I posted a bit of a comparison or example of the market conditions within the space that POET occupies.

Photon Control (PHO on the TSX). That company has really accumulated a lot free cash flow and is now sitting on $43milllion dollars but my impression of that company is that there is limited growth potential to put that money to work. They provide very accurate fiber optic process monitoring systems for Wafer Fabrication Equipment Manufactures. Precise monitoring of the surface temperature of wafers during processing to maximize yield. Their solutions are “designed in” to their partner’s products. So they capture a small percentage of the Wafer Fabrication Equipment (WFE) market. Basically they replace the old thermal couple technology with fiber optic sensing to very accurately monitor temperatures in a harsh environment (the chamber).

So their revenue stream is completely tied to new wafer equipment demand. When you look at their corporate presentation you will see information on the global semiconductor market and trends of growth and a breakdown of Wafer Fabrication Equipment OEM’s but you won’t find any real representation of the Total Addressable Market. The growth opportunity for Photon Control looks OK but there is just no comparison to the growth opportunity for POET.

POET is doing “design ins” as we speak with leading global companies that are significantly larger than Wafer Fabrication Equipment suppliers. POET has no problem finding places to spend money as there is a very big pipeline of applications for the foreseeable future. What they are focused on doing in the meantime is spending other people’s money that want/need the “design ins”. That is not bad when you think about it.