u/OkAppeal4608

Lumilens CEO (Ankur Singla) gave an interview to 'theCUBE + NYSE Wired' (https://www.youtube.com/watch?v=XWxtW6_Hfiw) which throws some interesting light on the outlook for POET.

First, Ankur said at (around 7:10): “our customer is one of the top two hyperscalers in the world”

Previously, the perception had been top three (I think this came from a LinkedIn article), so this appears to narrow the field to AWS or Microsoft.

Second, in answer to the question “So what's the top priority?” (around 18:00), Ankur talks extensively about manufacturing. I've clipped a few parts of his answer:

“So the top priority for us is actually scaling manufacturing. As you know in photonics manufacturing is as important as designing the right chips.”

“We've actually been working on both the factories aspect of it which we've been building in Singapore.”

“We are reimagining how manufacturing needs to be done and going back and redesigning the chips around it.”

“So we invented a concept called electrical optical interposer to rethink the entire manufacturing technique around scaling photonics manufacturing…”

This last comment caught my attention because of what POET said in its announcement of the Lumilens agreement: POET described the Electrical-Optical Interposer (EOI) as:

“combining alignment-free wafer-level optical engine production with next-generation optical chipsets and advanced manufacturing capabilities”

So it looks like Lumilens's EOI architecture combines its next-generation optical chipsets with the kind of alignment-free, wafer-level optical-engine manufacturing technology that POET has developed through its Optical Interposer platform. This would also appear consistent with the wording of POET's announcement that “Lumilens has placed an initial purchase order with POET for the manufacturing of EOI-based engines”

There's a strong indication here that POET's patented Optical Interposer technology is an important part of the manufacturing process for Lumilens's EOI architecture at scale.

That said, the key things that stood out to me from the interview were:

how aggressively Lumilens is pursuing high-volume photonics manufacturing;
that it is building manufacturing capability in Singapore and redesigning its chips around manufacturing;
that POET appears to be very closely involved in the wafer-level optical-engine manufacturing part of that solution; and
(and perhaps most significantly), that the end customer is apparently one of the two largest hyperscalers in the world.

The current Lumilens transceiver being shipped to the hyperscaler apparently predates the POET EOI programme but if Lumilens is now redesigning its technology around EOI specifically to solve the manufacturing/scale problem, and POET is manufacturing the resulting EOI-based engines, that looks potentially very significant for POET.

EDIT (and post-script): This interview has changed my view on the implications of Lumilens' recent $700m funding for POET's investment case. Until listening to the interview I hadn't appreciated how central the EOI initiative was to Lumilens' strategy. The scale and calibre of the funding is a significant validation of the EOI business case, of which POET appears to be a key technology partner.

The round was reportedly co-led by Atreides, Bain Capital Ventures, Meritech, Seligman Ventures and Spark Capital, with a broader investor group including Addition, Alkeon, HarbourVest, JPMorgan Private Capital, Mayfield, MVP Ventures, Qualcomm Ventures, Peak XV, Redpoint Ventures and Seifdune.

In June 2024, this is what POET said about Celestial (now Marvell).. "POET Starlight™ is a lightbar component in Celestial AI’s flagship product, Photonic Fabric, that is designed to shatter the memory wall and deliver data directly to the point of compute. An 8-channel packaged light source for chip-to-chip AI applications and co-packaged optics for the data center market, Starlight can be integrated on a host board and connected to chips and ASICs with built-in silicon photonics. POET will supply initial production orders to Celestial AI in the second half of 2024."

OK, H2'24 was somewhat optimistic, though this may have been down to Celestial not POET. Anyhow, there had been no further confirmation that this relationship still existed until Mika confirmed this in his interview - though there had been no indication to the contrary either. But the positive market response to news of the production order was almost certainly magnified by the news that POET's was redomiciling to the US, which had opened the floodgates for US fund purchases. That news had already caused a near 20% increase just before the interview.

Specifically what Mika said that appeared to breach the NDA was "So we have a purchase order from them that we're going to ship against… and I believe some of it will be shipped next quarter.” This is operationally specific and new but not exceptionally detailed and pretty much just confirmed what everyone suspected - though it's still technically an NDA breach.

But why the nuclear response to a narrow NDA breach of a small company that had spent years in good faith developing a purpose-built component for their architecture, that had been a loyal and discreet partner under NDA for that entire period, that had one bad day when their CFO got funnelled into an indiscretion by a skilled interviewer while defending against a short attack?

Every other small company or startup in the photonics ecosystem is watching this. The message it sends is stark. You can spend years co-developing critical technology with us, honor your NDAs faithfully throughout, build something that is genuinely central to our most important program and one misstep, in circumstances that are at least partially understandable, will result in total and immediate public destruction of the relationship with no warning and no opportunity to remedy. That's a chilling message to send to the innovation ecosystem you depend on.

I'm wondering whether Marvell used the size of the share price increase as a measure of the degree of NDA breach, not understanding the effect that redomiciling the POET HQ had in magnifying the effect of what was said. The size of flow in that week certainly seemed to suggest that institutions were taking a position in POET.

Celestial AI spent years building a partnership with POET. That relationship was part of the value Marvell acquired - a qualified, production-ready, purpose-built supplier in a supply constrained market. Destroying it four months after the acquisition closed, over a narrow and legally thin NDA breach, suggests Marvell either didn't fully value what they acquired or were willing to damage it for other reasons. Marvell will need small innovative companies to trust them as a commercial partner for as long as they operate in semiconductors and photonics. And these companies will know what happened to POET.

You don't build a reputation as a trustworthy large company partner by publicly destroying a small collaborator over a shipping timeline disclosure for a product whose existence was already public knowledge. You build it by handling difficult situations with proportionality, discretion, and respect for the relationships that got you where you are.

Lumilens CEO Interview and POET