Shares of AXT and Lumentum Holdings rose after AXT said it signed a long-term agreement to supply indium phosphide wafers to Lumentum and reserve production capacity.

Shares of AXT were recently up about 22% at $45.04 in Thursday afternoon trading, while Lumentum shares were up about 14% at $682.74. AXT is up about 176% year to date, and Lumentum is up about 86%.

AXT said the agreement reserves a minimum annual commitment of indium phosphide for Lumentum through December 31, 2031, with support for additional capacity if needed.

Lumentum will pay a $43.5 million deposit within 30 business days and a second $43.5 million deposit with timing to be determined in 2028. AXT said the deposits will be applied as shipment credits against future purchases.