AXT Shares Are Tumbling Today: What's Going On?

AXT Inc (NASDAQ:AXTI) shares are trading lower Wednesday after China announced export restrictions on select rare earth metals.

What Happened: According to a Wall Street Journal report, China set export restrictions on gallium and germanium, which are two minerals that are used for semiconductor production, solar cells and missiles.

China also put restrictions on more than 35 other related metals and materials. The restrictions will go into effect on Aug. 1. 

After the close on Monday, AXT addressed the potential impact of the announcement. 

The company said its China-based subsidiary Tongmei plans to seek permits to export gallium and germanium substrate products. Gallium arsenide and germanium substrates exported outside of China contributed approximately $4.3 million in revenue for AXT in the first quarter. 

"We are actively pursuing the necessary permits and are working to minimize any potential disruption to our customers," said Morris Young, CEO of AXT.

AXT is set to report second-quarter earnings after the close on Aug. 3.

See Also: MP Materials Stock Is Moving Higher: What's Going On?

AXT Price Action: AXT shares were down 16% at $2.95 at the time of publication, according to Benzinga Pro.

This illustration was generated using artificial intelligence via MidJourney.