AIXG Aixtron SE ADS, Each Representing One Ordinary Share

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CONSOLIDATED FINANCIAL STATEMENTS

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F

Date of event requiring this shell company report                                    

Commission file number: 000-51196

AIXTRON SE
(Exact Name of Registrant as Specified in Its Charter)

Federal Republic of Germany
(Jurisdiction of Incorporation or Organization)

Dornkaulstr. 2
52134 Herzogenrath
Federal Republic of Germany
(Address of Principal Executive Offices)

Guido Pickert, +49 2407 9030-444, +49 2407 9030-445, AIXTRON SE, Dornkaulstr. 2, 52134 Herzogenrath,
Federal Republic of Germany

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

American Depositary Shares, each representing one Ordinary Share
Ordinary shares, no par value (not for trading, but only in connection with the listing of its American Depositary Shares on
The NASDAQ Global Select Market)
(Title of Class)

The NASDAQ Global Select Market
(Name of each Exchange on which registered)

Securities registered or to be registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

          Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of December 31, 2015: 112,720,355 ordinary shares, no par value.

          Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

          If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o    No ý

          Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) Yes o    No o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

          Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing.

          If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

          Item 17 o    Item 18 o

          If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o    No ý

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Presentation of Information

        In this Annual Report on Form 20-F (this "report"), unless the context otherwise requires, references to "AIXTRON," "the AIXTRON Group", the "Group" or "the Company" are to AIXTRON SE and its consolidated subsidiaries. References to "Management" are to the Executive Board of AIXTRON SE. Throughout this report, whenever a reference is made to AIXTRON's website, such reference does not incorporate information from the website by reference into this report.

        The Company's audited Consolidated Financial Statements are prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB).

        AIXTRON publishes its audited Consolidated Financial Statements in Euros. As used in this report, "EUR", "Euro" or "€" means the lawful currency of the Federal Republic of Germany and other participating member states of the European Union. "US-Dollar", "U.S$", "$" or "USD" means the lawful currency of the United States of America. "Pound Sterling", "British Pounds", "GB Pounds" or "GBP" means the lawful currency of the United Kingdom.

        For convenience only (except where noted otherwise), some of the Euro amounts have been translated into US-Dollar amounts at the noon buying rate in New York for cable transfers in Euros certified by the Federal Reserve Bank of New York for customs purposes. You should not construe these translations as a representation that Euro amounts actually represent these US-Dollar amounts or that the Euro amounts could have been, or could be, converted into US-Dollars at those rates or at any other rate. Refer to "Key Information—Selected Financial Data—Exchange Rate Information" for certain exchange rates between the Euro and the US-Dollar.

        Due to rounding, numbers presented throughout this report may not add up precisely to the totals we provide and percentages may not precisely reflect the absolute figures.

        Except where AIXTRON otherwise attributes market or industry data to another source, all such data included in this report are its own estimates. These estimates are based upon the Company's experience in its industry and its familiarity with the relevant markets. While AIXTRON believes these estimates to be reliable, the Company has not verified them with independent sources.

Forward-Looking Statements

        AIXTRON believes that various statements in this report may constitute forward-looking statements. You can identify these statements by forward-looking words such as "may", "will", "could", "expect", "anticipate", "contemplate", "believe", "estimate", "intends" and "continue" or similar words. You should read statements that contain these words carefully because they:

•

discuss future expectations;



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contain projections of future results of operations or financial condition; or



•

state other "forward-looking" information.

        AIXTRON believes it is important to communicate its expectations. There may be events in the future that AIXTRON is unable to predict accurately or over which the Company has no control. The risk factors and cautionary language discussed in this document provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by AIXTRON in its forward-looking statements, including among other things:

•

the extent to which the technologies AIXTRON offers are demanded by the market place;



•

the actual number of customer orders AIXTRON receives;



•

the timing of final acceptance of products by customers;



•

the financial climate and accessibility of financing, general conditions in the thin film equipment market and in the macro-economy;



•

the extent to which AIXTRON's business is impacted by global economic slowdown;



•

cancellations, rescheduling or delays in product shipments;



•

manufacturing capacity constraints;

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lengthy sales and qualification cycles;



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difficulties in the production process;



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changes in semiconductor industry growth;



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increased competition;



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exchange rate fluctuations;



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availability of government funding;



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variability and availability of interest rates;



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delays in developing and commercializing new products; and



•

general economic conditions being less favorable than expected.

        You are cautioned not to place undue reliance on these forward-looking statements.

        All subsequent written and oral forward-looking statements attributable to AIXTRON or to any person acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. AIXTRON does not undertake and expressly disclaims any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

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PART I

Item 1:    Identity of Directors, Senior Management and Advisers

        Not applicable.

Item 2:    Offer Statistics and Expected Timetable

        Not applicable.

Item 3:    Key Information

A.    Selected Financial Data

Five Year Financial Summary

        You should read the selected consolidated financial data set forth below in conjunction with "Item 5—Operating and Financial Review and Prospects" and AIXTRON's Consolidated Financial Statements included in this report. The historical results included below and elsewhere in this report are not necessarily indicative of AIXTRON's future performance.

Exchange Rate Information

        The following tables set forth, for the periods indicated, information concerning the exchange rates for Euros per US-Dollar. AIXTRON has provided these rates solely for your convenience and you should not construe these translations as a representation that Euro amounts actually represent these US-Dollar amounts or that the Euro amounts could have been, or could be, converted into US-Dollars at those rates

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or at any other rate. AIXTRON did not use these rates in the preparation of its financial statements included elsewhere in this report. Fluctuations in the exchange rate between the US-Dollar and the Euro will affect the US-Dollar equivalent of the Euro price of the Company's ordinary shares traded on the Frankfurt Stock Exchange and are likely to affect the market price of the Company's American Depositary Shares ("ADS") traded on the NASDAQ Global Select Market.

        As used in this report, the term "noon buying rate" refers to the rate of exchange for Euro, expressed in US-Dollar per Euro, as announced by the Federal Reserve Bank of New York for customs purposes as the rate in The City of New York for cable transfers in foreign currencies.

        The table below shows the average noon buying rates in The City of New York for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York for US-Dollar per Euro for AIXTRON's last five fiscal years. The average is computed using the noon buying rate on the last business day of each month during the period indicated.

        The following table shows the noon buying rates for Euros in US-Dollars for the last six months.

        On February 10, 2016, the noon buying rate was USD 1.1222 per EUR 1.00.

B.    Capitalization and Indebtedness

        Not applicable

C.    Reasons for the Offer and Use of Proceeds

        Not applicable

D.    Risk Factors

        Any of the following risks could have a material adverse effect on AIXTRON's financial position, results of operations, liquidity and the actual outcome of matters that the forward-looking statements contained in this annual report refer to. The risks described below are not the only ones the Company faces. There may be additional risks AIXTRON is currently unaware of, and risks that are common to most companies. There may also be risks that AIXTRON now believes are immaterial, but which may ultimately have a material adverse effect on the Company's financial position, results of operations, liquidity and the actual outcome of matters that the forward-looking statements contained in this annual report refer to. For additional information regarding forward-looking statements, see "Forward-looking statements" included in this annual report.

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Company-Related Risk

The compound semiconductor and the semiconductor industries can be highly volatile and unpredictable, which may adversely affect AIXTRON's operating results and result in significant volatility in the market price of its ordinary shares and American Depositary Shares.

        The compound semiconductor and the semiconductor manufacturing equipment industry can be affected by the cyclical nature of the semiconductor industry and its sensitivity to general economic conditions. Although semiconductors are used in many different products, the markets for those products are interrelated to various degrees. The industry has historically experienced sudden changes in supply and demand for semiconductors based on general economic conditions. The timing, length and severity of these industry cycles are difficult to predict. The cyclical nature of AIXTRON's operations tends to reflect and be amplified by changes in economic conditions, both in Asia and internationally, supply/demand imbalances and foreign currency exchange fluctuations. Economic downturns or a prolonged period of slow growth in Asia and foreign markets or any of the industries in which AIXTRON operates that are contributing to a softer demand environment for the Company's products could have a material adverse effect on the Company's results of operations, financial condition and cash flows. During periods of declining demand for semiconductor manufacturing equipment, AIXTRON needs to be able to quickly and effectively align its cost structure with prevailing market conditions, to manage its inventory levels to reduce the possibility of future inventory write-downs resulting from obsolescence, and to motivate and retain key employees. Because a high proportion of AIXTRON's costs are fixed in the near term, the Company's ability to reduce expenses quickly in response to revenue shortfalls is limited. During periods of rapid growth, AIXTRON's business must be able to acquire and/or develop sufficient manufacturing capacity and inventory to meet customer demand, and to attract, hire, assimilate and retain a sufficient number of qualified people. The Company's customers often accelerate or delay expenditures, or they cancel or reschedule their orders. Such events may lead to the results of operations being adversely affected, which could result in significant volatility in the market price of the Company's ordinary shares and ADSs in reaction to variations in their businesses or market conditions.

        As a result, AIXTRON must be able to react quickly to these changes in supply and demand. A failure to quickly align the Company's cost structure and manufacturing capabilities with industry fluctuations could lead to significant losses or a failure to capitalize on increased demand.

Uncertainties of economic and political conditions, in particular the global macroeconomic situation, may adversely impact AIXTRON's financial position and results of operations.

        Global economic development throughout the year 2015 was worse than originally expected, especially in the emerging and developing countries, including China. The main reasons for the reduced growth dynamics in these countries were lower commodity prices, tighter financial conditions, structural bottlenecks and geopolitical factors. Additionally, markets in the Middle East have struggled due to decreasing oil prices throughout 2015 as well as increased uncertainty related to geopolitical tensions in the Middle East. On the other hand, the major growth drivers in the world's advanced economies, such as easy financial conditions, more neutral fiscal policy in the euro area, lower fuel prices, and improving confidence and labor market conditions, remained intact and led to stable growth in these countries. Therefore, as expected the Federal Reserve (the "Fed") has turned to a slightly tighter monetary policy with the first interest rate increase since 2006 taking place in December 2015. The Fed's monetary policy might raise additional uncertainties about the global economic development in the year 2016. Although AIXTRON has no bank borrowings, it has cash bank deposits. AIXTRON monitors carefully the financial condition of its banking partners, but if one of AIXTRON's banking partners were to default before AIXTRON detected the problem or took appropriate measures, this could adversely impact AIXTRON's financial position. A constantly subdued global economic development might adversely affect the business prospects of AIXTRON's customers and suppliers and thus also harm AIXTRON's business development as a capital goods producer. In addition to the potential for pricing pressure and reduced demand, AIXTRON customers might delay or cancel orders and suppliers might delay or cancel deliveries, which could adversely affect AIXTRON's ability to align its production capacity with its sales and could result in inventory write-downs. These conditions might make it challenging for AIXTRON to plan and adapt, which could adversely impact AIXTRON's results of operations. AIXTRON is also subject to U.S. and German export control and economic sanctions laws, which prohibit the shipment of certain products to embargoed or sanctioned countries, governments and persons. Any change in export or import regulations, economic sanctions or related legislation, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in

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decreased use of AIXTRON products by, or in decreased ability to export or sell products to, existing or potential customers with international operations. Any decreased use of AIXTRON products or limitation on the ability to export or sell products would likely adversely affect the Company's business, financial condition and results of operations.

AIXTRON depends on a limited number of customers that operate in concentrated industries.

        AIXTRON's customer base has been in the past and may in the future be highly concentrated. Orders from a relatively limited number of customers have accounted for, and likely will continue to account for, a substantial portion of the Company's revenues, which may lead customers to demand pricing and other terms less favorable to the Company. If a principal customer discontinues its relationship with AIXTRON or suffers economic setbacks, AIXTRON's business, financial condition and operating results could be materially and adversely affected. AIXTRON's ability to increase revenues in the future will depend in part upon its ability to obtain orders from new customers. AIXTRON cannot be certain that it will be able to do so. In addition, because a relatively small number of large manufacturers, many of whom are AIXTRON's customers, dominate the industries in which they operate, it may be especially difficult for the Company to replace these customers if it loses their business. A large portion of orders in AIXTRON's order backlog are orders from its principal customers. Furthermore, AIXTRON does not have long-term contracts with many of its customers. The Company's customers may delay existing or new orders because of raw material shortages, credit/liquidity tightness or delays in preparing their facilities. Any such delays could have a negative impact on customer acceptance of AIXTRON's systems, and ultimately, on its ability to generate revenues. As a result, the Company's agreements with its customers do not provide any assurance of future revenues and AIXTRON is exposed to competitive price pressure on most new orders it attempts to obtain. The Company's failure to obtain new orders from new or existing customers would have a negative impact on its results of operations. Because of the significant size of some orders and the limited ability of the Company to reduce expenses quickly in response to such delays, the Company may experience volatility in its results of operations.

AIXTRON is dependent on a limited number of suppliers and the Company's operating results could be affected if it loses access to sources of materials or services.

        The systems that AIXTRON produces are complex and require the Company to manufacture or obtain through third party sources many critical components. Many of these components are only available from a limited number of suppliers or, in some cases, even a single supplier. Because of the cost of AIXTRON's systems, the Company generally aims to keep its inventories at minimum levels. AIXTRON generally does not have long-term supply agreements with many of its suppliers. Consequently, the Company could experience significant price increases and/or may not be able to obtain replacement components in a timely manner or at all. Such price increases would increase the cost of goods which could adversely affect the Company's gross margins and operating results. Because AIXTRON often does not account for a significant part of its suppliers' business, the Company may not have access to sufficient capacity from these suppliers in periods of high demand. In addition, AIXTRON risks having important suppliers terminate product lines, change business focus or even go out of business. If AIXTRON were required to change any of its suppliers, it would be required to re-qualify each new supplier. In the near term, the Company's supplier qualification processes could prevent or delay component shipments, which could in turn prevent the Company from delivering products to its customers in a timely manner. AIXTRON estimates that it could take approximately six to eighteen months to replace suppliers of certain critical components used in its systems. In addition, in connection with third-party manufacturing activities, it is possible that AIXTRON may encounter unforeseen technical complexities that it may be unable to resolve, or that the resolution of such complexities may lead to delays in the implementation of these third-party manufacturing activities.

AIXTRON's business operates in a highly competitive industry characterized by increasingly rapid technological changes, and if the Company does not develop new products in a timely manner and in response to changing market conditions or customer requirements, it may not be able to compete successfully in this market.

        The introduction of new products and technologies occurs at a continuously increasing pace and grows increasingly complex over time. If AIXTRON's business does not develop and introduce new products and technologies in a timely manner in response to changing market conditions or customer requirements, its

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financial condition and results of operations could be materially and adversely affected. AIXTRON's competitive advantage and future success depend on its ability to:

•

develop successfully new products and technologies;



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develop new markets for its products and services;



•

introduce new products to the marketplace in a timely manner;



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qualify new products with its customers; and



•

commence and adjust production to meet customer demands.

In order to compete, AIXTRON must attract, retain and motivate key employees, and its failure to do so could have an adverse effect on its results of operations.

        In order to compete, AIXTRON must attract, retain and motivate executives and other key employees, including those in managerial, technical, sales, marketing and support positions. Hiring and retaining qualified executives, scientists, engineers, technical staff and sales representatives are critical to the Company's business, and competition for experienced employees in the semiconductor industry can be intense. To attract, retain and motivate qualified employees, AIXTRON relies heavily on paying cash compensation at market-competitive rates and offering additional incentives and bonus payments. If such cash payments cease to be viewed as a valuable benefit by the Company's key employees, the Company's ability to attract, retain and motivate its employees could be adversely impacted, which could negatively affect its results of operations and/or require AIXTRON to increase the amount it expends on cash and other forms of compensation.

AIXTRON's competitors may have greater resources than AIXTRON, or may otherwise be better suited to compete in the Company's markets, and AIXTRON's failure to compete successfully with these companies would seriously affect its business.

        Some of AIXTRON's competitors have greater financial, engineering, manufacturing and marketing resources than the Company. In addition, AIXTRON faces competition from smaller emerging equipment companies whose strategy is to provide a portion of the products and services that the Company's semiconductor equipment business offers, using innovative technology to sell products into specialized markets. New product introductions or enhancements by AIXTRON's competitors could cause a decline in revenues or loss of market acceptance of AIXTRON's existing products. Increased competitive pressure could also lead to intensified price competition resulting in lower margins. The Company's failure to compete successfully with these other companies would seriously affect its business.

AIXTRON faces lengthy research and development sales and qualification cycles for its new and existing products and, in many cases, must invest a substantial amount of time and funds with no assurance that these efforts or expenditures will result in revenues.

        Revenues from AIXTRON's systems primarily depend upon the decision of a prospective customer to invest in or upgrade its manufacturing capabilities, which typically involves a significant capital commitment by the customer. Customers usually place orders with AIXTRON between three to nine months, or longer, after the Company's initial contact with them regarding a particular system. AIXTRON often experiences delays in obtaining system orders while customers evaluate and receive internal approvals for the purchase of these systems. These delays may include the time necessary to plan, design or complete a new or expanded semiconductor fabrication facility. Due to these factors, the Company expends substantial funds as well as marketing and management efforts to sell its semiconductor production systems. These expenditures and efforts may not result in revenues.

        In order to expand its materials production capabilities, the Company has dedicated a number of its systems to the manufacture of wafers and devices. At any given time, some of AIXTRON's products are being tested to determine whether they meet customer or industry specifications. During such a qualification period, AIXTRON invests significant resources and dedicates substantial production capacity to the manufacture of these new products, prior to any commitment to purchase by the prospective customer and without generating significant revenues from the qualification process. Customer orders regularly include demanding technical or other commercial hurdles which have to be overcome. If AIXTRON was unable to meet these specifications, was unable to overcome technical or commercial hurdles or does not receive sufficient customer orders to profitably use the dedicated production capacity, its business, financial condition, results of operations and cash flows could be materially and adversely affected.

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        Additionally, AIXTRON makes efforts to invest in research and develop of new equipment, materials and processes for production of its products. Continued research and development efforts will be needed to stay competitive in the industries in which the Company operates. However, AIXTRON cannot be assured that such investments in research and development would result in successful innovation of the company's equipment, materials or processes

        AIXTRON's future budgets for operating expenses, capital expenditures, operating leases and service contracts are based upon the Company's assumptions as to the anticipated market acceptance of its products. If AIXTRON's products do not meet the expected customer demand, the Company's business, financial condition, results of operations and cash flows could be materially and adversely affected.

AIXTRON's quarterly operating results fluctuate significantly, which may cause the market price of its ordinary shares and its ADSs to increase or decrease significantly.

        AIXTRON has historically experienced significant fluctuations in its quarterly operating results and the Company anticipates that such fluctuations will continue. AIXTRON's results may vary significantly depending on a number of factors, including:

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changes in the semiconductor market environment;



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changes in regulations affecting the semiconductor industry;



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changes in the mix or cost of its products and services;



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the timing of the introduction or acceptance of new products and services offered by AIXTRON or its competitors; and



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exchange rate fluctuations, in particular between the Euro, the US-Dollar and the Pound Sterling.

        In addition, the Company derives a substantial portion of its revenues in any fiscal period from the sale of a relatively small number of high-priced systems. As a result, the timing of recognition of revenue for a single transaction could have a material effect on total revenues and operating results for a particular reporting period. A delay of only a week or two can often shift the related realization of revenues into the next quarter, which could adversely affect the Company's ability to meet expectations. In addition, customers at times attempt to cancel or reschedule orders, even when not permitted to do so under the contractual terms of the purchase order.

        As stated above, AIXTRON has experienced long and unpredictable sales cycles. The timing of an order often depends on the capital expenditure budget cycle of customers. In addition, the time it takes the Company to build a product to customer specifications, which the Company refers to as the build cycle, typically ranges from three to nine months, followed in certain cases by a period of customer acceptance during which the customer evaluates the performance of AIXTRON's system and may potentially reject such system. As a result of the build cycle and evaluation periods, the period between a customer's initial purchase decision and revenue recognition on an order often varies widely, and variations in length of this period can cause further fluctuations in operating results.

        The factors described above, together with the cyclical nature of the semiconductor industry, could cause the market price of AIXTRON's ordinary shares and its ADSs to fluctuate significantly.

AIXTRON's business is exposed to the risks of operating an international business.

        AIXTRON's business has operations located in many countries throughout the world to support the Company's sales and services to the global semiconductor industry. Managing international operations located in many countries throughout the world presents complex management challenges. These challenges may make it more difficult for AIXTRON to implement business strategies and enforce centralized business processes and controls across its enterprise.

AIXTRON is highly dependent on international revenues, particularly revenues from Asian countries.

        Revenues outside of Europe accounted for 81.91% of the Company's total revenues for the year ended December 31, 2015, versus 87.00% for the year ended December 31, 2014, and 86.76% of total revenues for the year ended December 31, 2013. Revenues from AIXTRON's Asian-based customers accounted for 59.86% for the year ended December 31, 2015, versus 82.68% for the year ended December 31, 2014, and 77.54% of total revenues for the year ended December 31, 2013. AIXTRON anticipates that international revenues, including revenues from Asia, will continue to account for a

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significant portion of its revenues. As a result, a significant portion of the Company's revenues will be subject to risks, including:

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unexpected changes in foreign law or regulatory requirements;



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exchange rate volatility;



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tariffs and other trade barriers;



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political and economic instability;



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military confrontation;



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difficulties in accounts receivable collection;



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extended payment terms;



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difficulties in managing distributors or representatives;



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difficulties in staffing its subsidiaries;



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difficulties in managing foreign subsidiary operations; and



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potentially adverse tax consequences.

        Wherever currency devaluations occur abroad, AIXTRON's products become more expensive for its customers in that country. In addition, difficult economic conditions may limit capital spending by the Company's customers. These circumstances may also affect the ability of AIXTRON's customers to meet their payment obligations, resulting in cancellations or deferrals of existing orders and the limitation of additional orders.

Exchange rate fluctuations, in particular between the Euro, the US-Dollar and the Pound Sterling, could adversely affect AIXTRON's ability to price its products competitively and its operating results.

        The Company's operations are conducted by entities in many countries and a substantial portion of its sales and production costs are denominated in currencies other than the Euro. As a result, fluctuations between the value of the Euro and other major currencies, in particular the US-Dollar and the Pound Sterling, may affect the Company's operating results. In addition, changes in monetary or other policies, including as a result of the regionally unbalanced economic development as well as geopolitical conflicts, would also likely affect foreign currency exchange rates. AIXTRON may not be able to effectively reduce or eliminate the risk that fluctuations in foreign currencies will adversely affect its operating results.

        Further details can be found in "Item 11—Quantitative and Qualitative Disclosure about Market Risk."

Because AIXTRON's operating income is subject to taxation in differing jurisdictions, the Company is exposed to a number of different tax risks.

        Because AIXTRON operates in a number of countries throughout the world, including the U.S., its operating income is subject to taxation in differing jurisdictions and at differing tax rates. AIXTRON seeks to organize its affairs in a tax efficient and balanced manner, taking into account the applicable regulations of the jurisdictions in which it operates. As a result of the Company's multi-jurisdictional operations, it is exposed to a number of different tax risks, including tax risks related to: income tax, value added tax, payroll tax, social security tax, customs and excise duties, sales and use tax, U.S. state tax, withholding tax requirements, tax treaty interpretation, tax credits, permanent establishments, transfer pricing on internal deliveries of goods and services (including benefit tests and requirements to prove the arm's length character of internal transactions), loss carry-forwards, multi-jurisdictional double taxation, acquisitions, dispositions, reorganizations, and internal restructurings.

        The tax authorities in the jurisdictions in which AIXTRON operates may audit the Company's tax returns and may disagree with the positions taken in those returns. An adverse outcome resulting from any settlement or future examination of AIXTRON's tax returns may subject the Company to additional tax liabilities and may adversely affect its effective tax rate which could have a material adverse effect on its financial position, results of operations and liquidity. In addition, any examination by the tax authorities could cause AIXTRON to incur significant legal expenses and divert the Company's management's attention from the operation of its business.

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AIXTRON is exposed to risks associated with acquisitions.

        AIXTRON has in the past and may in the future undertake acquisitions of, or significant investments in, other businesses with complementary products, services or technologies. Acquisitions, or other significant investments, involve many risks, including:

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difficulties in integrating the operations, technologies, products and personnel of acquired companies;



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lack of synergies or the inability to realize expected synergies and cost-savings;



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revenue and expense levels of acquired entities differing from those anticipated at the time of the acquisitions;



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difficulties in managing geographically dispersed operations;



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the potential loss of key employees, customers and strategic partners of acquired companies;



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claims by terminated employees, shareholders of acquired companies or other third parties related to the transaction;



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the issuance of dilutive securities, assumption or incurrence of additional debt obligations or expenses, or use of substantial portions of AIXTRON's cash;



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diversion of AIXTRON's management's attention from daily operations of the business; and



•

the impairment of acquired intangible assets as a result of technological advancements, or worse-than-expected performance of acquired companies.

        AIXTRON may not be successful in addressing the risks that its past or future acquisitions may present and the Company may fail to realize the perceived benefits of such acquisitions.

AIXTRON may increase production in anticipation of customer orders that may not materialize, which would negatively affect the Company's operating results.

        AIXTRON schedules production of its systems based upon order backlog and customer commitments. Based on the complexity of the systems that AIXTRON produces, the Company must expend considerable efforts in hiring, training and retaining qualified manufacturing personnel. AIXTRON has in the past experienced delays in customer delivery schedules, as well as outright cancellations of orders. For instance, in December 2015, AIXTRON's customer San'an Optoelectronics significantly reduced the volume of its order of AIX R6 Metal-Organic Chemical Vapor Deposition ("MOCVD") systems. For additional information, see "Item 4: Information on the Company—A. History and Development of the Company—Important Events—Substantial reduction in order volume from San'an Optoelectronics." As a consequence, the Company may incur significant near term expenses for manufacturing capabilities that it may not be able to fully utilize, which would negatively affect its gross margins and its profitability. Moreover, industry analysts evaluate AIXTRON's backlog in determining the Company's prospects. If AIXTRON experiences significant reductions in its backlog as a result of cancellations or the Company's failure to obtain new orders, it could experience negative ratings from analysts which could adversely impact the trading value of the Company's stock.

The semiconductor industry and AIXTRON's operations are characterized by a high percentage of costs that are fixed or otherwise difficult to reduce in the short-term, and by product demand that is highly variable and is subject to significant downturns that may adversely affect the Company's business, results of operations and financial condition.

        The semiconductor industry and AIXTRON's operations are characterized by high costs, such as those related to facility construction and equipment, research and development, and employment and training of a highly skilled workforce, that are either fixed or difficult to reduce in the short-term. At the same time, demand for the Company's products is highly variable and downturns have been experienced, often in connection with maturing product cycles and downturns in general economic market conditions. These downturns have been characterized by reduced product demand, manufacturing overcapacity, high inventory levels and decreased average selling prices. The combination of these factors may cause AIXTRON's revenue, gross margin, cash flow and profitability to vary significantly both in the short-term and over the long-term.

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AIXTRON's businesses use potentially harmful chemicals and other hazardous materials. AIXTRON is subject to environmental risks and regulations which could affect the Company's results of operations and financial condition.

        The Company's research and development activities, as well as the manufacturing and demonstration of AIXTRON's products, involve the use of potentially harmful chemical and other hazardous or potentially hazardous materials and radioactive compounds. AIXTRON cannot completely eliminate the risk of contamination or injury from the use, storage, handling or disposal of these materials. In the event of contamination or injury, AIXTRON could be held liable for damages that result, and any liability could exceed the Company's resources. AIXTRON is subject to the laws and regulations of numerous jurisdictions governing the use, storage, handling and disposal of these materials and specified waste products. The Company's cost of compliance with these laws and regulations include local, state and federal fees and costs related to the installation and maintenance of safeguards to mitigate the risk of potential release of hazardous materials (including equipment safeguards, such as scrubbers). The amounts expended in compliance with these laws and regulations to date have not had a material effect on the Company's capital expenditures, earnings and competitive position. However, if stricter laws were passed or applicable environmental laws were more strictly enforced, AIXTRON may incur significant additional capital expenditure to address compliance with such environmental laws and regulations.

        Failure or inability to comply with existing or future environmental regulations could result in significant remediation liabilities, the imposition of fines and/or the suspension or termination of production, each of which could materially and adversely affect the Company's business, financial condition, results of operations and cash flows.

        In addition, new climate change regulations could require AIXTRON to change its manufacturing processes or obtain substitute materials that may cost more or be less available for its manufacturing operations. Furthermore, new restrictions on carbon dioxide or other greenhouse gas emissions could result in significant costs for AIXTRON. The Company expects increased worldwide regulatory activity in the future. The cost of complying, or of failing to comply, with these and other climate change and emissions regulations could have an adverse effect on AIXTRON's business plans and operating results.

AIXTRON is exposed to the risk that third parties may violate the Company's proprietary rights or accuse the Company of infringing upon their proprietary rights.

        AIXTRON's success in the markets in which it operates may depend on its ability to operate without infringing the intellectual property rights of others and to prevent others from infringing the Company's intellectual property rights.

        There has been substantial litigation regarding patents and other intellectual property rights in the semiconductor industry. AIXTRON may become a party to patent litigation or proceedings to determine its patent rights with respect to third parties, including, potentially, its customers. Infringement proceedings may be necessary to establish which party was the first to discover certain intellectual property. AIXTRON may also become involved in patent litigation against third parties to enforce the Company's patent rights, to invalidate patents held by third parties or to defend against similar claims by others. The cost to AIXTRON of any patent litigation or similar proceeding could be substantial, and it may require significant management time. Any patent infringement litigation may also adversely affect the Company's ADS or ordinary share prices. If infringement litigation against the Company was resolved unfavorably, AIXTRON may be enjoined from providing some of its products or services, or the Company may be required to obtain a license from a third party. AIXTRON may not be able to obtain the requisite license on commercially acceptable terms, which could require the Company to cease selling systems that contain infringing technology until it can identify and implement subsystems that do not infringe on third party technology. AIXTRON may not be successful in developing non-infringing solutions and may be prevented from selling its systems, which could result in a significant reduction in the Company's revenues and a reduction in the value of its ordinary shares and ADSs.

The Company's competitive position may depend on its ability to protect its intellectual property rights and trade secrets. If AIXTRON was unable to protect such rights and secrets, other companies may be able to compete more effectively against it, and the Company's business could suffer.

        AIXTRON's success is dependent upon the protection of the Company's proprietary rights. In the high-tech industry, intellectual property is an important asset that is always at risk of infringement. AIXTRON incurs costs to file for patents and defend its intellectual property and AIXTRON relies upon the laws of Germany and of foreign countries in which it develops, manufactures or sells its products to

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protect its proprietary rights. However, there can be no assurance that these proprietary rights will provide competitive advantages, or that other parties will not challenge, invalidate or circumvent these rights. Moreover, the laws of some foreign countries may not be as protective of intellectual property rights as those in Germany and the United States, and mechanisms for enforcement of intellectual property rights may be inadequate. Infringement upon the Company's proprietary rights by a third party could result in lost market and revenue opportunities for AIXTRON.

        AIXTRON relies on trade secret protection for its confidential and proprietary information and procedures. AIXTRON currently protects this information and these procedures as trade secrets through recognized practices, including confidentiality agreements with employees, consultants, collaborators and customers. These confidentiality agreements may be breached, however, and AIXTRON may not have adequate remedies for any breach. In addition, these trade secrets may otherwise become known to, or be independently discovered by, competitors. If AIXTRON's trade secrets were to become known to, or be independently discovered by, competitors, the Company's competitive position and its business may be negatively impacted.

System security risks, data protection breaches, cyber-attacks and other related cyber security issues could disrupt our internal operations, and any such disruption could reduce our expected net sales, increase our expenses, damage our reputation and adversely affect our stock price.

        The Company is subject to cyber security risks and may incur costs to minimize those risks. Cyber security breaches, such as unauthorized access, inadvertent disclosure, employee error or malfeasance, computer viruses, computer hackings or other disruptions, could compromise the security of AIXTRON's data and infrastructure, thereby exposing such information to unauthorized access by third parties. Techniques used to obtain unauthorized access to, or to sabotage systems, change frequently and generally are not recognized until launched against a target. AIXTRON may be required to expend significant capital and other resources to remedy, protect against or alleviate these and related problems, and AIXTRON may not be able to remedy these problems in a timely manner, or at all. Breaches of the Company's security measures or inadvertent disclosure of proprietary information could damage the Company's brand and reputation or otherwise harm its business. In addition, the cost and operational consequences of implementing further data protection measures could be significant. Delayed sales, significant costs or lost customers resulting from these system security risks, data protection breaches, cyber-attacks and other related cyber-security issues could adversely affect AIXTRON's operating results, stock price and reputation.

AIXTRON's leases may be terminated or the company may be unable to renew our leases on acceptable terms; if AIXTRON decides to relocate, AIXTRON may incur additional costs if AIXTRON terminates a lease.

        If AIXTRON is unable to renew leases for its manufacturing facilities on acceptable terms or if a lease is terminated:

•

AIXTRON may be unable to find a new property with the amenities and in the location we require, which may force us to close or move to a less desirable location;



•

AIXTRON may incur significant costs in identifying, securing and moving to a new location;



•

AIXTRON may lose employees or have trouble retaining employees due to a relocation to a less desirable location; and



•

the relocation may significantly disrupt the company's operations.

        In addition, terminating any of our manufacturing leases could be costly. If AIXTRON wishes to terminate a lease in order to relocate or close a manufacturing facility, AIXTRON may be unable to negotiate satisfactory termination arrangements and could incur significant costs or liabilities under the lease, which could materially adversely affect AIXTRON's results of operations and financial condition.

AIXTRON is subject to complex regulations and any failure to comply with such regulations or increases in the cost of such compliance may have a significant negative effect.

        AIXTRON is obligated to comply with the laws of all of the countries around the world in which it operates and sells products. Such legal requirements can vary from country to country and new requirements may be imposed on AIXTRON from time to time. Any actual or alleged failure to comply

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with such laws and regulations or increase in the cost of such compliance could have a material adverse effect on AIXTRON's business, financial condition, results of operations and reputation.

AIXTRON may incur significant legal expenses in connection with, and allocate management time and attention to, legal actions involving the company that may take place from time to time and it is possible that AIXTRON will not be able to prevail in its legal actions.

        AIXTRON has in the past and may in the future be involved in litigation related to its business. Current and future litigation may result in AIXTRON incurring significant legal expenses and allocating management time and attention to such litigation. No assurance can be provided that AIXTRON will be able to prevail in any legal actions that arise. Decisions of courts or other authorities as well as settlements can cause expenses, which may have a material adverse effect on AIXTRON's business, financial condition and results of operations.

Risks relating to holding AIXTRON's ADSs and Ordinary Shares

You may be unable to enforce a judgment against AIXTRON or members of its Executive Board or Supervisory Board.

        AIXTRON is a stock corporation organized under the laws of the Federal Republic of Germany. None of the members of its Supervisory or Executive Boards is currently a citizen or resident of the United States. Substantially all of the assets of these individuals and most of the assets of the Company are located outside the United States. As a result, it may not be possible for you to enforce against AIXTRON judgments obtained in the United States. You may also encounter difficulties in connection with the enforcement in Germany of liabilities based solely upon United States laws in original actions or in actions for the enforcement of judgments of United States courts.

You may have access to less information about AIXTRON and fewer opportunities to exercise your rights as a shareholder if you hold AIXTRON's ordinary shares through its ADSs.

        The rights and terms of AIXTRON's ADSs are designed to replicate, to the extent reasonably practicable, the rights applicable to the Company's ordinary shares, for which there is no active trading market in the United States. However, because of aspects of German law, the Company's Articles of Association and the contractual terms of the deposit agreement under which AIXTRON's ADSs are issued, your rights as a holder of ADSs will differ in various ways from a shareholder's rights, and you may be affected in other ways, including:

•

you may not be able to participate in rights offerings or dividend alternatives;



•

you may not receive copies of AIXTRON's reports as promptly as a holder of ordinary shares;



•

you will be able to exercise voting rights only by instructing the depositary how to exercise the voting rights of the shares that underlie your ADSs, and due to logistical, timing and other issues, you may not receive the opportunity to exercise a right to vote;



•

the deposit agreement may be amended by the Company and the depositary, or may be terminated by AIXTRON or the depositary, without your consent in a manner that could prejudice your rights; and



•

the deposit agreement limits AIXTRON's obligations and liabilities and those of the depositary.

As a holder of AIXTRON's ADSs you may have fewer or less well-defined shareholders' rights compared to a holder of common stock of a U.S. company.

        AIXTRON's corporate affairs are governed by its Articles of Association (Satzung) and German law. German law is generally less specific than U.S. law in terms of governance of corporate operations. Under German law, as a holder of AIXTRON's ADSs you may have fewer or less well-defined rights than you would as a shareholder of a U.S. company. For example, a shareholder of a U.S. corporation may institute lawsuits on behalf of the corporation and class actions. In Germany the company must assert claims for damages against members of the Executive Board or the Supervisory Board upon a respective shareholders' resolution requiring a simple majority of the votes cast. Moreover, in Germany, shareholders whose shares represent 1% or a proportional amount of € 100,000 of the stated share capital of the stock corporation may apply in court for authorization to assert claims for damages of the Company against members of the Executive Board and/or the Supervisory Board in their own name. However, the Company

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may at any time assert its claims for damages on its own behalf; in such case any pending authorization or court proceeding initiated by a shareholder of the Company related to the same claims for damages will then be inadmissible. As a result, a shareholder of a German stock corporation may not be able to protect his or her interest in the shares as well as a shareholder of a U.S. corporation could.

AIXTRON may in the future be considered a passive foreign investment company.

        The United States Internal Revenue Code contains special rules relating to passive foreign investment companies ("PFICs"). A United States holder who owns stock in a PFIC is generally subject to adverse tax consequences under these rules. These rules do not apply to non-United States holders. A company is treated as a PFIC if at least 75% of the company's gross income for a taxable year consists of "passive income", defined generally as income from passive investments, as opposed to operating income. A company is also treated as a PFIC if the average percentage of the value of its assets, including cash balances that produce or are held for the production of passive income is at least 50%. While AIXTRON believes it is currently not a PFIC, because a company's status as a PFIC is a complex, factual determination made on an annual basis, there can be no assurance that the Company will not become a PFIC in the future. Further details about the PFIC rules and their consequences to United States holders can be found under "Item 10.E Additional Information—Taxation."

        If AIXTRON was classified as a PFIC, unless a U.S. holder made a timely specific election, a special tax regime would apply to any "excess distribution", which would be such holder's share of distributions in any year that are greater than 125% of the average annual distributions received by such holder in the three preceding years or such holder's holding period, if shorter; and any gain realized on the sale or other disposition of the ADSs. Under this regime, any excess distribution and realized gain would be treated as ordinary income and would be subject to tax as if the excess distribution or gain had been realized ratably over such holder's holding period for the ADSs. A U.S. holder will generally be required to pay taxes on the amount allocated to a year at the highest marginal tax rate and pay interest on the prior year's taxes, unless such U.S. holder is able to ameliorate the tax consequences somewhat by making a mark-to-market election or "QEF election". You should consult your tax advisor of the consequences of AIXTRON's classification as a PFIC.

Because AIXTRON is not obligated to continue to have its ADSs listed on the NASDAQ Global Select Market, your ability to trade the ADSs may be eliminated in the future, and the market prices of the Company's ADSs and ordinary shares may be negatively affected and it may become more difficult to sell the ordinary shares.

        Because AIXTRON is not obligated to continue to have the ADSs listed on the NASDAQ Global Select Market, AIXTRON could delist its ADSs, which could adversely affect the market price for the ADSs and ordinary shares. In addition, if the ADSs are no longer listed on the NASDAQ Global Select Market, there can be no assurance that a market will develop for the ADSs and it will be more difficult for a United States holder to sell the underlying ordinary shares.

Identification of deficiencies or weaknesses in AIXTRON's internal control over financial reporting may have an adverse impact on the Company's financial condition and results of operations and the trading price of its securities.

        The Company's Management is required to prepare a report relating to its evaluation of the Company's internal control over financial reporting, as required pursuant to Section 404 of the U.S. Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"). AIXTRON intends to take prompt measures to eliminate any identified deficiencies or weaknesses in the Company's internal control structure. Such measures may involve significant effort and expense. Depending on the nature and extent of any identified deficiency or weakness, AIXTRON could be required to restate previously issued financial statements. Any of such actions may have an adverse impact on the Company's financial condition and results of operations and the trading price of its securities.

Item 4:    Information on the Company

A.    History and Development of the Company

Introduction

        AIXTRON SE was incorporated as a German limited liability corporation in 1983 and converted to a stock corporation under the laws of the Federal Republic of Germany in 1997. In 2010, AIXTRON

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converted from a German stock corporation ("Aktiengesellschaft" or "AG") to a stock corporation in the form of a European Company ("Societas Europaea" or "SE"). As such, AIXTRON SE is subject not only to the German stock corporation law, but also to the superseding European SE regulations and the German SE Implementation Act ("SE-Ausführungsgesetz"). As a result of such conversion, AIXTRON will continue to be treated to a large extent like a German stock corporation, including with respect to capital measures, shareholders' meetings and accounting. AIXTRON is headquartered in Herzogenrath, Germany and has wholly-owned subsidiaries in the United Kingdom, China, Japan, South Korea, Sweden, Taiwan and the United States. AIXTRON's principal executive office is located at Dornkaulstrasse 2, 52134 Herzogenrath, Germany, and the Company's telephone number there is +49-2407-9030-0. AIXTRON's agent for service of process in the United States is AIXTRON, Inc., 1139 Karlstad Drive, Sunnyvale, California 94089.

Important Events

Acquisition of PlasmaSi, Inc., Fremont, California (USA)

        On April 1st, 2015, the Group acquired 100% of the voting equity interests of PlasmaSi Inc. (California, USA), obtaining control of the company. The acquired technology enables the encapsulation of organic thin-films by depositing ultra-thin, light weight and flexible barrier films through its proprietary technology which is particularly well suited to Organic Light Emitting Diodes ("OLED") displays. In combining AIXTRON's Organic Vapor Phase Deposition ("OVPD®") technology with PlasmaSi's innovative approach, the Company will be able to add significant value in the production of flexible OLED applications. For a more detailed financial information on the acquisition refer to Item 18 "Financial Statements—Note 38. Acquisition of PlasmaSi Inc.".

Substantial reduction in order volume from San'an Optoelectronics

        In December 2015, AIXTRON has reached an agreement with its Chinese customer San'an Optoelectronics regarding a substantial reduction in the volume of AIX R6 MOCVD systems ordered from 50 to the three which have already been delivered. Following the Company's internal recognition policy, the 47 tools were not recorded in order intake and order backlog, so that the number of orders recorded in 2015 was not affected by the reduction. However, AIXTRON recorded additional provisions in Q4/2015 which resulted in an impact on operating results of EUR 2.6 million (see also Page F-41 Note 37). The Companies' cash position was affected negatively by the reduction in order volume, as the majority of the previously received advance payments from San'an have been repaid prior to the time of publication of this report. Despite the efforts made by both parties, the customer's specific qualification requirements were not achieved. Both parties agreed to continue their existing partnership by cooperating on future system generations as well as on systems for other applications. AIXTRON will proceed in marketing and the further development of the AIX R6 Showerhead technology. The focus is now on existing customers that have already achieved or are in the process of achieving qualification.

Amendments to Articles of Association

        For information regarding amendments to AIXTRON's Articles of Association, refer to Item 10.B. "Additional Information—Memorandum and Articles and Association" in this report.

Capital Expenditures

        For information regarding capital expenditures, refer to Item 5.B. "Liquidity and Capital Resources—Investments" in this report.

B.    Business Overview

Business Model

        AIXTRON is a leading provider of deposition equipment to the semiconductor industry. The Company's technology solutions are used by a diverse range of customers worldwide to build advanced components for electronic and optoelectronic applications based on compound, silicon, or organic semiconductor materials. Such components are used in displays, signaling, lighting, fiber optic communication systems, wireless and mobile telephony applications, optical and electronic storage devices, computing, as well as a range of other leading-edge applications.

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        AIXTRON's business activities include developing, producing and installing equipment for the deposition of semiconductor and other complex materials, process engineering, consulting and training, including ongoing customer support and after-sales service.

        AIXTRON supplies its customers with both production-scale material deposition systems and small scale systems for Research & Development ("R&D") or small scale production.

        Demand for AIXTRON's products is driven by increased processing speed, improved efficiency, energy storage and energy efficiency requirements and the necessity to reduce the cost of ownership for current and emerging microelectronic and optoelectronic components. The ability of AIXTRON's products to precisely deposit thin material films and the ability to control critical surface dimensions in these components, enables manufacturers to improve performance, yield and quality in the fabrication process of advanced microelectronic and optoelectronic devices.

        Environmental protection and the responsible use of resources are an essential part of AIXTRON's business strategy. The Company's engineers work on improving AIXTRON's systems continuously, both in terms of resource conservation and environmental-friendly design and function. AIXTRON SE's DIN EN ISO 50001:2011 certified energy management system and the EN ISO 14001:2004 certified environmental management system at AIXTRON, Inc. contribute to the efficient use of energy and the careful use of resources.

        For more information regarding potential factors that could adversely affect the described Company's business activities, model and strategy going forward, refer to Item 3.D. "Key Information—Risk Factors" in this report.

Employees

        AIXTRON's success very much depends on the achievements and motivation of the Company's staff. The employees are recruited on the basis of professional and personal qualifications and experience. Apart from the direct advertising of job opportunities to attract new employees, AIXTRON regularly participates in job fairs and other career events, has local press coverage, and enjoys close collaborative relationships with universities worldwide, including the RWTH Aachen University and the University of Cambridge.

        As a global Company with an international corporate culture, AIXTRON places great value on diversity and sees it also as a competitive advantage. The overall aim is to create a productive work environment, to prevent social discrimination of minorities, and to cultivate equal opportunities

        As part of its innovation management process, AIXTRON has an employee suggestion scheme to encourage all employees to submit their ideas to improve the Company, for instance with ideas to improve processes or products or to save cost, etc.

        Management and leadership quality of an organization also have great impact on the success of a company. AIXTRON promotes these qualities within a specific leadership program, coaching members of the management team in management and team building techniques. AIXTRON considers its labor relations to be satisfactory.

        In 2015, the total number of employees decreased by 5%, from 789 employees at the end of 2014 (2013: 776) to 748 at December 31, 2015. Manufacturing & Service as well as R&D positions still comprise the largest group of permanent employees. In 2014, the higher employee numbers were mainly attributable to the increase of 11% in Research and Development (regionally located in Europe) and increased project related tasks in the area of Organic Semiconductors. While Manufacturing and Service positions saw the biggest reduction, it still comprised the largest group of permanent employees.

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        As of December 31, 2015, the majority of AIXTRON's worldwide permanent employees were based in Europe. In 2014, the majority of AIXTRON's worldwide permanent employees were based in Europe, the region that saw an increase in headcount in fiscal year 2014 due to the above mentioned headcount increase in R&D mainly in Europe.

Technology, Products and Services

        AIXTRON's product range includes customer specific systems capable of depositing material films on a diverse range of different substrate sizes and materials.

        The deposition technologies for opto and power electronics include MOCVD for the deposition of compound materials to produce for instance Light Emitting Diodes ("LEDs"), power electronics or other optoelectronic components.

        For thin film deposition technologies for organic electronics applications including OLEDs, AIXTRON offers Polymer Vapor Phase Deposition ("PVPD®") and Organic Vapor Phase Deposition (OVPD®). For thin film encapsulation, AIXTRON offers a Plasma Enhanced Chemical Vapor Phase Deposition ("PECVD") technology. PECVD is also being employed for the deposition of complex Carbon Nanostructures (Carbon Nanotubes, Nanowires or Graphene).

        For logic and memory applications, AIXTRON systems are capable of depositing material films on wafers of up to 300mm in diameter for the production of memory chips, by employing technologies such as: Chemical Vapor Deposition ("CVD") and Atomic Layer Deposition ("ALD"). Additionally, MOCVD technology is applied to deposit compound materials for the development of future logic devices.

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        The following table summarizes the products and technologies AIXTRON offers to its customers for use in specific applications and devices:

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        AIXTRON also offers a comprehensive range of peripheral equipment and services. Additionally, the Company offers its customers training, consulting and support services.

        AIXTRON is constantly working on the improvement of existing technologies and products. In the course of the last three years, AIXTRON has introduced several new system generations and technologies, such as the CRIUS R MOCVD systems for logic & memory applications, the AIX R6 Close Coupled Showerhead® as well as the automated AIX G5+C for opto & power electronics applications. The OPTACAP™ line of systems was introduced for the encapsulation of organic materials.

Research and Development

        In addition to the state-of-the-art R&D center at its headquarters in Herzogenrath, AIXTRON also operates R&D laboratories in Aachen (Germany), in Cambridge (United Kingdom) and in Sunnyvale (United States). In Suzhou (China), AIXTRON operates an application laboratory. These in-house laboratories are equipped with AIXTRON systems and are used to research and develop new equipment, materials and processes for the production of semiconductor structures.

        The Company's R&D capability remains of important strategic significance, as it provides for a competitive, leading edge technology portfolio and supports the future business development. Therefore, AIXTRON is committed to investing specifically in research and development projects to not only further pursue the Company's leading technology position in MOCVD equipment for applications such as LEDs and for the production of wide band gap materials for Power Electronics or next generation logic & memory applications. AIXTRON also targets to penetrate growth areas in the field of Organic Semiconductors. Key aspects of the Company's R&D activities in fiscal year 2015 comprised the launch of an automated AIX G5+C allowing a cassette-to-cassette operation, the development and delivery of a MOCVD tool for the deposition of compound materials for logic structures (Three-Five-On-Silicon TFOS) as well as the installation and startup of the Gen8 demonstration tool for organic material. These expenditures are monitored very closely.

        The Company's R&D program in 2015 comprised a team of an average of 265 dedicated and highly skilled R&D employees (2014: 285; 2013: 297). 2015 R&D expenditures were down 17% to € 55.4 million (2014: € 66.7 million; 2013: € 57.2 million), reflecting AIXTRON's clearly focused R&D approach. In 2014, R&D expenditures were up 17% to € 66.7 million. This figure was influenced especially by pre-launch development costs related to the next generation of MOCVD tools and the progress made in the OLED area.

        For more information regarding R&D expenses from fiscal year 2013 through 2015, refer to Item 5.A "Operating Results—Development of Results—Operating Costs" in this report.

        The following provides specific examples of AIXTRON's R&D activities in 2015:

        In early 2015, the new OLED research project "FLEXOLIGHTING", which has been approved by the European Commission at the end of 2014 and was formally started. The aim of the program is to produce large area OLED devices with improved cost efficiency, high brightness, high uniformity and long lifetime, and thus bridging the gap between research prototypes and low cost mass production technologies. The three year project, headed by Brunel University, involves various suppliers with AIXTRON as production equipment supplier, with the ultimate goal of establishing unique technology know-how in Europe covering the whole supply chain.

        Additionally, AIXTRON was involved with a number of different publicly funded R&D projects, including the graphene-based research project "GRAPHICA" and the power electronic research project "ALMA", both funded by the European Commission and partially by the German government (GRAPHICA). The target of "GRAPHICA" is to develop a Silicon-technology compatible graphene synthesis method. The "ALMA" project plans to enable the development of heat management strategies and models for applications in power electronics. Moreover, AIXTRON is partner in a project of the Marie Skłodowska-Curie Initial Training Network "EXCILIGHT" in the course of the "Horizon 2020" program of the European Commission. The project aims to research new materials for easy-to-tailor, ultra-efficient OLED lighting.

Intellectual Property

        AIXTRON aims to secure its technology by patenting and protecting inventions, provided it is strategically expedient and possible for the Company to do so. As of December 31, 2015, the Company had

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189 patent families available (December 31, 2014: 196 patent families), of which 97 were patent protected and patents were pending for the remaining 92. For 17 patent families, patent protection was applied for within fiscal year 2015. Patent protection for inventions is usually applied for in those sales markets relevant for AIXTRON, specifically in Europe, China, Japan, South Korea, Taiwan and the United States. Patents are maintained and renewed annually and will expire between 2016 and 2035. As of December 31, 2014, 196 patent families were in use, of which for 30 patents were applied for in the reporting period.

        AIXTRON also has exclusive and non-exclusive licenses to patents owned by others covering certain AIXTRON products, as well as SAP Software licenses.

        AIXTRON is the licensee of certain patents owned by Centre National de la Recherche Scientifique and Universal Display Corporation which are important to the Company's operations in the fields of complex material deposition. AIXTRON sells certain reactor technologies under the terms of those licenses, which apply to the principles of delivering precursor material into a vacuum vapor deposition chamber.

Manufacturing

        The AIXTRON Manufacturing operation is principally involved in the final assembly stage of production, including equipment configuration and tuning as well as the final inspection. The Company purchases all of the components and most of the assemblies required to manufacture the equipment from third-party suppliers and contractors. AIXTRON's contractors and suppliers are carefully selected and qualified to be able to source, supply and/or partially assemble and test individual equipment parts and sub-assemblies. For strategic reasons, there are typically several suppliers for each AIXTRON equipment component/assembly. However, AIXTRON single sources some key components for its systems and is therefore dependent on contracts with the specific supplier of such components. AIXTRON's own staff manages the whole manufacturing process and in conjunction with external contractors executes the final manufacturing steps.

        All AIXTRON manufacturing facilities have an ISO 9001 certified process oriented management system. The certification was confirmed at AIXTRON SE in November 2015 following a successful certification audit without any deviation. In 2014, the energy management system of AIXTRON SE was certified according to DIN EN ISO 50001:2011. Also in 2014, the environmental management system on AIXTRON, Inc. was certified according to EN ISO 14001:2004.

        The Company complies with national and international standards and procedures for the equipment industry that are applicable to AIXTRON products.

        The "CE" marking confirms the conformity of AIXTRON products with the applicable European directives and standards. Moreover, relevant US American standards for admission of AIXTRON products to the US market and the recommended requirements of the SEMI organization are also complied with. When developing new AIXTRON products, among other things, the European Directive RoHS "Restriction of Hazardous Substances" is strictly adhered to. The certifications from independent institutions, such as "TÜV" and "ETL" also confirm compliance of AIXTRON's products with national and international requirements and specifications.

        AIXTRON commits itself and its suppliers to ethical and moral standards for the purchase and usage of conflict minerals (gold, tantalum, tin and tungsten). AIXTRON is continuously striving for transparency regarding the origin of these minerals to comply with the rules and regulations of the U.S. Dodd-Frank Act for Conflict Minerals (Section 1502). Therefore, a process has been established where due-diligence is carried out based on the OECD guidelines. The result of the vendor related due-diligence is filed annually with the Securities and Exchange Commission on AIXTRON's Form SD.

Marketing Channels

        The Company markets and sells its products worldwide, principally through its own direct sales organization, but also through appointed dealers and sales representatives. The relationships with these appointed sales and service representatives are generally terminable at the Company's will. These arrangements typically require that AIXTRON reimburse the representatives for their business expenses as well as pay specified service rates or sales commissions, which vary by geographic region.

        AIXTRON's own Sales and Service Organization provides a full range of customer services, from the initial support of the customized development of an AIXTRON system, through to the final installation

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and the ongoing customer training as well as the operational support of its systems. For a breakdown of revenues by geographic markets, refer to "Item 5—Operating and Financial Review and Prospects—Operating Results—2013-2015—Development of Revenues" in this report.

Customers and Principal Markets

        Among other areas of activity, AIXTRON's semiconductor device customers are engaged in the manufacturing of LEDs, wireless devices, power electronics, other optoelectronic devices, as well as logic and memory chips. Some of these customers are vertically integrated device manufacturers who serve the entire value chain down to the end consumer. Others are independent component suppliers who deliver chips and components produced on AIXTRON equipment to the next link in the value chain, namely, the electronic device manufacturers. The Company's customers also include research centers and universities. Most of the world's leading electronic device manufacturers produce in Asia and consequently, the majority of AIXTRON sales continue to be delivered into this region.

        In 2015, one AIXTRON customer represented more than 10% of total revenues (18% of total revenues) (2014: Four AIXTRON customers with 12%, 11%, 10% and 10% respectively; 2013: One AIXTRON customer with 14%).

        For more information regarding a breakdown of revenues by technology and region for each of the last three fiscal years, refer to Item 5.A. "Operating and Financial Review and Prospects—Operating Results—Development of Revenues" in this report.

Seasonality

        AIXTRON's business is currently not materially affected by seasonality.

Competitive Positioning

        AIXTRON's main competitor in MOCVD applications remains Veeco Instruments Inc. (USA) ("Veeco"). AIXTRON also competes with a number of Asian manufacturers including Taiyo Nippon Sanso (Japan). Additional companies continue to attempt to qualify their own MOCVD tools with customers. For example, Jusung Engineering Co. Ltd. (South Korea) or Nuflare Technology Inc. (Japan) are known to have been active in the development of in-house equipment solutions for the production of LEDs. Certain Chinese companies, such as Advanced Micro-Fabrication Equipment Inc. or Tang Optoelectronics Equipment (Shanghai) Corporation Limited are also working on the development and production of MOCVD equipment, supported by respective government initiatives.

        Based on the latest published market share research by Gartner Dataquest (Forecast: Semiconductor Manufacturing Equipment, Worldwide, April 2015), it was estimated that the share of the worldwide MOCVD equipment market (estimated 2014 total market value: USD 413 million) held by AIXTRON in 2014 was around 41%. Particularly due to lower LED related revenues, the market share is expected to decline in 2015. In the same report, the Company's strongest competitor in terms of sales, Veeco Instruments Inc., had an estimated market share of approximately 53%. Viewed in the mid- to long-term, AIXTRON continues to target retaining a market leading position in the global MOCVD market.

        For CVD-, MOCVD- and ALD-technologies for Silicon applications, AIXTRON competes with a variety of other equipment companies, including LAM Research, Inc. (USA), Applied Materials, Inc. (USA), Tokyo Electron Ltd. (Japan), ASM International N.V. (Netherlands), IPS Technology (South Korea), Jusung Engineering Co. Ltd. (South Korea), and Hitachi Kokusai Electric Co. Inc. (Japan). With the Company's currently available silicon semiconductor manufacturing technologies and thin film processes, AIXTRON is potentially well positioned to offer advanced films for 21nm node and below for Memory and Logic Integrated Circuits (ICs). AIXTRON technologies enable extremely high precision in depositing very thin material layers and facilitate the consistent coating of complex three-dimensional microelectronic device structures. Moreover, they offer new material deposition possibilities for next generation semiconductor devices, and, in AIXTRON's opinion, present high development potential for the future.

        However, as AIXTRON only addresses a specific niche, market share of the total Silicon Semiconductor market is not considered meaningful at this point in time.

        For emerging Organic Semiconductor applications, AIXTRON competes with established manufacturers such as Ulvac, Inc. (Japan), Tokki Corporation (Japan), SNU Precision (South Korea),

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Sunic System (South Korea) and a number of other smaller companies. While these competitors use the vacuum thermal evaporation ("VTE") or polymer technologies to produce OLEDs, AIXTRON offers OLED manufacturers its own highly innovative OVPD® and PVPD® large area deposition technologies. In AIXTRON's opinion, due to a perceived superior process technology enabling a reduction of OLED manufacturing costs, these technologies have the potential to compete successfully with VTE and polymer technologies, especially in the field of large area displays. AIXTRON is positioning itself as an alternative deposition system supplier for next generation OLEDs and large area deposition applications such as displays, future lighting, solar cells, and other electronic OLED applications.

        On April 1, 2015, AIXTRON acquired California, USA based PlasmaSi, Inc. The acquired technology enables the encapsulation of organic thin-films by applying "PECVD", depositing ultra-thin, light weight and flexible barrier films. For thin film encapsulation applications, AIXTRON's PECVD technology competes with manufacturers such as Ulvac, Inc. (Japan), SNU Precision (South Korea), Applied Materials Inc. (USA) and a number of other smaller companies applying PECVD or ALD technology.

        As AIXTRON's organic material deposition and encapsulation technologies as well as most customer applications are still in the market entry phase, Organic Semiconductor market share information is considered not meaningful at this point in time.

        For more information regarding a breakdown of revenues by technology and region for each of the last three fiscal years, refer to Item 5.A. "Operating and Financial Review and Prospects—Operating Results—Development of Revenues" in this report.

Financial and other Performance Indicators

        The Executive Board has implemented dedicated control systems and procedures to manage, monitor, analyze, and document Company risks and opportunities, including a Key Performance Indicator system addressing relevant business areas, with a primary focus on the "Market", "Finance" and "Technology Development" control areas.

        In the "Market" control area, using third party reports and direct customer dialog, AIXTRON pursues a customer- and market-led product development strategy through the careful examination of market trends and customer requirements. The objective of this strategy is to ensure the timely market availability of new and appropriately competitive product generations in line with customer requirements.

        In the "Finance" control area, the Executive Board uses a range of internal and external financial and non-financial performance indicators with particular focus on: order intake, revenues, gross margins, EBITDA (Earnings before Interest, Tax, Depreciation and Amortization), operating result EBIT (Earnings before Interest and Tax) and free cash flow. The objective of these controls is to ensure that profitable revenue growth is matched with cost and asset efficiency to achieve sustainable value generation.

        In the "Technology Development" control area, the Executive Board again uses a range of performance indicators to evaluate the progress of key research and development projects. The Management regularly reviews compliance with project plans, pre-defined targets and quality gates, such as timelines, quality, cost and margin targets. Following the release of new products for example, the Management monitors closely the development of the respective revenues and related returns. The objective of this review process is to ensure that ongoing technological developments retain not only the necessary level of technological standards but also commercial competitiveness throughout the life of the product.

Government Regulation

        Due to the nature of AIXTRON's products, the shipment of some products to customers in certain countries requires the Company to obtain an export license from statutory authorities in Germany, the UK and the US, including, for example, the Bundesamt für Wirtschaft und Ausfuhrkontrolle ("BAFA") in Germany, the Department for Business, Innovation and Skills in the UK as well as the Department of State and the Department of Commerce in the US. Following external audits, it was confirmed by the relevant German authorities in 2015, that the management system AIXTRON uses for the control of import and export activities is effective to comply with applicable regulations.

        Research and development activities, as well as the manufacturing and demonstration of the Company's products involve the use of potentially harmful chemical and hazardous materials and radioactive compounds and as a result, AIXTRON is subject to stringent environmental and safety

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regulations in connection with its business operations (such as industrial safety regulations, the ordinance on hazardous substances, labor protection laws or the workplaces ordinance).

        The Company is also subject to the rules and regulations promulgated by the SEC, including those defined under the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act of 2010. In addition, AIXTRON is subject to other regulations, for example the provisions of the US Foreign Corrupt Practices Act and the UK Bribery Act relating to the maintenance of books and records and anti-bribery controls. AIXTRON has a specific anti-corruption guideline in place with which every AIXTRON employee must comply.

C.    Organizational Structure

        The table below shows a list of the AIXTRON subsidiaries as of December 31, 2015:

D.    Property, Plant and Equipment

        The Company has its registered office in Herzogenrath, Germany, and had a total of 12 facilities worldwide owned or rented as of December 31, 2015:

Environmental Issues

        The research and development activities, as well as the manufacturing and demonstration of AIXTRON's products conducted in some of its facilities, involve the use of potentially harmful chemical and other hazardous or potentially hazardous materials and radioactive compounds. Failure or inability to comply with existing or future environmental regulations could result in significant remediation liabilities, the imposition of fines and/or the suspension or termination of production.

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        The Company's engineers work diligently to continuously improve AIXTRON's systems, both in terms of resource conservation and environmental-friendly design and function. AIXTRON underlines its strategic commitment to a responsible management and control of the Company, oriented to long-term value creation, applying a certified energy management system (certification under international standard DIN EN ISO 50001:2011). All AIXTRON manufacturing facilities have an ISO 9001 certified process oriented management system. The certification was confirmed at AIXTRON SE in November 2015 following a successful certification audit without any deviation. In 2014, the environmental management system on AIXTRON, Inc. was certified according to EN ISO 14001:2004. AIXTRON thereby is contributing to the sustained support of the various national and international climate and environmental protection initiatives by its efficient use of energy and the careful use of resources. AIXTRON and its suppliers are committed to ethical and moral standards for the purchase and usage of conflict minerals (gold, tantalum, tin and tungsten). AIXTRON annually files the result of the vendor related due-diligence on its Form SD with the Securities and Exchange Commission. Moreover, AIXTRON provides targeted support to local social institutions.

Item 4A:    Unresolved Staff Comments

        None.

Item 5:    Operating and Financial Review and Prospects

Global Economy

        As a producer of capital goods the AIXTRON Group is affected by the global economic development as far as it has an effect on its own supply chain and cost of sales as well as on its customers' sales projections and therefore also on their investment behavior.

        Global economic development throughout the year 2015 was even worse than originally expected, especially in the emerging and developing countries, including China. The main reasons for the reduced growth dynamics in these countries were lower commodity prices, tighter financial conditions, structural bottlenecks and geopolitical factors. Additionally, markets in the Middle East have struggled due to decreasing oil prices throughout 2015 as well as increased uncertainty related to geopolitical tensions in the Middle East. On the other hand, the major growth drivers in the advanced economies, such as easy financial conditions, more neutral fiscal policy in the euro area, lower fuel prices, and improving confidence and labor market conditions, remained intact and led to stable growth in these countries. Therefore, as expected, the Fed has turned to a slightly tighter monetary policy with the first interest rate increase since 2006 taking place in December 2015. In total, the International Monetary Fund (the "IMF"), in the January 2016 update of its World Economic Outlook, saw global growth in 2015 slightly below the previous year's level at an estimated 3.1% (2014: 3.4%), with growth in the advanced economies for 2015 now being projected at 1.9% (2014: 1.8%) and in the emerging and developing countries at 4.0% (2014: 4.6%).

        However, this global economic environment had no specific effects on AIXTRON's business development in fiscal year 2015 as AIXTRON is more dependent on innovation-driven industry business cycles such as the progressing technology changes in semiconductor markets.

        With the positive economic development in the U.S. and the continued expansive monetary policy of the European Central Bank, the US dollar saw a further significant improvement in the first quarter of 2015 against the Euro, reaching a peak of approximately 1.05 USD/EUR in mid-March. In the second quarter, based on some weaker than expected economic data from the U.S., the exchange rate saw a rebound up to approximately 1.15 USD/EUR. In the second half of the year, the exchange rate moved sideways, mostly within a relatively small range. The prospect of the imminent reversal in interest rates became reality with the Fed's interest rate increase on December 16, 2015, strengthened the US dollar again. Thus, at the end of fiscal year 2015, the US dollar exchange rate improved by approximately 11% from USD/EUR 1.217 at the end of 2014 to 1.089 USD/EUR. The average exchange rate used by AIXTRON to translate income and expenses denominated in US dollars in fiscal year 2015 was 1.11 USD/EUR (Q1/2015: 1.16 USD/EUR; Q2/2015: 1.10 USD/EUR; Q3/2015: 1.11 USD/EUR; Q4/2015: 1.09 USD/EUR) which was a significant improvement on the previous year (2014: 1.33 USD/EUR). This development had a respectively positive effect on AIXTRON's US dollar denominated revenue and earnings in fiscal year 2015. For more information on the Companies' exposure to exchange rate risk refer to Item 11—"Quantitative and Qualitative Disclosure about Market Risk—Foreign Currency Exchange Rate Risk".

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        AIXTRON Management continues to monitor carefully the developments of the global economy and the financial markets, and regularly examines what can potentially be done to mitigate negative exogenous effects on AIXTRON's business.

The Semiconductor Equipment Market

        The total ALD market of which AIXTRON addresses only a specific niche with its system technologies, was estimated by Gartner Dataquest in its latest forecast of December 2015 (Forecast: Semiconductor Manufacturing Equipment, Worldwide, 4Q15 Update) to be valued at USD 901 million for 2015.

        In 2015, the electronics equipment industry in total declined by 4% (according to Gartner Dataquest, Forecast: Semiconductor Manufacturing Equipment, Worldwide, 4Q15 Update, December 2015) which was below the estimated 2015 global GDP growth of 3.1% (according to the IMF World Economic Outlook January 2016 update).

        In comparison, the subset, semiconductor capital spending is expected to have declined by 3.5% in 2015. A further subset, specific spending on Wafer Fab Equipment (WFE), which includes spending on deposition tools supplied by AIXTRON for the production of specialized applications such as gate stacks and capacitors, is expected to have remained flat year on year (according to Gartner Dataquest, Forecast: Semiconductor Manufacturing Equipment, Worldwide, 4Q15 Update, December 2015).

        Compared to 2014, AIXTRON's equipment revenues for memory and logic applications increased by 75% to € 29.3 million (2014: € 16.7 million) in fiscal year 2015.

The LED Market

        The market for Gallium nitride based, LED devices which can be produced with AIXTRON's compound semiconductor MOCVD equipment, was expected to have grown by 20% measured in units in 2015 according to a report from IHS (an independent semiconductor market research institute), published in December 2015. However, according to industry sources, LED prices have again dropped significantly throughout the year. Concurrently, the market for Gallium nitride based, high brightness LED devices was predicted to grow in 2016 by only 4% to USD 16.8 billion from USD 16.2 billion in 2015 (IHS).

        According to the market research institute IHS (December 2015), the market for LEDs for general lighting is expected to grow from 1.2 billion shipped units in 2015 to 3.4 billion shipped units in 2020. The penetration of LED-lamps relative to total lamps is expected to rise from 7% in 2015 to 25% in 2020, supported by the increasing availability of attractively priced, quality LED lighting products.

        In the more recent forecast "Semiconductor Manufacturing Equipment, Worldwide, 4Q14 Update" (December 2015) Gartner Dataquest anticipated that the total value of the 2015 MOCVD equipment market would increase to approximately USD 446 million which is at the high end of other analysts' expectations (USD 250 to 450 million). Veeco and AIXTRON are expected to remain the main players in this market.

        Mainly due to the missing contribution of shipments to San'an, AIXTRON's 2015 revenues of MOCVD manufacturing equipment for LEDs dropped from € 100.3 million in 2014 to € 39.7 million. However, AIXTRON's revenues for MOCVD equipment to manufacture other optoelectronic devices increased from € 14.5 million in 2014 to € 46.7 million in 2015.

The Wide Band Gap ("WBG") Gallium nitride and Silicon Carbide power semiconductor market

        According to the market research institute IHS (November 2014), the market for WBG Gallium nitride (GaN) and Silicon Carbide (SiC) based power management devices is expected to grow from 281 million shipped units in 2015 to 1.9 billion shipped units in 2020. Based on the opinion of both market research institutes IHS and Gartner, the penetration of WBG devices relative to total power device market is expected to rise from low single digit in 2015 to low double digit in 2020.

        The growing demand for more efficient power management and switching applications as well as governmental policy changes and efforts from the supply chain, have all contributed positively to increasing the momentum for wide band gap development activities across automotive, commercial, industrial and consumer segments.

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        The revenues of AIXTRON's MOCVD equipment for the manufacturing of WBG Gallium nitride (GaN) and Silicon Carbide (SiC) based power management devices more than doubled to € 25.8 million in 2015 from € 10.2 million in 2014.

The OLED market

        The market for large OLED displays is the most imminent opportunity for AIXTRON's Organic Semiconductor deposition and encapsulation technologies. The TV market is predicted to increasingly adopt OLED displays within the next 2–3 years, at which point, it is expected that OLEDs will have the potential to penetrate the high end of the volume TV market. With its thin film encapsulation technology, AIXTRON additionally targets the market for flexible displays which offer the best solution for small and medium size displays used in mobile and wearable applications.

        According to the market research institute IHS (July 2015), the market for OLED TV is expected to grow from 510 thousand shipped units in 2015 to 6.9 million shipped units in 2019. The penetration of OLED TV relative to the total flat panel display TV market is expected to rise from 0.2% in 2015 to 2.6% in 2019. The market research institute DisplaySearch (September 2014) predicted that the flexible OLED Display market will grow from 0.2 million square meters in 2015 to 3 million square meters in 2020.

Management Assessment of Company Situation

        Throughout fiscal year 2015, AIXTRON executed its strategy to consistently invest into or further develop future business fields including deposition technologies for Power Electronics, OLED, Memory, Logic and Carbon Nanomaterials including Graphene. The Company has seen market interest and demand from customers in all of these fields supporting the Companies' diversification strategy.

        Demand for LED chips has grown less than anticipated by market research institutes, while the production capacity increased at the same time, resulting in comparatively low utilization rates of LED producers. Consequently, market demand for LED production equipment has gone down as well. The current overcapacity will have to be absorbed again before meaningful market driven demand for capacity might return—notwithstanding potential strategic capacity investments. For AIXTRON, lower high volume market demand in combination with a longer than expected and further ongoing qualification process for the new generation MOCVD showerhead tool AIX R6 at several customers led to low demand for LED production tools from AIXTRON. Consequently, revenues for LED-related MOCVD equipment decreased in the reporting period from € 100.3 million in 2014 to € 39.7 million in 2015.

        For MOCVD equipment to manufacture power management devices, revenues have more than doubled within the reporting period compared to 2014 from € 10.2 million in 2014 to € 25.8 million in 2015. Further future growth in this area is expected.

        Revenues for AIXTRON's logic and memory tools have increased by 75% to € 29.3 million in 2015 compared to € 16.7 million in 2014. The Company expects future growth potential in this area depending on the successful production qualification of the technology at various customers.

        Market entry is the focus in the area of OLED deposition and encapsulation technologies. The OLED R&D Cluster has demonstrated AIXTRON's deposition capabilities in this space. The Gen8 Demonstrator for large area deposition was installed and put into operation in preparation to run customer demonstrations in order to prove the scalability of the organic deposition technology on very large substrates. The successful market entry of this highly innovative technology against the incumbent technologies depends on customer commitments to adopt the OVPD large area technology for high volume manufacturing. The short term win of a customer contract is decisive for the further development of the OVPD technology.

        Following the acquisition of an OLED thin film encapsulation ("TFE") technology in April of 2015, AIXTRON is on track with the first R&D order received in Q3/2015 and ongoing active discussions with other display manufacturers.

        In parallel, AIXTRON is executing improvement projects addressing the further reduction of material costs as well as further improvements in Supply Chain, Service and Production processes. Management will continue to execute on its productivity programs in all areas of the Company to further optimize the cost structure whilst sustaining the targeted investments into the defined business fields.

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        In light of changing market dynamics including customers' time-to-market and specification requirements, Management continuously reviews the performance and prospects of the Companies' product portfolio.

        The business development in all areas except for LED volume manufacturing was in line with Management's expectations. However, the Company's Management continues to consider this development as not satisfactory. Further improvements will depend on the continuous execution of the operating programs and the market entry of new technologies such as OVPD.

        The Company has a strong balance sheet and a strong liquidity without any bank borrowings.

A.    Operating Results: 2013-2015

        The following operating and financial review of AIXTRON's results of operations and financial condition should be read together with AIXTRON's Consolidated Financial Statements prepared in accordance with IFRS included under Item 8 "Financial Information" of this report.

        The following discussions include "forward-looking statements" that involve risks and uncertainties that are discussed more fully in "Risk Factors" and "Forward-looking statements notice" included in this annual report. Actual results could differ materially from future results expressed or implied by the forward-looking statements.

Development of Revenues

        In fiscal year 2015, AIXTRON recorded total revenues of € 197.8 million, an increase of € 4.0 million, or 2%, compared to € 193.8 million in 2014 (2013: € 182.9 million). Though the underlying demand volume has declined, a better price mix and positive currency effects have more than offset this effect. The 2015 equipment revenues increased to € 151.0 million (2014: € 148.5 million; 2013: € 138.0 million), with demand for MOCVD Equipment for LED manufacturing remaining the largest contributor to AIXTRON's equipment revenues, representing 26%.

        Total equipment sales generated 76% of total revenues in 2015 (2014: 77%; 2013: 75%).

        Total MOCVD related revenues decreased by 10% from € 127.8 million in 2014 to € 114.5 million in 2015 (2013: € 94 million). In 2015, the volume particularly reflecting lower MOCVD related market demand decreased by 37% and was partially offset by positive effects from changes in realized average selling price, product mix and exchange rate differences. In 2014, 22% of the increase was related to volume reflecting higher market demand. The remaining 14% was caused by changes in realized average selling price, product mix and exchange rate differences.

        Total memory market related revenues in fiscal year 2015 amounted to € 26.4 million (2014: € 16.5 million; 2013: € 30.4 million). The 2015 and 2014 changes are entirely volume related.

        24% of total revenues in 2015 were generated by sales of spare parts and service, which is virtually stable compared to the same figure in 2014 (2014: 23%; 2013: 25%). In absolute terms, sales of spare parts and service were at € 46.8 million, also largely stable in 2015 compared to 2014 (2014: € 45.3 million; 2013: € 44.8 million).

        The described pattern is typically a result of prior years' equipment sales as spare part revenues usually lag behind the revenue development from equipment, since services and spare part packages are typically included or covered by warranty provided to customers in the after sales period.

        In 2015, the major part of total revenues, 60%, continued to be generated by sales to customers in Asia, which was 23 percentage points lower than in the previous year (2014: 83%; 2013: 78%). 22% of total revenues in 2015 were generated in the Americas (2014: 4%; 2013: 9%) and the remaining 18% in Europe

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(2014: 13%; 2013: 13%), reflecting an increased demand of AIXTRON equipment for various applications from non-Asian customers.

Development of Results

Cost of Sales

        In 2015, the Company has reclassified warranty expenses from Selling Expenses to Cost of Sales. This classification is the usual practice in the semiconductor equipment industry. The previous years' figures have been adjusted to reflect the reclassification. 2014 Selling Expenses have been reduced by € 1,836k (2013: € 14,457k) and Cost of Sales increased by the same amounts.

        In 2015, cost of sales decreased year on year by 4% or € 6.2 million from € 154.1 million to € 147.9 million (2013: € 204.7 million). This was mainly due to lower material cost and higher efficiencies in logistics and service. Consequently, 2015 cost of sales relative to revenues decreased to 75% (2014: 80%; 2013: 112%).

        In 2014, cost of sales decreased year on year by 25% or € 50.6 million from € 204.7 million to € 154.1 million. The decrease was particularly attributable to unusual items recorded in 2014 (inventory write-downs and ramp-up costs for new products) being significantly lower than those recorded in 2013 (mainly inventory write-downs).

Gross Profit, Gross Margin

        Against this background and due to a better product and price mix as well as currency, the Company's gross profit in 2015 increased year-on-year to € 49.8 million (2014: € 39.7 million; 2013: € –21.8 million), resulting in an improved gross margin of 25% after 21% in 2014 (2013: –12%). In 2014, the Company's gross profit increased to € 39.7 million, resulting in a 21% gross margin after –12% in 2013, mainly due to the above-mentioned development in cost of sales.

Operating Costs

        With € 76.5 million, total operating costs in 2015 were in line with the targeted annual cost level of approximately € 80 million.

        This development was influenced by the following factors:

        Due to lower depreciation costs, selling expenses in 2015 decreased in absolute terms from € 14.1 million to € 11.5 million (2013: € 14.5 million). Selling expenses relative to revenues were stable at 6% (2014: 7%; 2013: 8%). Selling expenses in 2014 were virtually stable in absolute terms at € 14.5 million compared to € 14.1 million in 2013. 2014 selling expenses relative to revenues were stable down from 8% in 2013 to 7%.

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        Mainly due to a lower headcount and less use of external services, general and administration expenses in fiscal year 2015 decreased by 16% in absolute terms and improved by 2 percentage points in relative terms to € 16.3 million or 8% of revenues (2014: € 19.3 million or 10% of revenues; 2013: € 18.2 million or 10% of revenues). In 2014, general and administration expenses in absolute terms increased by 6% to € 19.3 million (2013: € 18.2 million) which was mainly project-driven. General and administration expenses relative to revenues were stable at 10% in 2014 (2013: 10%).

        Research and development costs decreased by 17% year-on-year from € 66.7 million in 2014 (2013: € 57.2 million) to € 55.4 million in 2015, which was mainly due to reductions as a result of the previously initiated restructuring program. The future-oriented OLED and the silicon industry related R&D activities increased at the same time. In 2014, research and development expenditures were up 17% from € 57.2 million in 2013 to € 66.7 million, reflecting the Company's commitment to innovation as well as pre-launch development costs related to the AIX R6 new generation MOCVD tool and progress made in the OLED area.

        In the course of the progressing restructuring program, the average number of Group employees in 2015 declined from 785 in 2014 to 757 (2013: 847), resulting in 5% lower personnel costs of € 63.0 million compared to € 66.5 million in 2014 (2013: € 67.5 million). In 2015, personnel costs included no restructuring charges (2014: € 5.8 million; 2013: € 5.2 million) with local currency effects partially offsetting the reduction of personnel costs. Based on the relatively stable revenue base, personnel expenses relative to revenues were down by 2 percentage points from 34% in 2014 to 32% in 2015 (2013: 37%). As of December 31, 2015, the number of employees, decreased from 789 as of December 31, 2014 to 748 (December 31, 2013: 776).

        Net other operating income and expenses for fiscal year 2015 resulted in an income of € 6.7 million (2014: € 2.2 million income; 2013: € 16.0 million income including insurance proceeds), mainly due to positive currency effects, higher R&D grants and a contractual compensation payment received in Q3/15. In 2014, net other operating income and expenses gave an operating income of € 2.2 million (2013: € 16.0 million income including insurance proceeds).

        In 2015, the Company recorded a net currency income of € 2.7 million (2014: € –0.3 net expense; 2013: € 0.5 million net income) resulting from currency transaction and translation differences of balance sheet positions. The 2014 net currency expense also resulted from currency and translation differences. The € 3.0 million of R&D grants received in 2015 (2014: € 1.8 million; 2013: € 2.5 million), were recorded as "other operating income".

        Total operating costs in 2015 came in at € 76.5 million and were significantly below the prior year's figure of € 98.0 million (2013: € 73.9 million), mainly due to better cost control as well as higher other operating income, stemming from positive currency related effects and higher R&D funding. Operating costs relative to revenues were 39% in 2015, 12 percentage points lower than the 51% in 2014 (2013: 40%).

EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization)

        At € –16.4 million, EBITDA in the fiscal year 2015 improved significantly against the previous year by 60% or € 24.9 million (2014: € –41.3 million; 2013: € –67.9 million), mainly due to the

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above-mentioned effects. In the second half of the year, AIXTRON reached the targeted EBITDA break-even with H2/2015 EBITDA equaling € 5.4 million (H2/2014: € –27.9 million).

        EBITDA is defined as operating result plus depreciation, amortization and impairment of assets. The Company considers EBITDA to be a key performance indicator as it is commonly used by analysts, investors and peers in the semiconductor industry. It is provided here to permit a more complete analysis of the Company's operating performance. EBITDA, as calculated herein, may not be comparable to similarly titled measures reported by other companies and may not be indicative of AIXTRON's historical results of operations, nor are they meant to be predictive of future results.

        The following table presents a reconciliation of operating result, the most directly comparable IFRS measure, to EBITDA, for the periods indicated:

Operating Result (EBIT (Earnings before Interest and Tax))

        The absolute operating result (EBIT) improved in a year-on-year comparison by € 31.6 million and came in at € –26.7 million in 2015 (2014: € –58.3 million; 2013: € –95.7 million) resulting in an EBIT margin of –14% (2014: –30%; 2013: –52%). This is attributable chiefly to the afore-mentioned cost effects. The 2014 improvement, despite higher R&D expenses, was attributable to the higher unusual items included in the 2013 figures.

Result Before Taxes

        Result before taxes improved year-on-year by € 31.1 million from € –57.1 million in 2014 (2013: € –95.2 million) to € –26.0 million in 2015, with a net finance income of €0.8 million (2014: € 1.2 million; 2013: € 0.5 million income).

        In 2015, AIXTRON recorded a country specific tax expense of € 3.2 million (2014: tax expense of € 5.4 million; 2013: tax expense of € 5.8 million). The 2014 tax expense also resulted from country specific taxes. Unrecognized deferred tax assets related to tax losses at December 31, 2015 totaled € 161.1 million (2014: € 129.5 million; 2013: € 88.7 million).

Profit/Loss Attributable to the Equity holders of AIXTRON SE (after taxes)

        The 2015 after-tax result attributable to the equity holders of AIXTRON SE was € –29.2 million or –15% of revenues, and € –62.5 million (–32% of revenues) in 2014 (2013: € –101.0 million or –55% of revenues).

Net Income AIXTRON SE—Use of Results

        AIXTRON SE, the parent company of the AIXTRON Group, recorded a net accumulated loss in accordance with German generally accepted accounting principles, (German GAAP) based on the German Commercial Code, HGB, of € –87.3 million for 2015 (2014: loss of € –53.6 million; 2013: loss of € –1.1 million).

        The 2015 loss will be carried forward and consequently no dividend payment will be made for 2015 (2014: no dividend; 2013: no dividend).

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Development of Orders

        As a matter of internal policy, the 2015 US dollar based order intake and backlog were recorded at the 2015 budget exchange rate of 1.25 USD/EUR (2014: 1.35 USD/EUR; 2013: 1.30 USD/EUR). In order to better reflect industry practice, Management has decided to report total order intake including spares & service from 2015 rather than continuing to report equipment order intake only. For comparison reasons, previous years' figures have been changed to reflect this policy. Due to the generally quick turnaround of spares & service into revenues, the equipment order backlog figures will remain unchanged and continue to include equipment orders only.

Order Intake

        In 2015, total order intake including spares & service was 16% lower year-on-year at € 167.1 million (2014: € 198.7 million; 2013: € 178.0 million). This was due to lower overall market demand as well as the effect from the longer than expected qualification process of the AIX R6. The 2014 increase in order intake was mainly driven by higher demand from LED chipmakers.

Equipment Order Backlog

        The total equipment order backlog of € 42.9 million at December 31, 2015 was 34% lower than the € 65.2 million at the same point in time in 2014 (December 31, 2013: € 59.6 million) and 38% lower than the 2015 opening backlog of € 69.0 million, revalued as of January 1, 2015, at the US-Dollar exchange rate of 1.25 USD/EUR valid at that time. The total equipment order backlog of € 65.2 million at December 31, 2014 was 9% higher than the € 59.6 million at the same point in time in 2013.

        The 2015 year-end order backlog was revalued at the 2016 budget rate of 1.10 USD/EUR as per January 1, 2016, leading to an opening equipment order backlog of € 46.7 million for 2016.

        In December 2015, AIXTRON SE and San'an Optoelectronics agreed on a substantial reduction in the order volume for AIX R6 MOCVD systems ordered in September 2014 by 47 tools from 50 down to three which have already been delivered. Following the Company's internal recognition policy, these 47 tools were not recorded in order intake and order backlog, so that number of orders recorded in 2015 was not affected by the reduction of order volume.

        As a matter of internal policy, AIXTRON follows clear internal requirements before recording and reporting received equipment orders as order intake and order backlog. These requirements comprise of all of the following minimum criteria:

1.

the receipt of a firm written purchase order,



2.

the receipt of the agreed deposit,



3.

accessibility to the required shipping documentation,



4.

a customer confirmed agreement on a system specific delivery date.

        In addition and reflecting current market conditions, the Company's Management reserves the right to assess whether the actual realization of each respective system order is sufficiently likely to occur in a timely manner according to Management's opinion. When Management concludes, that there is sufficient likelihood of realizing revenue on any specific system or that there is an unacceptable degree of risk of not realizing revenue on any specific system, Management will include or exclude the order, or a portion of the order, into or from the recorded order intake and order backlog figures, regardless of compliance with requirements of the points 1-4 above. The backlog is being regularly assessed and adjusted to reflect potential execution risks if necessary.

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Currency Fluctuation

        Fluctuations between the value of the Euro and other major currencies, in particular the US-Dollar and the Pound Sterling can affect the Company's operating results. The Company generally monitors if and to what extent currency hedging instruments shall be used to manage its exposure to foreign currency risk. See "Item 11—Quantitative and Qualitative Disclosure about Market Risk" for further details. Please also see "Item 3D—Risk Factors—Company-Related Risk—Exchange rate fluctuations, in particular between the Euro, the US-Dollar and the Pound Sterling, could adversely affect AIXTRON's ability to price its products competitively and its operating results" for further details.

B.    Liquidity and Capital Resources

Corporate Financial Management

        AIXTRON has a central financial management system to control its global liquidity, interest and currency management.

        Due to the volatile nature of the semiconductor business, a sufficient level of cash is essential to expeditiously finance potential business needs. The Company's need for cash is targeted to be generally provided for through operating cash flows. In order to secure future financing and support the indispensable R&D activities, the Company has access to a strong equity capital base. Furthermore, approved by the Annual General Meeting, and subject to Supervisory Board approval, the Company has the authority to issue equity instruments to be able to raise additional liquidity on the capital market if required. However, the availability of equity based funding might be negatively influenced by the currently low share price. A further share price decline may also result in the necessity of an impairment of assets. Refer to Item 18 "Financial Statements—Note 12. Intangible assets" for more information.

        AIXTRON conducts a large part of its business in foreign currencies, i.e. in currencies other than the Euro. The most prevalent foreign currency relevant to AIXTRON is the US Dollar. Unfavorable exchange rate movements, especially the US Dollar/Euro exchange rate, will adversely affect the Company's results of operation. In order to manage foreign exchange risks, the Company routinely monitors if and to what extent currency hedging instruments should be used. In 2015, no currency hedging instruments were used.

Funding

        AIXTRON SE's stated share capital as of December 31, 2015 amounted to € 112,720,355 (December 31, 2014: € 112,694,555 December 31, 2013: € 112,613,445) divided into 112,720,355 registered shares with a proportional interest in the share capital of € 1.00 per no-par value registered share. All registered shares are fully paid in. AIXTRON has an ADS program. The Company's ADSs each represent one ordinary share and are traded on the NASDAQ Global Select Market.

        Until May 13, 2019, the Executive Board shall be authorized, with the approval of the Supervisory Board, to increase the share capital on one occasion or in partial amounts on several occasions by up to a total of € 45,883,905.00 against cash and/or non-cash contributions by issuing new registered no-par value shares corresponding to approximately 40% of the Company's share capital.

        The Company has a number of stock option programs in place that grant the members of the Executive Board and employees the right to purchase AIXTRON shares or ADS under certain conditions. In fiscal year 2015, 25,800 stock options (2014: 81,100; 2013: 415,289) were exercised, resulting in delivery of in total 25,800 ordinary shares. In fiscal year 2015, no new stock options were granted (2014: 1,150,400 new stock options were granted under the 2014 tranches of the 2012 stock option plan; 2013: no new stock options were granted). For a more detailed description of the different stock option plans and a summary of all the stock option transactions, refer to Item 18 "Financial Statements—Note 23. Share-based payment".

        The Company recorded no bank borrowings as of December 31, 2015, 2014 and 2013.

        Where necessary, AIXTRON SE provides loans and financial security facilities to its subsidiaries to enable the business to continue to operate efficiently. The Company has granted no security interests in its own land and buildings.

        The equity ratio was 82% as of December 31, 2015, compared to 78% as of December 31, 2014 (December 31, 2013: 83%). This development was principally attributable to the structural effect of lower

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advanced payments from customers. In 2014, the equity ratio was down to 78% from 83% in the preceding year, mainly due to the period's net loss.

        In 2015, the return on equity (ROE) based on the negative 2015 Group's net result in proportion to the average total shareholders' equity at the start and end of the year was –7% (2014: –15%; 2013: –22%).

        In order to finance future developments, the Company regularly explores and assesses on an ongoing basis, potential funding opportunities available in the market. Additional funding needs could also be covered by the additional capital as authorized by the Annual General Meeting and laid out in the following table:

        In accordance with section 71 (1) no. 8 German Corporations Act, AktG, the Company is authorized until May 13, 2019, with the approval of the Supervisory Board, to purchase its own shares representing an amount of up to € 11,262,429 of the share capital. This authorization may not be used by the Company for the purpose of trading its own shares. The authorization may be exercised in full, or in part, once, or on several occasions by the Company. The shares may be purchased (1) on the stock market or (2) by way of a public offer to all shareholders made by the Company or (3) by way of a public invitation to submit offers for sale.

        Any amendment to the Articles of Association related to capital measures requires a 75% majority of the share capital represented at the Annual General Meeting (Article 59 SE Regulation, SE-VO; §179 German Corporations Act, AktG). Other amendments to the Articles of Association require a majority of two thirds of the votes cast or, if at least one half of the share capital is represented, a simple majority of the votes cast.

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Investments

        The AIXTRON Group's total capital expenditures in fiscal year 2015 amounted to € 13.3 million (2014: € 13.4 million; 2013: € 10.1 million). In 2015, € 12.5 million (2014: € 12.6 million; 2013: € 9.6 million) were related to property, plant and equipment ((including testing and laboratory equipment). The remaining € 0.7 million in 2015 (2014: € 0.8 million; 2013: € 0.5 million) were related to intangible assets including software licenses. In 2014, € 12.6 million of the total of € 13.4 million were related to investments in property, plant and equipment. The remaining € 0.8 million in 2014 were related to intangible assets including software licenses.

        The majority of capital expenditures (45%) for the year 2015 (2014: 87% in Germany; 2013: 82% in Germany) were invested in the U.S. Such expenditures for 2016 are generally expected to be invested again primarily in Germany.

        In 2016, investments will again be made mainly for laboratory and test equipment. 2016 capital expenditures amounting to € 12.1 million are currently planned to be made in Germany and paid in cash.

        The decrease of € 60.5 million in bank deposits with a maturity of at least three months in 2015 was recorded as cash inflow from investing activities. In 2014 bank deposits with a maturity of at least three months increased by € 9.9 million which was recorded as cash outflow from investing activities (2013: increase of 30.4 million was recorded as cash outflow from investing activities).

        All 2015, 2014 and 2013 expenditures were funded out of operating cash flow and available cash resources.

        Capital commitments are disclosed in Item 18 "Financial Statements—Note 28. Capital commitments" and are expected to be funded out of available cash resources.

Cash Flow

        In fiscal year 2015, a cash outflow from operating activities of € 45.7 million (2014: cash outflow of € 33.8 million; 2013: cash inflow of € 8.2 million) was recorded. The decrease in operating cash flow in 2015 was mainly caused by the net loss incurred for the full fiscal year and the reduction of advance payments from customers (2015: net loss of € –29.2 million; 2014: net loss of € –62.5 million; 2013: net loss of € –101.0 million). In 2014, the decrease in operating cash flow was mainly caused by the net loss incurred for the full fiscal year and the scheduled increase of inventories for the MOCVD tools only partially being offset by received advance payments from customers.

        A cash inflow from investment activities of € 41.2 million was recorded in 2015 (2014: cash outflow of € 23.2 million; 2013: cash outflow of € 39.7 million). Factors which mainly influenced this were the liquidation of money market deposits in the amount of € 60.5 million (2014: € 9.9 million added; 2013: € 30.4 million added), which were previously classified as "other financial assets". This effect was only partially offset by the previously mentioned capital expenditures (2015: € 13.3 million; 2014: € 13.4 million; 2013: € 10.1 million) and cost related to the acquisition of PlasmaSi, Inc. in Q2/2015. In 2014, a cash outflow of € 23.2 million was recorded from investment activities, mainly due to previously mentioned capital expenditures and money market deposits that were added in the amount of € 9.9 million.

        In 2015, the cash outflow from financing activities of € 145 thousand (2014: cash inflow of € 193 thousand, 2013: cash inflow of € 101.6 million) was recorded from the acquisition of own shares being partially offset by proceeds from the issue of new shares. In 2015, no dividends were paid to AIXTRON shareholders (2014: 0; 2013: 0). The 2014 cash inflow of € 193 thousand was attributable to proceeds from the issue of new shares.

        Cash and cash equivalents including cash deposits with a maturity of at least three months, most of which is held in Euros (also see "Investments"), decreased by 22% or € 58.7 million to € 209.4 million (€ 93.1 million + € 116.3 million financial assets) as of December 31, 2015 (December 31, 2014: € 268.1 million, equaling € 116.6 million + € 151.5 million; December 31, 2013: € 306.3 million, equaling € 167.5 million + € 138.9 million). Specific items that lowered the 2015 year-end liquidity compared to 2014 came predominantly from the acquisition of PlasmaSi and the partial return of the previously received advance payment to San'an following an agreed reduction of order volume from this customer. The second half of the return payment was made in Q1/2016 and was recorded in other liabilities as of December 31, 2015. In 2014, Cash and cash equivalents including cash deposits with a maturity of at least three months, most of which were held in Euros, decreased by 12% or € 38.2 million to € 268.1 million. Specific items that lowered the 2014 year-end liquidity came predominantly from the 2014 net loss

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(€ –62.5 million), the capital expenditures and the inventory build-up. These cash outflows were only partially offset by increased received advance payments from customers.

        There are currently no restrictions on the Company's use of cash resources.

Assessment of Liquidity and Capital Resources

        The Company's liquidity is affected by many factors, some of which are related to its ongoing operations and others which are related to the nature of the semiconductor equipment industry and to the economics of the countries in which the Company operates. Although the cash requirements fluctuate based on the timing and extent of these factors, the Company believes that the liquidity provided by operating cash flows, existing cash resources and financing arrangements, is sufficient to fund working capital, capital expenditures and other ongoing business requirements. In the market and economic environment currently experienced by AIXTRON characterized by persisting subdued customer demand for the Company's products and services, cash generated by operations could be lower than forecasted and not be sufficient. Additionally, the price for AIXTRON's ADSs declined by 61% year-on-year (December 31, 2015: USD 4.63; December 31, 2014: USD 11.21). In such a situation, the Company might need to pursue obtaining short-term credit facilities or additional equity financing offerings. There can be no assurance that any such supplemental funding, if sought, could be obtained, or if obtained, would be adequate or on terms acceptable to AIXTRON. However, AIXTRON believes that its balance sheet at December 31, 2015 should provide additional sources of liquidity if required.

        As of December 31, 2015, € 93.1 million (2014: € 151.5 million; 2013: € 138.9 million) of the Company's cash resources were held, mostly in Euros, in bank deposits with a maturity of at least three months at inception.

C.    Research and Development, Patents and Licenses, etc.

        For information regarding research and development, patents and licenses, refer to Item 4.B. "Information on the Company—Business Overview—Research and Development", "—Intellectual Property" and Item 5.A. "Operating and Financial Review and Prospects—Operating Results—Development of Results—Operating Costs" in this report.

D.    Trend Information

        The development of leading edge complex material deposition technology remains AIXTRON's core competency. It is an area where the Company has developed global leadership positions. AIXTRON Management intends to keep this focus and positioning while at the same time expanding this core know-how into both existing and emerging markets.

        AIXTRON remains committed to investing in R&D to maintain and expand the Company's leading technology position in MOCVD equipment for applications such as LEDs, power electronics or next generation logic applications. The Company also targets greater penetration into markets for memory and organic semiconductor devices.

        Important fields for AIXTRON are power management devices based on wide band gap materials such as Gallium Nitride (GaN) and Silicon Carbide (SiC). These devices are extremely energy efficient. Such device applications can be found in electric vehicles, transformers, converters, feed-in of renewable energy into the grid and they will be considered for power management on high performance logic chips. AIXTRON expects further growth of equipment demand as the penetration of above mentioned devices gain momentum.

        AIXTRON continues to pursue the market entry into the large area organic semiconductor application markets with the Company's deposition technology for organic materials, OVPD® and PVPD®. The exclusively licensed OVPD® technology allows a highly efficient deposition of organic material, especially on large area substrates, and offers a number of advantages over the incumbent technologies especially in terms of material consumption. Demonstration and qualification efforts are closely linked to the expansion plans of potential customers in this field. AIXTRON will continue to position its newly acquired PECVD technology for thin film encapsulation with manufacturers of flexible and rigid OLED displays as well as other OLED applications, expecting to secure additional orders in this field.

        The Company also aims to make further inroads into the research and development community with its PECVD technology to manufacture advanced carbon nanostructures including carbon nanotubes,

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carbon nanowires and graphene. The potential applications for these materials include, among other things, display technologies, semiconductor technologies and composite materials. The installed base of AIXTRON R&D tools and the close collaboration with customers allow the Company to align its roadmaps with the market requirements of this emerging technology. Building on a leading position captured over several years, AIXTRON expects the market opportunity for equipment to expand.

        AIXTRON's QXP-8300 ALD mini-batch deposition tool aimed specifically at providing efficient and innovative solutions for memory and logic applications. AIXTRON's QXP tool is production qualified at a major Korean memory chip manufacturer and is in the process of production qualification at other memory and logic chip manufacturers. AIXTRON's CVD tool Lynx-iXP is in full production providing critical solution to major 3-D NAND memory customer. AIXTRON therefore sees growth potential with this technology. In addition, based on R&D projects and customer feedback, AIXTRON sees tangible opportunities to further support the miniaturization of logic device structures with the use of compound semiconductor materials produced on AIXTRON's MOCVD tool technology. This outlook may vary, positively or negatively from our expectations due to the risks and opportunities described elsewhere in the Report. See "Item 3: Key Information—Risk Factors" and "Forward Looking Statements" at the beginning of the Report.

E.    Off-Balance Sheet Arrangements

        The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

F.     Tabular Disclosure of Contractual Obligations

        In the ordinary course of business, AIXTRON's primary contractual obligations regarding cash involve purchase commitments, operating lease commitments and capital expenditures.

        The following table summarizes contractual obligations for future cash outflows as of December 31, 2015:

        Commitments for capital expenditures were € 1.0 million as of December 31, 2015 (December 31, 2014: € 2.0 million; December 31, 2013: € 831 thousand).

        No obligations for funding of pension plans existed as of December 31, 2015, December 31, 2014 and December 31, 2013.

        The Company outsources a substantial portion of the manufacturing of its operations to third party suppliers. As the Company's products are technologically complex, the lead times for purchases from its suppliers can vary up to six months. Principally, but not exclusively, contractual commitments are made for specific customer orders or forecast orders. In some circumstances, where contractual commitments to suppliers for multiple modules or systems reduce the Company's purchase prices per module or system, purchase commitments may be made against anticipated demand. For the majority of purchase commitments, the Company has flexible delivery schedules depending on the market conditions, which allow the Company, to a certain extent, to delay delivery beyond originally planned delivery schedule estimates, if necessary.

        The Company leases certain office and plant facilities, office furniture and motor vehicles under various operating leases. Regarding most of the lease commitments for office and plant facilities, the Company has options to renew the leasing contracts. The leases typically run for a period between one and 15 years. None of the leases includes contingent rentals.

Preparation of Consolidated Financial Statements under IFRS

        The Consolidated Financial Statements of AIXTRON SE and its subsidiaries ("AIXTRON" or "Company") have been prepared in accordance with, and fully comply with

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•

International Financial Reporting Standards (IFRS), and the interpretations as published by the International Accounting Standards Board (IASB); and also



•

International Financial Reporting Standards (IFRS) as adopted for use in the European Union; and also



•

Requirements of Section 315a of the German Commercial Code HGB.

Critical Accounting Policies and Key Sources of Estimation and Uncertainty

        The preparation of AIXTRON's Consolidated Financial Statements requires the Company to make certain estimates, judgments and assumptions that the Company believes are reasonable based upon the information available. These estimates and assumptions affect the reported amounts and related disclosures and are made in order to fairly present the Company's financial position and results of operations. The following accounting policies are significantly impacted by these estimates and judgments that AIXTRON believes are the most critical to aid in fully understanding and evaluating its reported financial results:

Revenue Recognition

        Revenue is generally recognized in two stages for the supply of equipment to customers, partly on delivery and partly on final installation and acceptance (see note 2 (n)). The Company believes, based on past experience, that this method of recognizing revenue fairly states the revenues of the Company. The judgements made by management include an assessment of the point at which substantially all of the risks and rewards of ownership have passed to the customer. For more information regarding revenue recognition, refer to Item 18 "Financial Statements—Note 2. Significant accounting policies, Note 3. Segment Reporting and Note 37. Critical accounting judgments and key sources of estimation and uncertainty".

Valuation of Inventories

        Inventories are stated at the lower of cost and net realizable value. This requires the Company to make judgments concerning obsolescence of materials. This evaluation requires estimates, including both forecasted product demand and pricing environment, both of which may be susceptible to significant change. The carrying amount of inventories is disclosed in Item 18 "Financial Statements—Note 16. Inventories".

        As disclosed in Item 18 "Financial Statements—Note 3. Segment Reporting" and Item 18 "Financial Statements—Note 16. Inventories", during the years 2015, 2014 and 2013 the Company incurred expenses of € 4,141 thousand, € 3,016 thousand and € 17,885 thousand respectively arising mainly from changes to past assumptions concerning net realizable value of inventories and excess and obsolete inventories.

        In future periods, write-downs of inventory may be necessary due to (1) reduced demand in the markets in which the Company operates, (2) technological obsolescence due to rapid developments of new products and technological improvements, or (3) changes in economic or other events and conditions that impact the market price for the Company's products. These factors could result in adjustment to the valuation of inventory in future periods, and significantly impact the Company's future operating results.

Income Taxes

        At each balance sheet date, the Company assesses whether the realization of future tax benefits is sufficiently probable to recognize deferred tax assets. This assessment requires the exercise of judgement on the part of management with respect to future taxable income. The recorded amount of total deferred tax assets could be reduced if estimates of projected future taxable income are lowered, or if changes in current tax regulations are enacted that impose restrictions on the timing or extent of the Company's ability to utilize future tax benefits. The carrying amount of deferred tax assets is disclosed in Item 18 "Financial Statements—Note 14. Deferred tax assets and liabilities".

Provisions

        Provisions are liabilities of uncertain timing or amount. At each balance sheet date, the Company assesses the valuation of the liabilities which have been recorded as provisions and adjusts them if necessary. Because of the uncertain nature of the timing or amounts of provisions, judgement has to be

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exercised by the Company with respect to their valuation. Actual liabilities may differ from the estimated amounts. Details of provisions are shown in Item 18 "Financial Statements—Note 24. Provisions".

Recently Issued Accounting Standards

        In the current year, the following new and revised standards have been adopted. Their adoption has not had any significant impact on the amounts reported in these financial statements.

        Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

        The Group has no defined benefit plans.

        Annual Improvements to IFRSs 2010 - 2012 Cycle and 2011 - 2013 Cycle

        The majority of the amendments are clarifications rather than substantive changes to existing requirements. The amendments to IFRS 8 Operating Segments—Aggregation of operating segments and IAS 24 Related Party Disclosures—Key management personnel represent changes to existing requirements. Neither of these changes has had an effect on the reported results because the company does not aggregate operating segments and does not use management entities to provide key management services.

        At the date of authorization of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

        IFRS 9

        Financial Instruments

        IFRS 15

        Revenue from Contracts with Customers

        IFRS 11 (amendments)

        Accounting for Interests in Joint Operations

        IAS 16 and IAS 41 (amendments)

        Agriculture: Bearer Plants

        IAS 1 (amendments)

        Disclosure initiative

        IAS 16 and IAS 38 (amendments)

        Clarification of Acceptable Methods of Depreciation and Amortization

        IAS 27 (amendments)

        Equity method in Separate Financial Statements

        IFRS 10 and IAS 28 (amendments)

        Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

        IFRS 10, IFRS 12 and IAS 28 (amendments)

        Investment entities: Applying the Consolidation Exemption

        Annual Improvement to IFRSs: 2012 - 2014 Cycle

        Amendments to various IFRSs

        The company does not expect that the adoption of these standards will have a material impact on the financial statements of the Group in future periods.

        For more information regarding recently issued accounting standards, refer to Item 18 "Financial Statements—Note 2. Significant accounting policies".

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Item 6:    Directors, Senior Management and Employees

A.    Directors and Senior Management

        As a European Company, AIXTRON SE is subject not only to the German Stock Corporation Law, but also to the superseding European SE regulations (SE VO) and the German SE Implementation Act (SE-Ausführungsgesetz). It has a dual management and supervisory board structure consisting of an Executive Board and a Supervisory Board. The two boards are separated and no individual may simultaneously be a member of both boards.

Supervisory Board

        The Supervisory Board is responsible for the appointment and employment terms of Executive Board members. It oversees and advises the Executive Board regarding its management duties.

        Pursuant to Article 11 of AIXTRON SE's Articles of Association, the Supervisory Board consists of six members. The General Shareholders' Meeting can specify any other number of Supervisory Board members divisible by three. The members of the Supervisory Board are generally appointed for terms that run until the end of the General Shareholders' Meeting, in which the shareholders represented, resolve on the approval of the Supervisory Board's activities for AIXTRON SE's fourth fiscal year following the beginning of such term and not counting the fiscal year in which the term began. The maximum term is six years and repeated appointments are permitted. The Supervisory Board elects a Chairman and a Deputy Chairman from its members. The Supervisory Board Chairman or, if he is prevented from doing so, his Deputy, convenes the meetings of the Supervisory Board and leads them.

        As of December 31, 2015 AIXTRON's Supervisory Board consisted of the following six individuals:

        No member of AIXTRON's Supervisory Board serves as a director of an SEC-reporting company in the United States.

        The Supervisory Board's business address is Dornkaulstr. 2, 52134 Herzogenrath, Germany.

        For more information regarding the members of the Supervisory Board, refer to Item 18 "Financial Statements—Note 36. Supervisory Board and Executive Board."

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Executive Board

        Pursuant to the guidelines set forth in the German Stock Corporation Act, to which AIXTRON SE is subject via the SE statutes, the Executive Board of AIXTRON SE is responsible for the management of the Company and informs the Supervisory Board regularly, comprehensively and without delay, of any appropriate issues or developments regarding business trends, corporate planning and strategy, and on the Company's risk status.

        According to Article 8 of AIXTRON SE's Articles of Association, the Executive Board is to comprise of two or more persons. The Supervisory Board determines the number of Executive Board members and also decides whether there should be a Chairman and whether deputy members or a Deputy Chairman should be appointed.

        As of December 31, 2015, AIXTRON's Executive Board ("Management") consisted of the following two individuals:

•

Martin Goetzeler (Chairman of the Executive Board, President and Chief Executive Officer): Mr. Goetzeler has been the President and Chief Executive Officer and a member of the Executive Board of AIXTRON since March 1, 2013. His present term will expire on February 28, 2017. Before his appointment Mr. Goetzeler served on the executive board of Siemens' subsidiary Osram and also held various international leadership positions within the Siemens group. He is an acknowledged expert in the LED and lighting industry.



•

Dr. Bernd Schulte (Member of the Executive Board, Executive Vice President and Chief Operating Officer): Dr. Schulte has been Executive Vice President, Chief Operating Officer and a member of the Executive Board of AIXTRON since April 1, 2002. . His present term will expire on March 31, 2018. Dr. Schulte joined AIXTRON in 1993, and he served as Director, Sales and Marketing, from 2001 to 2002.

        The Executive Board's business address is Dornkaulstr. 2, 52134 Herzogenrath, Germany.

B.    Compensation

Executive Board Remuneration

        The remuneration system summarized below pursuant to Section 120(4) of the German Stock Corporation Act was approved by the General Shareholders' Meeting on May 23, 2013 as amended by the Supervisory Board in its Meeting on December 5, 2012.

        The Supervisory Board is responsible for establishing the structure of the remuneration system and the total remuneration for individual members of the Executive Board. It regularly discusses and reviews the remuneration for appropriateness.

        The level of remuneration of AIXTRON's Executive Board members is aligned with the commercial and financial situation and future prospects of the Group and the level and structure of Executive Board remuneration at comparable companies as well as the compensation structure in place in other areas of the Company. In addition, the responsibilities, experience and contribution of each individual Executive Board member are taken into account when calculating the remuneration.

        Executive Board remuneration currently consists of three components: fixed remuneration (including benefits in kind and payments for individual private pension insurance plans), a variable bonus, and may include stock-based remuneration.

        The Executive Board employment contracts stipulate an annual income for the fixed remuneration component. The fixed remuneration component is non-performance-related and is paid out on a monthly

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basis (13 times a year) as a salary. Payments in kind are made, chiefly consisting of company car usage and payments for individual private pension insurance plans.

        The limited variable bonus scheme for the collective Executive Board (profit-sharing) is based on consolidated net income for the year and is paid from an "accrued internal bonus pool", defined as up to 10% of the modified consolidated net income for the year, but not to exceed € 6.5 million in total. The modified consolidated net income for the year is obtained from the Company's Consolidated Financial Statements (IFRS) certified by the auditor, less a consolidated loss carry forward figure and those amounts that are to be allocated to retained earnings in the Annual Financial Statements of AIXTRON by law or in accordance with the Articles of Association. The consolidated loss carry forward is obtained from consolidated net losses from previous years, less consolidated net income from subsequent fiscal years. The variable bonuses which are provided from the "accrued internal bonus pool" as defined above will be paid half through a monetary element and half in shares. That part of the variable bonus payable in shares will be converted into whole numbers of shares of the Company and will be deferred until the third bank working day following the ordinary General Meeting in the third fiscal year after having been granted to the Board members. The number of the shares to be granted for the part of the variable bonus payable in shares will be determined in accordance with the closing price of the share of the Company on the third bank working day following the ordinary General Meeting which is presented with the annual financial statements of the Company and the consolidated financial statements for the fiscal year for which the bonus is granted. The shares will be delivered from treasury shares. Thus, during the multi-year waiting period, the Executive Board members will take part in both positive and negative developments of the Company's share price so that the variable compensation structure is clearly oriented toward a sustainable business development. This new compensation structure was approved by AIXTRON's shareholders at the Annual General Meeting held on May 23, 2013.

        In addition, as a variable component acting as a long-term incentive with an element of risk, the members of the Executive Board may receive a share-based payment in the form of options that are granted under AIXTRON's stock option plans. The stock option plans, including the exercise thresholds, are adopted at each General Shareholders' Meeting. The number of options granted to the Executive Board is stipulated by the Supervisory Board. Further details on the outstanding stock options of the Executive Board as well as comments on the respective stock option plans are set out further in this report.

        The appropriateness of the above-mentioned remuneration components is regularly reviewed by the Supervisory Board. Attention is also paid to ensuring that the terms of the remuneration components do not induce the Executive Board to take inappropriate risks.

        In fiscal year 2015, the total fixed and variable remuneration of the Executive Board (including benefits in kind and pension allowance) totaled € 1,040,631 (2014: € 2,014,775; 2013: € 2,584,834). In fiscal year 2015, no stock options were granted to the Members of the Executive Board (2014: 100,000 options; 2013: 0).

        No variable bonus was paid for fiscal year 2015. For each of the years 2013 and 2014, Mr. Goetzeler received a contractually guaranteed bonus of € 500,000 which was paid half in cash and half in shares. That part of the bonus payable in shares was converted into whole numbers of shares of the Company and will be deferred until the third bank working day following the ordinary General Meeting in the third fiscal year after having been granted (2015: 35,053 shares; 2014: 24,594 shares). During the past fiscal year, no stock options were granted to the Members of the Executive Board (2014: 100,000; 2013: 0).

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        The division between the individual members of the Executive Board for the years 2013 to 2015 is presented in the table below:

        As of December 31, 2015, the AIXTRON Executive Board held a total of 395,500 Company stock options (December 31, 2014: 396,160 and December 31, 2013: 500,408 options respectively) to subscribe to a total of 395,500 ordinary shares of the Company (December 31, 2014: 398,140 and December 31, 2013: 505,116 shares respectively). The number of shares underlying the options is set out below. The actual profits from exercising the stock options may differ significantly from the figures shown in the table.

        In accordance with IFRS 2, the "grant-date fair value of the options" is also used as the basis for recognizing options issued after November 7, 2002 under expenses in the Income Statement. For stock options issued after November 7, 2002, the fair value is calculated using a binomial lattice model, for stock options issued before November 7, 2002, the fair value was calculated using the Black-Scholes model.

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        The expenses for share based compensation of each individual member of the Executive Board are as follows:

        In 2015, options to acquire 2,640 AIXTRON shares expired (2014: 158,976; 2013: 207,000). The expenses for the unvested expired options have been reversed in accordance with IFRS 2.

        In fiscal year 2015, current Executive Board members exercised no options (2014: 48,000; 2013: 211,500), and options to acquire 2,640 AIXTRON shares expired (2014: 158,976; 2013: 207,000).

        The current Executive Board members have no individual company pension benefits which would result in pension provisions being required to be made by the company. Instead, the combined contractual Executive Board annual pension allowance (€ 120,000 per year in 2015; € 120,000 per year in 2014 and € 160,000 per year in 2013) paid by AIXTRON and included in fixed remuneration is transferred by the Executive Board members into independent insurance contracts with a benevolent fund allowance (or similar plan). The current Executive Board members have no individual company pension benefits which would result in pension provisions being required to be made by the company. Instead, the Executive Board annual pension allowance is paid by AIXTRON and included in the fixed remuneration, and is transferred by the Executive Board members into independent insurance contracts with a benevolent fund or similar plan. In the years 2015, 2014 and 2013, payments of € 80,000 per annum (in 2013: 10 months pro rata since start of appointment) were made to Martin Goetzeler. The allowance amounts to € 40,000 for other members of the Executive Board. In the years 2015, 2014 and in 2013, payments of € 40,000 per year were made to Dr. Bernd Schulte, Wolfgang Breme (in 2014: five months pro rata until termination of appointment) and Paul Hyland (in 2013: two months pro rata until termination of appointment) respectively.

        The Executive Board members receive no loans from the Company.

Supervisory Board Remuneration

        The remuneration of the Supervisory Board is regulated by the Articles of Association of AIXTRON SE, as defined and approved by the General Shareholders' Meeting of May 19, 2011.

        Accordingly, the annual fixed compensation for individual members of the Supervisory Board is € 25,000. The Chairman's compensation is three times this amount and the Deputy Chairman's one and a half times the amount received by a regular member of the Supervisory Board.

        The members of the Supervisory Board also receive, in aggregate, a limited variable compensation of 1% of the Company's net income, less an amount corresponding to 4% of the paid-in contributions to the share capital. The Chairman of the Supervisory Board receives ⁶/17 of the variable compensation, the Deputy Chairman ³/17, and each other member of the Supervisory Board ²/17. The variable compensation is limited to the fourfold of the fixed compensation per Supervisory Board member. In addition, committee members receive an attendance fee of € 2,000 for attending a committee meeting, with the Chairman of the committee receiving twice this amount. The total annual attendance fee per Supervisory Board member is limited to one and a half times that individual's fixed compensation.

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        In fiscal year 2015, the compensation of the Supervisory Board totaled € 302,500 (2014: € 292,500; 2013: € 290,042). The division between the individual members of the Supervisory Board for the years 2013 to 2015 is presented in the table below:

        As in previous years, there were no payments made to any Supervisory Board member for advisory services in the year 2015.

        The Supervisory Board members receive no loans from the Company.

C.    Board Practices

        For general information of the Company's board practice, refer to Item 6.A. "Directors, Senior Management and Employees—Directors and Senior Management" in this report. Also refer to Item 10.C. "Additional Information—Material Contracts" for further information regarding the Company's directors' employment contracts.

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        If the employment contract of any of the Company's Executive Board Members is terminated without notice for good cause on the part of the Executive Board Member and for which he has to bear responsibility, the entitlement to the profit sharing bonus lapses from the time that the termination becomes effective, but if it is not for an important reason or if the Executive Board Member terminates the employment relationship after a change in control, each member of the Executive Board will receive a severance pay in an amount equal to the fixed and variable compensation expected to be owed by the Company for the remaining term of the service contract, however, not exceeding an amount equal to twice the annual compensation. A change of control situation exists if a third party or a group of third parties who contractually combine their shares in order to act subsequently as a third party, directly or indirectly holds more than 50% of the Company's authorized capital. No additional benefits are generally paid to the Company's Executive Board Members upon regular termination of their employment contracts.

        None of the members of the Supervisory Board has a service contract with the Company or any of its subsidiaries, providing for benefits upon termination of employment.

        The Company has a D&O insurance contract in place, covering the activities of members of the Executive Board and members of the Supervisory Board. Following the entry into force of the Act on the Appropriateness of Executive Board Compensation (VorstAG), the D&O insurance policies for members of the Executive Board and members of the Supervisory Board of AIXTRON were adjusted to reflect such new legal requirements. Effective January 1, 2010, the deductible amounts to a minimum of 10% of the respective potential loss incurred, but cannot exceed a factor of 1.5 of the respective annual fixed remuneration.

Audit Committee

        According to Article 16 of AIXTRON's Articles of Association, the Supervisory Board is authorized and, if prescribed by law, required to form committees of its members.

        The by-laws for the Supervisory Board specify that the Audit Committee is responsible, in particular, for preparing, on behalf of the Supervisory Board, proceedings and resolutions concerning accounting issues, the accounting process and the effectiveness of the internal control system, the risk management system and the internal audit system, as well as supervising the audit of the financial statements (and especially the independence of the auditors and any additional services performed by the auditors) and the handling of compliance issues. In addition, the Audit Committee is responsible for issuing the mandate to audit the annual accounts and the consolidated financial statements and to carry out any examination of interim reports of AIXTRON SE, for identifying the main focus areas of the audit and for agreeing on the fee arrangements with the auditors. The Audit Committee forwards to the Supervisory Board its recommendation on which firm should be appointed as auditor. The Chairman of the Committee regularly reports to the Supervisory Board with regard to the work performed.

        AIXTRON's Audit Committee operates under the terms of reference of a codified Audit Committee charter. The Audit Committee's charter includes the following terms of reference:

•

The Audit Committee consists of up to three members, elects one Audit Committee member to be the Audit Committee's Chairman and one Audit Committee member whose area of expertise is reporting and audits (as required by Articles 107(4) and 100(5) of the German Stock Corporation Act/AktG), and meets at least two times per half-year.



•

The Audit Committee performs its duties in accordance with legal requirements, AIXTRON's Articles of Association, the charter of AIXTRON's Supervisory Board, and the Audit Committee charter.



•

The Audit Committee may inspect AIXTRON's records and routinely liaises with both the Company's Executive Board and the auditors of the Company to identify and remedy possible weaknesses in AIXTRON's accounting and internal controls and to solve potential differences of opinion between the Company's Executive Board and the Company's auditors.

        Set forth in the table below are the current members of the Audit Committee:

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Further Committees

        AIXTRON does not have a Compensation Committee that assists the Supervisory Board in establishing the structure of the remuneration system. However, the Supervisory Board as a whole is responsible for establishing the structure of the remuneration system and for the total remuneration for individual members of the Executive Board. It regularly discusses and reviews remuneration for appropriateness to ensure that Management is not taking unreasonable risks. The remuneration level of the Executive Board members of AIXTRON SE is aligned not only with the commercial and financial situation and future prospects of the Company and the level and structure of Executive Board remuneration at comparable companies but also with the compensation structure in place in other areas of the Company. In addition, the responsibilities, experience and contribution of each individual Executive Board member, and the desire to retain them, are taken into account when calculating the remuneration. The structure of the Executive Board remuneration system is regularly approved by the shareholders at the General Shareholders' Meeting.

        Since May 19, 2011, the Company has established a Technology Committee. The Technology Committee is composed of three members. It deals in particular with issues involving AIXTRON's market positioning, product planning and developments, potential technology acquisitions or other diversification issues. The Committee Chair regularly reports to the Supervisory Board on the activities of the Technology Committee. The members of the Technology Committee are currently Prof. Dr. Petra Denk (Chair), Kim Schindelhauer and Dr. Andreas Biagosch.

        The Company has established a Nomination Committee. The Nomination Committee is composed of three members. In the event of needing to replace a Board member, the Committee makes nomination proposals to the Supervisory Board. The Nomination Committee is currently composed of Prof. Dr. Rüdiger von Rosen (Chair), Prof. Dr. Petra Denk and Kim Schindelhauer.

        To evaluate opportunities for mergers and acquisitions ("M&A") and strategy options with possible capital market relevance, the Company has established a Capital Market Committee. The Capital Market Committee is currently composed of Kim Schindelhauer and Prof. Dr. Wolfgang Blättchen.

Compliance with NASDAQ Listing Standards on Corporate Governance

        For information about the Company's compliance with the NASDAQ listing standards on Corporate Governance, refer to Item 10.B. "Additional Information—Memorandum and Articles of Association—Sarbanes-Oxley Requirements and NASDAQ Rules" in this report.

D.    Employees

        For information regarding employees of the Company, refer to Item 4.B. "Information on the Company—Business Overview—Employees" in this report.

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E.    Share Ownership

Beneficial Ownership

        The following table sets forth certain information known to AIXTRON regarding beneficial ownership of the Company's ordinary shares and options to acquire its equity securities as of February 10, 2016, unless otherwise specified, by (i) each of the Company's Supervisory and Executive Board members and (ii) all Supervisory and Executive Board members of AIXTRON as a group:

        Pursuant to Section 15a of the German Securities Trading Act (WpHG), members of the Executive and Supervisory Boards were required to disclose significant purchases or sales of shares of AIXTRON ("Directors Dealings"). In fiscal year 2015, no such transactions were reported.

Employee Options

Share Option Programs

        The Company has a number of stock option programs in place that grant the members of the Executive Board and employees the right to purchase AIXTRON shares or ADS under certain conditions. Since the stock option programs have been installed as part of the variable remuneration, the stock options themselves are granted without purchase price.

        In fiscal year 2015, 25,800 stock options (2014: 81,110; 2013: 415,289) were exercised, resulting in delivery of in total 25,800 ordinary shares. No new stock options were granted in fiscal year 2015 (2014: 1,150,400 new grants under tranches 2014 and 2014_I of the 2012 stock option plan; 2013: no options were granted). Half of the granted options under the stock option plan 2007 may be exercised after a waiting period of not less than two years, an additional 25% may be exercised after three years and the remaining 25% of the granted options may be exercised after at least four years. In accordance with the Act on the Appropriateness of Management Board Remuneration (VorstAG Gesetz zur Angemessenheit der Vorstandsvergütung), the options under the 2012 Stock Option Plan can only be exercised, at the earliest point in time, after a waiting period of four years. In addition to an absolute performance target, stock options issued to members of the Executive Board contain a relative exercise threshold with the

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TecDAX as a comparison parameter. The maximum term of the stock options is 10 years. The options expire 10 years after they have been granted.

        See Item 18 "Financial Statements—Note 23. Share-based payment" for a more detailed description of the different stock option plans and a summary of all the stock option transactions.

Item 7:    Major Shareholders and Related Party Transactions

A.    Major Shareholders

        In its capacity as AIXTRON's depositary bank as of December 31, 2015, the Bank of New York Mellon, N. Y. held 4.158.984 ordinary shares as of December 31, 2015, represented by 4.158.984 ADSs, or 3.7% of AIXTRON's shares outstanding.

        As of February 10, 2016, the following investors had shareholdings in AIXTRON SE exceeding the 3% reporting threshold (shares held as of the reporting date, based on publications pursuant to Section 26 (1) of the German Securities Trading Act/WpHG or other public filings):

        Argonaut Capital Partners LLP, London, UK, 8,628,989 shares or 7.66% of AIXTRON's shares outstanding

        Camma B.V., Renesse, Netherlands, 7,650,000 shares or 6.79% of AIXTRON's shares outstanding

        Baillie Gifford & Co, Edinburgh, UK, 5,872,610 shares or 5.21% of AIXTRON's shares outstanding

        Generation Investment Management LLP, London, UK, 5,815,261 shares or 5.16% of AIXTRON's shares outstanding

        Allianz Global Investors Europe GmbH, Frankfurt am Main, Germany, 5,409,483 shares or 4.80% of AIXTRON's shares outstanding

        Caisse des dépôts et consignations, Paris, France, 3,509,631 shares or 3.11% of AIXTRON's shares outstanding

        Vanguard International Growth Fund, Wayne, USA, 3,377,229 shares or 3.00% of AIXTRON's shares outstanding

        Actual shareholdings may differ from these figures. To the Company's knowledge and based on public filings, there was no other single natural or legal person that may be considered a beneficial owner of 3% or more of AIXTRON's outstanding shares as of February 10, 2016.

        As of December 31, 2015, AIXTRON had 137 registered ADS holders, and an estimated 4,131 beneficial holders of ADSs. As of February 10, 2016, AIXTRON had 51,772 shareholders registered in its share register of ordinary shares, and U.S. record holders held approximately 4,158,984 or 3.7% of AIXTRON's outstanding shares.

        For more information, refer to Item 6.E. "Directors, Senior Management and Employees—Share Ownership" in this report.

        The Company's major shareholders do not have voting rights that are different from any other shareholder.

B.    Related Party Transactions

        For related party transaction information, refer to Item 6.B. "Compensation" and Item 18 "Financial Statements—Note 30. Identity of related parties". During 2015, there were no outstanding personal loans or guarantees to members of the Executive Board or the Supervisory Board.

C.    Interests of Experts and Counsel

        Not applicable.

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Item 8:    Financial Information

A.    Consolidated Financial Statements and Other Financial Information

        For the Company's Consolidated Financial Statements and other financial information, refer to Item 5. "Operating and Financial Review and Prospects" and Item 18 "Consolidated Financial Statements".

Export Revenues

        Revenues outside of Europe accounted for € 162.0 million or 81.91% of the AIXTRON's total revenues for the year ended December 31, 2015 (2014: € 168.6 million or 87.00%; 2013: € 158.7 million or 86.76%). Revenues from AIXTRON's Asian-based customers accounted for € 118.4 million or 59.86% of the Company's total revenues for the year ended December 31, 2015 (2014: € 160.2 million or 82.68%; 2013: € 141.8 million or 77.54%).

Legal Proceedings

        In the normal course of business, the Company is subject to various legal proceedings and claims. On January 4, 2016, the Company was named as a defendant in a putative class action commenced in the United States District Court for the Southern District of New York brought on behalf of a putative class of purchasers of the Company's securities between September 25, 2014 and December 9, 2015. The complaint is making reference to an announcement AIXTRON published on December 9, 2015 regarding a substantial reduction in order volume from Chinese customer San'an Optoelectronics from 50 down to three AIX R6 MOCVD systems which caused a strong decline of the price of the Companies' shares and ADS's. The complaint claims in part that the Company made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations and prospects in connection with the above mentioned order. AIXTRON disputes the allegations and intends to contest the allegations vigorously.

        Based on an initial assessment from legal counsel, AIXTRON believes that the above mentioned claim will not be successful. However, it cannot be ruled out that decisions of the above mentioned court as well as settlements could potentially cause expenses, which may have a material adverse effect on AIXTRON's business, financial condition and results of operations.

        The Company is not aware of any unasserted claims that may have a material adverse effect on its financial condition or results of operation.

Policy on Dividend Distributions

        The maximum amount of dividends available for distribution to shareholders is based on the level of earnings, as determined in accordance with the German Commercial Code HGB and the German Stock Corporation Act AktG. All dividends must be approved by the Company's shareholders.

        AIXTRON SE, the parent company of the AIXTRON Group, recorded a net accumulated loss in accordance with German generally accepted accounting principles (German GAAP), based on the German Commercial Code HGB, of € –86.7 million for 2015 (2014: € –53.6 million; 2013: € –1.1 million).

        AIXTRON's Executive and Supervisory Boards will propose to the shareholders' meeting that the 2015 loss should be carried forward and consequently no dividend payment should be made for 2015. For the fiscal years 2014 and 2013 the Company did not distribute any dividends.

B.    Significant Changes

        For information regarding significant changes, refer to Item 18 "Financial Statements—Note 32. Events after the reporting period".

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Item 9:    The Offer and Listing

A.    Offer and Listing Details

Trading Markets

        The principal trading market for AIXTRON's ordinary shares is the Frankfurt Stock Exchange, where the shares trade under the symbol "AIXA." AIXTRON's ADSs, each evidencing one ADS, which represents one ordinary share, trade on the NASDAQ Global Select Market under the symbol "AIXG."

Market Price Information

        The table below sets forth, for the calendar periods indicated, the high and low German closing prices (all stock exchanges, including XETRA) for AIXTRON's ordinary shares, and the high and low closing prices per ADS as reported on the NASDAQ Global Select Market. See also the discussion under "Item 3. Key Information—Exchange Rate Information" for information with respect to rates of exchange between the US-Dollar and the Euro applicable during the periods set forth below.

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        On February 10, 2016, the closing price in Germany per ordinary share was € 3.04.

        On February 10, 2016, the closing price per ADS on NASDAQ Global Select Market was USD 3.35.

B.    Plan of Distribution

        Not applicable

C.    Markets

        See Item 9.A. "Offer and Listing Details".

D.    Selling Shareholders

        Not applicable.

E.    Dilution

        Not applicable

F.     Expenses of the Issue

        Not applicable

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Item 10:    Additional Information

A.    Share Capital

        Not applicable.

B.    Memorandum and Articles of Association

Articles of Association

        This section summarizes the material provisions of AIXTRON's Articles of Association. This is only a summary and does not describe the Articles of Association in their entirety. Copies of AIXTRON's Articles of Association are publicly available from the commercial register of the local court in Aachen, Germany under the entry number HRB 16590, and an English translation of AIXTRON's Articles of Association as of January 20, 2016 is also available on the AIXTRON website and can be found in Exhibit 1.1 of this report.

Share Capital

        The Company's share capital amounts to € 112,720,355 as per December 31, 2015. It is composed of 112,720,355 no-par value registered shares.

Purpose

        According to Section 2 of AIXTRON's Articles of Association, the purpose of the Company is the manufacture and sale of products, as well as research and development and services for the implementation of semiconductor technologies and other physicochemical technologies, particularly those bearing the AIXTRON trademark. The Company is authorized to conduct all transactions suitable for promoting the Company's purpose indirectly and directly. The Company may establish branch offices in Germany and abroad, may acquire equity interests in other companies in Germany and abroad, as well as purchase or establish such companies. The purpose of subsidiaries and investees may differ from that referred to above insofar as it seems capable of promoting the purpose of the Company. The Company may outsource all or part of its operations to affiliates.

Future Share Capital; Preemptive Rights

        AIXTRON's stated share capital may be increased against either contributions of cash or contributions-in-kind by a resolution of AIXTRON's General Shareholders' Meeting with a 75% majority of the share capital represented at the meeting at which the resolution is adopted, or under AIXTRON's Articles of Association by a resolution of the Executive Board with the consent of the Supervisory Board by using AIXTRON's authorized share capital.

        In accordance with the German Stock Corporation Law, an existing shareholder in a stock corporation has a preemptive right to subscribe for any issue of new shares, debt instruments convertible into shares (Wandelschuldverschreibungen) and participating debt instruments (Genussrechte) in proportion to the number of shares held by that shareholder in the existing stated share capital of the Company. The General Shareholders' Meeting may exclude this preemptive right by a majority of at least 75% of the share capital represented at the meeting at which the resolution authorizing the capital increase is adopted. In addition to these formal procedural requirements, the exclusion requires a substantive justification. The Executive Board is required to submit a written report concerning this justification to the General Shareholders' Meeting. The goal pursued by the corporation through the issuance of the new security must outweigh the elimination of this preemptive right and that the goal could not be reasonably achieved without it.

        The preemptive rights are freely assignable and may be traded on German stock exchanges for a specified time within the subscription period. The preemptive rights lapse if they are not exercised.

Dividend and Liquidation Rights

        The ordinary shares underlying the AIXTRON ADSs are fully entitled to any dividends as and when declared by AIXTRON. Upon proposal by AIXTRON's Executive Board and Supervisory Board, the annual General Shareholders' Meeting approves the allocation of AIXTRON's net profits (Bilanzgewinn), which AIXTRON determines on the basis of its unconsolidated annual financial statements prepared in accordance with the accounting principles generally accepted in Germany. The Executive Board and the

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Supervisory Board are authorized to allocate, in their discretion, up to half of AIXTRON's net profit in any fiscal year to other retained earnings (andere Gewinnrücklagen). Shareholders participate in dividends in proportion to the number of shares held by each shareholder.

        In accordance with the German Stock Corporation Law, upon AIXTRON's liquidation, shareholders will receive, in proportion to their shareholdings, any liquidation proceeds remaining after payment of all of AIXTRON's liabilities.

Voting Rights and General Shareholders' Meeting

        A General Shareholders' Meeting of AIXTRON may be called by the Executive Board, the Supervisory Board or upon request of shareholders whose aggregate holding is not less than 5% of the stated share capital. The annual General Shareholders' Meeting must take place within the first six months of the fiscal year. The Executive Board calls this meeting upon the receipt of the Supervisory Board's report on the annual financial statements.

        Under German law and AIXTRON's Articles of Association, AIXTRON must publish notices of shareholders meetings in the German federal gazette (Bundesanzeiger) at least one month before the last day on which the shareholders must deposit their shares for the meeting.

        Under AIXTRON's Articles of Association, those shareholders whose names are entered into the share register on the date of the General Shareholders' Meeting and who have registered for participation in a timely manner shall be entitled to participate in such General Shareholders' Meeting and to exercise their voting rights. Such registration for participation must be received at the Company under the address notified for this purpose in the call for the meeting in German or English in the form of text or, if so resolved by the Executive Board, electronically in a manner determined in the call for the General Shareholders' Meeting, at least six days prior to the General Shareholders' Meeting, whereby the date of the General Shareholders' Meeting and the date of receipt are not taken into account. Cancellations and new registration in the share register will not take place on the date of the General Shareholders' Meeting and during the last six days prior to the General Shareholders' Meeting.

        The Executive Board is authorized to provide that shareholders can participate in the General Shareholders' Meeting without being present at its location and without a proxy and can completely or partially exercise all or individual rights they have by means of electronic communication.

        Each ordinary share carries one vote at General Shareholders' Meeting. According to AIXTRON's Articles of Association, resolutions are generally passed with a simple majority of the votes cast unless otherwise required by the Articles of Association or by law. Resolutions that require a majority of the share capital represented at the time of the adoption of the resolution are passed with a simple majority of the share capital represented at the meeting of shareholders at which the resolution is considered, unless otherwise required by law. Resolutions about amending the Articles of Association, to the extent legal provisions do not determine otherwise, require a majority of two thirds of the votes cast or, if at least one half of the share capital is represented, a simple majority of the votes cast. Under the German Stock Corporation Law, a number of significant resolutions must be passed by a majority of the votes cast and at least 75% of the share capital represented in connection with the vote taken on that resolution. The approval threshold required for some of these resolutions may be lowered by the Articles of Association.

        The following resolutions require the approval of a majority of at least 75% of the share capital represented at the meeting:

•

capital increase;



•

exclusion of preemptive rights in a capital increase;



•

capital decreases (Kapitalherabsetzung);



•

creation of authorized share capital or conditional share capital;



•

amendment to the business purpose stated in AIXTRON's Articles of Association;



•

dissolution (Auflösung);



•

merger (Verschmelzung) or a consolidation with another stock corporation (Eingliederung) or another corporate transformation (Maßnahmen nach dem Umwandlungsgesetz);



•

transfer of all or substantially all of AIXTRON's assets; or

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•

conclusion of any direct control, profit and loss pooling or similar intercompany agreements (Abschluss von Unternehmensverträgen).

        Although AIXTRON must notify shareholders of any ordinary or extraordinary shareholders' meeting as described above, neither the German Stock Corporation Law nor AIXTRON's Articles of Association fixes a minimum quorum requirement. This means that holders of a minority of AIXTRON's shares could control the outcome of resolutions not requiring a specified majority of AIXTRON's stated share capital.

Notice Requirements

        The German Securities Trading Act (Wertpapierhandelsgesetz) provides for notification requirements. It requires each person whose voting rights reach, exceed or, after exceeding, fall below the 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% voting rights thresholds in an issuer for whom the Federal Republic of Germany is the home member state within the meaning of the German Securities Trading Act to notify the company and the Federal Supervisory Agency (Bundesanstalt für Finanzdienstleistungsaufsicht) in writing within four trading days after they have reached, exceeded or fallen below that threshold. For any period in which a notice is not given, the shareholder is prevented from exercising its rights as an AIXTRON shareholder, including voting rights and dividend rights. With the exception of the 3% threshold, the notification requirements shall also apply to direct or indirect holders of (a) financial instruments that, on maturity, give the holder either the unconditional right to acquire, or the discretion as to his right to acquire, shares to which voting rights are attached, already issued, of an issuer an issuer for whom the Federal Republic of Germany is the home member state within the meaning of the German Securities Trading Act, and (b) financial instruments which are not included in point (a) but which are referenced to shares referred to in that point and with economic effect similar to that of the financial instruments referred to in point (a), whether or not they confer a right to a physical settlement. Financial instruments relating to the same underlying issuer shall be aggregated. Long positions shall not be netted with short positions relating to the same underlying issuer. The notification requirements shall also apply to a natural person or a legal entity when the number of voting rights held directly or indirectly by such person or entity aggregated with the number of voting rights relating to financial instruments held directly or indirectly reaches, exceeds or falls below the abovementioned thresholds, with the exception of the 3% threshold.

Notices, Paying Agent and Depository

        AIXTRON publishes official notices exclusively in the German federal gazette (Bundesanzeiger).

        In addition, AIXTRON will file reports and other information with the SEC.

        Deutsche Bank AG is the German Paying Agent (Zahlstelle) for the AIXTRON ordinary shares.

        There are no limitations on rights to own AIXTRON ordinary shares.

Corporate Governance

        AIXTRON's Declaration of Conformity with the recommendations of the Government Commission of the German Corporate Governance Code was last updated in February 2016 and states that the Company has been in full compliance with the Corporate Governance Code with the exception of some deviations which were declared. It is posted together with the "Declaration on Corporate Governance" in the "Investors—Corporate Governance" section of AIXTRON's website at www.aixtron.com.

        AIXTRON has had a Code of Ethics procedure since 2006 for the Executive Board members and selected key managers in Finance. For more details to the Company's Code of Ethics refer to Item 16B: "Code of Ethics".

        In addition, AIXTRON has issued a Compliance Code of Conduct applicable to the Company's Executive and Supervisory Boards, as well as all employees in all Company offices throughout the world and holds them accountable to conduct that is required to be conscientious and in conformity with the law. Amongst the topics addressed, this Code covers the following issues: responsibility and respect towards society and the environment, compliance with overall legal conditions, legal and ethical conduct by each individual employee, loyalty to the Company, fair and respectful treatment of fellow employees, rejection of any form of discrimination, dealing responsibly with corporate risks, acting in an environmentally aware manner, security in all operating areas, working in a professional manner, reliability and fairness in all business relationships, compliance with guidelines on giving/taking unfair advantage, dealing with insider information and the treatment of Company property.

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        Due to particular specifications set by NASDAQ, AIXTRON SE has a separate NASDAQ-Code of Conduct. The NASDAQ-Code of Conduct is applicable to the Company's Executive Board, as well as all employees in all Company offices throughout the world and provides more details on certain ethical requirements of the behavior of AIXTRON's employees described in the Compliance Code of Conduct. A copy of each of the Compliance Code of Conduct and NASDAQ-Code of Conduct is available on the AIXTRON website www.aixtron.com under the section Investors / Corporate Governance / Code of Conduct.

        AIXTRON has issued a Compliance Manual which applies to all members of the Company's senior management. This manual, on which the principles of the Compliance Code of Conduct are based, provides a detailed view on all important areas of compliance and requirements deriving therefrom, applicable to the Executive Board, the Supervisory Board and the employees. It is regularly updated to reflect major legal changes. By signing each quarter, a representation letter, the senior managers thereby confirm that within their area of responsibility all compliance requirements were respected. Furthermore, they declare that in case of an update of the Compliance Manual, they will take note of the updated version, follow and communicate its contents within their area of responsibility.

        The AIXTRON Vendor Code of Conduct formulates ethical, moral, and compliance standards for the purchase and use of materials with Conflict Minerals in the supply chain. The purpose of the Vendor Code of Conduct is to communicate the Conflict Minerals Law, to introduce the due diligence process, to formulate the expectations on AIXTRON's supply chain partners / vendors and to explain consequences of non-compliance. Further information on the use and origination of conflict minerals in the AIXTRON Group are published in in its Form SD, which has been filed with the SEC on May 29, 2015 and is also available on the AIXTRON website under http://www.aixtron.com/en/investors/us-listings/form-sd/.

        The information available on AIXTRON's website is not incorporated by reference into this report.

Sarbanes-Oxley Act Requirements and NASDAQ Rules

        To facilitate the Company's compliance with the Sarbanes-Oxley Act, the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and the rules of the NASDAQ Stock Market (the "NASDAQ Rules"), AIXTRON has established a Disclosure Committee that is responsible for reviewing and approving its public disclosures. AIXTRON also has procedures for handling complaints related to accounting practices and a Code of Ethics.

        In conjunction with its annual report for the year ending December 31, 2015, the Company is required to include a report from its Management relating to its evaluation of the Company's internal control over financial reporting, as required pursuant to Section 404 of the U.S. Sarbanes-Oxley Act, see Item 15 in this annual report on Form 20-F.

        AIXTRON generally complies with applicable German Corporate Governance practice rather than certain of the Corporate Governance requirements of NASDAQ. The requirements of NASDAQ that AIXTRON is not following and its non-conforming practices in lieu thereof are as follows:

•

Rule 5250(d)(1)—Distribution of Annual and Interim Reports. AIXTRON is exempt from the requirement under NASDAQ Rule 5250(d)(1) that an annual report, containing audited financial statements of the company and its subsidiaries, be distributed to shareholders a reasonable period of time following the filing of the annual report with the Commission. Consistent with the German Stock Corporation Act, AIXTRON does not distribute annual and interim reports automatically to shareholders. Instead, AIXTRON's annual reports are available to the shareholders at the Company's website and are mailed to shareholders upon request. AIXTRON also files its annual reports with the SEC.



•

Rule 5605—Independent Directors. AIXTRON is exempt from the independent director requirement under NASDAQ Rule 5605 that requires that, among other things, a majority of a company's board of directors must be comprised of independent directors (as defined in NASDAQ Rule 5605(a)(2)) and sets forth certain voting and independence requirements with respect to the nomination of board members and the determination of compensation of officers. Consistent with the German Corporation Act, members of AIXTRON's Executive Board are elected by its Supervisory Board. The Executive Board manages the Company under its own responsibility and is not bound by orders of third parties, including the orders of the general meeting and the Supervisory Board. The Executive Board is obligated to comply with the statutory regulations, the provisions of the Articles of Association and the Rules of Procedure of the Executive Board.

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Furthermore the Supervisory Board is responsible for the compensation agreements with the members of Executive Board;

•

Rule 5605(c)—Audit Committee. AIXTRON is exempt from certain requirements under NASDAQ Rule 5605(c) with respect to a company's Audit Committee, which require the creation of several specified board committees composed of independent directors and operating pursuant to written charters that set forth their tasks and responsibilities. AIXTRON currently has an Audit Committee. Nevertheless, consistent with German law, the independent auditors are elected at the Annual General Meeting, instead of being appointed by the Audit Committee. The independence of the members of AIXTRON's Supervisory Board committees is governed by the independence standards applicable to Supervisory Board members. Collectively, AIXTRON's Supervisory Board is responsible for many of the same functions as the committees required under NASDAQ Rules;



•

Rule 5605(d)—Compensation Committee. AIXTRON is exempt from certain requirements under NASDAQ Rule 5605(d) with respect to a company's Compensation Committee, which require that a company's compensation committee be comprised exclusively of independent directors. Consistent with the German Stock Corporation Act, the Supervisory Board as a whole is responsible for the compensation agreements with the members of Executive Board and does not require a compensation committee.



•

Rule 5620(c)—Quorum. AIXTRON is exempt from NASDAQ's quorum rule which requires a quorum for any meeting of the holders of common stock of at least 33¹/3% of the outstanding shares of the company's voting stock. Consistent with German law and the rules and regulations promulgated by the Frankfurt Stock Exchange, AIXTRON's Articles of Association do not provide for a quorum for Annual General Meetings;



•

Rule 5620(b)—Solicitation of Proxies. AIXTRON is exempt from NASDAQ's proxy solicitation rules which require a company solicit proxies and provide proxy statements for all meetings of shareholders and provide copies of such proxy solicitation to NASDAQ. Consistent with German law, AIXTRON offers to its shareholders to exercise their voting rights in the general meeting through proxies appointed by the Company and keeps the declarations of such proxies available for inspection for a period of three years. The proxies appointed by AIXTRON are obliged to vote in accordance with the instructions of the represented shareholder. Under the deposit agreement pertaining to AIXTRON's ADSs, AIXTRON's depositary bank mails to holders of ADSs a notice stating inter alia that each holder of ADSs is entitled to instruct the depositary bank as to the exercise of the voting rights. Each shareholder who desires to exercise or to give instructions for the exercise of voting rights must execute and return a document provided by the depositary bank that instructs the depositary bank as to how the number of the shares represented by such holders' ADSs are to be voted; and



•

Rule 5635(c)—Shareholder Approval. AIXTRON is exempt from the NASDAQ's shareholder approval requirement which generally requires companies to obtain shareholder approval of all equity-compensation plans (including stock option plans) and any material revisions to them. Consistent with the German Corporation Act, the adoption of AIXTRON's stock option plans and any material revisions thereto needs to be approved by the Company's shareholders insofar as the issuance of shares and/or stock options under authorized or contingent capital authorizations requires shareholder approval.

        Other significant differences between AIXTRON's governance practices and those of U.S. domestic NASDAQ-listed companies are as follows:

Two-Tier Board

        In accordance with the requirements of the German Stock Corporation Act, to which AIXTRON SE is subject via the SE statutes, AIXTRON has a two-tier board structure consisting of an Executive Board and a Supervisory Board, which is not comparable to the one-tier or unitary board system in the U.S. The two-tier governance system provides a strict separation of management and supervisory functions. Roles and responsibilities of each of the two boards are clearly defined by law.

Independence

        Under this two-tier board system, except as described above, AIXTRON's methods for determining and ensuring the independence of its Supervisory Board differ from those of NASDAQ Rule 5605, which

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generally contemplates a U.S.-style, one-tier system. In contrast to the NASDAQ Rules, which require the board to affirmatively determine the independence of the individual directors with reference to specific tests of independence, German law does not require the Supervisory Board to make such affirmative findings on an individual basis. At the same time, the Bylaws of AIXTRON's Supervisory Board contain several provisions to help ensure the independence of the Supervisory Board's advice and supervision. Furthermore, the members of AIXTRON's Supervisory and Executive Boards are strictly independent from one another. A member of one board is legally prohibited from being concurrently active on the other. Supervisory Board members have independent decision making authority and are legally prohibited from following the direction or instruction of any affiliated party. Moreover, Supervisory Board members may not enter into advisory, service or certain other contracts with AIXTRON, unless approved by the Supervisory Board.

Compliance with the requirements of NASDAQ Rule 5600 Series applicable to foreign private issuers

        Under Rule 5615(a)(3), as amended, AIXTRON is required to comply with Rule 5625 (relating to the notification of material noncompliance), Rule 5640 (relating to certain voting rights and to have an Audit Committee that satisfies Rule 5605(c)(3) (regarding compliance with Rule 10A-3 of the Exchange Act) and to ensure that such Audit Committee's members meet the independence requirement in 5605(c)(2)(A)(ii) (regarding independence required under Rule 10A-3 of the Exchange Act).

        AIXTRON's Supervisory Board has determined that as of December 31, 2015, the Company is in compliance with the aforementioned requirements applicable to foreign private issuers pursuant to Rule 5600 Series. In particular, AIXTRON's Supervisory Board has determined that each member of the Audit Committee is "independent" as set forth in Rule 10A-3 of the Exchange Act and as required by Rule 5605(c)(2)(A)(ii).

C.    Material Contracts

        Apart from the following material contracts, all contracts AIXTRON has entered into during the course of the year 2015 were entered in the ordinary course of business.

Employment contracts of current members of the Executive Board

        The Company's employment contract with Dr. Bernd Schulte, effective April 1, 2002 and amended as of April 24, 2009, provides for a base salary of € 325,000 per year. Dr. Schulte's contract was renewed in 2014 and effective April 1, 2015, Dr. Schulte receives a base salary of € 390,000 per year. His employment contract provides for a bonus in accordance with the employment contract (2.5% of AIXTRON's annual Group net income adjusted by additions to and withdrawals from revenue reserves ("modified annual AIXTRON Group net income")). The total amount available to be paid as a bonus to all Executive Board members as a group is limited to the lesser of € 6.5 million or 10% of the modified annual AIXTRON Group net income and will be paid half in cash and half in shares. For the purposes of a pension scheme, the Company pays Dr. Schulte € 40,000 per year, as the premium for a life insurance of his choice to be taken out or as an additional component of his gross salary. In addition, the Company pays Dr. Schulte the employer's contribution to the compulsory health insurance or the same amount to an alternative insurance with waiver.

Intellectual Property Agreements

        See also item 4.B. "Information on the Company—Business Overview—Intellectual Property".

        Certain information, such as fees and royalties in the exclusive patent and know-how license agreement with the Centre National de la Recherche Scientifique ("CNRS") and the Institut National Polytechnique de Grenoble ("INPG") executed on December 17, 2002 (the "CNRS Agreement") is confidential and has been redacted from the copies of the CNRS Agreement AIXTRON filed with the SEC.

        The CNRS Agreement deals with the system for injection of precursors into a vacuum vapor deposition chamber (the "Product"). CNRS and INPG grant AIXTRON an exclusive license to develop, manufacture, use, sell the Product and exploit the patents and know-how in the entire world with the right to grant certain sub-licenses. Except for the specified sub-license grants, the CNRS Agreement is personal, not assignable and non-transferable. The CNRS Agreement remains in force during the life of the patents unless it is terminated by any of the parties to this agreement.

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D.    Exchange Controls

        At present, Germany does not restrict the movement of capital between Germany and other countries or individuals except certain persons, entities and countries subject to embargoes in accordance with German law and applicable resolutions adopted by the United Nations and the European Union.

        For statistical purposes, with certain exceptions, every corporation or individual residing in Germany must report to the German Central Bank any payment received from or made to a non-resident corporation or individual if the payment exceeds € 12,500 (or the equivalent in a foreign currency). Additionally, corporations and individuals residing in Germany must report to the German Central Bank any claims of a resident against, or liabilities payable to, a non-resident corporation or individual exceeding an aggregate of € 5 million (or the equivalent in a foreign currency) at the end of any calendar month. Resident corporations and individuals are also required to report annually to the German Central Bank any stakes of 10% or more they hold in the equity of non-resident corporations with total assets of more than € 3 million. Corporations residing in Germany with assets in excess of € 3 million must report annually to the German Central Bank any stake of 10% or more in the company held by an individual or a corporation located outside Germany.

E.    Taxation

German Taxation

        The following discussion is a summary of certain material German tax consequences for beneficial owners of AIXTRON's ordinary shares or ADSs:

(1)

who are not German residents for German income tax purposes (i.e., persons whose residence, habitual abode, statutory seat or place of effective management and control is not located in Germany), and



(2)

whose shares or ADSs do not form part of the business property of a permanent establishment or fixed base in Germany. Throughout this section such owners are referred to as "Non-German Holders."

        The discussion is based on tax laws of Germany as in effect on the date of this annual report, including the Convention between the United States of America and the Federal Republic of Germany for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With Respect to Taxes on Income and Capital and to Certain Other Taxes (the "Treaty"). Such laws are subject to change. The discussion is also based in part upon the representations of the Depositary and assumes that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms.

        The following discussion does not purport to be a comprehensive discussion of all German tax consequences that may be relevant for Non-German Holders. AIXTRON's discussion does not address all aspects of German taxation that may be relevant to you in light of your particular circumstances. You should consult your tax advisor regarding the German federal, state and local tax consequences of the purchase, ownership and disposition of AIXTRON's shares or ADSs and the procedures to follow to obtain a refund of German taxes withheld from dividends.

Taxation of the Company in Germany

        German Corporations are subject to a corporate tax rate of 15%. A 5.5% solidarity surcharge is imposed on the Corporation Tax, resulting in an overall tax rate of 15.825%.

        In addition, German corporations are by virtue of their legal form subject to a municipal profit-related German Trade Tax. Trade Tax is calculated on the basis of the taxable Corporation Tax income as shown in the annual statutory profit and loss accounts of the corporation which, however, is subject to certain particular Trade Tax add-backs and deductions. The effective Trade Tax rate applicable depends on the municipality in which the corporation maintains a permanent establishment and ranges between approximately 7% and 17%.

        German Corporation Tax and Trade Tax combined will result in an overall tax burden for German corporations amounting to approximately 30% at an average.

        The deduction for a taxable loss carry-forward for the fiscal year is unlimited up to a threshold of € 1,000,000, thereafter taxable income can only be offset to the extent of 60%. The temporary loss carry-forward is reduced by the amount used and remains unlimited in life. However, there are limitations on the

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use of loss carry-forwards upon a transfer of more than 25% of a corporation's shares or voting rights to one purchaser, a related party or group of purchasers within a specified time period.

Withholding Tax on Dividends

        Withholding Tax on Dividends in Germany constitutes 25%. A solidarity surcharge of 5.5% on the withholding tax results in a surcharge amount to 1.375% (5.5% × 25%), and a total effective withholding tax rate from dividends of 26.375%. For many Non-German Holders, the withholding tax rate is reduced under applicable income tax treaties. Under most income tax treaties to which Germany is a party, the rate of dividend withholding tax is reduced to 15%. To reduce the withholding to the applicable treaty rate of 15%, a Non-German Holder must apply for a refund of withholding taxes paid. The application for refund must be filed with the German Federal Tax Office. The relevant forms can be obtained from the German Federal Tax Office or from German embassies and consulates.

Special Tax Rules for tax resident in Germany

        Since January 1, 2009 onwards 100% of dividends of shares held as private assets are subject to a 25% fixed tax rate plus 5.5% solidarity surcharge thereon. If church tax is individually applicable for the shareholder this part of taxation will be subject of the withholding as well. This tax will be final unless the individual tax rate of the shareholder is less than 25% and the shareholder opts for the tax assessment. Moreover, from 2009 on, capital gains from the sales of shares, acquired after December 31, 2008, are taxable as well, regardless of the percentage of the shareholding and of how long the shareholding has been held. Capital gains from the sale of shares acquired before January 1, 2009 are tax exempt if the shareholding has been held for more than one year and the taxpayer has held less than 1% of the registered share capital of the company during a five-year period immediately preceding the disposition. The lump sum deduction of investment income related expenses amounts to € 801 for individuals and € 1,602 for married couples. Further investment income related expenses will not be tax deductible.

        Regarding shares held as business assets of the shareholder, 60% of the dividends will be subject to personal income tax (part income taxation). Accordingly, 60% of the income related expenses are deductible.

Special Tax Rules for U.S. Shareholders

        Under the current Treaty, the withholding tax rate generally is reduced to 15% of the gross amount of the dividends and a full refund of the solidarity surcharge can be obtained by U.S. holder. Dividend payments to an eligible U.S. holder made by AIXTRON will be subject to a 15% general withholding tax rate under the Treaty.

        Dividend distributions made by the Company are subject to a 25% withholding tax plus a solidarity surcharge of 5.5% on the withholding tax resulting in an aggregate German withholding tax of 26.375% of the declared dividend, and eligible U.S. holders (as defined below under "U.S. Taxation") are entitled to receive a payment from the German tax authorities equal to 11.375% of the declared dividend.

        Accordingly, for a declared dividend of 100, an eligible U.S. holder initially will receive 73.625: 100 minus the 26.375% withholding tax. The eligible U.S. holder is then entitled to a refund from the German tax authorities of 11.375 and will, as a result, effectively receive a total of 85 (i.e., 85% of the declared dividend).

Withholding Refund Procedure for U.S. Shareholders

        For shares and ADSs kept in custody with The Depository Trust Company in New York or one of its participating banks, the German tax authorities have introduced a collective procedure for the refund of German dividend, capital withholding tax and the solidarity surcharge thereon on a trial basis. Under this procedure, The Depository Trust Company may submit claims for refunds payable to eligible U.S. holders under the Treaty collectively to the German tax authorities on behalf of these eligible U.S. holders.

        The German Federal Tax Office will pay the refund amounts on a preliminary basis to The Depository Trust Company, which will redistribute these amounts to the eligible U.S. holders according to the regulations governing the procedure. The German Federal Tax Office may review whether the refund was made in accordance with the law within four years after making the payment to The Depository Trust Company. Details of this collective procedure are available from The Depository Trust Company. Individual claims for refunds may be made on a special German form which must be filed with the German

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Federal Tax Office (Bundeszentralamt für Steuern, Dienstsitz Bonn, An der Küppe 1, 53225 Bonn, Germany). Copies of this form can be downloaded from the homepage of the German Federal Tax Office:

http://www.bzst.bund.de or http://www.germantaxes.info or can be obtained from the Embassy of the Federal Republic of Germany, 4645 Reservoir Road, N.W., Washington, D.C. 20007-1998. Claims must be filed within a four-year period from the end of the calendar year in which the dividend was received.

        As part of the individual refund claim, an eligible U.S. holder must submit to the German tax authorities the original bank voucher (or a certified copy thereof) issued by the paying agent documenting the tax withheld, and an official certification on IRS Form 6166 of its last United States federal income tax return. Form 6166 is a letter printed on U.S. Department of Treasury stationery certifying that the individuals or entities listed are residents of the United States for purposes of the income tax laws of the United States. The Internal Revenue Service (IRS) procedure for requesting a certificate of residency (Form 6166) from the Philadelphia Accounts Management Center is the submission of Form 8802, Application for United States Residency Certification. This form may be obtained by filing a request with the Internal Revenue Service Center in Philadelphia, Pennsylvania, P.O. Box 71052, Philadelphia, PA 19176-6052 U.S.A. Requests for certification must include the eligible U.S. holder's name, Social Security or Employer Identification Number, tax return form number, and tax period for which the certification is requested. Requests for certifications can include a request to the Internal Revenue Service to send the certification directly to the German tax authorities. If no such request is made, the Internal Revenue Service will send a certification on IRS Form 6166 to the eligible U.S. holder, who then must submit this document with his refund claim.

Taxation of Capital Gains for U.S. Shareholders

        Capital Gains earned by a Non-German holder from the sale or other disposition of ordinary shares or ADS are subject to tax in Germany at statutory tax rates if the Non-German holder has held, directly or indirectly, shares or ADSs representing 1% or more of the registered share capital of the company at any time during a five-year period immediately preceding the disposition. Capital gains in general are not taxable if the above mentioned threshold is not exceeded and certain further conditions are met.

        The Income Tax Treaty provides that taxation in Germany on capital gains of U.S. residents does not apply to gains on the sale or other disposition of ADSs or Ordinary shares.

Inheritance and Gift Tax

        The current Estate Tax Treaty provides that an individual whose domicile is determined to be in the United States for purposes of such Treaty will not be subject to German inheritance and gift tax (the equivalent of the United States federal estate and gift tax) on the individual's death or making of a gift unless the ADSs or Ordinary Shares (1) are part of the business property of a permanent establishment located in Germany or (2) are part of the assets of a fixed base of an individual located in Germany and used for the performance of independent personal services. An individual's domicile in the United States, however does not prevent imposition of German inheritance and gift tax with respect to an heir, donee, or other beneficiary who either is or is deemed to be resident in Germany at the time the individual died or the gift was made.

        The Estate Tax Treaty also provides a credit against U.S. federal estate and gift tax liability for the amount of inheritance and gift tax paid to Germany, subject to certain limitations, in a case where the ADSs or Ordinary Shares are subject to German inheritance or gift tax and U.S. federal estate or gift tax.

Other Taxes

        No German transfer, stamp or similar taxes apply to the purchase, sale or other disposition of shares or ADSs by Non-German Holder. Currently, net worth tax is not levied in Germany.

U.S. Federal Taxation

        The following is a summary of the principal U.S. federal income tax consequences that may be relevant with respect to the acquisition, ownership and disposition of AIXTRON's shares or ADSs. This summary addresses only the U.S. federal income tax considerations of holders that hold shares or ADSs as

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capital assets. This summary does not address tax considerations applicable to holders that may be subject to special tax rules, such as:

•

financial institutions;



•

insurance companies;



•

real estate investment trusts;



•

regulated investment companies;



•

grantor trusts;



•

dealers or traders in securities or currencies;



•

tax-exempt entities;



•

persons that received shares or ADSs as compensation for the performance of services;



•

persons that will hold shares or ADSs as part of a "hedging" or "conversion" transaction or as a position in a "straddle" for U.S. federal income tax purposes;



•

certain former citizens or long-term residents of the United States;



•

persons that have a "functional currency" other than the US-Dollar; or



•

holders that own (or are deemed to own) 10% or more (by voting power or value) of AIXTRON's shares or ADSs.

        Moreover, this summary does not address the U.S. federal estate and gift or alternative minimum tax consequences of the acquisition, ownership and disposition of AIXTRON's shares or ADSs. This summary is based on (1) the federal tax laws of the United States as in effect and available on the date of this annual report, including the Internal Revenue Code of 1986, as amended (the "Code"), judicial and administrative interpretations thereof, and currently effective and proposed U.S. Treasury Regulations, each as available on the date hereof, and (2) in part on the representations and covenants of the Depositary and the assumption that each obligation in the Deposit Agreement and any related agreement will be performed in accordance with its terms. All of the foregoing is subject to change, which change could apply retroactively and could affect the tax consequences described below.

        For purposes of this summary, a "U.S. Holder" is a beneficial owner of AIXTRON's shares or ADSs that, for U.S. federal income tax purposes, is: (1) a citizen or resident of the U.S., (2) a partnership or corporation created or organized in or under the laws of the United States or any state thereof or the District of Columbia, (3) an estate, the income of which is subject to U.S. federal income taxation regardless of its source or (4) a trust if such trust validly elects to be treated as a U.S. person for U.S. federal income tax purposes or if (a) a court within the U.S. is able to exercise primary supervision over its administration and (b) one or more U.S. persons have the authority to control all of the substantial decisions of the trust. A "Non-U.S. Holder" is a beneficial owner of AIXTRON's shares or ADSs that is not a U.S. Holder.

        If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds AIXTRON's shares or ADSs, the tax treatment of such partnership and a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Such a partnership or partner should consult its own tax advisor as to its consequences.

        Each prospective purchaser should consult his/her own tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of acquiring, owning or disposing of AIXTRON's shares or ADSs.

Ownership of ADSs in general

        For U.S. federal income tax purposes, a holder of ADSs generally will be treated as the owner of the shares represented by such ADSs. The U.S. Treasury Department has expressed concern that depositaries for ADSs, or other intermediaries between the holders of shares of an issuer and the issuer, may be taking actions that are inconsistent with the claiming of U.S. foreign tax credits by U.S. Holders of such receipts or shares. Accordingly, the analysis regarding the availability of a U.S. foreign tax credit for German taxes and sourcing rules described below could be affected by future actions that may be taken by the U.S. Treasury Department.

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Distributions

        Subject to the discussion below under "—Passive Foreign Investment Company Considerations", the gross amount of any distribution the Company makes of cash or property (other than certain distributions, if any, of shares distributed pro rata to all AIXTRON shareholders, including holders of ADSs) with respect to shares or ADSs, before reduction for any German taxes withheld therefrom, will be includible in income by a U.S. Holder as dividend income to the extent such distributions are paid out of the Company's current or accumulated earnings and profits as determined under U.S. federal income tax principles. Subject to the discussion below under "—Passive Foreign Investment Company Considerations", individuals who are U.S. Holders may be taxed on any such dividends received at the lower tax rate applicable to long-term capital gains (i.e., gains from the sale of capital assets held for more than one year). In order to qualify for the preferential rate of taxation, certain requirements must be met, including certain holding period requirements and the absence of certain risk reduction transactions with respect to the shares or ADSs. Such dividends will not be eligible for the dividends received deduction generally allowed to corporate U.S. Holders. Subject to the discussion below under "—Passive Foreign Investment Company Considerations", to the extent, if any, that the amount of any distribution AIXTRON makes exceeds its current and accumulated earnings and profits as determined under U.S. federal income tax principles, it will be treated first as a tax-free return of the U.S. Holder's adjusted tax basis in the shares or ADSs and thereafter as capital gain. AIXTRON does not maintain calculations of its earnings and profits under U.S. federal income tax principles.

        Any such dividend paid in Euros will be included in the gross income of a U.S. Holder in an amount equal to the US-Dollar value of the Euros on the date of receipt, which in the case of ADSs, is the date they are received by the depositary. The amount of any distribution of property other than cash will be the fair market value of such property on the date of distribution. A U.S. Holder may elect to deduct in computing his/her taxable income or, subject to certain complex limitations on foreign tax credits generally, credit against its U.S. federal income tax liability German withholding tax at the rate applicable to such U.S. Holder. As discussed under "German Taxation—Special Tax Rules for U.S. Shareholders" above in this Item 10 under the Treaty, dividends paid by AIXTRON to a U.S. Holder generally will be subject to a German withholding tax rate of 15%. Such reduced rate of withholding will apply only if such U.S. Holder is treated as a resident of the U.S. for purposes of such Treaty and otherwise is entitled to the benefits of such treaty and the dividends are not effectively connected with a permanent establishment or fixed base of such U.S. Holder that is situated in Germany.

        Dividends received by a U.S. Holder with respect to ordinary shares or ADSs will be treated as foreign source income, which may be relevant in calculating such holder's foreign tax credit limitation. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For purposes of calculating the U.S. foreign tax credit, dividends paid by AIXTRON generally will constitute "passive category income", or in the case of certain U.S. Holders, "general category income". U.S. Holders should consult their tax advisors regarding the availability of, and limitations on, any such foreign tax credit.

        Subject to the discussion under "Backup Withholding Tax and Information Reporting Requirements" below in this section, a Non-U.S. Holder of shares or ADSs generally will not be subject to U.S. federal income or withholding tax on dividends received on shares or ADSs, unless such income is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the United States.

Sale or exchange of shares or ADSs

        Subject to the discussion below under "—Passive Foreign Investment Company Considerations", a U.S. Holder generally will recognize gain or loss on the sale or exchange of shares or ADSs equal to the difference between the amount realized on such sale or exchange and the U.S. Holder's adjusted tax basis in the shares or ADSs. Such gain or loss will be capital gain or loss. In the case of a non-corporate U.S. Holder, the maximum marginal U.S. federal income tax rate applicable to such gain will be lower than the maximum marginal U.S. federal income tax rate applicable to ordinary income (other than certain dividends) if such U.S. Holder's holding period for such shares or ADSs exceeds one year. Gain or loss, if any, recognized by a U.S. Holder generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. The deductibility of capital losses is subject to limitations.

        A U.S. Holder's initial tax basis in shares or ADSs will be the US-Dollar value of the Euro denominated purchase price determined on the date of purchase. If the shares or ADSs are treated as traded on an "established securities market", a cash basis U.S. Holder, or, if it elects, an accrual basis U.S.

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Holder, will determine the dollar value of the cost of such shares or ADSs by translating the amount paid at the spot rate of exchange on the settlement date of the purchase. If a U.S. Holder converts US-Dollars to Euros and immediately uses that currency to purchase shares or ADSs, such conversion generally will not result in taxable gain or loss to such U.S. Holder. With respect to the sale or exchange of shares or ADSs, the amount realized generally will be the US-Dollar value of the payment received determined on (1) the date of receipt of payment in the case of a cash basis U.S. Holder and (2) the date of disposition in the case of an accrual basis U.S. Holder. If the shares or ADSs are treated as traded on an "established securities market", a cash basis taxpayer, or, if he/she elects, an accrual basis taxpayer, will determine the US-Dollar value of the amount realized by translating the amount received at the spot rate of exchange on the settlement date of the sale.

        Subject to the discussion under "Backup Withholding Tax and Information Reporting Requirements" below in this section, a Non-U.S. Holder of shares or ADSs generally will not be subject to U.S. federal income or withholding tax on any gain realized on the sale or exchange of such shares or ADSs unless (1) such gain is effectively connected with the conduct by such Non-U.S. Holder of a trade or business in the U.S. or (2) in the case of any gain realized by an individual Non-U.S. Holder, such holder is present in the U.S. for 183 days or more in the taxable year of such sale or exchange and certain other conditions are met.

Passive Foreign Investment Company Considerations

        A Non-U.S. corporation will be classified as a "passive foreign investment company", or a PFIC, for U.S. federal income tax purposes in any taxable year in which, after applying certain look-through rules, either: (i) at least 75% of its gross income is "passive income"; or (ii) at least 50% of the average value of its gross assets is attributable to assets that produce passive income or are held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents and gains from commodities and securities transactions.

        Based on certain estimates of the Company's gross income and gross assets and the nature of the Company's business, AIXTRON does not believe it was a PFIC for the taxable year ending December 31, 2015. AIXTRON's status in future years will depend on its assets and activities in those years. AIXTRON has no reason to believe that its assets or activities will change in a manner that would cause the Company to be classified as a PFIC, but there can be no assurance that AIXTRON will not be considered a PFIC for any taxable year. If AIXTRON were a PFIC, U.S. Holders generally would have additional U.S. tax filing requirements and would be subject to imputed interest charges and other disadvantageous tax treatment with respect to any gain from the sale or exchange of, and certain distributions with respect to, shares or ADSs.

        If AIXTRON were a PFIC, U.S. Holders could make a variety of elections that may alleviate certain tax consequences referred to above, and one of these elections may be made retroactively. However, it is expected that the conditions necessary for making certain of such elections will not apply in the case of AIXTRON's shares and the ADSs. U.S. Holders should consult their own tax advisor regarding the tax consequences that would arise if AIXTRON were to be treated as a PFIC.

Backup withholding tax and information reporting requirements

        U.S. backup withholding tax and information reporting requirements generally apply to certain payments to certain holders of stock. Information reporting generally will apply to payments of dividends on, and to proceeds from the sale or redemption of, shares or ADSs made within the United States, or by a U.S. payor or U.S. middleman to a holder of shares or ADSs, other than an "exempt recipient." A payor will be required to withhold backup withholding tax from any payments of dividends on, or the proceeds from the, sale or redemption of, shares or ADSs within the United States to a holder, or by a U.S. payor or U.S. middleman, other than an "exempt recipient", if such holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, such backup withholding tax requirements.

        In the case of such payments made within the U.S. to a foreign simple trust, a foreign grantor trust or a foreign partnership, other than payments to a foreign simple trust, a foreign grantor trust or a foreign partnership that qualifies as a "withholding foreign trust" or a "withholding foreign partnership" within the meaning of the applicable U.S. Treasury Regulations and payments to a foreign simple trust, a foreign grantor trust or a foreign partnership that are effectively connected with the conduct of a trade or business in the U.S., the beneficiaries of the foreign simple trust, the persons treated as the owners of the foreign

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grantor trust or the partners of the foreign partnership, as the case may be, will be required to provide the certification discussed above in order to establish an exemption from backup withholding tax and information reporting requirements. Moreover, a payor may rely on a certification provided by a payee that is not a U.S. person only if such payor does not have actual knowledge or a reason to know that any information or certification stated in such certificate is incorrect.

Foreign Asset Reporting

        Certain U.S. Holders who are individuals are required to report information relating to an interest in shares or ADSs, subject to certain exceptions (including an exception for shares or ADSs held in accounts maintained by U.S. financial institutions). U.S. Holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of shares or ADSs.

Medicare Tax

        A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, is subject to a 3.8% tax on the lesser of (1) such U.S. Holder's "net investment income" (or undistributed "net investment income" in the case of estates and trusts) for the relevant taxable year and (2) the excess of such U.S. Holder's modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between $125,000 and $250,000, depending on the individual's circumstances). A U.S. Holder's net investment income will generally include its gross dividend income and its net gains from the disposition of the ADSs, unless such dividends or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a U.S. Holder that is an individual, estate or trust, you are urged to consult your tax advisor regarding the applicability of this tax to your income and gains in respect of your investment in the ADSs.

        The above summary is not intended to constitute a complete analysis of all tax consequences that may be relevant to the acquisition, ownership and disposition of shares or ADSs, and does not address state, local, foreign or other tax laws. Holders of shares or ADSs should consult their own tax advisors concerning the tax consequences of their particular situations.

F.     Dividends and Paying Agents

        Not applicable.

G.    Statement by Experts

        Not applicable.

H.    Documents on Display

        AIXTRON is subject to the informational requirements of the U.S. Exchange Act. In accordance with these requirements, AIXTRON files reports and other information with the SEC. These materials, including this report and the exhibits thereto, may be inspected and copied at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Copies of the materials may be obtained from the SEC's Public Reference Room at prescribed rates. The public may obtain information on the operation of the SEC's Public Reference Room by calling the SEC in the United States at 1-800-SEC-0330. AIXTRON's filings, including this report, are also available on the SEC's website at www.sec.gov.

I.     Subsidiary Information

        Not applicable.

Item 11:    Quantitative and Qualitative Disclosure about Market Risk

        The global nature of AIXTRON's businesses exposes the Company to market risks resulting from changes in foreign currency exchange rate and interest rates. Accordingly, changes in foreign currency exchange rates and interest rates may adversely affect its operating results and financial condition. AIXTRON seeks to manage and control these market risks primarily through monitoring of its operating and financial activities and the use of derivative financial instruments.

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Foreign Currency Exchange Rate Risk

Transaction Risk and Currency Risk

        The global nature of AIXTRON's businesses exposes its operations and reported financial results and cash flows to the risks arising from fluctuations in the exchange rates of the dollar, the Euro and other world currencies. AIXTRON's businesses are exposed to transaction risk whenever the Company has revenues in a currency that is different from the currency in which it incurs the costs of generating those revenues. When AIXTRON converts the revenues into the currency in which it incurs the costs, the value of the revenues may have declined in the interim relative to the currency in which the Company incurred the costs. The main billing currency in the semiconductor equipment industry, and therefore also for AIXTRON equipment, continues to be the US-Dollar, while AIXTRON incurs manufacturing costs primarily in Euros.

Effects of Currency Translation

        Most of AIXTRON's subsidiaries are located outside the Euro zone. Since the Company's presentation currency is the Euro, AIXTRON translates the income statements of these subsidiaries into Euros so that the Company can include their financial results in its Consolidated Financial Statements. Period-to-period changes in the exchange rate for a particular country's currency can significantly affect the translation of both revenues and operating income denominated in that currency into Euros.

        AIXTRON has assets and liabilities outside the Euro zone. These assets and liabilities are denominated in local currencies and reside primarily at AIXTRON's subsidiaries in the United States and the United Kingdom.

        When AIXTRON converts net asset values into Euros, currency fluctuations result in period-to-period changes in those net asset values. The Company's equity position reflects these changes in net asset values. AIXTRON generally does not hedge against this type of risk.

Management of Foreign Currency Exchange Rate Risk

        The Company's activities expose it to the financial risks of changes in foreign currency exchange rates. In order to manage foreign exchange risks, the Company routinely monitors if and to what extent currency hedging instruments should be used. In 2015, no hedging instruments were used. The main exchange rates giving rise to the risk are those between the US-Dollar, Pound Sterling, and Euro.

        The Company's use of derivative financial instruments is governed by the Company's policies, approved by the Supervisory Board, which provide principles on foreign exchange rate risk and the use of derivative financial instruments. Exposures are reviewed on a regular basis. The Company does not enter into derivative financial instruments for purely speculative purposes.

        Exposure to exchange rate risk is managed by the Company through sensitivity analysis. The following table details the Company's historical sensitivity to a 10% increase/decrease in the value of the Euro against the principal foreign currencies involved.

        This represents AIXTRON's assessment of the possible change in foreign exchange rates. The sensitivity analysis of the Company's exposure to foreign currency risk at the reporting date has been determined based on the change taking place at the beginning of the applicable financial year and sustained throughout such fiscal year, the effects of changes in the opening and closing balance sheet values have been ignored in this analysis. A negative number indicates a decrease in revenue and net income or net loss where the Euro strengthens against the US-Dollar or the Pound Sterling.

 

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        The sensitivity of the Company's net income to exchange rate risk is reduced, in comparison with the effect on revenue, by the use of foreign currency exchange contracts and by the "natural hedge" effect of costs incurred in those currencies.

        It is the Company's policy, if it enters into foreign exchange contracts only to do so to hedge its exposure to foreign exchange rate risk. The Company has not entered any such contracts during 2015.

Interest Rate Risk

        The Company's income is subject to effects from interest rate fluctuations relating to interest rate influenced cash and cash equivalents, short term investments and bank loans. During 2015, the Company received € 0.8 million (2014: € 1.2 million; 2013: € 0.8 million) of interest income.

        Since AIXTRON has no bank borrowings, the Company does not enter into derivative financial instruments to manage exposure to interest rate risks.

        Refer to Item 18 "Financial Statements—Note 26. Financial Instruments" for more information on the credit, interest rate, and currency risks arising in AIXTRON's normal course of business.

Item 12:    Description of Securities other than Equity Securities

        The depositary for the AIXTRON ADS program is The Bank of New York Mellon ("Bank of New York Mellon"). The amended and restated deposit agreement with Bank of New York Mellon is dated February 7, 2011.

        As provided for in the American Depositary Receipt included as Exhibit A to the amended and restated deposit agreement among AIXTRON, Bank of New York Mellon, as depositary (the "Depositary") and all owners and holders of American Depositary Shares dated as of February 7, 2011, holders of ADS may be charged, directly or indirectly, the following amounts in relation to the ownership of depositary receipts held in the Company's ADS Program, which amounts are payable to the Depositary.

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        The following table shows the fees and charges that a holder of AIXTRON ADSs may have to pay, either directly or indirectly:

Direct Payments made by the Depositary to AIXTRON

        The Depositary, has agreed under certain conditions to reimburse certain reasonable expenses related to the AIXTRON ADS program and incurred by us in connection with such program.

        For fiscal year 2015, Bank of New York Mellon granted reimbursements in the amount of USD 40,000 to AIXTRON. The reimbursement was paid out on February 19, 2015.

Indirect Payments made by the Depositary to AIXTRON

        As part of its service to AIXTRON, Bank of New York Mellon has agreed to waive fees for the standard costs associated with the administration of the AIXTRON ADS program, associated operating expenses and IR-related services, estimated to be approximately USD 200,000 annually.

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PART II

Item 13:    Defaults, Dividend Arrearages and Delinquencies

        Not applicable.

Item 14:    Material Modifications to the Rights of Security Holders and Use of Proceeds

        Not applicable.

Item 15:    Controls and Procedures

Disclosure Controls and Procedures

        As of the end of the period covered by this report, Management of AIXTRON conducted an evaluation, under the supervision and with the participation of AIXTRON's Chief Executive Officer and Acting Chief Financial Officer, of the effectiveness of the design and operation of AIXTRON's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act).

        Based on such evaluation, AIXTRON's Chief Executive Officer and Acting Chief Financial Officer Martin Goetzeler has concluded that, as of December 31, 2015, AIXTRON's disclosure controls and procedures are effective.

Management's Report on Internal Control over Financial Reporting

        AIXTRON's Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act, for AIXTRON. Under the supervision and with the participation of AIXTRON's Chief Executive Officer and Acting Chief Financial Officer Martin Goetzeler, AIXTRON's Management conducted an evaluation of the effectiveness of AIXTRON's internal control over financial reporting based upon the 2013 framework in "Internal Control—Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission as of the end of the period covered by this report.

        Based on such evaluation, Management has concluded that AIXTRON's internal control over financial reporting was effective as of December 31, 2015.

        Deloitte & Touche GmbH, an independent registered public accounting firm, has audited the Consolidated Financial Statements included in this annual report on Form 20-F and, as part of the audit, has issued an attestation report, included herein, on the effectiveness of AIXTRON's internal control over financial reporting.

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Attestation Report of the Registered Public Accounting Firm

To The Supervisory Board
AIXTRON SE
Herzogenrath, Germany

We have audited the internal control over financial reporting of AIXTRON SE and subsidiaries (the "Company") as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's supervisory board, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements as of and for the year ended December 31, 2015 of the Company and our report dated February 23, 2016 expressed an unqualified opinion on those consolidated financial statements.

/s/ Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft

Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Duesseldorf, Germany, February 23, 2016

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Changes in Internal Control over Financial Reporting

        During the year ended December 31, 2015 there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Disclosure Controls and Procedures in Internal Control over Financial Reporting

        It should be noted that any system of controls, however well-designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events.

Item 16A:    Audit Committee Financial Expert

        AIXTRON's Supervisory Board has determined that the Chairman of the Audit Committee Prof. Dr. Wolfgang Blättchen is an "Audit Committee financial expert" and has determined that the "Audit Committee financial expert" is "independent" as set forth in Rule 10A-3 of the Exchange Act and NASDAQ Rule 5605(a)(2). Prof. Dr. Wolfgang Blättchen is Chairman of the Audit Committee and acts as its independent financial expert since 2005.

Item 16B:    Code of Ethics

        AIXTRON has adopted a Code of Ethics that applies to the members of the Company's Executive Board and senior financial officers nominated by AIXTRON's Executive Board. All of these Executive Board members and senior financial officers have agreed to abide by this Code. The aim of the Code is to prevent misconduct and promote upright and ethical conduct, including ethical handling of conflicts of interest, the complete, fair, precise, timely and transparent disclosure of quarterly and annual reports, compliance with prevailing laws, rules and regulations, the immediate internal reporting of breaches of the Code and responsibility for compliance with the Code. AIXTRON's Code of Ethics, which is filed as an exhibit to this annual report on Form 20-F, is consistent with the requirements of the NASDAQ Stock Market. The Company has revised its Code of Ethics in 2014 and has published the updated version of the code on its website at www.aixtron.com. A copy of the Code of Ethics is available on the AIXTRON website www.aixtron.com under the section Investors / Corporate Governance / Code of Ethics.

Item 16C:    Principal Accountant Fees and Services

        Aggregate fees billed to AIXTRON for the years ended December 31, 2015 and 2014 by AIXTRON's independent principal accountant, Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates are as follows:

        In the above table, "audit fees" are the aggregate fees for professional services in connection with the audit of the Company's Consolidated Financial Statements, reviews of interim financial statements, as well as audits of statutory financial statements of AIXTRON and its subsidiaries. Also included in "Audit fees" are amounts for attestation services in relation to regulatory filings and other compliance requirements. "Audit-related fees" are fees for accounting advice on actual or contemplated transactions, due diligence engagements related to acquisitions, attestation regarding compliance with certain agreements and other agreed-upon procedures. "Tax fees" are fees for tax advice on actual or contemplated transactions, tax compliance and expatriate employee tax services. "All Other Fees" are miscellaneous items. For more information, refer to Item 18 "Financial Statements—Note 33. Auditors' fees".

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Audit Committee Pre-Approval Policies

        In accordance with German law, AIXTRON's independent auditors are appointed at the Annual General Meeting based on a recommendation of the Company's Supervisory Board. The Audit Committee of the Supervisory Board prepares the Board's recommendation on the selection of the independent auditors. Subsequent to the auditors' appointment, the Supervisory Board awards the contract and in its sole authority approves the terms and scope of the audit and all audit engagement fees, as well as monitors the auditors' independence. On May 20, 2015, at the Annual General Meeting of Shareholders, Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, Germany ("Deloitte & Touche") was appointed to serve as the Company's independent auditors for the year ending December 31, 2015.

        In order to assure the integrity of independent audits, AIXTRON's Audit Committee established a policy to approve all audit and permissible non-audit services provided by the Company's independent auditors prior to the auditors' engagement. As part of this approval process, the Audit Committee adopted pre-approval policies and procedures pursuant to which the Audit Committee annually pre-approves certain types of services to be performed by AIXTRON's independent auditors. Under the policies, the Company's independent auditors are not allowed to perform any non-audit services which may impair the auditors' independence under the rules of the SEC. In fiscal year 2015 the Audit Committee pre-approved 100% of the performance by Deloitte & Touche of the above specified audit and permitted non-audit services.

Item 16D:    Exemptions from the Listing Standard for Audit Committees

        Not applicable.

Item 16E:    Purchases of Equity Securities by the Issuer and Affiliated Purchasers

        Not applicable.

Item 16F:    Change in Registrant's Certifying Accountant

        Not applicable.

Item 16G:    Corporate Governance

        AIXTRON is a stock corporation in the form of a European Company (Societas Europaea) under the laws of the Federal Republic of Germany and AIXTRON's ADSs are listed on NASDAQ Global Select Market. AIXTRON generally complies with applicable German Corporate Governance practice rather than certain of the Corporate Governance requirements of NASDAQ Rule 5600 Series. For more information regarding how AIXTRON's Corporate Governance practices are different from a domestic issuer, refer to "Item 10.B: Additional Information—Memorandum and Articles of Association" in this report.

Item 16H:    Mine Safety Disclosure

        Not Applicable.

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PART III

Item 17:    Financial Statements

        Not applicable.

Item 18:    Financial Statements

        See pages F-1 to F-44, incorporated herein by reference.

Item 19:    Exhibits

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SIGNATURES

        The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

Date: February 23, 2016

 

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Report of Independent Registered Public Accounting Firm

To The Supervisory Board
AIXTRON SE
Herzogenrath, Germany

        We have audited the accompanying consolidated statements of financial position of AIXTRON SE and subsidiaries (the "Company") as of December 31, 2015 and 2014, and the related consolidated statements of income, consolidated statements of other comprehensive income, consolidated statements of cash flow, and consolidated statements of changes in equity for each of the three years in the period ended December 31, 2015. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of AIXTRON SE and subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2015, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB).

        We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2016 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft

Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Duesseldorf, Germany, February 23, 2016

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CONSOLIDATED FINANCIAL STATEMENTS

F-1

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CONSOLIDATED INCOME STATEMENT

See accompanying notes to consolidated financial statements.

F-2

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CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

See accompanying notes to consolidated financial statements.

F-3

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

See accompanying notes to consolidated financial statements.

F-4

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CONSOLIDATED STATEMENT OF CASH FLOW

See accompanying notes to consolidated financial statements.

F-5

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

See accompanying notes to consolidated financial statements.

F-6

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.     General Principles

        AIXTRON SE is incorporated as a European Company (Societas Europaea) under the laws of the Federal Republic of Germany. The Company is domiciled at Dornkaulstraße 2, 52134 Herzogenrath, Germany. AIXTRON SE is registered in the commercial register of the District Court ("Amtsgericht") of Aachen under HRB 16590.

        The consolidated financial statements of AIXTRON SE and its subsidiaries ("AIXTRON" or "Company") have been prepared in accordance with, and fully comply with

•

International Financial Reporting Standards (IFRS), and the interpretations as published by the International Accounting Standards Board (IASB); and also



•

International Financial Reporting Standards (IFRS) as adopted for use in the European Union; and also



•

the requirements of Section 315a of HGB (German Commercial Law).

        AIXTRON is a leading provider of deposition equipment to the semiconductor industry. The Company's technology solutions are used by a diverse range of customers worldwide to build advanced components for electronic and opto-electronic applications based on compound, silicon, or organic semiconductor materials. Such components are used in fiber optic communication systems, wireless and mobile telephony applications, optical and electronic storage devices, computing, signaling and lighting, displays, as well as a range of other leading-edge technologies.

        These consolidated financial statements have been prepared by the Executive Board and have been submitted to the Supervisory Board at its meeting held on February 22, 2016 for approval and publication.

2.     Significant Accounting Policies

(a)   Companies included in consolidation

        Companies included in consolidation are the parent company, AIXTRON SE, and 8 companies, in which AIXTRON SE has a 100% direct shareholding or control. The balance sheet date of all consolidated companies is December 31. A list of all consolidated companies is shown in note 31.

(b)   Basis of accounting

        The consolidated financial statements are presented in Euro (EUR). The amounts are rounded to the nearest thousand Euro (kEUR). Some items in the consolidated statement of financial position and consolidated income statement have been combined under one heading to improve the clarity of presentation. Such items are disclosed and commented on individually in the notes.

        The financial statements have been prepared on the historical cost basis, except for the revaluation of certain financial instruments.

        The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the balance sheet date and the reported amounts of income and expenses during the reported period. Actual results may differ from these estimates.

        The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if this revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. Judgments which have a significant effect on the Company's financial statements are described in Note 37.

        The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements.

        The accounting policies have been applied consistently by each consolidated company.

F-7

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(c)   Bases of consolidation

(i)

Subsidiaries

Entities over which AIXTRON SE has control are treated as subsidiaries (see note 31). Control exists when the Company is exposed, or has the rights to, variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

(ii)

Transactions eliminated on consolidation

All intercompany income and expenses, transactions and balances have been eliminated in the consolidation.

(d)   Foreign currency

        The consolidated financial statements have been prepared in Euro (EUR). In the translation of financial statements of subsidiaries outside the Euro-Zone the local currencies are also the functional currencies of those companies. Assets and liabilities of those companies are translated to EUR at the exchange rate as of the balance sheet date. Revenues and expenses are translated to EUR at average exchange rates for the year or at average exchange rates for the period between their inclusion in the consolidated financial statements and the balance sheet date. Net equity is translated at historical rates. The differences arising on translation are disclosed in the Consolidated Statement of Changes in Equity.

        Exchange gains and losses resulting from fluctuations in exchange rates in the case of foreign currency transactions are recognized in the income statement in "Other operating income" or "Other operating expenses".

(e)   Property, plant and equipment

(i)

Acquisition or manufacturing cost

Items of property, plant and equipment are stated at cost, plus ancillary charges such as installation and delivery costs, less accumulated depreciation (see below) and impairment losses (see accounting policy (j)).

Costs of internally generated assets include not only costs of material and personnel, but also a share of directly attributable overhead costs, such as employee benefits, delivery costs, installation, and professional fees.

Where parts of an item of property, plant and equipment have different useful lives, they are depreciated as separate items of property, plant and equipment.

(ii)

Subsequent costs

The Company recognizes in the carrying amount of an item of property, plant and equipment the cost of replacing components or enhancement of such an item when that cost is incurred if it is probable that the future economic benefits embodied in the item will flow to the Company and the cost of the item can be measured reliably. All other costs such as repairs and maintenance are expensed as incurred.

(iii)

Government grants

Government grants related to the acquisition or manufacture of owned assets are deducted from original cost at the date of capitalization.

(iv)

Depreciation

Depreciation is charged on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Useful lives, depreciation method and residual values of property,

F-8

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

plant and equipment are reviewed at the year-end date or more frequently if circumstances arise which are indicative of a change. The estimated useful lives are as follows:

        The useful lives of leased assets do not exceed the expected lease periods.

(f)    Intangible assets

(i)

Goodwill

Business combinations are accounted for by applying the purchase method. In respect of business combinations that have occurred since January 1, 2004, goodwill represents the difference between the fair value of the consideration for the business combination and the fair value of the net identifiable assets acquired.

Goodwill is stated at cost less any accumulated impairment loss. Goodwill is allocated to cash-generating units and is tested annually for impairment (see accounting policy (j)).

(ii)

Research and development

Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and understanding using scientific methods, is recognized as an expense as incurred.

Expenditure on development comprises costs incurred with the purpose of using scientific knowledge technically and commercially. As not all criteria of IAS 38 are met AIXTRON did not capitalize such costs.

(iii)

Other intangible assets

Other intangible assets that are acquired by the Company are stated at cost less accumulated amortization (see below) and impairment losses (see accounting policy (j)).

Intangible assets acquired through business combinations are stated at their fair value at the date of purchase.

Expenditure on internally generated goodwill, trademarks and patents is expensed as incurred.

(iv)

Subsequent expenditure

Subsequent expenditure on capitalized intangible assets is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

(v)

Amortization

Amortization is charged on a straight-line basis over the estimated useful lives of intangible assets, except for goodwill. Goodwill has a useful life which is indefinite and is tested annually in respect of its recoverable amount. Other intangible assets are amortized from the date they are available for use. Useful lives and residual values of intangible assets are reviewed at the year-end date or more frequently if circumstances arise which are indicative of a change. The estimated useful lives are as follows:

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(g)   Financial Instruments

(i)

Financial Assets

Financial assets are classified into the following specific categories: financial assets 'at fair value through profit or loss' (FVTPL), 'held to maturity investments', and 'loans and receivables'. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.

Investments are recognized at the contract date, and are initially measured at fair value, plus transaction costs, except for those financial assets classified as at fair value through profit or loss, which are initially measured at fair value.

(ii)

Financial assets at FVTPL

Financial assets are classified as at FVTPL where the asset is either

•

held for trading or



•

it is designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognized in profit or loss. The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

(iii)

Held to maturity investments

Investments with fixed or determinable payments and fixed maturity dates that the Company intends to and has the ability to hold to maturity are classified as held to maturity investments. Held to maturity investments are recorded at amortized cost using the effective interest rate method less any impairment, with revenue recognized on an effective yield basis.

(iv)

Trade receivables

Trade receivables and other receivables that have fixed or determinable payments that are not quoted on an active market are classified as loans and receivables. Loans and receivables are measured at amortized cost using the effective interest rate method, less any impairment.

(v)

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

(vi)

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and deposits with banks with a maturity of less than three months at inception.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

(vii)

Equity instruments

Equity instruments, including share capital, issued by the company are recorded at the proceeds received, net of direct issue costs.

(viii)

Financial liabilities

Financial liabilities are classified as either financial liabilities "at FVTPL" or "other financial liabilities".

(ix)

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL where the liability is either

•

held for trading or



•

it is designated as at FVTPL.

Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognized in profit or loss. The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

(x)

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortized cost using the effective interest rate method, with interest expense recognized on an effective yield basis.

(xi)

Derivative financial instruments and hedge accounting

The Company's activities expose it to the financial risks of changes in foreign exchange currency rates (see note 26). The Company uses foreign exchange forward contracts to hedge these exposures. The Company does not use derivative financial instruments for speculative purposes. The use of financial derivatives is governed by policies approved by the Executive Board, which provide written principles on the use of financial derivatives.

Changes in the fair value of derivative financial instruments that are designated as effective hedges of future cash flows are recognized directly in equity and the ineffective portion is recognized immediately in the income statement.

Changes in fair value of derivative financial instruments that do not qualify for hedge accounting are recognized in the income statement as they arise.

Hedge accounting is discontinued when the derivative financial instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, any cumulative gain or loss on the derivative financial instrument recognized in equity is retained in equity until the forecasted transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to net profit or loss for the period.

(h)   Inventories

        Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and selling expenses. Cost is determined using weighted average cost.

        The cost includes expenditures incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work in progress and finished goods, cost includes direct material and production cost, as well as an appropriate share of overheads based on normal operating capacity. Scrap and other wasted costs are expensed on a periodic basis either as Cost of Sales or, in the case of Beta tools as Research and Development expense.

        Allowance for slow moving, excess and obsolete, and otherwise unsaleable inventory is recorded based primarily on either the Company's estimated forecast of product demand and production requirement or

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

historical usage. When the estimated future demand is less than the inventory, the Company writes down such inventories.

(i)    Operating Result

        Operating result is stated before finance income, finance expense and tax.

(j)    Impairment of property, plant and equipment and intangible assets

        Goodwill purchased as part of a business acquisition is tested annually for impairment, irrespective of whether there is any indication of impairment. For impairment test purposes, the goodwill is allocated to cash-generating units. Impairment losses are recognized to the extent that the carrying amount exceeds the higher of fair value less cost to sell or value in use of the cash-generating unit.

        Property, plant and equipment as well as other intangible assets are tested for impairment, where there is any indication that the asset may be impaired. The company assesses at the end of each period whether there is an indication that an asset may be impaired. Impairment losses on such assets are recognized, to the extent that the carrying amount exceeds either the fair value that would be obtainable from a sale in an arm's length transaction, or the value in use.

        In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments and the risks associated with the asset.

        Impairment losses are reversed if there has been a change in the estimates used to determine the recoverable amount. Reversals are made only to the extent that the carrying amount of the asset does not exceed the carrying amount that would have been determined if no impairment loss had been recognized.

        An impairment loss in respect of goodwill is not reversed.

(k)   Earnings per share

        Basic earnings per share are computed by dividing net income (loss) by the weighted average number of issued common shares (see note 21) for the year. Diluted earnings per share reflect the potential dilution that could occur if options issued under the Company's stock option plans were exercised and convertible bonds were converted, unless such conversion had an anti-dilutive effect.

(l)    Employee benefits

(i)

Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an expense in the income statement as incurred.

(ii)

Share-based payment transactions

The stock option programs allows members of the Executive Board, management and employees of the Company to acquire shares/ADS (see note 23) of the Company. These stock option programs are accounted for by AIXTRON according to IFRS 2. The fair value of options granted after November 7, 2002 is recognized as personnel expense with a corresponding increase in additional paid-in capital. The fair value is calculated at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options granted is measured using a mathematical model, taking into account the terms and conditions upon which the options were granted. In the calculation of the personnel expense options forfeited are taken into account.

(m)  Provisions

        A provision is recognized when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle this obligation. If the effect is material, provisions are determined by discounting the expected future cash

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

flows at a pre-tax interest rate that reflects current market assessments of the time value of money and, where appropriate, the risks associated with the liability.

(i)

Warranties

The Company normally offers one, occasionally two, year warranties on all of its products. Warranty expenses generally include cost of labor, material and related overhead necessary to repair a product free of charge during the warranty period., The specific terms and conditions of those warranties may vary depending on the equipment sold, the terms of the contract and the locations from which they are sold. The Company establishes the costs that may be incurred under its warranty obligations and records a liability in the amount of such costs at the time revenue is recognized. Factors that affect the Company's warranty liability include the historical and anticipated rates of warranty claims and cost per claim.

The Company accrues material and labor cost for systems shipped based upon historical experience. The Company periodically assesses the adequacy of its recorded warranty provisions and adjusts the amounts as necessary.

The Company has reclassified warranty expenses from Selling Expenses to Cost of Sales. This classification is the usual practice in the semiconductor equipment industry. Selling expenses have been reduced by k€ 1,836 in 2014 (2013 k€ 14,457) and Cost of Sales increased by the same amounts.

(ii)

Onerous contracts

A provision for onerous contracts is recognized when the expected economic benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The amount recognized as a provision is determined as the excess of the unavoidable costs of meeting the obligations under the contract over the economic benefits expected to be received. Before making that provision any impairment loss that has occurred on assets dedicated to that contract are recognized. The provision is discounted to present value if the adjustment is material.

(n)   Revenue

        Revenue is generated from the sale and installation of equipment, spare parts and maintenance services and is recognized when the Company satisfies a performance obligation by transferring goods or services to the customer and it is probable that the economic benefits associated with the transaction will flow to the entity.

        The sale of equipment involves a customer acceptance test at AIXTRON's production facility. After successful completion of this test, the equipment is dismantled and packaged for shipment. Upon arrival at the customer site the equipment is reassembled and installed, which is a service generally performed by AIXTRON engineers. AIXTRON gives no general rights of return, discounts, credits or other sales incentives within its terms of sale. However, occasionally some customers of AIXTRON have specifically negotiated terms and conditions of business.

        Revenues from the sale of products that have been demonstrated to meet product specification requirements are recognized upon shipment to the customer, if a full customer acceptance test has been successfully completed at the AIXTRON production facility and the significant risks and rewards of ownership has passed to the customer.

        Revenue relating to the installation of the equipment at the customer's site is recognized when the installation is completed and the final customer acceptance has been confirmed.

        The portion of the contract revenue related to equipment deferred until completion of the installation services is determined based on either the fair value of the installation services or, if the company determines that there may be a risk that the economic benefits of installation services may not flow to the Company, the portion of the contract amount that is due and payable upon completion of the installation.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

        Fair value of the installation services is determined based on the price that would be received in an orderly transaction in the principal market for such equipment at the measurement date under current market conditions.

        Revenue related to products where meeting the product specification requirements has not yet been demonstrated, or where specific rights of return have been negotiated, is recognized only upon final customer acceptance.

        Revenue on the sale of spare parts is recognized when title and risk passes to the customer, generally upon shipment. Revenue from maintenance services is recognized as the services are provided.

        The consideration from contracts which include combinations of different performance obligations such as equipment, spares and services is allocated to each performance obligation in an amount that depicts the amount of consideration to which the company expects to be entitled in exchange for transferring the goods or services to the customer. The company uses a combination of methods such as an estimated cost plus margin approach, and allocating discounts proportionately to each performance obligation when determining the consideration for each performance obligation.

(o)   Expenses

(i)

Cost of sales

Cost of sales includes such direct costs as materials, labor and related production overheads.

(ii)

Research and development

Research and development costs are expensed as incurred. Costs of beta tools which do not qualify to be recognized as an asset are expensed as research and development costs.

Project funding received from governments (e.g. state funding) and the European Union is recorded in other operating income, if the research and development costs are incurred and provided that the conditions for the funding have been met.

(iii)

Operating lease payments

Payments made under operating leases are recognised as expense on a straight-line basis over the term of the lease.

(p)   Other operating income

Government grants

        Government grants awarded for project funding are recorded in "Other operating income" if the research and development costs are incurred and provided that the conditions for the funding have been met.

(q)   Tax

        The tax expense represents the sum of the current and deferred tax.

        Deferred tax assets and liabilities are recorded for all temporary differences between tax and commercial balance sheets and for losses brought forward for tax purposes as well as for tax credits of the companies included in consolidation. The deferred taxes are calculated, based on tax rates applicable at the balance sheet date or known to be applicable in the future. Effects of changes in tax rates on the deferred tax assets and liabilities are recognized upon substantively enacted amendments to the law.

        A deferred tax asset is recognized only to the extent that it is probable that future taxable profits can be set off against tax credits and tax losses carried forward. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit can be realized. The recoverability of deferred tax assets is reviewed at least annually.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

(r)   Segment reporting

        An operating segment is a component of the Company that is engaged in business activities and whose operating results are reviewed regularly by the Chief Operating Decision Maker, which the Company considers to be its Executive Board, to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. AIXTRON has only one reportable segment.

        Accounting standards applied in segment reporting are in accordance with the general accounting policies as explained in this section.

(s)   Cash flow statement

        The cash flow statement is prepared in accordance with IAS 7. Cash flows from operating activities are prepared using the indirect method. Cash inflows and cash outflows from taxes and interest are included in cash flows from operating activities.

(t)    Recently issued accounting standards

        In the current year, the following new and revised standards have been adopted. Their adoption has not had any significant impact on the amounts reported in these financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2.     Significant Accounting Policies (Continued)

        At the date of authorization of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective

        The company does not expect that the adoption of these standards will have a material impact on the financial statements of the Group in future periods.

3.     Segment Reporting and Revenues

        IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Executive Board, as chief operating decision maker, in order to allocate resources to the segments and to assess their performance.

        The Executive Board regularly reviews financial information to allocate resources and assess performance only on a consolidated group basis since the various activities of the group are largely integrated from an operational perspective. In accordance with IFRS, AIXTRON has only one reportable segment.

        The company's reportable segment is based around the category of goods and services provided to the semiconductor industry.

        Revenues are recognized as disclosed in Note 2 (n).

        The company values the revenue deferred for installation services, using a market based approach, based on observed transactions for all such contracts involving two elements where revenue has been recognized during the financial year. This is level 2 within the fair value hierarchy described in IFRS 13. The fair value of the installation services is taken as the most frequently observed (modal value) percentage of the contract price payable upon completion of the installation service.

        For contracts where revenue is recognized in two elements, the same method is also used to determine the fair value of products delivered, which is taken to be the most frequently observed (modal value) percentage of the contract value payable upon delivery of the equipment to the customer. This is also level 2 in the fair value hierarchy.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.     Segment Reporting and Revenues (Continued)

Segment revenues and results

        The accounting policies of the reportable segment are identical to the Group's accounting policies as described in note 2. Segment profit represents the profit earned by the segment without the allocation of investment revenue, finance costs and income tax expense. This is the measure reported to the Executive Board for the purpose of resource allocation and assessment of performance.

Segment assets and liabilities

 

        For the purpose of monitoring segment performance and allocating resources all assets other than tax assets, cash and other financial assets are treated as allocated to the reportable segment. All liabilities are allocated to the reportable segment apart from tax liabilities and post-employment benefit liabilities.

        Additions to Property, Plant and Equipment, to Goodwill and to Intangible assets, and the depreciation and amortization expenses are given in notes 11 and 12. Other non-current assets increased by k€ 248 during 2015 (decreased by k€ 525 in 2014).

        Information concerning other material items of income and expense for personnel expenses and R&D expenses can be found in notes 7 and 4.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3.     Segment Reporting and Revenues (Continued)

Geographical Information

        The Group's revenue from continuing operations from external customers and information about its non-current assets by geographical location are detailed below. Revenues from external customers are attributed to individual countries based on the country in which it is expected that the products will be used.

        Sales from external customers attributed to Germany, AIXTRON'S country of domicile, and to other countries which are of material significance are as follows:

        Revenues from all foreign countries outside of Germany were k€ 191,051, k€ 187,176 and k€ 175,653 for the years ended December 31, 2015, 2014, and 2013 respectively.

        In 2015 sales to one customer were 18.1% of Group revenue, with no other customer exceeding 10%. Sales to four customers in 2014 exceeded 10% of Group revenue, representing 12.2%, 10.9%, 10.4% and 10.1% respectively. In 2013 sales to one customer amounted to 14.4% of Group revenues.

        Non-current assets exclude deferred tax assets, financial instruments, post-employment benefit assets and rights arising under insurance contracts.

4.     Research and development

        Research and development costs, before deducting project funding received, were k€ 55,415, k€ 66,739 and k€ 57,153 for the years ended December 31, 2015, 2014 and 2013 respectively.

        After deducting project funding received and not repayable, net expenses for research and development were k€ 52,409, k€ 64,944 and k€ 54,627 for the years ended December 31, 2015, 2014 and 2013 respectively.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.     Other operating income

        In June 2013 inventory belonging to Aixtron with an original cost of k€ 22,284 was destroyed by a fire in a third party warehouse in the United Kingdom. The inventory valuation had been written down by a provision of k€ 17,127 to a net amount of k€ 5,157. Insurance proceeds related to the incident amounting to k€ 22,479 are included within Insurance recoveries in Other operating income. The destroyed inventory, net of the provision, is expensed in cost of sales.

        The total amount of exchange gains and losses (see also note 6) recognized in profit or loss was a gain of k€ 2,685, (2014 loss k€ 297; 2013 gain k€ 540).

6.     Other operating expenses

7.     Personnel expense

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7.     Personnel expense (Continued)

        Personnel expenses include restructuring costs related to reductions in personnel in a number of the Group's activities.. Costs are included in expenses as set out in the table below.

8.     Net finance income

        Interest income relates to interest on cash and cash equivalents and held to maturity investments.

9.     Income tax expense/benefit

        The following table shows income tax expenses and income recognized in the consolidated income statement:

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9.     Income tax expense/benefit (Continued)

        Income/loss before income taxes and income tax expense relate to the following regions:

        The Company's effective tax rate is different from the German statutory tax rate of 32.80% (2014: 30.55%; 2013: 30.54%) which is based on the German corporate income tax rate, including solidarity surcharge, and trade tax.

        The following table shows the reconciliation from the expected to the reported tax expense:

10.   Current tax receivable and payable

        As of December 31, 2015 the current tax receivable and payable, arising because the amount of tax paid in the current or in prior periods was either too high or too low, are k€ 2,538 (2014: k€ 543) and k€ 2,874 (2014: k€ 1,969) respectively.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.   Property, plant and equipment

Depreciation

        Depreciation expense amounted to k€ 9,146 for 2015 and was k€ 15,591 and k€ 16,314 for 2014 and 2013 respectively.

        During each financial year, asset useful lives are reviewed in accordance with IAS 16. The effect of the changes in assets useful lives has been to increase the depreciation expense in 2015 by k€ nil (2014 k€ 561; 2013 k€ 2,160) compared with the depreciation which would have occurred had the asset useful lives remained unchanged. The changes relate to test equipment which is no longer used.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11.   Property, plant and equipment (Continued)

Impairments

        In 2015 and 2014 there were no impairments of Fixed Assets.

        In 2013 impairment charges of k€ 9,888 were made in respect of a building and specific equipment contained in that building in Herzogenrath, Germany. The impairment losses are recorded in Other operating expenses in the Income Statement, within AIXTRON's one operating segment, and are also shown in the table above.

        The company decided to relocate its main activities from its Kaiserstrasse facility in Herzogenrath to a purpose built building nearby. Consequently, the recoverable amount of the Kaiserstrasse facility was re-assessed as its fair value less costs of disposal, which was k€ 5,500.

        The valuation was carried out by a professionally qualified valuer (CIS Immobiliengutachter HypZert fuer finanzwirtschaftliche Zwecke) and is level 2 in the hierarchy of valuations in IFRS 13. The valuation was based on observable inputs from comparable property transactions. The valuation given of the building in 2013 was k€ 5,670 and an allowance for the costs of disposal of k€ 170 has been made against this.

        The valuation was updated on the same basis as at the end of 2015. The building is now valued at k€ 5,070 less costs of disposal of k€ 152. Other operating income includes a reversal of impairment of k€ 225 resulting from this updated valuation.

        The building is expected to be put on the market for sale in the near future.

Assets under construction

        Assets under construction relates mainly to self-built systems for development laboratories in 2015 and 2014.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.   Intangible assets

Amortization and impairment expenses for other intangible assets

        Amortization and impairment expenses for other intangible assets are recognized in the income statement as follows:

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.   Intangible assets (Continued)

        In 2015, 2014, and 2013, no impairment losses were incurred and no reversals of impairment losses were made.

        The amortization expected to be charged on other intangible assets in the future years is as follows:

        The actual amortization can differ from the expected amortization.

Impairment of goodwill

        At the end of 2015 the Group assessed the recoverable amount of goodwill and determined that no impairment loss had to be recognized (2014: k€ 0; 2013 k€ 0).

        The carrying value of goodwill was k€ 75,902 (2014 k€ 64,813; 2013 k€ 64,115).

        As at the end of 2015 the cash generating unit, to which the goodwill has been allocated, is the Aixtron Group Semiconductor Equipment segment.

        The recoverable amount of the cash-generating unit is determined through a fair value less cost to sell calculation. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As AIXTRON has only one cash generating unit (CGU), market capitalization of AIXTRON, adjusted for a control premium, has been used to determine the fair value less cost to sell of the cash generating unit. This is level 2 in the hierarchy of fair value measures set out in IFRS 13.

        As at December 31, 2015 the market capitalization of AIXTRON was € 460.6 million, based on a share price of € 4.128 and issued shares (excluding Treasury Shares) of 111,581,783.

        In an orderly selling process costs are incurred. AIXTRON has used 1.5% to account for the costs to sell.

        A control premium typically in the range of 20%-40% is incurred in the acquisition of a company. A 20% premium has been applied in this test to adjust the market capitalization to the fair value. Market capitalization was also adjusted for net debt and tax assets prior to comparing it to the carrying amount of

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12.   Intangible assets (Continued)

the CGU. The analysis shows that the fair value less costs to sell of the CGU AIXTRON exceeds its carrying amount and that Goodwill is not impaired.

        The fair value less costs to sell, which is the recoverable amount, exceeds the carrying amount of the CGU by 80% (2014: 566%).

        A sensitivity analysis of the impairment test, in which the control premium is reduced to zero, shows that the carrying amount of the CGU would equal the recoverable amount should the market capitalization of AIXTRON fall by 13% (2014: 60%) to € 402.5 million; € 3.61 per share (2014: € 422.0 million; € 3.78 per share).

        A sensitivity analysis of the impairment test in which a control premium of 20% or 40% was used would show that the carrying amount of the CGU would equate with the recoverable amount should the share price be € 3.01 or € 2.58 respectively (2014: 20%, € 3.15; 40%, € 2.70).

13.   Other non-current assets

        Other non-current assets totaling k€ 630 (2014: k€ 382) include mainly rent deposits for buildings.

14.   Deferred tax assets and liabilities

Recognized deferred tax assets and liabilities

        Deferred tax assets are recognized at the level of individual consolidated companies in which a loss was realised in the current or preceding financial year, only to the extent that realization in future periods is probable. The nature of the evidence used in assessing the probability of realization includes forecasts, budgets and the recent profitability of the relevant entity. The carrying amount of deferred tax assets for entities which have made a loss in either the current or preceding year was k€ 1,542 (2014: k€ 2,281).

        Deferred taxes for tax losses in the amount of k€ 161,068 (2014: k€ 129,544) and on deductible temporary differences in the amount of k€ 19,555 (2014: k€ 12,164) were not recognized. Tax losses in the amount of k€ 139,853 can be used indefinitely (2014: k€ 110,550), k€ nil expire by 2020 (2014: k€ nil, by 2019) and k€ 21,215 expire after 2020 (2014: k€ 18,994 after 2019).

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14.   Deferred tax assets and liabilities (Continued)

        The following table shows the development of temporary differences during the financial year:

        Deferred tax assets and liabilities are attributable to the following items

 

 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15.   Long term receivable from current tax

        Long term receivables from current tax consist of a receivable from corporate tax which will be refunded over a period of up to five years. The amount included in long term receivables is for the amount receivable after more than one year from the balance sheet date.

16.   Inventories

 

        The reversal of write-downs recognized during the year in both 2014 and 2015 mainly relates to inventories which had been written down to their net realizable value and subsequently were sold.

17.   Trade receivables and other current assets

        Additions to allowances against trade receivables are included in other operating expenses, releases of allowances are included in other operating income. Allowances against receivables developed as follows:

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

17.   Trade receivables and other current assets (Continued)

        Ageing of past due but not impaired receivables

        Due to the worldwide spread of risks, there is a diversification of the credit risk for trade receivables. Generally, the Company demands no securities for financial assets. In accordance with usual business practice for capital equipment however, the Company mitigates its exposure to credit risk by requiring payment by irrevocable letters of credit and substantial payments in advance from most customers as conditions of contracts for sale of major items of equipment.

        At the balance sheet date one customer accounted for 22% of the company's net trade receivables, no other single customer accounted for more than 10% of trade receivables. In 2014 four customers each accounted for more than 10% of the company's net trade receivables, representing respectively 30.4%, 16.2%, 11.5% and 10.5% of trade receivables. In determining concentrations of credit risk the company defines counterparties as having similar characteristics if they are connected entities.

        Included in the Company's trade receivable balance are debtors with a carrying amount of k€ 5,734 (2014: k€ 3,975) which are past due at the reporting date for which the Company has not provided. As there has not been a significant change in credit quality, and although the company has no collateral, the amounts are still considered recoverable.

        In determining the financial assets which may be individually impaired the Company has taken into account the likelihood of recoverability based on the past due nature of certain receivables, and our assessment of the ability of all counter-parties to perform their obligations.

18.   Other financial assets

        Other financial assets of k€ 93,089 (2014: k€ 151,494) are fixed deposits with banks with a maturity of more than three months at inception of the contracts.

        An analysis of the maturities at December 31, 2015 and 2014 is as follows:

19.   Cash and cash equivalents

        Cash and cash equivalents comprise short-term bank deposits with an original maturity of 3 months or less. The carrying amount and fair value are the same.

        Bank balances included k€ 0 given as security (2014: k€ 0) at December 31, 2015.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

20.   Shareholders' Equity

FULLY PAID CAPITAL

        The share capital of the company consists of no-par value shares and was fully paid-up during 2015 and 2014. Each share represents a portion of the share capital in the amount of € 1.00.

Authorized share capital

        Authorized share capital, including issued capital, amounted to € 219,214,144 (2014: € 219,214,144).

Additional paid-in capital

        Additional paid-in capital mainly includes the premium on increases of subscribed capital as well as cumulative expense for share-based payments.

        In 2015 and 2014 all shares issued were the results of stock options being exercised.

        The Company regards its shareholders' equity as capital for the purpose of managing capital. Changes in Shareholders' equity are shown in the Consolidated Statement of Changes in Equity. The Company considers its capital resources to be adequate.

Income and expenses recognized in other comprehensive income

        The foreign currency translation adjustment comprises all foreign exchange differences arising from the translation of the financial statements of foreign subsidiaries whose functional currency is not the Euro.

21.   Loss per share

Basic loss per share

        The calculation of the basic loss per share is based on the weighted-average number of common shares outstanding during the reporting period.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

21.   Loss per share (Continued)

Diluted loss per share

        The calculation of the diluted loss per share is based on the weighted-average number of outstanding common shares and of common shares with a possible dilutive effect resulting from share options being exercised under the share option plan.

        The following securities issued were not included in the computation of the diluted earnings per share, as their effect would be anti-dilutive:

22.   Employee benefits

Defined contribution plan

        The Company grants retirement benefits to qualified employees through various defined contribution pension plans. The expenses incurred for defined contribution plans mainly arise from two pension plans in subsidiaries. The contributions made by the company do not exceed 10% of qualified employees' base salaries. In 2015 the expense recognized for defined contribution plans amounted to k€ 1,274 (2014: k€ 1,667, 2013: k€ 1,340).

        In addition to the Company's retirement benefit plans, the company is required to make contributions to state retirement benefit schemes in most of the countries in which it operates. The company is required to contribute a specified percentage of payroll costs to the retirement schemes in order to fund the benefits. The only obligation of the group is to make the required contributions.

23.   Share-based payment

        The Company has different fixed option plans which reserve shares of common stock and AIXTRON American Depository Shares (ADS) for issuance to members of the Executive Board, management and employees of the Company. Each AIXTRON ADS represents the beneficial ownership in one AIXTRON common share. The following is a description of these plans:

AIXTRON stock option plan 1999

        In May 1999, options were authorized to purchase 3,000,000 shares of common stock (after giving effect to capital increases, stock splits, and the EURO conversion). The stock options can be exercised when 15 years have elapsed since their issue. Under the terms of the 1999 plan, options were granted at

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

23.   Share-based payment (Continued)

prices equal to the average closing price over the last 20 trading days on the Frankfurt Stock Exchange before the grant date. Under this plan options for the purchase of 644,000 common shares were outstanding as of December 31, 2015.

AIXTRON stock option plan 2002

        In May 2002, options were authorized to purchase 3,511,495 shares of common stock. The options are exercisable in equal instalments of 25% per year after the second anniversary of the date of grant, subject to certain conditions. Options expire ten years from date of grant. Under the terms of the 2002 plan, options are granted at prices equal to the average closing price over the last 20 trading days on the Frankfurt Stock Exchange before the grant date, plus 20%. No grants were issued with a strike price less than fair market value. Options to purchase 108,750 common shares were outstanding under this plan as of December 31, 2015.

AIXTRON stock option plan 2007

        In May 2007, options were authorized to purchase 3,919,374 shares of common stock. 50% of the granted options may be executed after a waiting period of not less than two years, further 25% after three years and the remaining 25% after at least four years. The options expire 10 years after they have been granted. Under the terms of the 2007 plan, options were granted at prices equal to the average closing price over the last 20 trading days on the Frankfurt Stock Exchange before the grant date, plus 20%. Options to purchase 1,113,665 common shares were outstanding under this plan as of December 31, 2015.

AIXTRON stock option plan 2012

        In May 2012, options were authorized to purchase shares of common stock. The granted options may be exercised after a waiting period of not less than four years. The options expire 10 years after they have been granted. Under the terms of the 2012 plan, options are granted at prices equal to the average closing price over the last 20 trading days on the Frankfurt Stock Exchange before the grant date, plus 30%. Options to purchase 1,025,400 were outstanding under this plan as of December 31, 2015.

Genus stock option plan 2000

        With the acquisition of Genus, Inc. the company adopted the Genus Incentive Stock Option Plan 2000. Under this plan at the date of acquisition options were authorized to purchase the equivalent of 2,013,487 AIXTRON ADS. Options granted before October 3, 2003 vest over a three-year-period and expire five years from the date of grant. Options granted after October 3, 2003 vest over a four-year-period and expire ten years from the date of grant.

        No options to purchase AIXTRON ADS remain outstanding under this plan as of December 31, 2015.

Summary of Stock Option Transactions

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

23.   Share-based payment (Continued)

 

AIXTRON Stock Options as of December 31, 2015

Assumptions used to calculate fair values and share-based payment expenses

        The fair value of services received in return for stock options granted is measured by reference to the fair value of the stock options granted. The fair value of the stock options is determined on the basis of a mathematical model. In accordance with IFRS 2 the measurement includes only options which were granted after November 7, 2002.

        In 2015, the personnel expenses from share-based payments, all of which were equity settled share based payments, were k€ 991 (2014: k€ 779; 2013: k€ 981).

        As of December 31, 2015 an amount of k€ 2,649 relating to stock options granted prior to that date had not yet been recognized as a personnel expense. This amount will be charged over the periods to 2018. The expected allocation of the expense is as follows: 2016: k€ 980, 2017: k€ 975 and 2018 k€ 694.

AIXTRON share options granted

The expected volatility is based on historical volatility.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

24.   Provisions

        Development and breakdown of provisions

Personnel expenses

        These include mainly provisions for holiday pay, payroll and severance costs, which are financial liabilities.

Provisions for onerous contracts

        These include provisions associated with contracts where the unavoidable costs of meeting the contract obligations exceed the economic benefits expected to be received. These mainly relate to supply contracts for materials which are excess to the forecast future requirements.

Commissions

        Commissions are payable to sales agents and are recorded as financial liabilities.

Warranties

        Warranty provisions are the estimated unavoidable costs of providing parts and service to customers during the normal warranty periods.

Other provisions

        Other provisions consist mainly of the estimated cost of services received.

        For provisions existing at both December 31, 2015 and December 31, 2014, the economic outflows resulting from the obligations that are provided for are expected to be settled within one year of the respective balance sheet date for current provisions and within two years of the respective balance sheet date, but more than one year, for non-current provisions.

25.   Trade payables and other current liabilities

        The liabilities consist of the following:

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25.   Trade payables and other current liabilities (Continued)

        The carrying amount of trade payables and other current liabilities approximates their fair value. Trade payables, grant liabilities, taxes and other liabilities fall due for payment within 90 days of receipt of the relevant goods or services.

        Other liabilities includes k€ 17,187 (2014 k€ nil) previously recorded as an advance payment from a customer in China and which is repayable following the reduction in order volume.

26.   Financial Instruments

        Details of the significant accounting policies and methods, the basis of measurement that are used in preparing the financial statements and the other accounting policies that are relevant to an understanding of the financial statement are disclosed in note 2 to the financial statements.

Financial risk management objectives

        The group seeks to minimize the effects of any risk that may occur from any financial transaction. Key aspects are the exposures to liquidity risk, credit risk, interest rate risk and currency risk arising in the normal course of the Company's business.

        The AIXTRON Group's central management coordinates access to domestic and international financial institutions and monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposure to risk by likelihood and magnitude. These risks cover all aspects of the business, including financial risks; and the risk management system is in accordance with the corporate governance recommendations specified in the German Corporate Governance Code.

Liquidity risks

        Liquidity risk is the risk that the Group is unable to meet its existing or future obligations due to insufficient availability of cash or cash equivalents. Managing liquidity risk is one of the central tasks of AIXTRON SE. In order to be able to ensure the Group's solvency and flexibility at all times cash and cash equivalents are projected on the basis of regular financial and liquidity planning.

        As at December 31, 2015 the group had no borrowings (2014 nil). Financial liabilities, all due within one year, of k€ 34,782 (2014 k€ 19,589) consisting of trade payables and other liabilities and are shown in Note 25, together with an analysis of their maturity.

        As at December 31, 2015 the group had k€ 116,305 cash and cash equivalents (2014 k€ 116,580) and a further k€ 93,089 of fixed deposits with banks (2014 k€ 151,494).

Credit risks

        Financial assets generally exposed to a credit risk are trade receivables (see note 17) and cash and cash equivalents.

        The Group's cash and cash equivalents are kept with banks that have a good credit standing. Central management of the Group assesses the counter-party risk of each financial institution dealt with and sets limits to the Group's exposure to those institutions. These credit limits are reviewed from time to time so as to minimize the default risk as far as possible and to ensure that concentrations of risk are managed.

        The maximum exposure of the Group to credit risk is the total amount of receivables, financial assets and cash balances as described in notes 17, 18 and 19.

        For receivables measured at fair value, the maximum amount of the exposure to credit risk is the amount of receivables measured at fair value as disclosed in note 26. There are no credit derivatives or similar instruments which mitigate the maximum exposure to credit risk and there has been no change during the period or cumulatively in the fair value of such receivables that is attributable to changes in the credit risk.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

Market risks

        The Company's activities expose it to the financial risks of changes in foreign currency exchange rates and interest rate risks. Interest rate risks are not material as the company only receives a minor amount of interest income. The Company does not use derivative financial instruments to manage its exposure to interest rate risk. Cash deposits are made with the company's bankers at the market rates prevailing at inception of the deposit for the period and currency concerned. There has been no change to the Company's exposure to market risk or the manner in which it manages and measures the risk.

Foreign currency risk

        The Company may enter into a variety of derivative financial instruments to manage its exposure to foreign currency risk, including forward exchange contracts to hedge the exchange rate risk arising on the export of equipment, the Company did not use derivative financial instruments during either 2015 or 2014. The main exchange rates giving rise to the risk are those between the US Dollar, Pound Sterling and Euro.

        The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities at the reporting date are as follows:

        Exposures are reviewed on a regular basis and are managed by the Company through sensitivity analysis.

Foreign currency sensitivity analysis

        The Company is mainly exposed to US Dollar exchange rate risks through its worldwide activities.

        The following table details the company's sensitivity to a 10% change in the value of the Euro against the Dollar. A positive number indicates an increase in profit and other equity, a negative number indicates a reduction in profit and other equity.

        The sensitivity analysis represents the foreign exchange risk at the year-end date only. It is calculated by revaluing the Group's financial assets and liabilities, existing at 31 December, denominated in US-Dollars by 10%. It does not represent the effect of a 10% change in exchange rates sustained over the whole of the financial year, only the effect of a different rate occurring on the last day of the year.

Fair values

        Cash and cash equivalents, Loans and receivables and Held to maturity investments are stated at amortized cost. At FVTPL are classed as at fair value through profit or loss and are designated as such upon initial recognition. At FVTPL includes accrued receivables arising as the difference between the fair value of revenue (note 3) and the invoiced amounts. The fair value is level 2 in the fair value hierarchy.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

26.   Financial Instruments (Continued)

        The fair values and the carrying amounts of the financial instruments shown in the balance sheet are shown in the following table. Financial assets are classified into categories.

FINANCIAL ASSETS 2015

FINANCIAL LIABILITIES 2015

FINANCIAL ASSETS 2014

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26.   Financial Instruments (Continued)

FINANCIAL LIABILITIES 2014

Trade receivables/payables

        For trade receivables/payables due within less than one year, measured at amortized cost, the fair value is taken to be the carrying amount.

27.   Operating leases

LEASES AS LESSEE

        Non-cancellable operating lease rentals are payable as follows:

        The Company leases certain office and plant facilities, office furniture and motor vehicles under various operating leases. Under most of the lease commitments for office and plant facilities the Company has options to renew the leasing contracts. The leases typically run for a period between one and fifteen years. None of the leases include contingent rentals.

        The expenses for leasing contracts were k€ 4,520, k€ 4,150 and k€ 3,957 for 2015, 2014 and 2013 respectively.

28.   Capital commitments

        As of December 31, 2015, the Company had entered into purchase commitments with suppliers in the amount of k€ 19,104 (2014: k€ 38,998) for purchases within the next 12 months. Commitments for capital expenditures for fixed assets are k€ 1,059 (2014: k€ 1,977) as of December 31, 2015.

29.   Contingencies

        The Company is involved in various legal proceedings or can be exposed to a threat of legal proceedings in the normal course of business. The Executive Board regularly analyses these matters, considering any possibilities of avoiding legal proceedings or of covering potential damages under insurance contracts and has recognized, where required, appropriate provisions. It is not expected that such matters will have a material effect on the Company's net assets, results of operations and financial position.

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30.   Identity of related parties

        Related parties of the Company are members of the Executive Board and members of the Supervisory Board.

Executive Board and Supervisory Board Remuneration

        The disclosures for key management personnel compensation required according to IAS 24 contain the remuneration of the Executive Board and the Supervisory Board.

        Remuneration of the members of the Executive Board:

        Share based payments refer to the fair value of share options at grant date and also includes that portion of bonus agreements which is settled in shares.

        Remuneration of the members of the Supervisory Board:

        Supervisory Board:

        Individual amounts and further details regarding the remuneration of the members of the Executive Board and Supervisory Board are disclosed in the Remuneration Report which is an integral part of the Group Management Report.

31.   Consolidated entities

        AIXTRON S.E. controls the following subsidiaries:

        All companies in the Group are engaged in the supply of equipment to the semiconductor industry. Design and manufacture of equipment takes place at the entities in Germany, UK and USA. Service and distribution takes place at all locations.

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32.   Events after the reporting period

        There are no events which have occurred after the balance sheet date, of which the directors have knowledge, which would result in a different assessment of the Company's net assets, results of operation and financial position.

33.   Auditors' fees

        Fees expensed in the income statement for the services of the group auditor Deloitte & Touche are as follows:

        Included in the total amount of fees are fees for the group auditor Deloitte & Touche GmbH, Wirtschaftsprüfungsgesellschaft, Duesseldorf, in the amount of k€ 583 for audit (2014: k€ 416), k€ 33 for other confirmation services (2014: k€ 34), k€ 41 for tax services (2014: k€ 76) and k€ 18 for other services (2014: k€ 53).

34.   Employees

        Compared to last year, the average number of employees during the current year was as follows:

Employees by Function
average number for the year

35.   Statement of compliance with the German Corporate Governance Code

        In 2015, Executive and Supervisory Boards have made the declaration of compliance in accordance with Section 161 of AktG and this is permanently available on the Company's web site at http://www.aixtron.com/en/investors/corporate-governance/principles

36.   Supervisory Board and Executive Board

Composition of the Supervisory Board as of December 31, 2015

•

Dipl.-Kfm. Kim Schindelhauer



•

Aachen / businessman / Chairman of the Supervisory Board since 2002



•

Prof. Dr. Wolfgang Blättchen

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36.   Supervisory Board and Executive Board (Continued)

•

Leonberg / Managing Director of Blättchen Advisory GmbH / member of the Supervisory Board since 1998 / Deputy Chairman of the Supervisory Board since February 27, 2013

Membership of Supervisory Boards and controlling bodies:

•

Pfisterer Holding AG, Winterbach—Chairman of the Supervisory Board



•

H. STOLL AG & Co. KG, Reutlingen—member of the Supervisory Board (June 2015 until January 2016)



•

FAS AG, Stuttgart—member of the Supervisory Board



•

Prof. Dr. Rüdiger von Rosen

Frankfurt/Main / businessman / member of the Supervisory Board since 2002

Membership of Supervisory Boards and controlling bodies:

•

ICF Kursmakler AG, Frankfurt/Main—Deputy Chairman of the Supervisory Board



•

Paladin Asset Management Investment AG, Frankfurt/Main—Chairman of the Supervisory Board



•

AKO Capital AG, Thalwil/Switzerland—member of the Board



•

Prof. Dr. Petra Denk

Unterschleißheim / Professor of Energy Economics / member of the Supervisory Board since 2011

Membership of Supervisory Boards and controlling bodies:

•

Pfisterer Holding AG, Winterbach—member of the Supervisory Board



•

Dr Andreas Biagosch

Munich / Managing Partner Impacting I GmbH & Co KG / member of the Supervisory Board since May 2013

Membership of Supervisory Boards and controlling bodies

•

Wacker Chemie AG, Munich, member of the Supervisory Board



•

Lürssen Maritime Beteiligungen, Bremen, member of the Advisory Board



•

Ashok Leyland Limited, Chennai/Indien—non-executive director



•

Dr Martin Komischke

Morgarten/Switzerland / Group Chief Executive Officer, Hoerbiger Holding AG, Zug/Switzerland / member of the Supervisory Board since May 2013

Membership of Supervisory Boards and controlling bodies

•

Adcuram Group AG, Munich—member of the Supervisory Boarvd

        The composition of the Company's Executive Board is:

•

Martin Goetzeler, Icking, businessman, Chairman, President and Chief Executive Officer since March 1, 2013



•

Dr. Bernd Schulte, Aachen, physicist, Executive Vice President and Chief Operating Officer since 2002

37.   Critical accounting judgments and key sources of estimation and uncertainty

        The preparation of AIXTRON's Consolidated Financial Statements requires the Company to make certain estimates, judgments and assumptions that the Company believes are reasonable based upon the information available. These estimates and assumptions affect the reported amounts and related disclosures and are made in order to fairly present the Company's financial position and results of operations. The following accounting policies are significantly impacted by these estimates and judgments

F-41

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Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

37.   Critical accounting judgments and key sources of estimation and uncertainty (Continued)

that AIXTRON believes are the most critical to aid in fully understanding and evaluating its reported financial results:

Revenue Recognition

        Revenue is generally recognized in two stages for the supply of equipment to customers, partly on delivery and partly on final installation and acceptance (see note 2 (n)). The Company believes, based on past experience, that this method of recognizing revenue fairly states the revenues of the Company. The judgements made by management include an assessment of the point at which substantially all of the risks and rewards of ownership have passed to the customer.

Valuation of Inventories

        Inventories are stated at the lower of cost and net realizable value. This requires the Company to make judgments concerning obsolescence of materials. This evaluation requires estimates, including both forecasted product demand and pricing environment, both of which may be susceptible to significant change. The carrying amount of inventories is disclosed in note 16.

        As disclosed in notes 3 and 16, during the years 2015, 2014 and 2013 the Company incurred expenses of k€ 4,141, k€ 3,016 and k€ 17,885 respectively arising mainly from changes to past assumptions concerning net realizable value of inventories and excess and obsolete inventories. In future periods, write-downs of inventory may be necessary due to (1) reduced demand in the markets in which the Company operates, (2) technological obsolescence due to rapid developments of new products and technological improvements, or (3) changes in economic or other events and conditions that impact the market price for the Company's products. These factors could result in adjustment to the valuation of inventory in future periods, and significantly impact the Company's future operating results.

        Commitments for the manufacture of 25 AIX R6 systems existed as of December 31, 2015. The carrying value of inventories and outstanding supplier commitments totals k€ 20,608. The expected realizable value of these systems has been based on past experience and estimates supplied by regional and head office sales management. A further 3 systems were in the process of customer qualification as of December 31, 2015.

Income Taxes

        At each balance sheet date, the Company assesses whether the realization of future tax benefits is sufficiently probable to recognize deferred tax assets. This assessment requires the exercise of judgement on the part of management with respect to future taxable income. The recorded amount of total deferred tax assets could be reduced if estimates of projected future taxable income are lowered, or if changes in current tax regulations are enacted that impose restrictions on the timing or extent of the Company's ability to utilize future tax benefits. The carrying amount of deferred tax assets is disclosed in note 14.

Provisions

        Provisions are liabilities of uncertain timing or amount. At each balance sheet date, the Company assesses the valuation of the liabilities which have been recorded as provisions and adjusts them if necessary. Because of the uncertain nature of the timing or amounts of provisions, judgement has to be exercised by the Company with respect to their valuation. Actual liabilities may differ from the estimated amounts. Details of provisions are shown in Note 24.

Legal proceedings

        In the normal course of business, the Company is subject to various legal proceedings and claims. On January 4, 2016, the Company was named as a defendant in a putative class action commenced in the United States District Court for the Southern District of New York brought on behalf of a putative class of purchasers of the Company's securities between September 25, 2014 and December 9, 2015. The complaint claims in part that the Company made false and/or misleading statements, as well as failed to disclose

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Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

37.   Critical accounting judgments and key sources of estimation and uncertainty (Continued)

material adverse facts about the Company's business, operations and prospects. AIXTRON disputes the allegations and intends to contest the allegations vigorously.

        The Company, based upon advice from legal counsel, believes that the matters the Company is aware of are not likely to have a material adverse effect on its financial condition or results of operations. The Company is not aware of any unasserted claims that may have a material adverse effect on its financial condition or results of operation.

38.   Acquisition of PlasmaSi Inc.

        On April 1^st, 2015 the group acquired 100% of the voting equity interests of PlasmaSi Inc.(USA), obtaining control of the company. PlasmaSi enables the encapsulation of organic thin-films by depositing ultra-thin, light weight and flexible barrier films through its proprietary technology which is particularly well suited to OLED displays. In combining AIXTRON's OVPD technology with PlasmaSi's innovative approach the Company expects to be able to add significant value in the production of flexible OLED applications.

        The amounts recognized in respect of the identifiable assets acquired and liabilities assumed are as set out in the table below.

        In March 2015, AIXTRON made a short term loan to PlasmaSi Inc. of USD 1.65m which is included in the other current liabilities assumed. The cash acquired of k€ 1,471 is effectively the cash needed to repay this loan to AIXTRON.

        The goodwill arising on the acquisition of k€10,515 is underpinned by a number of elements which individually cannot be quantified. The most significant of these is the competitive advantage gained from AIXTRON's complimentary products. None of the goodwill is expected to be deductible for tax purposes. Individually identifiable and quantifiable intangible assets amount to k€ 4,655 and represent the fair value of the developed technology acquired.

        Contingent consideration of k€4,236 is payable if specified sales milestones are met. The contingent consideration has been valued at its gross contractual amount because the milestones were met during the final quarter of 2015 and payment is expected to be made within one year of the acquisition date The contingent consideration outstanding as at December 31, 2015 was k€ 4,177, the difference arising from exchange rate movements.

        During 2015 the business of PlasmaSi was absorbed within other AIXTRON companies and PlasmaSI Inc. was dissolved.

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Table of Contents

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

38.   Acquisition of PlasmaSi Inc. (Continued)

        The acquired business did not record revenue in 2015. A loss of k€ 2,719 in respect of the business is included in the Group Income Statement.

        Had the acquisition taken place on January1, 2015, the combined Group revenue would have been € 197.8m and the loss for the year would have been € 30.0m.

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Exhibit 1.1

Articles of Association

ARTICLES OF ASSOCIATION
of
AIXTRON SE

It is hereby certified that the following Articles of Association of
AIXTRON SE, Herzogenrath
are consistent with the Articles of Association submitted to the commercial register
in the version dated January 20, 2016.

Aachen, February, 2016
Müsgen, Civil law notary, Aachen

1

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Translation for Convenience Purposes

AIXTRON SE
Articles of Association

2

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I.     GENERAL PROVISIONS

§ 1
Company Name, Domicile, Duration

1.

The Company is registered under the name:

AIXTRON SE.

2.

The domicile of the Company is Herzogenrath.

3.

The duration of the Company is unlimited.

§ 2
Purpose

1.

The purpose of the Company is the manufacture and sale of products, as well as research and development and services for the implementation of semiconductor technologies and other physicochemical technologies, particularly those bearing the AIXTRON trademark.

2.

The Company is authorized to conduct all transactions suitable for promoting the Company's purpose indirectly and directly. The Company may establish branch offices in Germany and abroad, may acquire equity interests in other companies in Germany and abroad, as well as purchase or establish such companies.

The purpose of subsidiaries and investees may differ from that referred to in clause 1 above insofar as it seems capable of promoting the purpose of the Company.

The Company may outsource all or part of its operations to affiliates.

§ 3
Notices and Information

1.

The Company's notices will be published in the electronic Bundesanzeiger (Federal Gazette), unless otherwise required by law.

2.

Information intended for the holders of listed securities of the Company may also be transmitted electronically.

II.    SHARE CAPITAL AND SHARES

§ 4
Share Capital

1.

The Company's share capital is € 112,720,355.00 (in words: one hundred and twelve million seven hundred twenty thousand three hundred fifty five euros). It is composed of 112,720,355 no-par value registered shares. The share capital in the amount of € 100,667,177.00 (in words: one hundred million six hundred sixty seven thousand one hundred seventy seven euros) has been contributed through the conversion of the corporate form of AIXTRON Aktiengesellschaft into AIXTRON SE.

2.1

The Executive Board shall be authorized, with the approval of the Supervisory Board, to increase the share capital on one occasion or in partial amounts on several occasions in the period to May 13, 2019 by up to a total of € 45,883,905.00 against cash and/or non-cash contributions by issuing new registered no-par value shares (Authorized Capital 2014). Shareholders must be granted pre-emptive rights. The shares may also be underwritten by one or several credit institutions with the obligation to offer the shares to the shareholders of the Company for subscription. The Executive Board shall, however, be authorized, with the approval of the Supervisory Board, to exclude the pre-emptive rights of shareholders in full or in part:

–

to eliminate fractions resulting from the subscription ratio;

–

if required for protection against dilution, to grant holders and/or creditors of option or conversion rights arising from bonds with warrants or convertible bonds that were or will be issued by the Company and/or its subsidiaries the right to subscribe for new shares to the extent that they would be entitled to do so after option or conversion rights have been exercised or conversion obligations fulfilled;

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–

in the case of capital increases against non-cash contributions to grant shares to be used in the acquisition of companies, parts of companies, or equity interests in companies, or for the acquisition of other assets;



–

if the issue price of the new shares is not significantly lower within the meaning of § 203 (1) and (2) and § 186 (3) sentence 4 Aktiengesetz (German Stock Corporation Act) than the market price of the listed shares carrying the same rights when the final issue price is fixed by the Executive Board. However, this authorization is only valid provided that the shares issued, while excluding pre-emptive rights in accordance with § 186 (3) sentence 4 Aktiengesetz (German Stock Corporation Act), do not exceed a total of 10 percent of the share capital, either at the time of effectiveness or at the time of exercise of this authorization. In calculating this limit of 10 percent of the share capital, those shares shall be included which are issued or used during the term of this authorization while excluding pre-emptive rights in direct or analogous application of § 186 (3) sentence 4 Aktiengesetz (German Stock Corporation Act). In addition, in calculating the limit of 10 percent of the share capital, those shares shall be included which are issued or will have to be issued in respect of subscription rights arising from bonds with warrants and/or convertible bonds, provided that the bonds were issued or will be issued based on an authorization to issue bonds that is valid during the term of this authorization while excluding pre-emptive rights in analogous application of § 186 (3) sentence 4 Aktiengesetz (German Stock Corporation Act).

The Executive Board shall also be authorized, with the approval of the Supervisory Board, to determine the further content of the share rights and the conditions for issuing shares.

This authorization shall apply—without taking into account shares issued without pre-emptive rights in order to eliminate fractions and/or to protect the holders of option or conversion rights or conversion obligations arising from bonds with warrants or convertible bonds against dilution—only subject to the provision that following exercise of such authorization the sum of the shares issued without pre-emptive rights under Authorized Capital 2014 does not exceed 20 percent of the share capital existing at the time this authorization becomes effective or—if this amount is lower—existing at the time of its exercise. In calculating this limit of 20 percent of the share capital, those shares shall be included which are issued during the term of this authorization with exclusion of pre-emptive rights under any other authorized capital and/or contingent capital as a result of the exercise of options and/or conversion rights or conversion obligations to holders of bonds with warrants or convertible bonds, provided that an exclusion of pre-emptive rights to eliminate fractions and/or in favor of the holders of bonds with warrants or convertible bonds to protect them against dilution will not be taken into account.

2.2

The Executive Board shall be authorized, with the approval of the Supervisory Board, to increase the share capital on one occasion or in partial amounts on several occasions in the period to May 15, 2017 by up to a total of € 10,422,817.00 against cash contributions by issuing new registered no-par value shares (Authorized Capital 2012). Shareholders must be granted pre-emptive rights. The shares may also be underwritten by one or several credit institutions with the obligation to offer the shares to the shareholders of the Company for subscription. The Executive Board shall, however, be authorized, with the approval of the Supervisory Board, to exclude the pre-emptive rights of shareholders in order to eliminate fractions resulting from the subscription ratio. The Executive Board shall also be authorized, with the approval of the Supervisory Board, to determine the further content of the share rights and the conditions for issuing shares.

2.3

The Company's share capital is conditionally increased by up to € 1,926,005.00 by issuing up to 1,926,005 new no-par value registered shares. This conditional capital increase serves the purpose of granting options to members of the Executive Board and employees of the Company and to members of the management and employees of affiliated companies under the stock option plans resolved by the General Meeting on May 26, 1999 under agenda item 5. The conditional capital increase will only be implemented to the extent that the holders of such share options exercise their rights. The new shares carry dividend rights as of the start of the fiscal year in which they are issued as a result of the options being exercised in each case. The Executive Board is authorized to determine the further details of the implementation of the conditional capital increase with the approval of the Supervisory Board. Where options are to be granted to members of AIXTRON Aktiengesellschaft's Executive Board, the further details of the conditional capital increase will be determined by the Supervisory Board.

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2.4

The share capital is conditionally increased by up to € 40,715,810.00 by issuing up to 40,715,810 new registered no-par value shares carrying dividend rights from the beginning of the fiscal year in which they are issued. This contingent capital increase serves the purpose of granting shares to the holders or creditors of bonds with warrants and/or convertible bonds which will be issued against cash contributions by the Company or any company in which the Company owns a majority interest, either directly or indirectly, based on the authorization granted by the General Meeting on May 16, 2012 (agenda item 7). The contingent capital increase will only be implemented to the extent that option and/or conversion rights arising from the bonds will be exercised and/or conversion obligations arising from the bonds will be fulfilled and to the extent that no cash compensation is granted or own shares are used to satisfy such rights or obligations. The Executive Board shall be authorized, with the approval of the Supervisory Board, to determine the further details of implementing the contingent capital increase (Contingent Capital I 2012).

2.5

The Company's share capital is conditionally increased by up to € 463,888.00 by issuing up to 463,888 new no-par value registered shares. This conditional capital increase serves the purpose of granting options to members of the Executive Board of the Company and members of the management of affiliated companies as well as to employees of the Company and of affiliated companies under the stock option plans in accordance with the General Meeting's resolution of May 22, 2002 (Stock Option Plan 2002). The conditional capital increase will only be implemented to the extent that the holders of options make use of their rights, and the Company does not grant own shares to satisfy these rights. The new shares carry dividend rights as of the start of the fiscal year in which they are issued as a result of the options being exercised. The Executive Board is authorized to determine the further details of the implementation of the conditional capital increase with the approval of the Supervisory Board. Where options are to be granted to members of AIXTRON Aktiengesellschaft's Executive Board, the further details of the conditional capital increase will be determined by the Supervisory Board.

2.6

The Company's share capital is conditionally increased by up to € 2,872,638.00 by issuing up to 2,872,638 new no-par value registered shares (Contingent Capital II 2007). The Contingent Capital II 2007 serves the purpose of securing subscription rights arising from share options which will be issued by the Company under the Stock Option Plan 2007 until and including May 21, 2012 based on the authorization granted by the General Meeting on May 22, 2007. The contingent capital increase will only be implemented to the extent that the holders of such share options will exercise their option rights and the Company does not grant own shares or cash compensation in fulfillment of the share options. The new shares will carry dividend rights from the beginning of the fiscal year in which they are issued.

2.7

The Company's share capital is conditionally increased by up to € 4,208,726.00 by issuing up to 4,208,726 new no-par value registered shares (Contingent Capital II 2012). The Contingent Capital II 2012 serves the purpose of securing subscription rights arising from share options which will be issued by the Company under the Stock Option Plan 2012 until and including May 15, 2017 based on the authorization granted by the General Meeting on May 16, 2012. The contingent capital increase will only be implemented to the extent that the holders of such share options will exercise their option rights and the Company does not grant own shares or cash compensation in fulfillment of the share options. The new shares will carry dividend rights from the beginning of the fiscal year in which they are issued.

2.8

The Supervisory Board is authorized to reformulate the Articles of Association in accordance with the amount of the capital increase from authorized and contingent capital in each case.

§ 5
Dividend Rights

In the case of a capital increase, the dividend rights of the new shares can be determined differently from section 60 of the Aktiengesetz (German Stock Corporation Act).

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§ 6
Classes of Shares

1.

The shares are registered shares.

2.

If, as part of an increase in capital, the resolution makes no provision as to whether shares are to be bearer shares or registered shares, they will be registered shares.

3.

The Executive Board, with the approval of the Supervisory Board, determines the type of share certificates as well as the coupons and renewal coupons. The same applies to interim certificates, bonds, interest coupons and warrants.

4.

The Company may issue share certificates representing multiples of shares (global shares). The right of shareholders to the certification of their shares is excluded.

5.

Renewal coupons and coupons shall be attached to the shares.

III.  CONSTITUTION OF THE COMPANY

§ 7
Corporate Bodies

        The Company's corporate bodies are:

the Executive Board,

the Supervisory Board,

the General Meeting.

A.    Executive Board

§ 8
Executive Board

1.

The Company's Executive Board is comprised of two or more persons. The Supervisory Board determines the number of Executive Board members. The appointment of deputy Executive Board members is permitted. The members of the Executive Board are appointed for a maximum period of six years. Reappointments are permissible.

2.

The Supervisory Board can delegate the conclusion, amendment, and termination of employment contracts to a Supervisory Board committee.

3.

The Supervisory Board can appoint a member of the Executive Board as the Chairman or the Spokesman of the Executive Board and additional members of the Executive Board as Deputy Chairmen or Deputy Spokesmen.

§ 9
Legal Representation

1.

The Company is legally represented by two members of the Executive Board or by one member of the Executive Board acting jointly with a Prokurist (authorized signatory). The Supervisory Board can grant individual Executive Board members power of sole representation.

2.

The Supervisory Board can also exempt individual Executive Board members from the restrictions imposed by section 181, second alternative, of the Bürgerliches Gesetzbuch (BGB—German Civil Code) (multiple representation).

§10
Management

1.

The Executive Board conducts the business of the Company in accordance with the law and the Articles of Association. It will pass by-laws for itself by a unanimous resolution of its members and with the approval of the Supervisory Board.

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2.

The Executive Board requires the prior consent of the Supervisory Board in order to conduct the following transactions or take the following measures:

–

establishing, acquiring, disposing of, especially in the form of sale, surrendering or dissolving plants, subsidiaries and companies in which shareholdings are held and participations in other enterprises if, in the specific case, an amount of € 500,000 is exceeded;

–

commencing, materially restricting or giving up fields of activity of the Company;

–

acquiring and selling real property and rights equivalent to real property, dispositions over such properties and rights and corresponding transactions resulting in obligations to make such dispositions;

–

conclusion, amendment and termination of important license contracts or cooperation contracts which involve an economic risk of more than € 1,000,000 for AIXTRON SE or its group companies;

–

appointment of holders of registered signing authority, general agents and representatives for the entire business operations.

The Supervisory Board can make other matters dependent on its consent.

The Supervisory Board can issue the consent for specific matters in advance or in the context of approving the business planning.

B.    Supervisory Board

§ 11
Composition, Election, Term of Office

1.

The Supervisory Board consists of 6 (six) members. The General Meeting can specify any other number of Supervisory Board members divisible by three.

2.

The appointment of the Supervisory Board occurs for the period of time until the end of the General Meeting resolving on the approval of actions for the fourth fiscal year after the commencement of the term of office, whereby the fiscal year in which the appointment occurs is not taken into account; however, the longest term is six years. The General Meeting may resolve a shorter term of office. Repeated appointment is permissible.

3.

Substitute members can be elected for Supervisory Board members who have been elected by the General Meeting. The term of office of a substitute member taking the place of a retired member ends at the end of the General Meeting in which a supplementary election for the remaining term of the retired member takes place, but no later than the end of the retiring member's term of office.

§ 12
Resignation from Office

        Any member of the Supervisory Board can resign from office by addressing a statement to the Chairman of the Supervisory Board or the Executive Board, giving one month's notice.

§ 13
Chairman of the Supervisory Board

        The Supervisory Board elects a Chairman and a Deputy from among its members. If in the course of an electoral period, the Chairman or the Deputy Chairman retire from their posts, the Supervisory Board must immediately hold an election for the remainder of the term of the retiree.

§ 14
Meetings

        The meetings of the Supervisory Board are convened in writing by the Chairman, or—if he is prevented from doing so—by his Deputy, giving 14 days' notice. When calculating the period of notice required, the day on which the invitation was sent and the day of the meeting are not included. The invitation must indicate the individual items on the agenda. In urgent cases, the period of notice for convening a meeting can be reduced to 3 (three) business days and the invitation can be issued verbally, by fax, telephone, or email.

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§ 15
Resolutions

1.

The agenda must be announced at the time the meeting is convened. Resolutions on agenda items not duly announced in the invitation are only permitted if no Supervisory Board member presents objects. In such cases, absent Supervisory Board members must be given the opportunity to object to the resolution within an appropriate period to be determined by the Chairman, or—if he is prevented from doing so—by his Deputy, or to submit their vote in writing. The resolution shall only take effect if the absent Supervisory Board members do not object to it within this period or if they vote in favor of it.

2.

Resolutions of the Supervisory Board are passed at meetings. In exceptional, justified cases, members of the Supervisory Board may also participate in meetings of the Supervisory Board and its committees by telephone conferencing or video conferencing with the approval of the Chairman, or—if he is prevented from giving such approval—by his Deputy. Supervisory Board members who do not participate in the meeting in accordance with clause 2, sentence 2 above, may take part in resolutions of the Supervisory Board and its committees by submitting a written vote (also by fax) to the Chairman of the meeting. Outside the meetings, resolutions of the Supervisory Board are only permitted by way of votes cast in writing, by fax, telephone, or e-mail or by way of a combination of these aforementioned means of communication, if no member of the Supervisory Board objects to this procedure.

3.

The Supervisory Board is quorate if two thirds of its members in accordance with § 11 clause 1 of the Articles of Association take part in the resolution. If the Supervisory Board only consists of three members, all three members are required to take part in the resolution.

4.

The resolutions of the Supervisory Board require a majority of the votes cast. Abstentions are not counted as votes. The Chairman of the meeting has the casting vote in the event of a tie. The Chairman of the meeting will determine the type of voting procedure to be followed. These provisions apply accordingly to votes cast in writing, or by telephone, fax, or e-mail.

5.

Minutes must be taken of Supervisory Board meetings and must be signed by the Chairman of the meeting. The minutes taken on resolutions passed in writing, or by telephone, fax, or e-mail must be signed by the Chairman of the Supervisory Board, or—if he is prevented from doing so—by his Deputy.

§ 16
Committees

1.

The Supervisory Board is authorized and, if prescribed by law, required to form committees of its members and to draw up by-laws establishing their responsibilities and powers. The Supervisory Board can also, if permitted by law, assign decision-making powers to the committees.

2.

Declarations of intent by the Supervisory Board and its committees are submitted by the Chairman on behalf of the Supervisory Board, or—if he is prevented from doing so—by his Deputy.

§ 17
Tasks/Remuneration for the Supervisory Board

1.

The Supervisory Board supervises the management activities of the Executive Board.

2.

The Supervisory Board shall draw up by-laws for itself.

3.

In addition to the reimbursement of expenses (including any value added tax payable on their Supervisory Board remuneration or expenses), the members of the Supervisory Board will receive an annual compensation in an amount of € 25,000, with the Chairman receiving triple this amount and the Deputy Chairman one and a half times this amount. As well as fixed compensation, the members of the Supervisory Board will also receive total variable compensation of 1% of the Company's net retained profit, less an amount corresponding to 4% of the paid-in contributions to the share capital. The Chairman of the Supervisory Board receives 6/17, the Deputy Chairman 3/17, and a member of the Supervisory Board 2/17 of the variable compensation. The amount of the variable compensation shall not exceed four times the fixed compensation per member of the Supervisory Board. Such variable compensation shall be payable following the end of the General Meeting that resolves on the appropriation of the net retained profit. If members of the Supervisory Board have been members on

8

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the Supervisory Board for only part of the fiscal year, they will receive a prorated remuneration for such period.

4.

The members of the Supervisory Board will receive an attendance fee in an amount of € 2,000 for attending the meetings of committees each; the chairman of a committee will receive triple this amount. The total amount of attendance fees payable to the members of the Supervisory Board shall be limited to one and a half times of the fixed compensation of this person pursuant to § 17 clause 3.

5.

The Company also pays the insurance premiums for the members of Supervisory Board for liability and legal insurance to cover liability risks arising from their activities for the Supervisory Board, as well as the insurance tax payable on these.

C.    General Meeting

§ 18
General Meeting

        The Company's General Meetings take place either at the Company's domicile or a German city with over 100,000 residents.

§ 19
Convening the General Meeting

        The General Meeting is called by the Executive Board or by the Supervisory Board. The General Meeting must be called at least 30 days prior to the date of the meeting. The minimum notice period under sentence 2 is extended by the days of the registration period (§ 20 clause 2 sentence 1).

§ 20
Participation in the General Meeting

1.

Those shareholders whose names are entered into the share register on the date of the General Meeting and who have registered for participation in a timely manner shall be entitled to participate in such General Meeting and to exercise their voting rights.

2.

Such registration for participation must be received at the Company under the address notified for this purpose in the call for the meeting in German or English in the form of text or, if so resolved by the Executive Board, electronically in a manner determined in the call for the General Meeting, at least six days prior to the General Meeting, whereby the date of the General Meeting and the date of receipt are not taken into account (registration period). Cancellations and new registrations in the share register will not take place on the date of the General Meeting and during the last six days prior to the General Meeting.

3.

The details regarding registration will be announced together with the call for the General Meeting.

4.

The Executive Board is authorized to provide that shareholders can participate in the General Meeting without being present at its location and without a proxy and can completely or partially exercise all or individual rights they have by means of electronic communication (online participation). The Executive Board is also authorized to make determinations about the scope and the process for participating and exercising rights under sentence 1. The determinations will be announced together with the call for the General Meeting.

§ 21
Chairing the General Meeting

1.

The General Meeting is chaired by the Chairman of the Supervisory Board, or by his Deputy if the Chairman is unable to do so. If neither the Chairman nor his Deputy chairs the meeting, it will be chaired by the most senior member of the Supervisory Board (in terms of service) present.

2.

The chairman of the General Meeting can change the sequence of topics to be discussed as against that announced in the agenda. In addition, he shall decide on the type and form of voting.

3.

The chairman of the General Meeting may restrict the right of shareholders to speak and to ask questions to an appropriate amount of time. In particular the person presiding over the General Meeting may determine an appropriate time frame for the course of the entire General Meeting, for individual items on the agenda and for questions and contributions by the shareholders.

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4.

The chairman of the General Meeting is authorized to permit in parts or completely the transmission in pictures and sound of the General Meeting in a manner to be determined in more detail by the chair of the meeting. The transmission can also occur in a form to which the public has unrestricted access.

§ 22
Resolutions

1.

Resolutions of the General Meeting are passed by a simple majority of the votes cast, unless the Articles of Association or mandatory provisions of law require otherwise. Insofar as the provisions in the law require that resolutions be passed by a majority of the share capital represented at the time of resolution, a simple majority of the represented capital is sufficient, as far as this is legally permissible. Resolutions about amending the Articles of Association, to the extent legal provisions do not determine otherwise, require a majority of two thirds of the votes cast or, if at least one half of the share capital is represented, a simple majority of the votes cast.

2.

If a simple majority is not achieved in the first round of voting for elections by the General Meeting, an additional round of voting will be held between the two people who have received the highest number of votes in the first round.

§ 23
Voting Rights

1.

Each no-par value share grants one vote at General Meetings. Any preferred shares without voting rights only have voting rights in the cases provided for by law, in this case, each no-par value share also grants one vote.

2.

The voting right can be exercised by proxy. The grant of proxy, its revocation and proof of proxy for the Company requires the form of text. An easing of the form can also be determined in the call for a meeting. The Company will provide at least one method of electronic communication for transmitting proof. The further details will be announced together with the call for the General Meeting. § 135 Aktiengesetz (German Stock Corporation Act) remains unaffected.

3.

The Executive Board is authorized to provide that shareholders can cast their votes in writing or by means of electronic communications (absentee ballot) even without participating in the meeting. The authorization includes the right to make determinations about the procedure. The determinations will be announced together with the call for the General Meeting.

IV.    ANNUAL FINANCIAL STATEMENTS, PROVISIONS, APPROPRIATION OF RETAINED EARNINGS

§ 24
Fiscal Year

        The fiscal year is the calendar year.

§ 25
Annual Financial Statements, Ordinary General Meeting, Appropriation of Retained Earnings

1.

The Executive Board shall prepare the annual financial statements as well as the management report for the previous fiscal year and present them to the Supervisory Board within the first 3 (three) months of each fiscal year. If the annual financial statements have to be audited by an auditor, these documents shall be submitted along with the auditor's report immediately after the receipt of the auditor's report by the Supervisory Board.

2.

At the same time, the Executive Board shall submit to the Supervisory Board its proposal for the appropriation of the net retained profit that will be presented to the General Meeting.

3.

The Supervisory Board is required to examine the annual financial statements, the management report, and the proposal for the appropriation of the net retained profit within one month of receiving the auditor's report. The Executive Board will receive the Supervisory Board's report.

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4.

After receiving the Supervisory Board's report of the result of its examination, the Executive Board shall immediately convene the Ordinary General Meeting, which is required to take place within the first 6 (six) months of every fiscal year.

5.

The Ordinary General Meeting resolves on the approval of the activities of the Executive Board and the Supervisory Board as well as on the appropriation of the net retained profit. In addition, the General Meeting resolves on the choice of the auditor and, in the cases provided for by the law, on the adoption of the annual financial statements.

V.     AUTHORITY OF THE SUPERVISORY BOARD TO AMEND THE ARTICLES OF ASSOCIATION, FORMATION EXPENSES, PLACE OF JURISDICTION, SPECIAL BENEFITS

§ 26
Amendments to the Articles of Association

        The Supervisory Board is authorized to resolve amendments and additions to the Articles of Association that only concern the formal wording.

§ 27
Costs

1.

The Company will bear the formation costs and taxes up to a maximum amount of DM 100,000.00.

2.

The Company assumes the expense for establishing itself with regard to the conversion of corporate form of AIXTRON AG into AIXTRON SE, especially the costs of the preparatory measures, the costs for examining and preparing the certificate on value by the court appointed expert in accordance with § 37 para. 6 SE Regulation, the costs for notarizing the Conversion Plan, the costs for entries in the register, the costs of external advisors, the costs for required publications, the costs for conducting the process for regulating the involvement of employees and the costs for converting stock exchange listings for the shares in AIXTRON AG to shares in AIXTRON SE in an estimated amount of up to € 1,000,000.00.

§ 28
Place of Jurisdiction

        The Company's domicile is the place of jurisdiction.

§ 29
Special Benefits

        The following is pointed out in the context of the conversion of corporate form of AIXTRON AG into AIXTRON SE due to reasons of precaution:

        Notwithstanding the responsibility of the Supervisory Board of AIXTRON SE to make decisions under stock corporation law, it must be assumed that the present members of the Executive Board of AIXTRON AG will be appointed as members of the Executive Board of AIXTRON SE. The members of the Executive Board of AIXTRON AG are Paul K. Hyland, Dr. Bernd Schulte and Wolfgang Breme.

        Furthermore, the then current members of the Supervisory Board of AIXTRON AG at the time the conversion of AIXTRON AG into AIXTRON SE takes effect are supposed to be appointed as members of the Supervisory Board of AIXTRON SE (see § 11 clause 3).

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Exhibit 1.1

Articles of Association
ARTICLES OF ASSOCIATION of AIXTRON SE
§ 1 Company Name, Domicile, Duration
§ 2 Purpose
§ 3 Notices and Information
§ 4 Share Capital
§ 5 Dividend Rights
§ 6 Classes of Shares
§ 7 Corporate Bodies
§ 8 Executive Board
§ 9 Legal Representation
§10 Management
§ 11 Composition, Election, Term of Office
§ 12 Resignation from Office
§ 13 Chairman of the Supervisory Board
§ 14 Meetings
§ 15 Resolutions
§ 16 Committees
§ 17 Tasks/Remuneration for the Supervisory Board
§ 18 General Meeting
§ 19 Convening the General Meeting
§ 20 Participation in the General Meeting
§ 21 Chairing the General Meeting
§ 22 Resolutions
§ 23 Voting Rights
§ 24 Fiscal Year
§ 25 Annual Financial Statements, Ordinary General Meeting, Appropriation of Retained Earnings
§ 26 Amendments to the Articles of Association
§ 27 Costs
§ 28 Place of Jurisdiction
§ 29 Special Benefits



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Exhibit 12.1

Section 302 Certification

I, Martin Goetzeler certify that:

1.

I have reviewed this annual report on Form 20-F for the fiscal year ended December 31, 2015 of AIXTRON SE (the "Company");

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5.

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the Audit Committee of the Company's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.

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Exhibit 12.1

Section 302 Certification



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Exhibit 12.2

Section 302 Certification

I, Martin Goetzeler certify that:

1.

I have reviewed this annual report on Form 20-F for the fiscal year ended December 31, 2015 of AIXTRON SE (the "Company");

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5.

I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the Company's auditors and the Audit Committee of the Company's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company's ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal control over financial reporting.

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Exhibit 12.2

Section 302 Certification



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Exhibit 13.1

Section 906 Certification
(pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the U.S. Sarbanes-Oxley Act of 2002)

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        In connection with the Annual Report on Form 20-F for the fiscal year ended December 31, 2015 of AIXTRON SE (the "Company") as filed with the U.S. Securities and Exchange Commission (the "Commission") on or about the date hereof (the "Report") and pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, in the capacities set forth below, hereby certifies, that, to the best of his knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 23, 2016

        A signed original of this written statement, or other document authenticating, acknowledging, or otherwise adopting the signature appearing in typed form within the electronic version of this written statement, has been provided to the Company and will be retained by the Company in accordance with the applicable provisions of the U.S. Securities Exchange Act of 1934, as amended, and the related rules and regulations.

        This written statement accompanies the Annual Report on Form 20-F in which it appears as an Exhibit pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the U.S. Sarbanes-Oxley Act of 2002 or other applicable law, be deemed filed by the Company for purposes of Section 18 of the U.S. Securities Exchange Act of 1934, as amended.

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Exhibit 13.1

Section 906 Certification (pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the U.S. Sarbanes-Oxley Act of 2002)



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Exhibit 15.1

Consent of Independent Registered Public Accounting Firm

        We consent to the incorporation by reference in Registration Statement No. 333-123513, No. 333-134045 and No. 333-165495 on Form S-8 of our reports dated February 23, 2016, relating to the financial statements of AIXTRON SE, and the effectiveness of AIXTRON SE's internal control over financial reporting, appearing in this Annual Report on Form 20-F of AIXTRON SE for the year ended December 31, 2015.

/s/ Deloitte & Touche GmbH Wirtschaftsprüfungsgesellschaft

Deloitte & Touche GmbH
Wirtschaftsprüfungsgesellschaft
Duesseldorf, Germany, February 23, 2016

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Exhibit 15.1

Consent of Independent Registered Public Accounting Firm