nr> the Company has, for the first time, engaged commercial epitaxial wafer suppliers in providing wafers with the unique and proprietary POET epitaxial stack.

I have to stress that much of the performance advantage enjoyed by POET integrated circuits is related to properties inherent to its materials system.

A key to POET's progress is the pace of concurrent development and quality materials.

POET has the tremendious advantage of developing in an environment in which capital equipment, fabrication, design know-how, and markets already exist.

We've come a long way -- 180 years -- from Faraday's 19th-century observation of semi-conductivity.

A bit of history.

GaAs MESFETs were first built in 1967, but self-sustaining commercial insertion did not occur until the mid 80s, constrained primarily by lack of availability of high-quality substrates.

HBTs in GaAs (first introduced in 1972) were not commercialized until the late 80s, even though they were not as sensitive to the starting substrate material. The pacing item in that case was development of new MBE epitaxial growth techniques.

HEMTs, first demonstrated in 1980 (more than 8 years after HBT) were commercialized earlier, because the epitaxial growth techniques were applicable to both, and HEMT structure was somewhat simpler.

With today's news, it's easy to read that epitaxial wafer suppliers are ready to say that, once the epi wafers are delivered, the devices (e.g., transistors) have already been made, and the only job left for the semiconductor fab is merely to reveal and interconnect them.

POET has no timeline-delay analog to the MESFET development experience, because the high-quality growth techniques used for GaAs CMOS are readily transferrable.

This allows POET to skip the historical "chicken and egg" period, in which the technology can't move forward because substrates aren't available, and substrate quality can't improve because the volume incentive is too low.

With wafer supply agreements in-hand, there is a very clear path forward to commericalization.

And a really fancy dinner for Geoff.

GLAL,

R.