Byron King on PTK

What's happening with POET? Why the four-bag gain in under three months? Does POET cure cancer or something?

Well, as long-time MTA readers know, POET stands for "Planar Opto-Electronic Technology." That is, POET is an entirely new platform for "monolithic" fabrication of integrated circuit devices -- one chip, period -- containing both electronic and optical elements all on a single semiconductor wafer.

What does that mean in plain English (at least "plainer" English)? Think of complex electronic systems. They're made up of different kinds of circuits, all wired and soldered together, sucking power, requiring cooling and taking time to communicate with each other. Except now with POET you can combine multiple tasks onto one low-powered chip. Much of the heavy lifting in terms of signal processing is done with coherent photons, better known as lasers -- nanolasers, actually. As in... nano-lasers are that "planar opto-electronic" part of the system, hence the name POET.

With POET, designers and engineers can build faster, more efficient semiconductor devices of any kind, beyond electronics, beyond optics and beyond silicon.

Let's get back to military apps for a moment. POET started, some years back, as a sort of "solar power" idea. Take photons, absorb them onto nano-scale, gallium-arsenide transceivers on a chip and convert them into electricity. Except that Dr. Taylor and colleagues reversed the process, such that you can now put electricity into the transceivers, and get "aimed" laser light out. If you ever watched Star Trek, it's sort of like the "phaser" guns on the USS Enterprise.

Amending Moore's Law

Still scratching your head? Well, that's OK; it IS highly technical, and it helps to be kind of geeky, if not learned in solid state physics and quantum chemistry.

Let's approach it another way. Recall Moore's law, which is that computing power doubles every 18 months or so. This has been the case for nearly 50 years, based on silicon. It's why you have iPads instead of big, clunky desktops; or flat-screen TVs, instead of big old tube sets; or an iPhone instead of an old "brick" telephone.

It's all good, right? Except that Moore's law is rapidly becoming outdated, based on the fact that silicon is approaching fundamental atomic limits for pushing electrons around. You can only make silicon chips only so small. Then the electrons start bumping into each other, so to speak.

Now along comes POET and its photons. The quantum physics are different, as compared with silicon. With POET, things operate at smaller scale, and much faster, with less power usage. Thus, overall, POET adds several more years to Moore's law. More doubling for a few more generations.

I hate to use buzzwords, but... POET is transformational. It's historic -- seriously. You are watching fundamental change if you follow POET. It's "breakthrough" tech, even though the guy who's been pioneering the idea (Dr. Geoffrey Taylor, now of University of Connecticut at Storrs) has been toiling at his workbench for nearly 40 years, going back to his days at old AT&T and Bell Labs.

What's Driving the Share Price?

OK, so POET is totally cool physics, it's 40 years in development, it's Star Trek in the here and now, and the share price languished in much of 2013. Why is it hot? Why the recent share price rise?

Because a few weeks ago, POET announced the release of a POET Technology Design Kit Documentation (POET/TDK). It's the basic technical documentation that electronics industry geeks need to begin incorporating the tech into working systems from computers to hand-held devices to televisions to radars and much, much more.

In essence, POET/TDK provides documentation for the entire catalog of active electronic and electro-optical devices currently supported by POET processes. Specifically, POET/DTK offers a comprehensive device parameter library. It enables potential customers and partners -- like semiconductor foundries (Intel, AMD, Taiwan Semiconductor, et al.) and device and library developers (Apple, Samsung, et al.) -- to implement the POET process.

At root, this is where the money is. Down at the firehall, it's time for some little old lady to yell, "BINGO!"

The Coming POET Ecosystem

As usage grows, POET/TDK will become the foundation for licensed designs within a POET ecosystem. The tech will proliferate across the electronics industry and work its way into complementary metal-oxide semiconductor (CMOS) functions as designers optimize POET and migrate it into their work efforts.

Completing the POET/TDK release marks a critical step to commercializing the tech and thus, to monetizing POET intellectual property. Now, potential customers can apply POET in a context that's specific to their own design and manufacturing framework.

Meanwhile, POET's chief scientist, Dr. Geoffrey Taylor, will give a major talk at the Empire Club of Canada on April 28, 2014. The program is sponsored by Canada's National Post newspaper and should garner global levels of attention. Dr. Taylor will spotlight POET's semiconductor solution in the race to sustain Moore's law beyond the constraints of traditional silicon.

So between the new design kit and Dr. Taylor's forthcoming speech to a global audience, I expect the POET buzz to build.

Outlook

Based on several reader emails, I detect that some of you are getting nervous. What goes up must come down, right? Should you sell some shares, if you're a holder? I've had emails from readers along these lines asking what to do. Should you sell enough to recover principal? Take some money off the table? Book a gain?

In general, I'm never against recovering principal and booking gains. Rule No. 1 of investing is, "I want my money back."

Still, I believe there's much further to go with POET. So no, I'm NOT recommending that you sell anything.

Of course, every subscriber has to make his/her own decision. If you need cash -- to pay taxes, tuitions, bills, etc. -- you should do what you need to do. Otherwise, I believe that POET is on a roll and we have big things yet to come.

Remember though, this is still a pre-operational, -pre-revenue company — POET could join the rest of the tech sector and pull back. But the promise is there. This one looks like it's really going places. And since it's a truly small play, even smallish price moves can drive the share price to more multiples.

If you don't own shares? Are you just out in the cold? Well, again, I like the company and where it's going. Obviously, if you jump in now, you're buying on the upside of a momentum play. Then again, I believe the momentum is still there. We might see some strong upswings, as well as some down days, too. In general, I'm okay with at least starting a shareholding position, as long as you accept the risk that another tech down-draft might hit.

Bottom line? I like POET. I've visited the lab at Storrs. I've met the people. I'm closely following the company. The tech will change the world, in many ways. It's all good.

That's all for now. Thanks for subscribing to MTA.

Best wishes...

Byron W. King