated balance sheets. As of March 31, 2018 and December 31, 2017, we included $1.1 million and $1.2 million in “Other assets” in our condensed consolidated balance sheets, respectively. JiYa also purchases raw materials from one of its equity investment entities for production in the ordinary course of business. The general manager of JiYa has a family member who has a 10% ownership position in this equity investment entity. As of March 31, 2018 and December 31, 2017, amounts payable of $2.1 million were included in “Accounts payable” in our condensed consolidated balance sheets. JiYa also sells raw materials to one of its equity investment entities for production in the ordinary course of business . As of March 31, 2018 and December 31, 2017, amounts receivable of $346,000 and $334,000, respectively, were included in “Accounts receivable” in our condensed consolidated balance sheets. During the three months ended December 31, 2016, we deemed the collection of the outstanding amount to be improbable and established an allowance in full. There have since been no additional sales made on credit to the customer and, as of March 31, 2018, the existing outstanding amount continues to be fully reserved. Beginning in 2012, our consolidated joint venture, Nanjing JinMei Gallium Co., Ltd. (“JinMei”), is contractually obligated under an agency sales agreement to sell raw material on behalf of its equity investment entity. JinMei bills the customers and remits the receipts, net of its portions of sales commission, to this equity investment entity. For the three months ended March 31, 2018 and 2017, JinMei has recorded $0 and $1,000, respectively, income from agency sales, which were included in “Other (expense) income, net” in the condensed consolidated statements of operations. In March 2012, our wholly-owned subsidiary, Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), entered into an operating lease for the land it owns with our consolidated joint venture, Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd. (“BoYu”). The lease agreement for the land of approximately 22,081 square feet commenced on January 1, 2012 for a term of 10 years with annual lease payments of $24,000 subject to a 5% increase at each third year anniversary. The annual lease payment is due by January 31 st of each year. Tongmei has paid certain amounts on behalf of Donghai County Dongfang High Purity Electronic Materials Co., Ltd. (“Dongfang”), its equity investment entity, to purchase materials. The original agreement was signed between Tongmei and Dongfang in 2014 and the date of repayment was set as December 31, 2015. In 2015, both parties agreed to delay the date of repayment to December 31, 2017. During 2017, the repayment of the full amount of principal and interest totaling $114,000 was received by our wholly owned subsidiary. In April 2014, Tongmei loaned an additional $46,000 to Dongfang. The loan bears interest at 6.15% per annum and was due on December 31, 2017. During 2017, the repayment of the full amount of principal and interest totaling $55,000 was received by our wholly owned subsidiary . Tongmei also purchases raw materials from Dongfang for production in the ordinary course of business. As of March 31, 2018 and December 31, 2017, amounts payable of $381,000 and $0, respectively, were included in “Accounts payable” in our condensed consolidated balance sheets. Tongmei also purchases raw materials from one of our equity investment entities, Emei Shan Jiamei Materials Co. Ltd. (“Jiamei”), for production in the ordinary course of business. As of March 31, 2018 and December 31, 2017, amounts payable of $400,000 and $370,000, respectively, were included in “Accounts payable” in our condensed consolidated balance sheets. Tongmei also purchases raw materials from one of our equity investment entities, Xilingol Tongli Germanium Refine Co. Ltd. (“Tongli”), for production in the ordinary course of business. As of March 31, 2018 and December 31, 2017, amounts payable of $497,000 and $219,000, respectively, were included in “Accounts payable” in our condensed consolidated balance sheets. In July 2017, Tongmei, provided an inter-company loan to JinMei in the amount of $768,000 in preparation for the acquisition of the land use rights and the construction of a new building. The inter-company loan carries an interest rate of 4.9% per annum and is due in three installments between December 2021 and December 2023 . JinMei is in the process of relocating its headquarters and manufacturing operations to an alternative location. Currently, JinMei has identified a site as a possible candidate and the estimated costs for the land use rights acquisition and facility construction are expected to be approximately $6 million. In April 2016, our consolidated joint venture, BoYu, provided a personal loan of $177,000 to one of its executive employees. This loan is secured by the officer’s shares in BoYu. The loan bears interest at 2.75% per annum. Principal and accrued interest are due on March 31, 2019. During the three months ended June 30, 2017, the repayment of the principal and interest totaling $180,000 was received by our consolidated joint venture. In November 2017, BoYu provided another personal loan of $318,000 to the same executive employee. The loan bears interest at 2.75% per annum. Principal and accrued interest are due on November 30, 2020. As of March 31, 2018 and December 31, 2017 , the balances, including both principal and accrued interest, were $318,000 and $307,000, respectively, and included in “Other assets” in our condensed consolidated balance sheets. Beijing Kaide Quartz Co. Ltd. (“Kaide”) has been a supplier of customized quartz tubes to AXT since 2004. Beijing XiangHeMing Trade Co. Ltd. (“XiangHeMing”) is a significant shareholder of Kaide. XiangHeMing was previously owned by, among others, certain immediate family members of Davis Zhang, our former President, China Operations, until at least sometime in 2004, at which time the official Chinese government records indicate that Mr. Zhang’s immediate family members transferred their ownership of XiangHeMing to a third party. However, we are currently unable to conclusively determine whether Mr. Zhang’s immediate family members retained any economic interest in XiangHeMing after the transfer. As of March 31, 2018 and December 31, 2017, amounts payable to Kaide of $693,000 and $708,000, respectively, were included in “Accounts payable” in our condensed consolidated balance sheets. On November 2, 2017, our consolidated joint venture, BoYu, raised additional capital in the amount of $2 million in cash from a third-party investor through the issuance of shares equivalent to 10% ownership of BoYu. This third-party investor is an immediate family member of the owner of one of BoYu's customers. For the three months ended March 31, 2018 and 2017, BoYu has recorded $801,000 and $337,000, respectively, in revenue from this customer. As of March 31, 2018 and December 31, 2017, amounts receivable of $969,000 and $635,000, respectively, were included in “Accounts receivable” in our condensed consolidated balance sheets. Our Related Party Transactions Policy seeks to prohibit all conflicts of interest in transactions between related parties and us, unless they have been approved by our Board of Directors. This policy applies to all of our employees, directors, and our consolidated subsidiaries. Our executive officers retain board seats on the board of directors of the companies in which we have invested in our China joint ventures. See Note 7 for further details.

Investments in Privately Held C

Investments in Privately Held Companies	3 Months Ended
	Mar. 31, 2018
Investments in Privately Held Companies
Investments in Privately Held Companies	Note 7. Investments in Privately-Held Companies We have made strategic investments in private companies located in China in order to gain access at a competitive cost to raw materials that are critical to our substrate business. We have six direct investments. Our consolidated subsidiaries have also made investments in private companies. We have four indirect investments. These companies form part of our overall supply chain. The six direct investments are summarized below (in thousands): Investment Balance as of March 31, December 31, Accounting Ownership Company 2018 2017 Method Percentage Beijing JiYa Semiconductor Material Co., Ltd. $ 3,331 $ 3,331 Consolidated 46 % Nanjing JinMei Gallium Co., Ltd. 592 592 Consolidated 83 % Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd. 1,346 1,346 Consolidated 63 % $ 5,269 $ 5,269 Donghai County Dongfang High Purity Electronic Materials Co., Ltd. $ 1,525 $ 1,473 Equity 46 % Xilingol Tongli Germanium Co. Ltd. 3,017 3,190 Equity 25 % Emeishan Jia Mei High Purity Metals Co., Ltd. 911 915 Equity 25 % $ 5,453 $ 5,578 Our ownership of JiYa is 46%. We continue to consolidate JiYa as we are the founding and largest shareholder, appoint the general manager and controller and have the ability to exercise control in substance over the long-term strategic decisions made. Our Chief Executive Officer is chairman of the JiYa board and we have appointed one other representative, Davis Zhang, to serve on the board. Mr. Zhang was an executive officer of AXT for 27 years. Further, our Chief Financial Officer, Gary Fischer, is on the board of supervisors of JiYa. Our ownership of JinMei is 83%. We continue to consolidate JinMei as we have a controlling financial interest and have majority control of the board. Our Chief Executive Officer is chairman of the JinMei board and we have appointed two other representatives to serve on the board. Our ownership of BoYu is 63%. On November 2, 2017, BoYu raised additional capital in the amount of $2 million in cash from a third-party investor through the issuance of shares equivalent to 10% ownership of BoYu. As a result, our ownership of BoYu was diluted from 70% to 63%. We continue to consolidate BoYu as we have a controlling financial interest and have majority control of the board and accordingly no gain was recognized as a result of this equity transaction. Our Chief Executive Officer is chairman of the BoYu board and we have appointed two other representatives to serve on the board. Although we have representation on the board of directors of each of these companies, the daily operations of each of these companies are managed by local management and not by us. Decisions concerning their respective short-term strategy and operations, ordinary course of business capital expenditures, and decisions concerning sales of finished products, are made by local management with regular guidance and input from us. During the three months ended March 31, 2018 and 2017, the three consolidated joint ventures, before eliminating inter-company transactions, generated an income of $1.4 million and a loss of $12,000, respectively, of which a gain of $315,000 and a loss of $240,000, respectively, were allocated to noncontrolling interests, resulting in an income of $1.1 million and $228,000 respectively, to our net income. For AXT’s three direct minority investment entities that are not consolidated, the investment balances are included in “Other assets” in our condensed consolidated balance sheets and totaled $5.5 million and $5.6 million as of March 31, 2018 and December 31, 2017, respectively. We own 46% of the ownership interests in one of these companies and 25% in each of the other two companies. These three companies are not considered variable interest entities because: · all three companies have sustainable businesses of their own; · our voting power is proportionate to our ownership interests; · we only recognize our respective share of the losses and/or residual returns generated by the companies if they occur; and · we do not have controlling financial interest in, do not maintain operational or management control of, do not control the board of directors of, and are not required to provide additional investment or financial support to any of these companies. We also maintain four minority investments indirectly in privately-held companies through our consolidated joint ventures. JiYa holds three investments and JinMei holds one investment. These minority investments are accounted for under the equity method in the books of our consolidated joint ventures. As of March 31, 2018 and December 31, 2017, our consolidated joint ventures included these minority investments in “Other assets” in our condensed consolidated balance sheets with a carrying value of $4.3 million and $4.3 million, respectively. There were no impairment charges in the three months ended March 31, 2018. The three months ended March 31, 2017 include an impairment charge of $313,000 for one of the gallium companies. During the first quarter of 2017, management determined that it is unlikely that this company will recover from the difficult pricing environment and we had written the investment down to zero. AXT’s three direct minority investment entities and the three minority investments of JiYa and the one minority investment of JinMei are not consolidated and are accounted for under the equity method. Excluding one fully impaired entity, the equity entities had the following summarized income information (in thousands) for the three months ended March 31, 2018 and 2017. Three Months Ended March 31, 2018 2017 Net revenue $ 7,356 $ 5,455 Gross profit $ 35 $ 3,722 Operating loss $ (1,163) $ (837) Net loss $ (1,430) $ (1,705) Our portion of the entity loss including impairment charges, from these seven minority investment entities that are not consolidated and are accounted for under the equity method were $334,000 and $933,000 for the three months ended March 31, 2018 and 2017, respectively .

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity
Stockholders' Equity	Note 8. Stockholders’ Equity Condensed Consolidated Statement of Changes in Stockholders’ Equity (in thousands) Accumulated Other AXT, Inc Total Preferred Common Additional Accumulated Comprehensive Stockholders’ Noncontrolling Stockholders’ Stock Stock Paid-In Capital Deficit Income Equity Interests Equity Balance as of December 31, 2017 $ 3,532 $ 39 $ 231,679 $ (54,837) $ 3,407 $ 183,820 $ 4,497 $ 188,317 Common stock options exercised — — 66 — — 66 — 66 Stock-based compensation — — 467 — — 467 — 467 Net income — — — 2,875 — 2,875 315 3,190 Other comprehensive income — — — — 2,439 2,439 260 2,699 Balance as of March 31, 2018 $ 3,532 $ 39 $ 232,212 $ (51,962) $ 5,846 $ 189,667 $ 5,072 $ 194,739 There were no reclassification adjustments from accumulated other comprehensive income for the three months ended March 31, 2018 and 2017. Stock Repurchase Program 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. 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 2016 and 2017. During the three months ended March 31, 2018, we did not repurchase any shares under the approved stock repurchase program. As of March 31, 2018, approximately $2.7 million remained available for future repurchases under this program. Currently, we do not plan to repurchase additional shares.

Stock-based Compensation

Stock-based Compensation	3 Months Ended
	Mar. 31, 2018
Stock-based Compensation
Stock-based Compensation	Note 9. Stock-Based Compensation We account for stock-based compensation in accordance with the provisions of ASC Topic 718, Compensation-Stock Compensation (“ASC 718”), which established accounting for stock-based awards exchanged for employee services. Stock-based compensation cost is measured at each grant date, based on the fair value of the award, and is recognized as expense over the employee’s requisite service period of the award. All of our stock compensation is accounted for as an equity instrument. The following table summarizes compensation costs related to our stock-based awards (in thousands, except per share data): Three Months Ended March 31, 2018 2017 Cost of revenue $ 21 $ 8 Selling, general and administrative 369 256 Research and development 77 48 Total stock-based compensation 467 312 Tax effect on stock-based compensation — — Net effect on net income $ 467 $ 312 As of March 31, 2018, the unamortized compensation costs related to unvested stock options granted to employees under our stock option plan was approximately $1.5 million, net of estimated forfeitures of $175,000. These costs will be amortized on a straight-line basis over a weighted-average period of approximately 2.2 years and will be adjusted for subsequent changes in estimated forfeitures. We did not capitalize any stock-based compensation to inventory as of March 31, 2018 and December 31, 2017 due to the immateriality of the amount. We estimate the fair value of stock options using the Black-Scholes valuation model, consistent with the provisions of ASC 718. There were no options granted in the three months ended March 31, 2018. There were 60,000 options with a weighted-average grant date fair values of $2.76 per share granted in the three months ended March 31, 2017. The fair values of our stock options granted to employees for the three months ended March 31, 2018 and 2017 were estimated using the following weighted-average assumptions: Three Months Ended Three Months Ended March 31, March 31, 2018 2017 Expected term (in years) — 5.9 Volatility — % 46.71 % Expected dividend — % — % Risk-free interest rate — % 2.08 % The following table summarizes the stock option transactions during the three months ended March 31, 2018 (in thousands, except per share data): Weighted average Weighted- Remaining Number of average Contractual Aggregate Options Exercise Life Intrinsic Stock Options Outstanding Price (in years) Value Balance as of January 1, 2018 2,666 $ 3.81 6.87 $ 13,149 Granted — — Exercised (22) 2.94 $ Canceled and expired — — Balance as of March 31, 2018 2,644 $ 3.81 6.66 $ 9,409 Options vested as of March 31, 2018 and unvested options expected to vest, net of forfeitures 2,616 $ 3.79 6.64 $ 9,352 Options exercisable as of March 31, 2018 1,694 $ 3.41 5.81 $ 6,523 The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on our closing price of $7.25 on March 29, 2018, which would have been received by the option holder had all option holders exercised their options on that date. Restricted stock awards A summary of activity related to restricted stock awards for the three months ended March 31, 2018 is presented below (in thousands, except per share data): Weighted-Average Grant Date Stock Awards Shares Fair Value Non-vested as of January 1, 2018 480 $ 7.13 Granted 4 $ 7.35 Vested — $ — Forfeited — $ — Non-vested as of March 31, 2018 484 $ 7.13 As of March 31, 2018, the unamortized compensation costs related to unvested restricted stock awards was approximately $2.9 million, which is to be amortized on a straight-line basis over a weighted-average period of approximately 1.7 years.

Net Income Per Share

Net Income Per Share	3 Months Ended
	Mar. 31, 2018
Net Income Per Share
Net Income Per Share	Note 10. Net Income Per Share Basic net income per share is computed using the weighted-average number of common shares outstanding during the periods less shares of common stock subject to repurchase and non-vested stock awards. Diluted net income per share is computed using the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding during the periods. The dilutive effect of outstanding stock options and restricted stock awards is reflected in diluted earnings per share by application of the treasury stock method. Potentially dilutive common shares consist of common shares issuable upon the exercise of stock options and vesting of restricted stock awards. Potentially dilutive common shares are excluded from the computation of weighted-average number of common shares outstanding in net loss years, as their effect would be anti-dilutive to the computation. A reconciliation of the numerators and denominators of the basic and diluted net income per share calculations is as follows (in thousands, except per share data): Three Months Ended March 31, 2018 2017 Numerator: Net income attributable to AXT, Inc. $ 2,875 $ 665 Less: Preferred stock dividends (44) (44) Net income available to common stockholders $ 2,831 $ 621 Denominator: Denominator for basic net income per share - weighted-average common shares 38,941 34,210 Effect of dilutive securities: Common stock options 1,289 1,220 Restricted stock awards 134 194 Denominator for dilutive net income per common shares 40,364 35,624 Net income attributable to AXT, Inc. per common share: Basic $ 0.07 $ 0.02 Diluted $ 0.07 $ 0.02 Options excluded from diluted net income per share as the impact is anti-dilutive 184 639 Restricted stock excluded from diluted net income per share as the impact is anti-dilutive 240 — The 883,000 shares of $0.001 par value Series A preferred stock issued and outstanding as of March 31, 2018 and December 31, 2017, valued at $3,532,000, are non-voting and non-convertible preferred stock with a 5.0% cumulative annual dividend rate payable when declared by the board of directors and a $4 per share liquidation preference over common stock, which must be paid before any distribution is made to common stockholders. These preferred shares were issued to Lyte Optronics, Inc. stockholders in connection with the completion of our acquisition of Lyte Optronics, Inc. on May 28, 1999.

Segment Information and Foreign

Segment Information and Foreign Operations	3 Months Ended
	Mar. 31, 2018
Segment Information and Foreign Operations
Segment Information and Foreign Operations	Note 11. Segment Information and Foreign Operations Segment Information We operate in one segment for the design, development, manufacture and distribution of high-performance compound and single element semiconductor substrates and sale of raw materials integral to these substrates. In accordance with ASC Topic 280, Segment Reporting, our chief operating decision-maker has been identified as our Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the Company. Since we operate in one segment, all financial segment and product line information can be found in the condensed consolidated financial statements. Product Information The following table represents revenue amounts (in thousands) by product type: Three Months Ended March 31, 2018 2017 Product Type: Substrates $ 19,364 $ 16,609 Raw Materials and Others 5,055 4,007 Total $ 24,419 $ 20,616 Geographical Information The following table represents revenue amounts (in thousands) reported for products shipped to customers in the corresponding geographic region: Three Months Ended March 31, 2018 2017 Geographical region: China $ 7,183 $ 4,422 Europe (primarily Germany) 6,393 5,598 Taiwan 5,049 3,318 Japan 2,455 3,140 North America (primarily the United States) 1,845 2,067 Asia Pacific (excluding China, Taiwan and Japan) 1,494 2,071 Total $ 24,419 $ 20,616 Long-lived assets consist primarily of property, plant and equipment, and are attributed to the geographic location in which they are located. Long-lived assets, net of depreciation, by geographic region were as follows (in thousands): As of March 31, December 31, 2018 2017 Long-lived assets by geographic region, net of depreciation: North America $ 1,237 $ 1,410 China 57,526 45,120 $ 58,763 $ 46,530 Significant Customers Two customers, Landmark and Osram Opto, each represented 12% of our revenue for the three months ended March 31, 2018 while one customer, Osram Opto, represented 11% of our revenue for the three months ended March 31, 2017. Our top five customers, although not the same five customers for each period, represented 38% and 35% of our revenue for the three months ended March 31, 2018 and 2017, respectively. We perform ongoing credit evaluations of our customers’ financial condition, and limit the amount of credit extended when deemed necessary, but generally do not require collateral. One customer accounted for 13% of our accounts receivable balance as of March 31, 2018 , and the same customer accounted for 12% of our accounts receivable balance as of December 31, 2017.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	Note 12. Commitments and Contingencies Indemnification Agreements We have entered into indemnification agreements with our directors and officers that require us to indemnify our directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of a culpable nature; to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified; and to obtain directors’ and officers’ insurance if available on reasonable terms, which we currently have in place. Product Warranty We provide warranties for our products for a specific period of time, generally twelve months, against material defects. We provide for the estimated future costs of warranty obligations in cost of sales when the related revenue is recognized. The accrued warranty costs represent the best estimate at the time of sale of the total costs that we expect to incur to repair or replace product parts that fail while still under warranty. The amount of accrued estimated warranty costs are primarily based on historical experience as to product failures as well as current information on repair costs. On a quarterly basis, we review the accrued balances and update the historical warranty cost trends. The following table reflects the change in our warranty accrual which is included in “Accrued liabilities” on the condensed consolidated balance sheets, during the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Beginning accrued product warranty $ 133 $ 251 Accruals for warranties issued 59 33 Adjustments related to pre-existing warranties including expirations and changes in estimates (46) (105) Cost of warranty repair (29) (46) Ending accrued product warranty $ 117 $ 133 Contractual Obligations We lease certain office space, warehouse facilities and equipment under long-term operating leases expiring at various dates through April 2023. The majority of our lease obligations relate to our lease agreement for the facility in Fremont, California with approximately 19,467 square feet. The term of the original lease for this facility would have expired in 2017. According to the lease agreement, we had an option to extend the term of the lease for an additional three years. In May 2017, we exercised this option and the lease was extended for an additional three year term. All terms of this lease otherwise remain the same and the term of this lease will expire in 2020. We entered into a royalty agreement with a competitor effective December 3, 2010 with a term of eight years, terminating December 31, 2018. We and our related companies are granted a worldwide, nonexclusive, royalty bearing, irrevocable license to certain patents for the term of the agreement. We shall pay up to $7.0 million of royalty payments over eight years that began in 2011 based on future royalty bearing sales. This royalty agreement contains a clause that allows us to claim a credit, starting in 2013, in the event that the royalty bearing sales for the year are lower than a pre-determined amount set forth in this agreement. The following table summarizes our contractual obligations as of March 31, 2018 (in thousands): Payments due by period 1-3 4-5 More than Contractual Obligations Total Less than 1 year years years 5 years Operating leases $ 550 $ 226 $ 299 $ 25 $ — Royalty agreement 431 431 — — — Total $ 981 $ 657 $ 299 $ 25 $ — Land Purchase and Investment Agreement We are in the process of relocating our gallium arsenide production line to Dingxing, China. In addition to a land rights and building purchase agreement that we entered into with a private real estate development company to acquire our new manufacturing facility, we also entered into a cooperation agreement with the Dingxing local government. In addition to pledging its full support and cooperation, the Dingxing local government will issue certain credits or rebates to us as we achieve certain milestones. We, in turn, agreed to hire local workers over time, pay taxes when due and eventually demonstrate a total investment of approximately $90 million in value, assets and capital. The investment will include cash paid for the land and buildings, cash on deposit in our name at local banks, the gross value of new and used equipment (including future equipment that might be used for indium phosphide and germanium substrates production), the deemed value for our customer list or the end user of our substrates (for example, the end users of 3-D sensing VCSELs (vertical cavity surface emitting lasers)), a deemed value for employment of local citizens, a deemed value for our proprietary process technology, other intellectual property, other intangibles and additional items of value. There is no timeline or deadline by which this must be accomplished, rather it is a good faith covenant entered into between AXT and the Dingxing local government. Further, there is no specific penalty contemplated if either party breaches the agreement. However, the agreement does state that each party has a right to seek from the other party compensation for losses. Under certain conditions, the Dingxing local government may purchase the land and building at the appraised value. We believe that such cooperation agreements are normal, customary and usual in China and that the future valuation is flexible. We have a similar agreement with the city of Kazuo, China, although on a smaller scale. 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. As of March 31, 2018, we do not have any outstanding purchase orders that will incur a penalty if cancelled by the Company. Legal Proceedings From time to time we may be involved in judicial or administrative proceedings concerning matters arising in the ordinary course of business. We do not expect that any of these matters, individually or in the aggregate, will have a material adverse effect on our business, financial condition, cash flows or results of operations.

Foreign Exchange Transaction Ga

Foreign Exchange Transaction Gains/Losses	3 Months Ended
	Mar. 31, 2018
Foreign Exchange Transaction Gains/Lossess
Foreign Exchange Transaction Gains/Losses	Note 13. Foreign Exchange Transaction Gains/Losses We incurred a foreign currency transaction exchange loss of $224,000 and a gain of $15,000 for the three months ended March 31, 2018 and 2017, respectively. These amounts are included in “Other (expense) income, net” on our condensed consolidated statements of operations.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2018
Income Taxes
Income Taxes	Note 14. 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. ASC 740 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized. Our deferred tax assets have been reduced to zero by a valuation allowance. We provide for income taxes based upon the geographic composition of worldwide earnings and tax regulations governing each region, particularly China. The calculation of tax liabilities involves significant judgment in estimating the impact of uncertainties in the application of complex tax laws, particularly in foreign countries such as China. We recognize interest and penalties related to uncertain tax positions in income tax expense. Income tax expense for the three months ended March 31, 2018 includes no interest and penalties. As of March 31, 2018, we have no accrued interest and penalties related to uncertain tax positions. We file income tax returns in the U.S. federal, various states and foreign jurisdictions. We have substantially concluded all U.S. federal and state income tax matters through 2002 and 2013, respectively. Provision for income taxes for the three months ended March 31, 2018 was mostly related to our wholly owned China subsidiaries and our three partially owned subsidiaries in China. Besides the state tax liabilities, no income taxes or benefits have been provided for U.S. operations for the three months ended March 31, 2018 due to the loss in the U.S. and the uncertainty of generating future profit in the U.S., which has resulted in our deferred tax asset being fully reserved.

Revenue

Revenue	3 Months Ended
	Mar. 31, 2018
Revenue
Revenue	Note 15. Revenue Revenue Recognition We manufacture and sell high-performance compound semiconductor substrates including indium phosphide, gallium arsenide and germanium wafers, and our three consolidated subsidiaries sell certain raw materials, including 99.99% pure gallium (4N Ga), high purity gallium (7N Ga), pyrolytic boron nitride (pBN) crucibles and boron oxide (B2O3). After we ship our products, there are no remaining obligations or customer acceptance requirements that would preclude revenue recognition. Our products are typically sold pursuant to purchase orders placed by our customers, and our terms and conditions of sale do not require customer acceptance. We account for a contract with a customer when there is a legally enforceable contract, which could be the customer’s purchase order, the rights of the parties are identified, the contract has commercial terms, and collectibility of the contract consideration is probable. The majority of our contracts have a single performance obligation to transfer products and are short term in nature, usually less than one year. Our revenue is measured based on the consideration specified in the contract with each customer in exchange for transferring products that is generally based upon a negotiated, formula, list or fixed price. Revenue is recognized when control of the promised goods is transferred to our customer, which is either upon shipment from our dock, receipt at the customer’s dock, or removal from consignment inventory at the customer’s location, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods. We have elected to account for shipping and handling as activities to fulfill the promise to transfer the goods. As such, shipping and handling fees billed to customers in a sales transaction are recorded in revenue and shipping and handling costs incurred are recorded in cost of revenue. Sales taxes and value added taxes in foreign jurisdictions that are collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from net sales. We do not provide training, installation or commissioning services. We provide for future returns based on historical data, prior experience, current economic trends and changes in customer demand at the time revenue is recognized. We do not recognize any asset associated with the incremental cost of obtaining revenue generating customer contracts. As such, sales commissions are expensed as incurred, given that the expected period of benefit is less than one year. On January 1, 2018, we adopted ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), and its related amendments, using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. The adoption of ASC 606, using the modified retrospective approach, had no significant impact to our accumulated deficit as of January 1, 2018 and no significant impact to the total net cash from or used in operating, investing, or financing activities within the condensed consolidated statements of cash flows. Contract Balances We receive payments from customers based on a billing schedule as established in our contracts. Contract assets are recorded when we have a conditional right to consideration for our completed performance under the contracts. Accounts receivables are recorded when the right to this consideration becomes unconditional. We do not have material contract assets as of March 31, 2018. Contract liabilities primarily relate to advances or deposits received from our customers before revenue is recognized under the contract. Contract liabilities are recognized as revenue as, or when, we perform under the contract. These amounts are recorded in “Accrued liabilities” on the condensed consolidated balance sheets. March 31, December 31, 2018 2017 Contract liabilities $ (1,061) $ (924) Revenue recognized in the three months period ended from: Amounts included in contract liabilities at the beginning of the period $ $ Disaggregated Revenue In general, revenue disaggregated by product types and geography (See Note 11) is aligned according to the nature and economic characteristics of our business and provides meaningful disaggregation of our results of operations. Since we operate in one segment, all financial segment and product line information can be found in the condensed consolidated financial statements. Practical Expedients and Exemptions As part of our adoption of ASC 606, we elected to use the following practical expedients: (i) not to adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less; (ii) to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less; (iii) not to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. In addition, we do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2018
Recent Accounting Pronouncements
Recent Accounting Pronouncements	Note 16. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued new guidance related to revenue recognition, which outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance. The new guidance requires a company to recognize revenue as control of goods or services transfers to a customer at an amount that reflects the expected consideration to be received in exchange for those goods or services. In August 2015, the FASB issued an amendment to defer the effective date of the guidance. The guidance became effective in the first quarter of our fiscal year 2018. The new standard creates a single source of revenue guidance under accounting principles generally accepted in the United States, eliminating industry-specific guidance. The underlying principle of the standard is to recognize revenue when a customer obtains control of promised goods or services at an amount that reflects the consideration that is expected to be received in exchange for those goods or services. An entity should apply a five-step approach for recognizing revenue as follows (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. The standard also requires increased disclosures including the nature, amount, timing, and uncertainty of revenues and cash flows related to contracts with customers. The standard allows two methods of adoption: (1) retrospectively to each prior period presented (“full retrospective method”), or (2) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption ("modified retrospective method"). With regard to Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers , we established a crossfunctional team to assess the potential impact of the new standard and reviewed current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to revenue contracts and identifying appropriate changes to the business processes, systems and controls to support revenue recognition and disclosure requirements under the new standard. We completed our evaluation of the potential impact on business processes, systems, controls and condensed consolidated financial statements of the new revenue standard and have concluded there are no significant changes to our condensed consolidated statement of operations. We adopted this standard on January 1, 2018 using the modified retrospective method. (See Note 15) In January 2016, the FASB issued ASU 2016-01, which made changes to the accounting for financial instruments that primarily affect equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. The amendments in this update supersede the guidance to classify equity securities with readily determinable fair values into different categories (that is, trading or available-for-sale) and require equity securities to be measured at fair value with changes in the fair value recognized through net income. The standard amends financial reporting by providing relevant information about an entity’s equity investments and reducing the number of items that are recognized in other comprehensive income. This update became effective for annual periods beginning after December 15, 2017, and interim periods within those annual periods. We adopted this guidance effective January 1, 2018 and it did not have a significant impact on our condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, which replaces the existing guidance for leases. The new standard establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and requires retrospective application. We will adopt this standard in fiscal 2019 and are currently evaluating the impact of the guidance on our condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, which reduces diversity in practice where the FASB was either unclear or did not provide specific guidance for classifying cash payments and receipts in the statement of cash flows for eight specific transactions. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and requires retrospective application with early application permitted. We adopted this guidance effective January 1, 2018 and it did not have a significant impact on our condensed consolidated financial statements . In October 2016, the FASB issued ASU No. 2016-16, which clarifies the accounting for the current and deferred income taxes for an intra-entity transfer of an asset other than inventory. The guidance is effective for fiscal years beginning after December 15, 2017, including periods within those fiscal years and requires retrospective application with early application permitted. We adopted this guidance effective January 1, 2018 and it did not have a significant impact on our condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-01, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for fiscal years beginning after December 15, 2017, including periods within those fiscal years and requires retrospective application with early application permitted. We adopted this guidance effective January 1, 2018 and it did not have a significant impact on our condensed consolidated financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting. The guidance provides clarity and reduces diversity in practice and cost and complexity when accounting for a change to the terms or conditions of a share-based payment award. The guidance is effective for fiscal years beginning after December 15, 2017. We adopted this guidance effective January 1, 2018 and it did not have a significant impact on our condensed consolidated financial statements.

Investments and Fair Value Me24

Investments and Fair Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2018
Investments and Fair Value Measurements
Cash, cash equivalents and investments	As of March 31, 2018 and December 31, 2017, our cash, cash equivalents and investments are classified as follows (in thousands): March 31, 2018 December 31, 2017 Gross Gross Gross Gross Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair Cost Gain (Loss) Value Cost Gain (Loss) Value Classified as: Cash $ 39,189 $ — $ — $ 39,189 $ 43,610 $ — $ — $ 43,610 Cash equivalents: Certificates of deposit 1 — — — — 742 — — 742 Total cash and cash equivalents 39,189 — — 39,189 44,352 — — 44,352 Investments (available-for-sale): Certificates of deposit 2 7,340 — (41) 7,299 7,099 — (24) 7,075 Corporate bonds 20,576 — (169) 20,407 25,602 — (69) 25,533 Total investments 27,916 — (210) 27,706 32,701 — (93) 32,608 Total cash, cash equivalents and investments $ 67,105 $ — $ (210) $ 66,895 $ 77,053 $ — $ (93) $ 76,960 Contractual maturities on investments: Due within 1 year 3 $ 15,288 $ 15,195 $ 20,056 $ 20,032 Due after 1 through 5 years 4 12,628 12,511 12,645 12,576 $ 27,916 $ 27,706 $ 32,701 $ 32,608 1. Certificates of deposit with original maturities of less than three months. 2. Certificates of deposit with original maturities of more than three months. 3. Classified as “Short-term investments” in our condensed consolidated balance sheets. 4. Classified as “Long-term investments” in our condensed consolidated balance sheets.
Fair value and gross unrealized losses related to available-for-sale securities	The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of March 31, 2018 (in thousands): In Loss Position In Loss Position Total In < 12 months > 12 months Loss Position Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of March 31, 2018 Value (Losses) Value (Losses) Value (Losses) Investments: Certificates of deposit $ 4,935 $ (35) $ 2,344 $ (6) $ 7,279 $ (41) Corporate bonds 13,153 (107) 7,254 (62) 20,407 (169) Total in loss position $ 18,088 $ (142) $ 9,598 $ (68) $ 27,686 $ (210) The following table summarizes the fair value and gross unrealized losses related to available-for-sale securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2017 (in thousands): In Loss Position In Loss Position Total In < 12 months > 12 months Loss Position Gross Gross Gross Fair Unrealized Fair Unrealized Fair Unrealized As of December 31, 2017 Value (Loss) Value (Loss) Value (Loss) Investments: Certificates of deposit $ 3,994 $ (16) $ 2,342 $ (8) $ 6,336 $ (24) Corporate bonds 25,533 (69) — — 25,533 (69) Total in loss position $ 29,527 $ (85) $ 2,342 $ (8) $ 31,869 $ (93)
Summary of financial assets and liabilities measured at fair value on a recurring basis	The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis in accordance with ASC 820 as of March 31, 2018 (in thousands): Quoted Prices in Significant Active Markets of Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs March 31, 2018 (Level 1) (Level 2) (Level 3) Assets: Cash equivalents and investments: Certificates of deposit $ 7,299 $ — $ 7,299 $ — Corporate bonds 20,407 — 20,407 — Total $ 27,706 $ — $ 27,706 $ — The following table summarizes our financial assets and liabilities measured at fair value on a recurring basis in accordance with ASC 820 as of December 31, 2017 (in thousands): Quoted Prices in Significant Active Markets of Significant Other Unobservable Balance as of Identical Assets Observable Inputs Inputs December 31, 2017 (Level 1) (Level 2) (Level 3) Assets: Cash equivalents and investments: Certificates of deposit $ 7,817 $ — $ 7,817 $ — Corporate bonds 25,533 — 25,533 — Total $ 33,350 $ — $ 33,350 $ —

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Mar. 31, 2018
Inventories:
Components of inventories	The components of inventories are summarized below (in thousands): March 31, December 31, 2018 2017 Inventories: Raw materials $ 25,626 $ 23,554 Work in process 23,805 20,135 Finished goods 1,691 2,151 $ 51,122 $ 45,840

Property, Plant and Equipment26

Property, Plant and Equipment, Net (Tables)	3 Months Ended
	Mar. 31, 2018
Property, Plant and Equipment, Net
Components of property, plant and equipment	The components of our property, plant and equipment are summarized below (in thousands): March 31, December 31, 2018 2017 Property, plant and equipment: Machinery and equipment, at cost $ 45,954 $ 44,549 Less: accumulated depreciation and amortization (42,217) (40,845) Building, at cost 33,635 32,461 Less: accumulated depreciation and amortization (12,234) (11,501) Leasehold improvements, at cost 5,715 5,539 Less: accumulated depreciation and amortization (4,538) (4,288) Construction in progress 32,448 20,615 $ 58,763 $ 46,530

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2018
Accrued Liabilities
Components of accrued liabilities	The components of accrued liabilities are summarized below (in thousands): March 31, December 31, 2018 2017 Preferred stock dividends payable $ 2,901 $ 2,901 Accrued compensation and related charges 2,058 3,205 Advances from customers 1,061 924 Dividends payable by consolidated joint ventures 552 533 Current portion of royalty payments 431 575 Accrued income taxes 375 270 Accrued professional services 251 570 Other tax payable 215 395 Other personnel related costs 213 230 Accrued product warranty 117 133 Other accrued liabilities 1,016 1,413 $ 9,190 $ 11,149

Investments in Privately Held28

Investments in Privately Held Companies (Tables)	3 Months Ended
	Mar. 31, 2018
Investments in Privately Held Companies
Summary of investments	The six direct investments are summarized below (in thousands): Investment Balance as of March 31, December 31, Accounting Ownership Company 2018 2017 Method Percentage Beijing JiYa Semiconductor Material Co., Ltd. $ 3,331 $ 3,331 Consolidated 46 % Nanjing JinMei Gallium Co., Ltd. 592 592 Consolidated 83 % Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd. 1,346 1,346 Consolidated 63 % $ 5,269 $ 5,269 Donghai County Dongfang High Purity Electronic Materials Co., Ltd. $ 1,525 $ 1,473 Equity 46 % Xilingol Tongli Germanium Co. Ltd. 3,017 3,190 Equity 25 % Emeishan Jia Mei High Purity Metals Co., Ltd. 911 915 Equity 25 % $ 5,453 $ 5,578
Summarized equity method income information	AXT’s three direct minority investment entities and the three minority investments of JiYa and the one minority investment of JinMei are not consolidated and are accounted for under the equity method. Excluding one fully impaired entity, the equity entities had the following summarized income information (in thousands) for the three months ended March 31, 2018 and 2017. Three Months Ended March 31, 2018 2017 Net revenue $ 7,356 $ 5,455 Gross profit $ 35 $ 3,722 Operating loss $ (1,163) $ (837) Net loss $ (1,430) $ (1,705)

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity
Consolidated statement of changes in equity	Condensed Consolidated Statement of Changes in Stockholders’ Equity (in thousands) Accumulated Other AXT, Inc Total Preferred Common Additional Accumulated Comprehensive Stockholders’ Noncontrolling Stockholders’ Stock Stock Paid-In Capital Deficit Income Equity Interests Equity Balance as of December 31, 2017 $ 3,532 $ 39 $ 231,679 $ (54,837) $ 3,407 $ 183,820 $ 4,497 $ 188,317 Common stock options exercised — — 66 — — 66 — 66 Stock-based compensation — — 467 — — 467 — 467 Net income — — — 2,875 — 2,875 315 3,190 Other comprehensive income — — — — 2,439 2,439 260 2,699 Balance as of March 31, 2018 $ 3,532 $ 39 $ 232,212 $ (51,962) $ 5,846 $ 189,667 $ 5,072 $ 194,739

Stock-based Compensation (Table

Stock-based Compensation (Tables)	3 Months Ended
	Mar. 31, 2018
Stock-based Compensation
Summary of compensation costs related to stock-based awards	The following table summarizes compensation costs related to our stock-based awards (in thousands, except per share data): Three Months Ended March 31, 2018 2017 Cost of revenue $ 21 $ 8 Selling, general and administrative 369 256 Research and development 77 48 Total stock-based compensation 467 312 Tax effect on stock-based compensation — — Net effect on net income $ 467 $ 312
Summary of weighted-average assumptions	Three Months Ended Three Months Ended March 31, March 31, 2018 2017 Expected term (in years) — 5.9 Volatility — % 46.71 % Expected dividend — % — % Risk-free interest rate — % 2.08 %
Summary of stock option activity	The following table summarizes the stock option transactions during the three months ended March 31, 2018 (in thousands, except per share data): Weighted average Weighted- Remaining Number of average Contractual Aggregate Options Exercise Life Intrinsic Stock Options Outstanding Price (in years) Value Balance as of January 1, 2018 2,666 $ 3.81 6.87 $ 13,149 Granted — — Exercised (22) 2.94 $ Canceled and expired — — Balance as of March 31, 2018 2,644 $ 3.81 6.66 $ 9,409 Options vested as of March 31, 2018 and unvested options expected to vest, net of forfeitures 2,616 $ 3.79 6.64 $ 9,352 Options exercisable as of March 31, 2018 1,694 $ 3.41 5.81 $ 6,523
Summary of restricted stock awards activity	A summary of activity related to restricted stock awards for the three months ended March 31, 2018 is presented below (in thousands, except per share data): Weighted-Average Grant Date Stock Awards Shares Fair Value Non-vested as of January 1, 2018 480 $ 7.13 Granted 4 $ 7.35 Vested — $ — Forfeited — $ — Non-vested as of March 31, 2018 484 $ 7.13

Net Income Per Share (Tables)

Net Income Per Share (Tables)	3 Months Ended
	Mar. 31, 2018
Net Income Per Share
Reconciliation of numerators and denominators of basic and diluted net income per share	A reconciliation of the numerators and denominators of the basic and diluted net income per share calculations is as follows (in thousands, except per share data): Three Months Ended March 31, 2018 2017 Numerator: Net income attributable to AXT, Inc. $ 2,875 $ 665 Less: Preferred stock dividends (44) (44) Net income available to common stockholders $ 2,831 $ 621 Denominator: Denominator for basic net income per share - weighted-average common shares 38,941 34,210 Effect of dilutive securities: Common stock options 1,289 1,220 Restricted stock awards 134 194 Denominator for dilutive net income per common shares 40,364 35,624 Net income attributable to AXT, Inc. per common share: Basic $ 0.07 $ 0.02 Diluted $ 0.07 $ 0.02 Options excluded from diluted net income per share as the impact is anti-dilutive 184 639 Restricted stock excluded from diluted net income per share as the impact is anti-dilutive 240 —

Segment Information and Forei32

Segment Information and Foreign Operations (Tables)	3 Months Ended
	Mar. 31, 2018
Segment Information and Foreign Operations
Revenues reported by product type	The following table represents revenue amounts (in thousands) by product type: Three Months Ended March 31, 2018 2017 Product Type: Substrates $ 19,364 $ 16,609 Raw Materials and Others 5,055 4,007 Total $ 24,419 $ 20,616
Revenue reported for products shipped to customers in the corresponding geographic region	The following table represents revenue amounts (in thousands) reported for products shipped to customers in the corresponding geographic region: Three Months Ended March 31, 2018 2017 Geographical region: China $ 7,183 $ 4,422 Europe (primarily Germany) 6,393 5,598 Taiwan 5,049 3,318 Japan 2,455 3,140 North America (primarily the United States) 1,845 2,067 Asia Pacific (excluding China, Taiwan and Japan) 1,494 2,071 Total $ 24,419 $ 20,616
Long-lived assets by geographic region	Long-lived assets consist primarily of property, plant and equipment, and are attributed to the geographic location in which they are located. Long-lived assets, net of depreciation, by geographic region were as follows (in thousands): As of March 31, December 31, 2018 2017 Long-lived assets by geographic region, net of depreciation: North America $ 1,237 $ 1,410 China 57,526 45,120 $ 58,763 $ 46,530

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Product warranty accrued liability	The following table reflects the change in our warranty accrual which is included in “Accrued liabilities” on the condensed consolidated balance sheets, during the three months ended March 31, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 Beginning accrued product warranty $ 133 $ 251 Accruals for warranties issued 59 33 Adjustments related to pre-existing warranties including expirations and changes in estimates (46) (105) Cost of warranty repair (29) (46) Ending accrued product warranty $ 117 $ 133
Outstanding contractual obligations	The following table summarizes our contractual obligations as of March 31, 2018 (in thousands): Payments due by period 1-3 4-5 More than Contractual Obligations Total Less than 1 year years years 5 years Operating leases $ 550 $ 226 $ 299 $ 25 $ — Royalty agreement 431 431 — — — Total $ 981 $ 657 $ 299 $ 25 $ —

Revenue (Tables)

Revenue (Tables)	3 Months Ended
	Mar. 31, 2018
Revenue
Schedule of amounts recorded in accrued liabilities	March 31, December 31, 2018 2017 Contract liabilities $ (1,061) $ (924) Revenue recognized in the three months period ended from: Amounts included in contract liabilities at the beginning of the period $ $

The Company and Summary of Sign

The Company and Summary of Significant Accounting Policies (Details)	3 Months Ended
	Mar. 31, 2018company
Basis of Presentation
Equity method investments	7

Investments and Fair Value Me36

Investments and Fair Value Measurements (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016
Cash, cash equivalents and investments [Abstract]
Cash	$ 39,189,000		$ 43,610,000
Cash equivalents [Abstract]
Certificates of deposit			742,000
Total cash and cash equivalents	39,189,000	$ 56,512,000	44,352,000	$ 36,152,000
Amortized cost	27,916,000		32,701,000
Cash, cash equivalents and investments, amortized costs	67,105,000		77,053,000
Gross Unrealized (Loss)	(210,000)		(93,000)
Fair Value	27,706,000		32,608,000
Cash, cash equivalents and investments, amortized costs	66,895,000		76,960,000
Contractual maturities on investments, amortized cost basis [Abstract]
Due within 1 year	15,288,000		20,056,000
Due after 1 through 5 years	12,628,000		12,645,000
Investments, amortized cost	27,916,000		32,701,000
Contractual maturities on investments, fair value basis [Abstract]
Due within 1 year	15,195,000		20,032,000
Due after 1 through 5 years	12,511,000		12,576,000
Investments, fair value	27,706,000		32,608,000
Proceeds from sales of available-for-sale investments	14,680,000	8,970,000
Investments held	5,453,000		5,578,000
Equity Securities, FV-NI, Realized Gain (Loss)		77,000
GHI
Contractual maturities on investments, fair value basis [Abstract]
Proceeds from sales of available-for-sale investments	0	125,000
Available-for-sale investments, expenses		48,000
Equity Securities, FV-NI, Realized Gain (Loss)		$ 77,000
Total Investments [Member]
Cash equivalents [Abstract]
Amortized cost	27,916,000		32,701,000
Gross Unrealized (Loss)	(210,000)		(93,000)
Fair Value	27,706,000		32,608,000
Contractual maturities on investments, amortized cost basis [Abstract]
Investments, amortized cost	27,916,000		32,701,000
Contractual maturities on investments, fair value basis [Abstract]
Investments, fair value	27,706,000		32,608,000
Certificates of Deposit [Member]
Cash equivalents [Abstract]
Amortized cost	7,340,000		7,099,000
Gross Unrealized (Loss)	(41,000)		(24,000)
Fair Value	7,299,000		7,075,000
Contractual maturities on investments, amortized cost basis [Abstract]
Investments, amortized cost	7,340,000		7,099,000
Contractual maturities on investments, fair value basis [Abstract]
Investments, fair value	7,299,000		7,075,000
Corporate Bonds [Member]
Cash equivalents [Abstract]
Amortized cost	20,576,000		25,602,000
Gross Unrealized (Loss)	(169,000)		(69,000)
Fair Value	20,407,000		25,533,000
Contractual maturities on investments, amortized cost basis [Abstract]
Investments, amortized cost	20,576,000		25,602,000
Contractual maturities on investments, fair value basis [Abstract]
Investments, fair value	$ 20,407,000		$ 25,533,000

Investments and Fair Value Me37

Investments and Fair Value Measurements - Investment Category and Length (Details)	3 Months Ended
	Mar. 31, 2018USD ($)company	Mar. 31, 2017USD ($)entity	Dec. 31, 2017USD ($)	Mar. 31, 2017company	Mar. 31, 2017USD ($)
Summary of fair value and gross unrealized losses related to available-for-sale securities [Abstract]
Fair value, in loss position less than twelve months	$ 18,088,000		$ 29,527,000
Gross unrealized loss, in loss position less than twelve months	(142,000)		(85,000)
Fair value, in loss position greater than twelve months	9,598,000		2,342,000
Gross unrealized loss, in loss position greater than twelve months	(68,000)		(8,000)
Fair value, total in loss position	27,686,000		31,869,000
Gross unrealized loss, total in loss position	(210,000)		(93,000)
Minority Investments
Investments in privately-held companies	$ 5,453,000		5,578,000
Equity method investments | company	7
Impairment charge	$ 0
One Gallium Company
Minority Investments
Investments in privately-held companies					$ 0
Number of gallium companies with impairment charge		1		1
Impairment charge		$ 313,000
Certificates of Deposit [Member]
Summary of fair value and gross unrealized losses related to available-for-sale securities [Abstract]
Fair value, in loss position less than twelve months	4,935,000		3,994,000
Gross unrealized loss, in loss position less than twelve months	(35,000)		(16,000)
Fair value, in loss position greater than twelve months	2,344,000		2,342,000
Gross unrealized loss, in loss position greater than twelve months	(6,000)		(8,000)
Fair value, total in loss position	7,279,000		6,336,000
Gross unrealized loss, total in loss position	(41,000)		(24,000)
Corporate Bonds [Member]
Summary of fair value and gross unrealized losses related to available-for-sale securities [Abstract]
Fair value, in loss position less than twelve months	13,153,000		25,533,000
Gross unrealized loss, in loss position less than twelve months	(107,000)		(69,000)
Fair value, in loss position greater than twelve months	7,254,000
Gross unrealized loss, in loss position greater than twelve months	(62,000)
Fair value, total in loss position	20,407,000		25,533,000
Gross unrealized loss, total in loss position	(169,000)		(69,000)
Other assets
Minority Investments
Investments in privately-held companies	$ 9,700,000		$ 9,800,000

Investments and Fair Value Me38

Investments and Fair Value Measurements- Recurring basis (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Assets, Fair Value Disclosure [Abstract]
Investments, amortized cost	$ 27,706	$ 32,608
Recurring [Member]
Assets, Fair Value Disclosure [Abstract]
Total	27,706	33,350
Recurring [Member] | Certificates of Deposit [Member]
Assets, Fair Value Disclosure [Abstract]
Cash and cash equivalents, fair value disclosure	7,299	7,817
Recurring [Member] | Corporate Bonds [Member]
Assets, Fair Value Disclosure [Abstract]
Investments, amortized cost	20,407	25,533
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member]
Assets, Fair Value Disclosure [Abstract]
Total	27,706	33,350
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Certificates of Deposit [Member]
Assets, Fair Value Disclosure [Abstract]
Cash and cash equivalents, fair value disclosure	7,299	7,817
Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Bonds [Member]
Assets, Fair Value Disclosure [Abstract]
Investments, amortized cost	$ 20,407	$ 25,533

Inventories (Details)

Inventories (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Inventories:
Raw materials	$ 25,626,000	$ 23,554,000
Work in process	23,805,000	20,135,000
Finished goods	1,691,000	2,151,000
Inventories, total	51,122,000	45,840,000
Inventory reserve	13,700,000	13,300,000
Excess and obsolete inventory	$ 322,000	$ 291,000

Property, Plant and Equipment40

Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Property, plant and equipment [Abstract]
Property, plant and equipment, net	$ 58,763	$ 46,530
Machinery and equipment
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	45,954	44,549
Less: accumulated depreciation and amortization	(42,217)	(40,845)
Building
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	33,635	32,461
Less: accumulated depreciation and amortization	(12,234)	(11,501)
Leasehold improvements
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	5,715	5,539
Less: accumulated depreciation and amortization	(4,538)	(4,288)
Construction in progress
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	32,448	20,615
Construction in progress Dingxin location
Property, plant and equipment [Abstract]
Property, plant and equipment, gross		14,800
Construction in progress Dingxin and Chaoyang locations
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	22,800
Construction in progress manufacturing equipment purchases
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	5,600	3,600
Construction in progress other consolidated subsidiaries
Property, plant and equipment [Abstract]
Property, plant and equipment, gross	$ 4,000	$ 2,200

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Mar. 31, 2017
Components of accrued liabilities [Abstract]
Preferred stock dividends payable	$ 2,901	$ 2,901
Accrued compensation and related charges	2,058	3,205
Advance from customers	1,061	924
Dividends payable by consolidated joint ventures	552	533	$ 503
Current portion of royalty payments	431	575
Accrued income taxes	375	270
Accrued professional services	251	570
Other tax payable	215	395
Other personnel related costs	213	230
Accrued product warranty	117	133
Other accrued liabilities	1,016	1,413
Accrued liabilities, total	$ 9,190	$ 11,149

Related Party Transactions (Det

Related Party Transactions (Details)	Nov. 02, 2017USD ($)	Nov. 30, 2017USD ($)	Jul. 31, 2017USD ($)installment	Apr. 30, 2016USD ($)	Apr. 30, 2014USD ($)	Aug. 31, 2011USD ($)item	Mar. 31, 2018USD ($)ft²installment	Jun. 30, 2017USD ($)	Mar. 31, 2017USD ($)	Dec. 31, 2017USD ($)
Related Party Transaction [Line Items]
Area of leased property (in square feet) | ft²							19,467
Nanjing JinMei Gallium Co., Ltd
Related Party Transaction [Line Items]
Estimated land and construction costs			$ 6,000,000
Equity investment entity | Beijing JiYa Semiconductor Material Co., Ltd
Related Party Transaction [Line Items]
Ownership (as a percent)							10.00%
Revenue from related parties							$ 0
Equity investment entity | Related party loan | Beijing JiYa Semiconductor Material Co., Ltd
Related Party Transaction [Line Items]
Amount of transaction						$ 1,600,000
Number of equity method investees to whom loan was granted | item						1
Term of loan							2 years 10 months
Number of installments | installment							3
Equity investment entity | Related party loan | Other assets | Beijing JiYa Semiconductor Material Co., Ltd
Related Party Transaction [Line Items]
Amounts due from related party, noncurrent							$ 1,100,000			$ 1,200,000
Equity investment entity | Raw materials purchases from related party | Accounts payable | Beijing JiYa Semiconductor Material Co., Ltd
Related Party Transaction [Line Items]
Amount payable to related party							2,100,000			2,100,000
Equity investment entity | Raw materials sales to related party | Accounts receivable | Beijing JiYa Semiconductor Material Co., Ltd
Related Party Transaction [Line Items]
Amounts receivable from related party							346,000			$ 334,000
Equity investment entity | Raw material agency sales agreement | Other (expense) income, net | Nanjing JinMei Gallium Co., Ltd
Related Party Transaction [Line Items]
Other income from related party							0		$ 1,000
Donghai County Dongfang High Purity Electronic Materials Co., Ltd | Related party loan | Beijing Tongmei Xtal Technology
Related Party Transaction [Line Items]
Amount of transaction					$ 46,000
Interest rate (as a percent)										6.15%
Repayment of related party notes receivable										$ 55,000
Donghai County Dongfang High Purity Electronic Materials Co., Ltd | Raw materials purchases from related party | Beijing Tongmei Xtal Technology
Related Party Transaction [Line Items]
Repayment of related party notes receivable										114,000
Donghai County Dongfang High Purity Electronic Materials Co., Ltd | Raw materials purchases from related party | Accounts payable | Beijing Tongmei Xtal Technology
Related Party Transaction [Line Items]
Amount payable to related party							381,000			0
Emei Shan Jiamei Materials Co., Ltd | Raw materials purchases from related party | Accounts payable | Beijing Tongmei Xtal Technology
Related Party Transaction [Line Items]
Amount payable to related party							400,000			370,000
Xilingol Tongli Germanium Co. Ltd | Raw materials purchases from related party | Accounts payable | Beijing Tongmei Xtal Technology
Related Party Transaction [Line Items]
Amount payable to related party							497,000			219,000
Beijing Kaide Quartz Co. Ltd | Raw materials purchases from related party | Accounts payable
Related Party Transaction [Line Items]
Amount payable to related party							$ 693,000			708,000
Beijing BoYu Semiconductor Vessel Craftwork Technology Co | Lease of land | Beijing Tongmei Xtal Technology
Related Party Transaction [Line Items]
Area of leased property (in square feet) | ft²							22,081
Lease term							10 years
Annual lease payment							$ 24,000
Increase in annual lease payment at each third year anniversary (in hundredths)							5.00%
Rental increase period							3 years
Nanjing JinMei Gallium Co., Ltd | Related party loan | Beijing Tongmei Xtal Technology
Related Party Transaction [Line Items]
Amount of transaction			$ 768,000
Number of installments | installment			3
Interest rate (as a percent)			4.90%
Executive officer | Related party loan | Beijing BoYu Semiconductor Vessel Craftwork Technology Co
Related Party Transaction [Line Items]
Amount of transaction		$ 318,000		$ 177,000
Interest rate (as a percent)		2.75%		2.75%
Repayment of related party notes receivable								$ 180,000
Executive officer | Related party loan | Other assets | Beijing BoYu Semiconductor Vessel Craftwork Technology Co
Related Party Transaction [Line Items]
Related party notes receivable - current							$ 318,000			307,000
3rd party investor | Beijing BoYu Semiconductor Vessel Craftwork Technology Co
Related Party Transaction [Line Items]
Investments, consolidated	$ 2,000,000
Percentage of ownership, consolidated method (in hundredths)	10.00%
Customer associated with third-party investor | Beijing BoYu Semiconductor Vessel Craftwork Technology Co
Related Party Transaction [Line Items]
Revenue from related parties							801,000		$ 337,000
Customer associated with third-party investor | Accounts receivable | Beijing BoYu Semiconductor Vessel Craftwork Technology Co
Related Party Transaction [Line Items]
Amount payable to related party							$ 969,000			$ 635,000

Investments in Privately Held43

Investments in Privately Held Companies (Details)	Nov. 02, 2017USD ($)	Mar. 31, 2018USD ($)employeesubsidiaryentityitem	Mar. 31, 2017USD ($)subsidiary	Dec. 31, 2017USD ($)entity	Mar. 31, 2017entity	Mar. 31, 2017company	Mar. 31, 2017USD ($)
Summary of investments [Abstract]
Direct investments | item		6
Indirect investments | item		4
Investments in privately-held companies		$ 5,453,000		$ 5,578,000
Number of consolidated joint ventures | subsidiary		1	1
Net loss attributable to noncontrolling interests		$ 315,000	$ (240,000)
Net income		$ (334,000)	(933,000)
Direct minority investments not consolidated | entity		3		3
Impairment charge		$ 0
Joint Ventures
Summary of investments [Abstract]
Indirect investments | entity		4
Number of consolidated joint ventures | entity		3
Income (loss) from consolidated joint ventures		$ 1,400,000	(12,000)
Net loss attributable to noncontrolling interests		315,000	(240,000)
Net income (loss) from joint ventures attributable to parent		1,100,000	228,000
Other assets
Summary of investments [Abstract]
Investments in privately-held companies		9,700,000		$ 9,800,000
Other assets | Joint Ventures
Summary of investments [Abstract]
Minority investment in consolidated joint venture, included in other assets		4,300,000		4,300,000
Beijing JiYa Semiconductor Material Co., Ltd Investment
Summary of investments [Abstract]
Investments, consolidated		$ 3,331,000		3,331,000
Percentage of ownership, consolidated method (in hundredths)		46.00%
Nanjing JinMei Gallium Co., Ltd Investment
Summary of investments [Abstract]
Investments, consolidated		$ 592,000		592,000
Percentage of ownership, consolidated method (in hundredths)		83.00%
Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd Investment
Summary of investments [Abstract]
Investments, consolidated		$ 1,346,000		1,346,000
Percentage of ownership, consolidated method (in hundredths)	70.00%	63.00%
Investment gain	$ 0
Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd Investment | 3rd party investor
Summary of investments [Abstract]
Investments, consolidated	$ 2,000,000
Percentage of ownership, consolidated method (in hundredths)	10.00%
Donghai County Dongfang High Purity Electronic Materials Co., Ltd Investment
Summary of investments [Abstract]
Investments in privately-held companies		$ 1,525,000		1,473,000
Percentage of ownership, equity method (in hundredths)		46.00%
Xilingol Tongli Germanium Co. Ltd Investment
Summary of investments [Abstract]
Investments in privately-held companies		$ 3,017,000		3,190,000
Percentage of ownership, equity method (in hundredths)		25.00%
Emeishan Jia Mei High Purity Metals Co., Ltd Investment
Summary of investments [Abstract]
Investments in privately-held companies		$ 911,000		915,000
Percentage of ownership, equity method (in hundredths)		25.00%
One Gallium Company
Summary of investments [Abstract]
Investments in privately-held companies							$ 0
Impairment charge			$ 313,000
Number of gallium companies with impairment charge					1	1
Beijing JiYa Semiconductor Material Co., Ltd
Summary of investments [Abstract]
Indirect investments | entity		3
Number of persons on board | employee		1
Employee duration		27 years
Beijing Boyu Semiconductor Vessel Craftwork Technology Co Ltd
Summary of investments [Abstract]
Number of persons on board | employee		2
Nanjing JinMei Gallium Co., Ltd
Summary of investments [Abstract]
Number of new board representatives | employee		2
Majority-Owned Subsidiaries
Summary of investments [Abstract]
Investments, consolidated		$ 5,269,000		$ 5,269,000
Jinmei
Summary of investments [Abstract]
Indirect investments | entity		1

Investments in Privately Held44

Investments in Privately Held Companies - Minority Investment Entities (Details)	3 Months Ended
	Mar. 31, 2018USD ($)company	Mar. 31, 2017USD ($)
Summarized income information of all the minority investment entities that are not consolidated and accounted for under the equity method [Abstract]
Net loss	$ (334,000)	$ (933,000)
Minority investment entities
Minority investments not consolidated accounted for under equity method | company	7
Seven Minority Investments
Summarized income information of all the minority investment entities that are not consolidated and accounted for under the equity method [Abstract]
Net revenue	$ 7,356,000	5,455,000
Gross profit	35,000	3,722,000
Operating loss	(1,163,000)	(837,000)
Net loss	$ (1,430,000)	$ (1,705,000)
Minority investment entities
Minority investments not consolidated accounted for under equity method | company	7

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Oct. 27, 2014
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	$ 188,317,000
Common stock options exercised	66,000
Stock-based compensation	467,000
Net income	3,190,000	$ 425,000
Other comprehensive income	2,699,000	352,000
Balance, end of period	194,739,000		$ 188,317,000
Reclassification adjustment from AOCI	0	$ 0
Stock repurchase program, authorized amount						$ 5,000,000
Shares repurchased (in shares)			0	0	908,000
Average price of shares repurchased (in dollars per share)					$ 2.52
Total purchase price					$ 2,300,000
Stock repurchase program remaining authorized repurchase amount	2,700,000
Preferred Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	3,532,000
Common stock options exercised
Balance, end of period	3,532,000		$ 3,532,000
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	39,000
Common stock options exercised
Balance, end of period	39,000		39,000
Additional Paid-In Capital
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	231,679,000
Common stock options exercised	66,000
Stock-based compensation	467,000
Balance, end of period	232,212,000		231,679,000
Accumulated Deficit
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	(54,837,000)
Net income	2,875,000
Balance, end of period	(51,962,000)		(54,837,000)
Accumulated Other Comprehensive Income
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	3,407,000
Other comprehensive income	2,439,000
Balance, end of period	5,846,000		3,407,000
AXT, Inc. Stockholders' Equity
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	183,820,000
Common stock options exercised	66,000
Stock-based compensation	467,000
Net income	2,875,000
Other comprehensive income	2,439,000
Balance, end of period	189,667,000		183,820,000
Noncontrolling Interests
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning of period	4,497,000
Net income	315,000
Other comprehensive income	260,000
Balance, end of period	$ 5,072,000		$ 4,497,000

Stock-based Compensation - Stoc

Stock-based Compensation - Stock-based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 467	$ 312
Net effect on net income	467	312
Cost of Revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	21	8
Selling, General and Administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	369	256
Research and Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 77	$ 48

Stock-based Compensation - Assu

Stock-based Compensation - Assumptions (Details) - Options	3 Months Ended
	Mar. 31, 2017
Weighted average assumptions [Abstract]
Expected term	5 years 10 months 24 days
Volatility (in hundredths)	46.71%
Risk-free interest rate (in hundredths)	2.08%

Stock-based Compensation - Opti

Stock-based Compensation - Options (Details) - Options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Mar. 29, 2018
Number of options outstanding [Roll Forward]
Options outstanding, beginning of period (in shares)	2,666,000
Granted (in shares)	0	60,000
Exercised (in shares)	(22,000)
Options outstanding, end of period (in shares)	2,644,000		2,666,000
Options vested and unvested options expected to vest, net of forfeitures, end of period (in shares)	2,616,000
Options exercisable, end of period (in shares)	1,694,000
Weighted average exercise price [Roll Forward]
Options outstanding, beginning of period (in dollars per share)	$ 3.81
Exercised (in dollars per share)	2.94
Options outstanding, end of period (in dollars per share)	3.81		$ 3.81
Options vested and unvested options expected to vest, net of forfeitures (in dollars per share)	3.79
Options exercisable, end of period (in dollars per share)	$ 3.41
Weighted-average grant date fair value of stock options granted (in dollars per share)		$ 2.76
Weighted average Remaining Contractual Life [Abstract]
Options outstanding	6 years 7 months 28 days		6 years 10 months 13 days
Options vested and unvested options expected to vest, net of forfeitures, end of period	6 years 7 months 21 days
Option exercisable, end of period	5 years 9 months 22 days
Aggregate Intrinsic Value [Abstract]
Options outstanding, beginning of period	$ 13,149
Exercised	97
Options outstanding, end of period	9,409		$ 13,149
Options vested and expected to vest, end of period	9,352
Options exercisable, end of period	$ 6,523
Closing price (in dollars per share)				$ 7.25

Stock-based Compensation - RSU

Stock-based Compensation - RSU (Details) - USD ($) $ / shares in Units, shares in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock options exercised (in shares)	22
Intrinsic value of options exercised	$ 97,000
Compensation costs related to unvested stock options not yet recognized	1,500,000
Value of estimated forfeitures	$ 175,000
Weighted-average period of amortization	2 years 2 months 12 days
Weighted Average Grant Date Fair Value [Roll Forward]
Weighted-average grant date fair value of stock options granted (in dollars per share)		$ 2.76
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average period of amortization	1 year 8 months 12 days
Shares [Roll Forward]
Non-vested, beginning of period (in shares)	480
Granted (in shares)	4
Non-vested, end of period (in shares)	484
Weighted Average Grant Date Fair Value [Roll Forward]
Non-vested, beginning of period (in dollars per share)	$ 7.13
Granted (in dollars per share)	7.35
Non-vested, end of period (in dollars per share)	$ 7.13
Unrecognized compensation expense related to restricted stock awards	$ 2,900,000

Net Income Per Share (Details)

Net Income Per Share (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Numerator:
Net income attributable to AXT, Inc.	$ 2,875,000	$ 665,000
Less: Preferred stock dividends	(44,000)	(44,000)
Net income available to common stockholders	$ 2,831,000	$ 621,000
Weighted-average number of common shares outstanding:
Denominator for basic net income per share - weighted-average common shares (in shares)	38,941,000	34,210,000
Effect of dilutive securities:
Denominator for dilutive net income per common share (in shares)	40,364,000	35,624,000
Net income attributable to AXT, Inc. per common share:
Basic (in dollars per share)	$ 0.07	$ 0.02
Diluted (in dollars per share)	$ 0.07	$ 0.02
Preferred stock, shares issued (in shares)	883,000		883,000
Preferred stock, shares outstanding (in shares)	883,000		883,000
Preferred stock, par value (in dollars per share)	$ 0.001		$ 0.001
Preferred stock, value	$ 3,532,000		$ 3,532,000
Cumulative annual dividend rate (as a percent)	5.00%		5.00%
Liquidation preference over common stock (in dollars per share)	$ 4		$ 4
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from diluted net income per share as the impact is anti-dilutive (in shares)	184,000	639,000
Restricted Stock Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Securities excluded from diluted net income per share as the impact is anti-dilutive (in shares)	240,000
Options
Effect of dilutive securities:
Effect of dilutive securities (in shares)	1,289,000	1,220,000
Restricted Stock Awards
Effect of dilutive securities:
Effect of dilutive securities (in shares)	134,000	194,000

Segment Information and Forei51

Segment Information and Foreign Operations - Product Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Revenue by product type
Revenue	$ 24,419	$ 20,616
Substrates
Revenue by product type
Revenue	19,364	16,609
Raw Materials And Others
Revenue by product type
Revenue	$ 5,055	$ 4,007

Segment Information and Forei52

Segment Information and Foreign Operations - Segment and Geographical Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)segment	Mar. 31, 2017USD ($)	Dec. 31, 2017USD ($)
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of operating segments | segment	1
Net revenues reported for products shipped to customers in corresponding geographic region [Abstract]
Revenue	$ 24,419	$ 20,616
Long-lived assets by geographic region, net of depreciation:
Long-lived assets	58,763		$ 46,530
Reportable Geographical Components | China
Net revenues reported for products shipped to customers in corresponding geographic region [Abstract]
Revenue	7,183	4,422
Long-lived assets by geographic region, net of depreciation:
Long-lived assets	57,526		45,120
Reportable Geographical Components | Europe (primarily Germany)
Net revenues reported for products shipped to customers in corresponding geographic region [Abstract]
Revenue	6,393	5,598
Reportable Geographical Components | Taiwan
Net revenues reported for products shipped to customers in corresponding geographic region [Abstract]
Revenue	5,049	3,318
Reportable Geographical Components | Japan
Net revenues reported for products shipped to customers in corresponding geographic region [Abstract]
Revenue	2,455	3,140
Reportable Geographical Components | North America (primarily the United States)
Net revenues reported for products shipped to customers in corresponding geographic region [Abstract]
Revenue	1,845	2,067
Long-lived assets by geographic region, net of depreciation:
Long-lived assets	1,237		$ 1,410
Reportable Geographical Components | Asia Pacific (excluding China, Taiwan, and Japan)
Net revenues reported for products shipped to customers in corresponding geographic region [Abstract]
Revenue	$ 1,494	$ 2,071

Segment Information and Forei53

Segment Information and Foreign Operations - Concentration of Credit Risk (Details) - customer	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Revenues
Revenue, Major Customer [Line Items]
Number of customers representing significant share	2	1
Accounts Receivable
Revenue, Major Customer [Line Items]
Number of customers representing significant share	1		1
Landmark [Member] | Revenues
Revenue, Major Customer [Line Items]
Percentage share generated by major customers	12.00%
Osram Opto [Member] | Revenues
Revenue, Major Customer [Line Items]
Percentage share generated by major customers	12.00%	11.00%
Major Customer One | Accounts Receivable
Revenue, Major Customer [Line Items]
Percentage share generated by major customers	13.00%		12.00%
Top Five Major Customers | Revenues
Revenue, Major Customer [Line Items]
Number of customers representing significant share	5	5
Percentage share generated by major customers	38.00%	35.00%

Commitments and Contingencies54

Commitments and Contingencies (Details) $ in Thousands	1 Months Ended	3 Months Ended
	May 31, 2017	Mar. 31, 2018USD ($)ft²	Mar. 31, 2017USD ($)
Product Warranty [Abstract]
Period of warranty		12 months
Change in warranty accrual [Roll Forward]
Beginning accrued product warranty		$ 133	$ 251
Accruals for warranties issued		59	33
Adjustments related to pre-existing warranties including expirations and changes in estimates		(46)	(105)
Cost of warranty repair		(29)	(46)
Ending accrued product warranty		$ 117	$ 133
Leases [Abstract]
Area of property under long-term operating lease (in square feet) | ft²		19,467
Additional years per lease option		3 years
Number of additional years to lease term	3 years
Term of royalty agreement		8 years
Aggregate amount payable towards royalty		$ 7,000
Operating leases
Less than 1 year		226
1-3 years		299
4-5 years		25
Total		550
Royalty agreement
Less than 1 year		431
Total		431
Total
Less than 1 year		657
1-3 years		299
4-5 years		25
Total		981
Dingxing
Leases [Abstract]
Total investment agreement value		90,000
Kazuo
Leases [Abstract]
Total investment agreement value		$ 15,000

Foreign Exchange Transaction 55

Foreign Exchange Transaction Gains/Losses (Details) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Other (expense) income, net
Foreign exchange gain (loss)	$ (224,000)	$ 15,000

Income Taxes - (Details)

Income Taxes - (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)subsidiary
Income Taxes
Deferred tax assets	$ 0
Unrecognized tax benefits interest and penalties	0
Unrecognized tax benefits accrued interest and penalties	$ 0
Number of partially owned subsidiaries | subsidiary	3
Federal income tax benefit or expense	$ 0

Revenue - Revenue Recognition (

Revenue - Revenue Recognition (Details)	3 Months Ended
	Mar. 31, 2018subsidiary
Revenue
Number of subsidiaries	3
Percentage of Gallium	99.99%

Revenue - Contract Balances (De

Revenue - Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Revenue
Contract liabilities	$ (1,061)	$ (924)
Amounts included in contract liabilities at the beginning of the period	$ 643	$ 563

Revenue - Disaggregated Revenue

Revenue - Disaggregated Revenue and Practical Expedients and Exemptions (Details)	3 Months Ended
	Mar. 31, 2018segment
Revenue
Number of operating segments	1
Practical expedients transfer and customer payment	1 year
Practical Expedients Amortization period	1 year
Unsatisfied performance obligations for contracts with an original expected	1 year