Good afternoon, everyone, and welcome to AXT's First Quarter 2026 Earnings Conference Call. Leading the call today is Dr. Morris Young, Chief Executive Officer, and Gary Fischer, Chief Financial Officer. In addition, Tim Bettles, VP of Business Development, will be participating in the Q&A portion of the call. My name is Tracy, and I will be your coordinator today. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. I would now like to turn the call over to Leslie Green, Investor Relations for AXT. Leslie, go ahead. Thank you, Tracy, and good afternoon, everyone. Before we begin, I would like to remind you that during the course of this conference call, including comments made in response to your questions, we will provide projections or make other forward-looking statements regarding, among other things, the future financial performance of the company, market conditions and trends, emerging applications using chips or devices fabricated on our substrates, our product mix, global economic and political conditions, including trade tariffs and import and export restrictions, ability to obtain China export permits, timing of receipt of export permits, our plan to list our subsidiary, Tongmei, in China, our ability to increase orders in succeeding quarters to control costs and expenses, to improve manufacturing yields and efficiencies, or to utilize our manufacturing capacity. We wish to caution you that such statements deal with future events, are based on management's current expectations, and are subject to risks and uncertainties that could cause actual events or results to differ materially. In addition to the matters just listed, these uncertainties and risks include but are not limited to the financial performance of our partially owned supply chain companies and increased environmental regulations in China. In addition to the factors just mentioned or that may be discussed in this call, we refer you to the company's periodic report filed with the Securities and Exchange Commission. These are available online by link from our website and contain additional information on risk factors that could cause actual results to differ materially from our current expectations. This conference call will be available on our website at axt.com through April 30th, 2027. Also, I want to note that shortly following the close of market today, we issued a press release reporting financial results for the first quarter of 2026. This information is available on our website at axt.com. I would now like to turn the call over to Gary Fischer for a review of our first quarter results. Gary? Thank you, Leslie, and good afternoon to everyone. Revenue for the first quarter of 2026 was $26.9 million, compared with $23.0 million in the fourth quarter of 2025 and $19.4 million in the first quarter of 2025 last year. To break down our Q1 2026 revenue for you by product category, Indium Phosphide was $13.6 million, primarily from data center applications. Gallium Arsenide was $5.4 million. Germanium substrates were $200,000. Finally, revenue from our consolidated raw material joint venture companies in Q1 was $7.6 million. In the first quarter of 2026, revenue from Asia Pacific was 78%, Europe was 21%, and North America was 1%. The top five customers generated approximately 32% of total revenue, and no customers were over the 10% level. Gross margin showed a substantial improvement in the first quarter. Non-GAAP gross margin was 29.9% compared with 21.5% gross margin in Q4 of 2025 and a - 6.1% gross margin in Q1 of 2025 last year. For those who prefer to track results on a GAAP basis, gross margin in the first quarter was 29.6%, compared with 20.9% in Q4 and a - 6.4% in Q1 of 2025. Moving to operating expenses, total non-GAAP operating expense in Q1 was $8.6 million, compared with $7.5 million in Q4 and $8.5 million in Q1 of 2025. On a GAAP basis, total operating expenses in Q1 was $9.6 million, compared with $8.7 million in Q4 of 2025 and $9.0 million in Q1 of 2025. Our non-GAAP operating loss for the first quarter of 2026 was $550,000, compared to the non-GAAP operating loss in Q4 of 2025 of $2.6 million and a non-GAAP operating loss of $9.6 million in Q1 of 2025. For reference, our GAAP operating line for the first quarter of 2026 was a net loss of $1.6 million, compared with an operating loss of $3.8 million in Q4 of 2025 and an operating loss of $10.3 million in Q1 of 2025. Non-operating other income and expense and other items below the operating line for the first quarter of 2026 was a net loss of $35,000. The details can be seen in the P&L included in our press release today. In Q1 of 2026, we made substantial progress towards profitability. We had a non-GAAP net loss of $585,000 or $0.01 per share, compared with a non-GAAP net loss of $2.3 million or $0.05 per share in the fourth quarter and non-GAAP net loss in Q1 of 2025 of $8.2 million or $0.19 per share. On a GAAP basis, the net loss in Q1 was $1.6 million or $0.03 per share, compared to a net loss of $3.6 million or $0.08 a share in the fourth quarter and $8.8 million or $0.20 per share last year in Q1 of 2025. The weighted average basic shares outstanding in Q1 of 2026 was 53.3 million. Cash, cash equivalents and investments decreased by $5.1 million to $123 million as of March 31st. By comparison, at December 31st, it was $128.4 million. Accounts receivable increased by $5.2 million, almost exactly the same as the change in cash. Depreciation and amortization in the first quarter was $2.4 million. Total stock comp was $1.0 million. Net inventory was up approximately $8.5 million for the first quarter to $90.2 million. This concludes the discussion of our quarterly financial results. Turning to our plan to list our subsidiary, Tongmei, in China on the STAR Market in Shanghai, we remain very interested in completing the IPO, particularly in light of the rapidly evolving AI infrastructure build-out in China and China's development of its semiconductor supply chain, which is fueling increased China-based demand for Indium Phosphide substrates. We have continued to keep our IPO application current, and Tongmei remains in process as a part of a much more selective and smaller group of prospective listings than a few years ago. Though the current geopolitical environment is dynamic, Tongmei is considered a Chinese company and continues to be regarded in China as a good IPO candidate. We'll keep you informed of any updates. With that, I'll now turn the call over to Dr. Morris Young for a review of our business and markets. Morris? Thank you, Gary. This is an incredibly exciting time for AXT. As many of you are aware, last week, we completed a capital raise for $632.5 million in support of Tongmei's Indium Phosphide capacity expansion, as well as R&D investment in new products like 6-inch Indium Phosphide and other working capital needs. With our backlog of orders and customer forecasts achieving record levels, we are laser-focused on adding capacity to support customer requirements. I'm pleased to report that we are running ahead of our plan to double our Indium Phosphide capacity this year from Q4 of 2025 levels. Our capability to scale up quickly is unique among our peers. Unlike our competitors, AXT designs and builds our own crystal growth furnaces, has our own supply of critical raw materials, and has the manufacturing space in place to achieve our expansion goal this year. As you can imagine, longer-term capacity planning is one of the most important discussions we're having today with customers and major supply chain players in our space. The message we are having for them is this " AXT is stepping up". Beyond our 2026 capacity expansion, we're planning to double our Indium Phosphide capacity again in 2027 with a new facility near our current one that we will be dedicated to Indium Phosphide wafer production. Our 2028 planning is also underway, and we expect to expand again meaningfully. This is an industry in which scale matters. The barrier to entry are high, even for most skilled manufacturers. As the market continues to grow, capacity has become a critical enabler. What we are hearing from the industry sources and echoed from our customers is the expectation that the market for optical components will increase significantly in the coming years, driving a 4x to 6 x increase in substrate market overall in the next three to five years, driven by both scale-out and scale-up applications. Beyond pluggable transceivers, we're seeing a very large developing market for CPO, Co-Packaged Optics. We are actively engaging in discussions with customers about their technical and timing requirements and believe this could represent another inflection point in our business beginning in late 2027 and beyond. With this massive growth cycle ahead of us, we're actively working with a multitude of players from our direct customers to the end customers, with whom we have not historically had direct relationships. We are there to understand their long, longer-term requirements and to align our growth and innovation plans accordingly. This will be a thoughtful and measured process, but we believe we are in a best position competitively to support and enable our industry in meeting its current and future needs. Over the last few quarters, the expansion of our Indium Phosphide customer base has been gratifying. We're now supporting nearly all leading customers in the optical space. This includes Tier 1 laser manufacturers and optical transceiver module makers, both around the globe and in China. In alignment with our customers' technical requirements and roadmaps, we're making important progress on our 6-inch Indium Phosphide product for both iron doped and sulfur doped specifications. A significant part of our capacity expansion will be focused on 6-inch crystal growth technology to support the planned roadmap of 6-inch capability by our customers. We're excited to be able to demonstrate the technological advantage of our low EPD wafers as the market moves to optical devices with higher speeds and greater sophistication for both scale up and scale out applications. Now turning to Q1. Export permits in our first quarter came in as slightly better than our guidance and are off to a solid start in Q2. Gary will take you through our full guidance in a few minutes, but we're expecting to achieve sequential revenue growth in Q2, driven primarily by growth in Indium Phosphide. In fact, Q2 will be expected to be our largest quarter for Indium Phosphide in AXT's history. This derives from an Indium Phosphide backlog that has now reached a new high of over $100 million. As we mentioned last quarter, customers are giving us more visibility into their expected demand and working closely with them in this supply-constrained environment to meet their need as we continue to expand our capacity. From a geographic demand perspective, the massive AI infrastructure build-out and planned CapEx spending by cloud services and AI platform providers in the U.S. is the primary driver for EML and Silicon Photonics-based optical transceivers, as well as high-speed photodetectors. We believe that today our material is being used in multiple U.S. hyperscalers. We expect that end customers' use will continue to broaden. We're also seeing significant growth in China as China moves to accelerate its capability throughout the AI supply chain. Our revenue related to Indium Phosphide-based laser market in China more than doubled in Q1 from the prior quarter. We expect them to double again in Q2. This highlights China's increasing investment in AI infrastructure supply chain for the global market. This is a great opportunity for AXT as there is no permit required to ship our product within China. Turning to Gallium Arsenide. In Q1, demand for semiconducting wafers for industry, robotics, and data center lasers applications all held steady from the prior quarter. We continue to see demand for semi-insulating wafers for wireless RF devices and believe that we have a strong opportunity for market share expansion. However, this is gated primarily by our ability to obtain export license, which came in light in Q1. Finally, our raw material business continue to be a crown jewel in our growth strategy. We're pleased to report that our subsidiary, JinMei, has begun to refine high-purity indium, which gives us direct control of a guaranteed supply of another critical material for our Indium Phosphide substrates. We're also investing to help JinMei expand its capability so that our AXT's demand grows, JinMei will continue to provide a meaningful portion of our raw material requirements. Globally, there continue to be a greater awareness of the importance of earth's materials, and we are decades ahead of the curve in developing our unique integrated supply chain. We continue to invest in our portfolio as we believe it's a major competitive differentiator. In summary, we believe AXT is entering one of the most consequential chapters in our company's history. The investment we're making today in capacity, in technology, and in our unique integrated supply chain positions us to meet extraordinary demand we see building across the optical and AI infrastructure markets. Our customer engagement is deepening, our visibility is improving, and our competitive differentiation is strong. While we remain disciplined and thoughtful in our execution, we're confident that the groundwork we are laying out now will enable us for meaningful growth in the years to come. With that, I turn the call back to Gary for our second quarter guidance. Gary? Thank you, Morris. To reiterate a couple of key points from Morris's commentary, we are seeing a strong increase in our Indium Phosphide wafer demand related to AI and the ongoing data center upgrade cycle. Given the geopolitical complexity surrounding this market trend, our customer base is diversifying and expanding, and customers are placing longer-term orders and providing greater visibility into their needs. With all of these positive market and AXT specific growth drivers, the most significant single factor to our growth in Q2 and beyond is the success and timing of getting export permits. Therefore, guiding for future revenue is somewhat tricky for us right now as we cannot predict future timing of permits or our success in obtaining them for any customer or individual order. Drawing on what we know and what we've experienced thus far in the export permitting process, we can offer the following insight into our expectations for Q2. As of today, we have approximately $34 million in revenue that can be realized in Q2 across our substrate product lines and raw materials, for which we either already have a permit to ship or for which an export permit is not required. We have a high degree of confidence in recognizing this revenue in Q2. We could see upside, even significant upside, to this number in Q2 should we receive permits for additional orders for which we have the inventory to support. We do want to stress that the timing for permit issuance is not predictable, nor in our control, and doesn't align with our quarterly reporting. We continue to focus on gross margin improvement. Further improvement depends on a number of factors, including total revenue as it relates to revenue mixed by product, absorption of fixed cost, and our ability to continue to drive better manufacturing efficiency. With regards to OpEx, we expect that it'll be approximately $9.3 million in Q2 on a non-GAAP basis and approximately $10 million on a GAAP basis. With these factors in mind, we expect to achieve profitability on both a GAAP and non-GAAP basis in Q2. We believe our non-GAAP net income will be in the range of $0.06-$0.08, and our GAAP net income will be in the range of $0.05-$0.07. We estimate share count for Q2 will be approximately 63.5 million shares. Okay. This concludes our prepared comments. We'll be glad to answer your questions now. Tracy? Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one now to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Finally, please limit yourself to one question and one follow-up. Please stand by now while we compile the Q&A roster. Your first question comes from the line of Tim Savageaux with Northland Securities. Your line is open. Please go ahead. Hey, good afternoon, and congrats on the step up in backlog, and the strong guidance for next quarter in Indium Phosphide. Guess my first question, you know, you mentioned backlog and customer forecasts at record levels, and we certainly saw that with $100 million in backlog. You know, with regards to long-term capacity planning with customers, you know, are you at the point of, you know, coming to any sort of long-term supply agreements with various customers? If so, you know, what's the kind of, what sort of timing might you'd expect on that? Thanks. Tim? I'll follow up. Yeah. Yeah. Thanks, Tim. Yes, we're talking to a number of customers right now on long-term supply agreements as we build our capacity out and try and understand where their demand is going. Nearly all of the larger customers in this space are talking about long-term supply agreements with us. We expect to come to resolution with some of those in the very near future. Great. Just following up on that. Sorry, go ahead. Oh, no. I was just saying it's your turn, Tim. Tim S. Okay. Roger that. Just an update, you'd mentioned last quarter that you were developing some relationships with Tier 1 customers or Tier 1 suppliers who hadn't, you know, necessarily been, you know, close relationships or customers over time. I wonder if we can get an update on that, and I have one more follow-up after that. Yeah. Thanks, Tim. That's going really well, actually. We've got qualification wafers in with a lot of customers, and we're finding paths and avenues to get wafers into a lot of these Tier 1 customers. You know, we've, as we see this market grow, there's a lot of opportunity for us, and we've said in the past that we've really been focused on these next generation technology products that require high quality material that frankly only AXT can build and can supply. Of course, we've. Emerging supply chain constraints with Indium Phosphide, we are in the strongest position to grow capacity. We're qualifying and we're supplying wafers to a lot of new T ier 1 customers in this field. It's exciting times for us. Yeah. I want to add one point because I think, you know, Tim, you are the front soldier, you're talking to them. From my perspective, I started to hear, let's say three months ago, was some of the tier 1 customers. Now I'm starting to hear even add on to it, is the end hyperscalers we're hearing. In other words, the customer's customer, the end users, are also interested in seeing how we develop the supply chain guarantee for their growth plan. Yeah, that's correct, Morris. It's a good point. You know, there's been a lot of press releases out about long-term supply agreements into our customers from the hyperscalers and from the hardware companies. There's been a lot of encouragement from those hyperscalers and hardware companies for their suppliers to enter into long-term supply agreements with AXT. That is actually driving a lot of the discussions, I think, that we're having on long-term supply agreements. Of course, it's given us a lot more visibility into what the market demands are at the hyperscaler side of things, and how that trickles down to demands for AXT. It also gives us a lot of visibility into technical demands as we move forward into high-end lasers and detectors in these new products. Great. That makes sense and maybe somewhat related to those discussions. I'd be interested in an update on where, what you're seeing in terms of pricing for Indium Phosphide substrates. Yeah, that's a, that's a good question. Again, thanks, Tim. What we are doing is we are raising some of our prices. We're seeing some recent pricing increase in raw materials, specifically with indium. We're having conversations with our customers to align our costs and maintain gross margins, maintain or grow gross margins. We're also starting to globalize or we've been globalizing our pricing. Obviously, certain geographical regions have been more aggressive in the past on price targets, especially when we're looking at the lower-end markets such as GPON. We're starting to globalize our markets so that it is more standardized across those geographical regions. Let me add on to that. I think nevertheless, I think the pricing opportunity for us, I believe, is also the fact we're migrating more towards larger size. As you know, some of the smaller size, they are more traditional, they are more price sensitive, and they are more competitor who can fill their shoes. But when you get to 4- inch and 6- inch, and then as well, as well as higher, specification requirement, then we can really demand, you know, that's where our product shines. Okay. Thanks very much. Appreciate it. Thanks, Tim. Your next question comes from the line of Matt Bryson with Wedbush Securities. Your line is open. Please go ahead. Hey, thanks for taking my question. Great results. I just wanted to hone in on gross margins a bit. Obviously you saw a pretty big uptick in Q1. I'm not quite getting to the peak you had in Q2, I'm not quite getting the peak back in the COVID time frame, but I'm getting pretty close. I guess, could you talk a little bit about how much of that is higher utilization levels versus how much of it is increased pricing, and whether my math is roughly accurate? For Q1, there is some that's a result of increased pricing, but it's the primary you know, drivers are the traditional two drivers that we highlight. One is volume is up, and the other is the mix is rich towards Indium Phosphide. As a matter of fact, if you look at it percentage-wise, Indium Phosphide was just an, a tad north over 50% of total revenue. It's really helped in that. The pricing effects are being put in place, but we'll see them, we'll see the impact from your eye viewpoint, Matt, for your eyes. Your eyes will see that later this year. Got it. Just, Q2, Gary, if I said that the gross margins are coming in roughly around 40%, is that in the ballpark? Again, can you just talk to how much that's mix versus utilization versus pricing? Yeah. I don't have your forecast in front of me, but I think that's too aggressive. You know, you know us, we like to take. Be a little bit more conservative. You know, we're definitely gonna be crossing the 30% threshold, which we've said for several years, if we can get to $30 million in revenue and have a good mix, then we could be above 30% in gross margin, so. I would. I think you're probably. You know, it's up to you, but I'd encourage you to, you know, maybe knock that down a bit. We can talk about it maybe later, so. Having said that, I, we're both on the right direction. Gross margins should go up, and we feel very confident that they will. You know, we have to, you know, how fast and what we calculate is to be determined. All the indicators are exactly what I've been saying for many years now. The mix is rich for Indium Phosphide, and the volume is up. You know, it's a unique sort of transition for us that it's, you know, inside the company, we're very pleased, so. Yeah, I do want to add another point about this. I mean, obviously, Gary, you own the gross margin calculation, I would argue the supply chain strategy will start to shine. You know. I always say AXT like a choo-choo train. We're the locomotive. We're chugging along. When we are accelerating, all the boxes behind us, such as our JinMei, BoYu, which makes our crucibles, high purity materials, et cetera, they also are gonna chug along with us. When we slow down, of course, they will crash against us. Right now is a good time. We're chugging along very strongly, you're gonna see their contribution to our, you know, ability to make profit will grow, too. Got it. My one follow-up is, I noticed going back to the last filing that you'd gotten export licenses, I think for every geography except for the U.S. Just any more thoughts on getting licenses for shipping to the U.S., and how important is that in terms of being able to fully utilize that additional capacity you're bringing on? I don't think we're giving up United States. No. It's still pending. Right. We're still, you know, Matt, we're still being encouraged to apply for export permits for U.S. customers both in the U.S. and in other global regions. You know, at the moment, obviously we are getting permits pretty readily for U.S. customers based in other global regions. That, as Morris said, that doesn't mean that we are completely stopping any work on trying to obtain permits for the U.S. We've been contacted by the Ministry of Commerce in China on a number of U.S. applications right now to submit more data that gives us an encouraging sign that they're still looking at U.S.-based permits, and there's still a possibility to get a permit for the U.S. in the near future, as I say. We are definitely looking at that avenue, and in the meantime, we are supplying wafers, globally to other regions as well. This is a very global supply chain, and it's a very global market, and I think we're taking advantage of all the avenues that we can. Yeah, thanks. I didn't mean to intimate that you weren't gonna get a U.S. permit or weren't working on it. I just wanted an update. That was an also update. Thanks. Thanks again guys. No problem. Just a reminder that if you would like to ask a question or a follow-up, please press star one to raise your hand now. Your next question comes from the line of Charles Shi with Needham. Your line is open. Please go ahead. Hi, thanks for taking my question. Wanna ask you more about the capacity and the capacity build plan here. I think your last COVID high for Indium Phosphide quarterly record was $17.7 million. That was achieved in second quarter 2022. You are basically implying you're gonna be at or above that level in this coming Q2, but I recall back in 2022, you probably also built above that $17.7 because back then you thought you would have Indium Phosphide demand from the premium electronics company for smartphone applications. Wanna ask you this. What's the max factory output for your existing factory today? How utilized is the existing factory, and what's the expected capacity factory output once you add the next two factories? I mean, I think that's something you talked about after, the follow-on offering. If you can provide any color, on the numbers, that would be great. Yeah. I usually take the last digit out. We usually say our highest Indium Phosphide revenue per quarter was $17 million. You have a very good memory. Okay. We did say in Q4, we said we have increased our capacity about 25% in Q4 of 2025, and in 2026 we're gonna double that. Okay? In my calculation, our own capacity planning, we think we're gonna get about $35 million per quarter capability by the end of 2026. Okay? Don't forget, that's the end of 2026. In other words, the capacity are increasing every month, every time we as we talk about. Look, I mean, in the next quarter, our Indium Phosphide revenue is gonna be above and beyond the $17 million per quarter. It'll be a new record. Yeah. Will be a new record in Q2. Okay? The other capacity we also mentioned about is that we are acquiring another piece of land near our existing factory in Beijing right now, which is we're in the process of negotiating buying the land and doing the design, and we're probably gonna start building it. Because it's a greenfield, it will probably take us about a year, maybe a year and a half to complete that expansion. Okay? Our capacity expansion is sort of in stages, you know. For instance, our sometimes, you know, the clean room is the most critical because if you don't have a clean room, you don't have no space to put in your machine. That's very digital. Some of the crystal growth capacity is more incremental. Okay? Right now the clean room capacity is greater, much greater than our crystal growth capacity. As we speak now, we're increasing our capacity sort of gradually. I think in the next year or so, once the greenfield is up for construction, I think it would be more logical to expand our clean room capacity. I mean, do you have anything to add, Tim? I just wanted to add a little bit. Morris talked about doubling our capacity to a rate of $35 million per quarter in Indium Phosphide by the end of this year. Remember, that's in a brownfield site that was once a crystal growth facility used for Gallium Arsenide. As we relocated Gallium Arsenide, we've been able to move into that. We've been extremely fortunate that we're in a position I think that nobody else in the Indium Phosphide world is in, that we can double our capacity so quickly. You know, looking into the next growth as Morris just mentioned, we're acquiring a facility which is right next door to us. Again, extremely fortunate. Building is already there, that allows us to double yet again. By the time we've completed that expansion, which should be by the end of 2027, maybe early 2028, we should be at the region of somewhere in the region of $65 million-$70 million of capacity per quarter. That really takes us to the type of capacity that we're expecting to see in our existing locations. Then as Morris mentioned again in his call, or in his script as we talked earlier, we're now looking at where we need to go from here. We're looking at other opportunities and other ways to expand beyond that, probably in a greenfield site somewhere else. Yeah. That's for 2028. Correct. Yeah. Let me be a bit more specific as sort of the detailed guys, but $17 million, which we've already achieved, by the end of this year we'll be at $35 million. Per quarter. Per quarter. Mm-hmm. That's times four. $35 million, $140 million? Per quarter? Per year. Yeah. Yeah. We'll have the capacity at the end of 2026 to do $140 million. Yeah, you cannot do that because of the capacity is continually increasing. Yeah, yeah. You're not, you can't use the end of the year. It's not digital. It's analog. A year later it'll be $280 million. It's double, double. Thanks. Maybe a follow-up on the capacity expansion, right? I think this is not like I come up with a question, but the investors do ask this question. When you think about your capacity expansion, why can't you do the China Plus One type of a strategy like many companies in the global economic electronic supply chain? Like, maybe you should continue to build in China to satisfy China demand, but can you build outside of China maybe to supply to the rest of the world? I know that there is a this is more, easier said than done. There are policy reasons that may stop you from doing that, but is there anything you think of from the business perspective that is preventing you from doing that, and why? Thank you. Well, there's certainly, there's certainly a lot of opportunity, both within China and outside of China for us to consider that. As I said just now, we're looking to build more capacity in 2028 and beyond, which is going to be meaningful capacity expansion in 2028 and beyond. As part of that plan, we are working closely with our customer base to understand the long-term requirements and aligning the plans globally, right? Our recent capital raise will be fundamental to expanding, as we enter this next growth plan, which could include more capacity within China, potentially also with capacity outside of China. Yeah. I do want to add one point. I know you don't want me to say this, okay? I tell you, important thing to answer to investors is that adding capacity versus able to deliver wafers is two different thing. You're gonna hear a lot of people is gonna say, "I'm gonna add capacity." Look, Indium Phosphide, I tell you, it's not easy. You know, one question a lot of investors asking me is, "You gonna double your capacity, why don't you triple or quadruple? Our need is 10 x." It's not easy. Morris, that's a really good point. That's really why our focus on the next two years has been focused on Beijing. Yeah Increasing the capacity on our existing Beijing Tongmei site. That is the minimum, the minimum risk that we can absolutely take to get wafers out, not just to increase capacity. Well, not only that, it's also for the good of our customers. Their demand is so aggressive, the better way or the guaranteed way to satisfy that capacity, and we're stretching, we're working very hard to answer that, their demand, is to do now, okay? Do we have other plans? You bet, we do. We're stepping up, don't forget. Yeah. Thanks, Morris. Like I said, easier said than done. Just felt like that's a question so common that I have to ask. Maybe last question. You talk about 6-inch versus maybe 4-inch or below. What's the shipment or maybe shipment is a bad metric here, but what's in the backlog that you're seeing that the mix between 6-inch and the 4-inch or below right now? Yeah, and want to get some thoughts around that. If you can, also, we're kind of curious about the mix between iron doped and sulfur doped. We know one is for laser, the other is for photodetector. Want to get some thoughts on what's the mix you expect to mix within that, the $100 million plus backlog. Thanks. That's the last question. Okay. Iron doped is coming up big time. We used to see about 10 to one in favor of sulfur doped prior to this. Right now, I would say the mix, especially the large diameter, is almost like iron doped is 40%, 60%. Correct, Tim? When we look at, when we look at backlog and we look at customer demand over the next few quarters into next year and beyond, what we can see is there's still a lot of 3-inch out there, specifically for the laser. sulfur doped is still going strong on 3-inch. There is a transition to 4-inch on N-type material for the laser, whereas the high-speed detector, frankly, has pretty much all transitioned to 4-inch already. We're seeing still a lot of 3-inch coming along, a lot of transitioning over to 4-inch. As we look into the future, of course, 6-inch is incredibly important, and there's a lot of interest and a lot of opportunity out there for 6-inch. I'll say at this moment in time, a lot of the production that we're seeing and a lot of our capacity that we're seeing is still focused on the 3 and 4-inch, with a longer term plan to transition to 6-inch within the next probably year or so. Yeah. The, the signal is, are obviously very strong. A lot of customers are telling us, "Can we get more 4-inch?" Okay. 6-inch is actually a little bit more out, but people are warning us it's coming, it's coming, okay? 4-inch is real. I would say the ratio for 6-inch, 3-inch and 6-inch right now is maybe 4 to 1 in favor of 3-inch. I think, going out in about six months to one year, it could be, I mean, as far as wafer number is concerned, it becomes probably two to one in favor of 3-inch. 3-inch is still the majority, the larger, the numbers. Because 4-inch is actually at a lower number right now, so it's gonna grow very rapidly in the next coming quarters. Thanks. Great color. I appreciate that. Thank you. Thank you, Charles. Your next question comes from the line of Richard Shannon with Craig-Hallum. Your line is open. Please go ahead. Well, hi, guys. Thanks for letting me ask a couple questions here. I'd love to understand how do we think about the CapEx requirements here for these capacity builds. You talked about a Brownfield 1 this year that's doubling. Then a Greenfield 1, I think that's gonna happen in 2028 or maybe in or in 2027, maybe going into 2028 here that's more greenfield. I wonder if you could give us some numbers or at least some statistics to think about what that's gonna require and over what period of time. Okay. Well, for this year, it's mostly adding, you know, high-tech growth equipment for crystal growth. Furnaces, some backend stuff for polishers. Yeah As Tim and Morris have said, we have an existing footprint. That's one reason we think we have an advantage. Our current Indium Phosphide crystal growth site has room for more furnaces, and as Tim explained, we're repurposing our Gallium Arsenide crystal growth that was in Beijing for even more. This year compared to future years, it's probably gonna be $35 million in CapEx, maybe $30 million, maybe $40 million, somewhere in that range. To be honest, we'll spend as much as we can as fast as we can because we're uniquely positioned to be able to add capacity quickly. Next year, it's dependent on which things we're talking about. Tim, you wanna, you've got it split up in your, in your paperwork there. I think as we, as we go into next year and we look at building out this facility next door to us, obviously buying a new facility, putting, doubling our capacity again there, and also building some capacity through our supply chains as well, I think we're looking somewhere in the region of about $100 million or so. Beyond that, if we were to build a greenfield site somewhere else, I think we're looking at somewhere in the region of $220 million-$250 million, depending on obviously what capacity we put in that greenfield site. Again, I'm thinking if we're putting a meaningful capacity there, you're looking at $200+ million. Okay. Fair enough. Thanks for that detail here. Wanted to ask on your Indium Phosphide business here by geography. You made a couple interesting comments here. Last call you said China was gonna grow by 60% this first quarter, and then you said it actually was up 100%, if I caught you correctly. It's gonna double again here in the second quarter. What kind of percentage of your Indium Phosphide business in the second quarter is China gonna be? That's a great question. I think we're seeing a lot of growth in China, and it's not just because we're seeing data center growth in China, but we're seeing China enter the global supply chain market for optical transceivers and potentially co-packaged optics as we go forward. Again, you know, remember this is fully globalized, and a lot of those transceiver companies that manufacture their transceivers within China are driving to a Chinese supply chain of laser diodes and photodetectors. In Q2, we estimate that the Chinese demand is probably about 30% of the overall Indium Phosphide global market demand that we're seeing. We're seeing that increasing through certainly through Q3 and Q4 as well. You know, as we get into Q4, it could even be as high as something pushing up to 40% share of the total Indium Phosphide market. Okay. That is helpful, Tim, I'll ask one last question, jump on the line here, and that's on the topic of gross margins. Gary, you've talked about in the past here with, you know, hoping to get to 35% with kind of an upside goal of looking at 40%. When you're talking about the pretty strong mix shift towards Indium Phosphide here and even about price increases here, I would imagine you'd maybe help us think about whether that could go higher at some point in time. I'm not asking for any time soon, but are you looking for a for a kind of a ceiling of gross margins that get us above that 40% level? Thank you. Well, internally as a management team, we're definitely gonna be targeting something that begins with a four, but it's far out, you know, we don't know yet. I'd still stick with my sense that, you know, somewhere in the 35% range is very, very reasonable, but that's for, you know, for the outside world. It's a safe, you know, arrival, landing point. That doesn't mean that we're satisfied with it and we think we can, you know, do better. Let's get it farther down the road and prove that first, so. Okay. That's all I want to hear. That's all for me, Gary. Thank you. You're welcome, Richard. Good to hear from you. There are no further questions at this time. I will now turn the call back to Leslie Green, Investor Relations at AXT, for closing remarks. Thank you, Tracy, and thank you all for participating in our conference call. We will be participating in the B. Riley Securities 2026 Annual Investor Conference and the Craig-Hallum Institutional Conference in May, as well as the Northland Virtual Conference in June. We hope to see many of you there. As always, feel free to contact us if you'd like to set up a call. We look forward to speaking with you all in the near future. Thanks. This concludes today's call. Thank you for attending. You may now disconnect.