Semi wafer manufacturer AXT shares surged more than 21% during early post-market trading on Thursday after revealing its second quarter financial results.

For the quarter ended June 30, the manufacturer of compound semiconductor wafer substrates reported an adjusted earnings per share of $0.19 versus the consensus estimate of $0.07. GAAP EPS was $0.17 compared to the $0.06 estimate.

Revenue for the second quarter surged 160% year over year to $47.6M, which was much more than the $34M estimate. It reported a gross margin of 44.9% compared to 8% during the same quarter last year.

"We have reached an inflection point in our business where strong customer demand for data center optical connectivity coupled with our continued success in adding manufacturing capacity and improving productivity are driving a step-function increase in our revenue," said AXT CEO Morris Young. "In Q2, we recorded our highest quarterly indium phosphide revenue to date. We are working closely with our direct customers as well as major end customers to understand their expected demand and roadmaps … The investments we are making today—in capacity, in technology, and in our uniquely integrated supply chain—position us to meet the extraordinary demand we see building across the optical and AI infrastructure markets."