So.. where are we now?

Step 1. We secured a wafer manufacturer enabled with our POET epi-process. (EpiWorks)

Step 2. We secured a Fab to "print" the remaining part of our IP(ie: VCSEL, ect.) onto the wafers.

...

Now this is the interesting part, the part we've all been waiting for, the part that most of us have always assumed(wrongly) that would come first(2 steps were missing)..

Step #3. This step can go in a few directions.

As we know POET is looking for 3 types of fees, one for the wafer enablement, one for the fab enablement, and one for the use of POET IP integrated into a client/partners product. On top of all of that, POET has said they're aspiring(as per Corp. Pres.) to have direct sales as well.

So... where does that leave us?

II-VI manufactures VCSELs in the same vertical as POET intends to. With yesterday's news release stating that Anadigics was only use for testing/fabricating(?) the prototypes, are we to assume Anadigics isn't fully POET enabled?

We know that EpiWorks is presumably fully POET enabled, having a multi-year contract with POET. We have not received a NRE fee from EpiWorks, so I'm to assume EpiWorks has our IP under the terms of POET's use only.

If II-VI wants to integrate POET's IP into their own products, they would presumably have to pay 3 types of NRE fees along with royalties for every product made. 1 NRE for EpiWorks, 1 NRE for Anadigics, 1 NRE(TDK?) for their products and royalties on each product sold.

So there's a couple of scenarios possible. Either EpiWorks is manufacturing POET enabled wafers for POET to use in direct sales products, or maybe their wafers will be sold to fabs by POET themselves(another potential source of revenue), or EpiWorks is getting ready to manufacture wafers to be processed by II-VI themselves, integrating their own line of VCSELs into their existing line of VCSELs.

Another scenario, would be that POET is manufacturing all these wafers to then have WaveTek(yes, WaveTek could presumably have another source, but not yet) "print" our VCSEL IP and sell POET enabled interconnects directly to the market(3-4 Billion dollar market).

Another scenario, would be that a 3rd party client is commissioning the manufacturing of these wafers/VCSELs from POET & EpiWorks/WaveTek for use or integration into their own product.(another source of revenue)

...

What do I think?

If I'm to look at this logically, I think we'll see our first NREs will come from II-VI, I think Disco68's post the other day was bang on, II-VI(1.2 billion market cap) wants to integrate all manufacturing in-house to supply demand. They also are in direct competition with Finisar(1.3 billion market cap) & Avago (35 billion market cap). From what I've read, II-VI is mostly in competition with Finisar, especially when it comes to Gesture-Recognition & Optical-Interconnects. So will POET enable II-VI to finally over take Finisar and eventually Avago? Perhaps.. We'll just have to wait and see I guess.. but some food for thoughts while we wait.. What do you guys think?

Also, IMO, we're more likely to see a direct sale or NRE revenue before a partner, this would enable POET to up-list, secure themselves from a low-buyout offer and give the company a more competitive valuation in the event an equity stake would present itself.. Suresh gave me the impression that he wants the company to stand alone before we do anything, ie: our VCSEL initiative.

All IMO or course..



Cheers!
Abel00