Q&A: State of the Product Roadmap
February 4th, 2021
POET Focuses on Customers as Its Product Roadmap Moves Forward
“De-risking”, “priceless” customer feedback, and the establishment of a “long-term supply chain” are among the notable happenings for POET Technologies since its Annual General Meeting on August 26, 2020. With a focus on timelines tied to its Product Roadmap, the company has continued to progress towards commercialization in 2021.
The four products it has initially identified remain on target based on timelines shared with investors:
- 100/200G CWDM4 Optical Engines: Production expected in Q3/Q4 2021
- 400G Light Engine (trademarked as the POET LightBar™): Production expected in Q3/Q4 2021 (Read more about the LightBar™: https://poet-technologies.com/news/2020-dec-8.html)
- 400G FR4 Receiver: Production expected in Q3/Q4 2021
- 400G FR4/DR4 Optical Engines: Alpha in Q3 2021 with production in 2022.
In the five months since meeting with shareholders, POET has expanded its ability to service the needs of its customers — both existing ones and those newly acquired. Collaborations with customers have become pivotal to realizing the range of solutions the POET Optical Interposer™ provides to the optoelectronics semiconductor industry, according to the company’s braintrust.
In the latest in a series of discussions with journalist Adrian Brijbassi, POET Chairman and CEO Dr. Suresh Venkatesan, President and General Manager Vivek Rajgarhia, and Vice-President of Product Marketing and Business Development, Edward Cornejo explained how recent moves have strengthened their confidence. As readers will see, those strategic maneuvers also demonstrate the team’s deep knowledge of their industry and how to succeed in it.
Q: What is the status of the four products identified in the roadmap?
Vivek Rajgarhia: I will start by explaining how the products go from technology development to a final product so you can understand the various aspects that need to be done. First, we have the technology platform validation, which was done early last year. Since then, we have continued to add features to roll out next-generation products.
The second step is to get the product designed and developed. In our field of optics, it’s not only about making an engine that works within itself. It has to be aligned with the outside world — with how light will go in and out. So the optical design and the fiber alignment design are core parts of the product development and the platform development.
If you look at Tesla, as an example, it invented the secret sauce of the battery. That involves the chemistry of making these batteries that can charge quickly, retain charge for a long time, and work in various environments. Then they had to package it in a usable manner and then put it into the car, and make the car work the way it is supposed to work; and then customers who buy the cars have to know how to charge it. So all of those pieces have to be put in place before you move to the commercialization phase.
In our case, the next stage in technology development would be how the optical design is done. Whether it’s a reference design or some customization for a customer who might want the fiber attached to our engines so they can use them, as an example. So that optical design work is another aspect that has been done.
Then the third aspect is to get the reliability and qualification completed.
Suresh Venkatesan: One other point is our products need to be interoperable. That’s a key requirement for us: interoperability. We just can’t come up with a custom solution that is just something POET does in a vacuum. At the end of the day we have to be interoperable with other vendors.
VR: That’s right. It should be seamless to a system company or a network company, whether they use a solution with POET technology or some other technology. That aligns with the third part of the process, which is system-level validation — making sure we are validating our engine design with electronics that a customer would use. System level doesn’t mean a big system, but the data signal and the optics have to work together seamlessly. Customers need to be able to use it without undue effort. If they have to jump through hoops to adopt our product, that doesn’t work. So we have to make it easy for them.
And the fourth part is, Can we supply that product in volume, reliably, at scale, and at a cost savings? And we can.
The important point here is that these aspects are related to our different groups. Although there are overlaps, each one of our groups is set up to deliver specific pieces that customers need. We have the Singapore team that has been doing the technology platform development. We have the Allentown team leading the collaboration among our different teams and leading with work on optical design. We have the Shenzhen team leading the system-level validation and we have Super Photonics doing the manufacturing.
All these things are important to understand on the product roadmap. It’s not just coming out with dates and hoping we have the ability to hit them. There is a significant amount of capability built up that we have done to make sure the roadmap is responsibly developed.
Now, to answer your question, I am pleased to say we are aligning our development and have accomplished all of this holistic work around our platform and products to the roadmap that we showed at the AGM. We are rolling out samples and are in the process of doing sample-level validations. Next quarter we will be supplying samples to key targeted customers — both the ones who have been engaged with us for a while as well as new customers.
By Q3, we will have done our reliability qualification of at least 100G and 200G and light engine products, as per the roadmap, and then we will be going into production. And those timelines align with the progress of the Super Photonics set up as well. (Read about the progress with the Super Photonics joint venture: https://poet-technologies.com/blog/2021-jan-27.html)
Q: Have there been any notable hurdles?
VR: Nothing notable. We have been managing any issues that have come up. There are new things we are learning from customers on how the technology is to be used. We are continuing to know customers’ challenges and that is why collaborations with key customers in the early stage of a technology platform that you productize are very important. They will trust you, they will open up about what they’re working on as it’s related to our product, and they will share what challenges they might have in using our product, and as a new platform it is vital to get that information.
This process is not new for us. We, as individuals, have seen how technology developments occur from our past experiences and know these communications are an important part of the process. It’s why getting that feedback from customers is priceless.
Q: Have the customers surfaced anything that you didn’t expect, such as new capabilities of the technology?
VR: I would not say they have found new capabilities. But they have pointed things out that we would not have thought of ourselves. These tend to be issues that are unique to their own products. These are questions that we can solve but we need to know the issue first before we can think of the solution, and we could only do that through our engagement with these customers.
Q: The customers have their own specific problems they’ve been trying to solve for months or perhaps years, and then they get their hands on your technology and all of a sudden light bulbs are going off where they see what it can do for them. Is that some of what’s happening in their feedback?
VR: That’s also the case. For certain standard applications, as they are adopting our platform, we are discussing with them what they can do and how it can be used. Predictably, they have questions like, ‘Hey, we only have so much space, how can we get your product to fit? Or how do we connect it with what we already have?’ Those are issues we have been able to solve.
It’s a customizable platform to a certain extent. It gives them the understanding of the platform and its potential. They’ve started to think about their next-level architectures and speeds and systems. They realize that this is exciting, having the availability of our technology that they can access for future development.
Q: Do the customers have to liaise with each of the groups in the POET ecosystem?
VR: Not everyone. The platform is at the core. It’s really at the solution level that they have to liaise.
It’s a reasonable amount of customer support in the early stages. As it becomes standardized the time involved reduces.
That’s why it is a big advantage for us to have the Shenzhen team in place to communicate with a multitude of customers in the region. China is a big customer base for optical module makers. For North American customers, we have Ed and others in Allentown, and then, of course, Suresh and I are also here in the U.S. We communicate with our lead customers regularly and have calls with them pretty much every week.
Many of these companies are multinational. Their headquarters may be in Europe but they have operations in North America. Just like us, we are a small company and still we have three locations, plus the joint venture, and each one of those operations is located where it is because that’s where you find the knowledge and expertise for that specific kind of work.
Q: Is there any progress to report regarding the European Tier 1 partner mentioned in September?
VR: We are very close to having a final product that is going to meet their requirements and be in their hands, and then going into production towards the Q3/Q4 timeframe.
Q: Is there any scenario where you can see the timeframes moving forward, to say Q2/Q3 vs. Q3/Q4?
VR: As of today our view is that we are still on schedule to deliver on what we have shown on the product roadmap and in that timeframe.
Q: What is your level of confidence today vs. where it was at during the time of the AGM?
VR: At the AGM, there were many more unknowns. Our confidence is definitely much higher today as we’re getting into final samples. We uncovered issues that needed to be solved, and we have solved those, and these issues are typical for this kind of work. As well, as I mentioned, customers giving us feedback on how they use and adopt our product has been of a huge benefit to us.
Definitely there are no show-stoppers at all. Whatever issues that have come in front of us have either been solved or we have a plan to solve them. Maybe something new might come up that we can’t predict at this point, but I don’t expect anything drastic that would impede us.
SV: Right about the time we did the AGM, we hadn’t yet closed the agreement with Sanan IC. We know our path to a successful deployment of 100G and 200G solutions requires us to implement what we have called an effectively vertically integrated model working with Sanan’s lasers. It’s only now, after the agreement has been signed and the teams have gotten engaged, that we have the ability to install, in a sense, the processes we need at Sanan.
That means that since the AGM in August we have changed our roadmap to incorporate in our development plan the ability to add the lasers from Sanan IC, which to a certain extent is also a means of de-risking because those lasers meet all the market requirements. They are already qualified for multiple applications.
VR: Suresh brings up a great point. Many times you come out with your early demonstration product using a supply chain that doesn’t include the final components. Then customers may go ahead and approve it, and later you want to change it because the long-term path is going to be slightly different.
When you make that change, it is very, very painful for our customers — especially in regards to where we are in the value chain. We need to get qualified and validated all the way up the supply chain.
We supply to module companies. Module companies supply to switch companies or data-center companies. And we have to get approved all the way up the ladder. In that scenario, it’s a big challenge to make changes because of the time and effort involved and different stages of qualification you have to go through. It’s something that could set us back tremendously if it were to happen.
What Suresh is saying is we have already been able to use what will be a long-term supply chain in the final samples that customers will approve and design into their products. So we won’t have to make changes. That means there is less concern about a delay in the product development arising than in ensuring we can manage that supply-chain process. It’s been a key focus of ours.
It’s important to select the right building blocks. We are working on the lasers with key strategic partners to co-design products and we are reaching a culmination point of that process. For 400G you need external modulators. We have shortlisted certain modulator partners to get the product finalized and to further solidify the supply chain.
Edward Cornejo: I think we’ve crossed the big barrier, the flip-chipping of the devices, the coupling of the light. Getting the processes down and making sure everything is working. Those are huge steps forward for us. Pretty much everything we deal with now are engineering problems. Those are easier to solve than if you’re designing something.
We’re in the phase of productizing the technology now.
Q: It has to be a big relief for you and the customers to know that the supply chain is in place for the foreseeable future.
VR: There was extra effort to bring that to reality. We have been able to successfully include the long-term supply chain in these samples and it will be a big savings for us, as Suresh mentioned.
The customers do a certain level of due diligence. As a product supplier, they want to make sure that our supply chain is robust and reliable. Their level of evaluation depends on the chip and the components. With some critical features, they may go deeper into questioning and analyzing. That’s why for 400G, for example, selecting the right partner from a technology, performance, product, and strategic alignment standpoint was something we took great care with before saying, ‘Yeah, this is the path we want to take.’
Q: Would these be partners who you’ve worked with in the past?
VR: It’s a small industry. So definitely when you’ve done business with certain people that gives you a lot of confidence and gives them a lot of credibility.
Q: Are you at the point yet where you know what the price for the products will be?
VR: With pricing, we continue to firmly believe our optical-engine solution will provide — from 100G all the way to 400G — a range of 25%-40% reduction in the manufacturing cost to our customers. Those savings depend on which product they’re making and what level of engine we supply to them.
That cost reduction can be used as margin increment for our customers, or they can try to get more market share through a lower price to their customers or end users.
Q: Would someone like me ever know if I’m holding a phone or a laptop with a POET product in it?
VR: Right now, we’re not servicing the consumer device market. I would expect as we go into LIDAR, into cars, it would be advertised that a POET optical engine is in it. But that’s not a market we have presently gone after.
EC: We’re not pursuing the consumer device market right now but it’s certainly possible in the future. Some of the A.I. applications we have been working on are for edge computing and that will have relevance to consumer products.
The Pieces are Falling Into Place at Super Photonics
Why POET Technologies Will Have a Positive Daily Impact On the World
Explaining POET’s Game-changing Optical Interposer Breakthrough
Note: Author Adrian Brijbassi has previously written about POET Technologies for the Globe & Mail and has since become an investor in the company.
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