AXT Inc (AXTI)

[RedStick]

Our business and operating results depend in significant part upon capital expenditures of semiconductor designers and manufacturers, which in turn depend upon the current and anticipated market demand for products incorporating semiconductors from these designers and manufacturers. Our business also depends in part on worldwide economic conditions. Following the severe recession in the United States and in other key international economies that began during the fourth quarter of 2008, we began to see improvement in the demand environment for our products worldwide in the second half of 2009 that contributed to our strengthening revenue results.