Dr. Morris Young
in well a inventory as demand environment our of the weakness was was rebalancing slowdown as data as the The growth demand we center the environment the weak. Gary. LED short, general the around QX several what expected at the including large industry you, In customers. market of in market, Thank combination world in of plus slowdown result economic in retentions, a semiconductor largely trade
of concentrate we effort both and focus could provide, we this long on and opportunity During short that will improvements meaningful business pay-offs. believe time, make we the to used term fundamentals where our term
we have four last noted priorities. I As quarter,
First, decline our in discipline better positive manufacturing In QX, sequential product results. improvement in achieve drive to in enabled in with gross group a revenue, shift to good coupled the revenue despite our margin. mix us
Going forward, we model. more leveraged that believe is the in
and expanding can lead are believe markets underlying higher absorb production increase. our this this a but volume will depreciation, we that increasing have will We to
Second, use we're committed to discipline cash. of our
As with reduce our we and align expansion will scrutinize to continue conditions. market inventories, Gary mentioned, expenditures again, capacity
assigning, on we schedule. assisting pleased through of to the improvement our supporting Third, relocation to and the report is our work the our that continue transfer of new I'm facilities. production customers
of In up addition, with large Dingxing Dingxing course them the our facility. qualifying year. next working is vast now shipments over of facility are to ramp customers of including the phase on our the majority all our their customers acceptance important from our The schedule a
revenue Our coming goal end the the is from for a customers' by the large of year. germanium facility and gallium have the arsenide of new to majority
is focus first innovation. Our
both industry many As in indium times, we for the we in our to low-EPD arsenide phosphide. characteristics said set pace gallium continue and
will for have vendors. competitive telecommunications materials. advantage between winning in QX, return we our unrelenting fact, moment, meaningful tangible low-EPD we this to among We that our a tighter emphasize our a And applications critical a order contributed peers, specifications here talk infrastructure. to investment. XG large our there continues those in differentiate low-EPD I I In where in more to a in pursuit is about believe of order a is to want that saw itself. related but In been AXT phosphide spec, difference our indium on
indium for let phosphide. QX to a markets. our Now, was quarter me turn solid
indium it as time indium first revenue also AXT's is phosphide our was second the the history. It fact, quarter In largest surpassed gallium largest in phosphide contributor. sales that arsenide
a customer that As XG I mentioned, we from Asia we believe relates infrastructure. large received order telecommunication in to a
indium our historically, revenue new center majority and indium connectivity As follow is vast of broad for represents points know, cells, the phosphide, us phosphide multiple in networks. many XG a optical and from across passive come investors backhaul who the center. data which has opportunity network data small including sizable fronthaul, the used
output is it XXXX. XG projected economic than trillion towards $XX lumpy. As drive industry but impact, likely But year with any to crazy enable be by significant in the with driven emerging economic will worldwide, technology, to more global
application for this has XG. strong trend As grow another technology to to our we adoption business to meaningful is that yet be AXT, of in important prolonged. a such, it be Further, able underlying are Most commercial alongside position and promises the begun.
We contribution to grow adoption XXXG the as enterprise to center more but QX. cloud other and see inventory have adjustments market, add cost this to modestly the and in to transition QX of Customer data ability XXXG about effectively overtime technology large expect optimism we continued quickly data expressing competitive silicon over some in going in to photonics this substrate capacity well provider are the field. continue on, In limited we centers, the technologies. than as or
services, fuel data move increasing total, upgrades. between greater strong wireless of networks In indium future locations, need will data as lidar, the architecture. in XG a business. amount house for and resulting The With intensive to provide of as adoption requirements and for the horizon, devices, our be I the to phosphide strong mentioned application well throughout the diversifying data addition, center In foundation monitoring, of new as able likely is remains on interconnects such driver others to from XG for as entire XG performance HBTs opportunities. current a commercial
building strange phosphide of As our powerful in believe we trend next fluctuate application in portfolio we believe some of will the growth tied quarter-by-quarter. that always, transformative significant sell technology that of to But we're and incremental a opportunities decades. into be will most the and collectively, that in we indium business the
gallium Turning now to arsenide.
-- demand challenges. the weak customer-specific both related recent both QX. have was were for and been revenue setbacks as Our seen wireless global and in expected soft to LED quarters have and This applications environment in a
view a we our head As cautious for expectation we're our taking regarding into products. QX, near-term
Tier-X However, is recovery, the it a LED customers and Though, Europe, a sizable market are neither and sensors have we market Japan, exact predict The variety infrared LED high-end Singapore. of to difficult is going lighting Korea, away. applications. wide devices in and is to fundamental of timing
proximity with in used laser-based year VCSEL sensing. first addition, phones XXXX. wafers semiconducting arsenide gallium us introduction are could capability point In sensing into our entry in or The this to provide this Android late
raw say I back for few to a QX before hand I call Now, the Gary guidance, want to about words materials.
our mentioned, QX, majority took we a gallium-based Gary material in to in ownership reduce As raw steps Ji-Ya, company.
raw off rolled years. the also faced company. have these ownership headwinds partial over several business We our of Tongmei, Both last significant germanium-based material a companies of
As a on results. a our conditions result seen overall of depressed drag have market
important protection from their to have fluctuations. actually talk We our forward. they important QX year. us positively to will for we AXT. contribute growth our results. strong well owned both source making in we from which our raw All a are to visibility, providing We're was the addition, In same believe as foundation this could strategic moving But joint quarter materials, have stay price be in that closing, influence a QX an ventures business in of market that, business have as China, of beneficial in phosphide means didn't building that it that indium in performance. changes to partially is essential fundamental our for In resulted in business importance improved also level our
strategic across our continues technology addition, applications well innovation to us position for portfolio. In our
continue of We qualification positive facility relocation and execute results. to customer also our with unscheduled the
that And believe overtime. prepared will that environment positive second will for my likely our our to inventory, gross significant of appropriate also portfolio. improves. making joint Finally, fundamentals in on are back being demand strengthen business our the adjustment growth technology business as model today drive on improvement financial trends margin Gary? we venture excited our opportunity comments. guidance. provide the our call turn returns to focusing by our in of to by concludes Gary quarter we're our We're I the reducing taking spending, structure careful and This
