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I absolutely agree with everything you stated. The curtain will be drawn this year.
Incredible. Thank you!
Again, I am assuming nothing. And again, you are misusing economics terms. I did not say LWLG has a "monopolistic position". I said they are entering a "monopolistic market" which is associated with high fixed cost and low variable cost. Therefore, they will achieve economies of scale at either 150mm or 300mm wafer sizes. This will be my last reply today because it is not a good use of time to tell you something that you could learn on your own.
I am assuming nothing. I am making a statement that your argument has no legs because the established economic terminology is not being used correctly. I am also making a statement that LWLG's patented product is entering a monopolistic market where price is determined by the firm and not the market.
Therefore, it is impossible to make revenue projections based on cost because product pricing is not a function of cost. You're a math guy. That should make sense. I don't know any other ways to say this.
I will agree with one thing you said, with a caveat. Higher cost does tend to get passed into higher end prices... (caveat) in a perfectly competitive market. This statement is a standard rule of economics.
However, that economic rule does not apply outside of perfect competition. LWLG is not entering a perfectly competitive market. Technology companies typically have high fixed cost and low marginal cost. This is part and parcel to monopoly, not perfect competition. In a monopolistic market, the price is not set based on cost of product. The price is set by the producer of the product, not supply and demand.
This is all researchable in any introductory economics text book.
So again, LWLG's wafer cost has no bearing on revenue projections.
You're conflating cost with price and you're conflating revenue with profit.
Cost is the amount of money LWLG must pay for production. Price is the amount of money the customer will pay for the finished product.
Price of product times quantity equals revenue. Revenue is top line, gross sales. Then you subtract the cost of doing business to get earnings. A standard earnings metric to compare companies within a market segment is EBITDA, not revenue, not cost, and not price.
LWLG's wafer cost has no bearing on revenue projections.
LWLG's wafer cost also has no bearing on market competitiveness.
LWLG's wafer cost is a single variable among many that will dictate profit margin. That's it.
Cost does not dictate product pricing for enabling technology. The price a customer will pay for a technology product is determined by the amount of money the enabling technology will save the customer. In the case of LWLG, it is hundreds of millions per hyperscale data center over the operating life of each product generation.
It would be helpful to have a discussion so long as we are all using the same and correct terminology. If not, it is incredibly easy to confuse people enough to make a point sound valid when it is not.
Hope this helps.
The invention of the integrated circuit in the 1960s, the computer revolution of the 1980s, the internet boom of the 1990s, the transition to mobile platforms in the 2000s, persistent connectivity and streaming of the 2010s. It is important as an investor to track these huge technological booms.
We will look back at the 2020s as the decade of the photonics revolution. How do we know? Every emerging economy is now creating their own photonics ecosystem. India, Africa, South America, China, and Middle East are all diving in.
High-Power-Compute, Quantum Computing, Self-driving cars, and Artificial Intelligence will all be enabled by photonics in the current decade.
Most people will look back at the 2020’s and wish they would have seen the next wave. A few people will look back with pride (and wealth) that they saw it coming. We are the few.
Reference:
https://ieee-ipc.org/symposium-on-globalization-in-photonics-research-development/
Hi Luther,
It would be great to meet you at the next ASM. I will be there along with many others that believe this company’s platform will revolutionize the way humans interact with networked technology. Denver is a beautiful place to be in the spring.
Incorrect. Nine PhD level authors of the paper are from KIT.
Exactly. The research paper is explicit in who conducted the setup and testing. The university staff did. The paper is written by them from their point of view.
No Polymer Paul. I am not saying either of those two things. That is not even close to what I said. This is willful disregard for facts or it is a lack of understanding complex subjects, or both.
Respectfully, you seem to not understand how research papers are drafted, co-authored, and corroborated. The research was conducted at, and the paper is the opinion of, Karlsruhe Institute of Technology laboratory. It is clear unbiased third party validation from a leading research university.
Hi Luther,
Thanks for watching and replying to it. Durability "the question of whether a company is going to be around a decade from now, that's what actually dominates the value equation". What an insightful method of company valuation from Peter Thiel. Glad you found it useful too.
Michael Lebby obviously knows this and understands this is why end-users want to see a decade or more of competitive advantage before switching to disruptive tech.
Respectfully, I'm not sure you understand what fiscal means. Lightwave Logic's fiscal year ends December 31.
For all the real investors out there, this lecture by Peter Thiel may be worth your time in helping to understand the timelines on how disruptive tech is brought to market.
We are living in the best time in history where you don't need to pay a Stanford tuition to learn some of their curriculum. It's free on YouTube.
If you only have five minutes, the most informative section is from 20:00 to 25:00.
I read the research paper and third party verification from NINE (9) PhD's at
the Institute of Photonics and Quantum Electronics (IPQ) / Institute of Microstructure Technology (IMT), Karlsruhe Institute of Technology (KIT), Karlsruhe, Germany
and
the Laboratory for Applications of Synchrotron Radiation (LAS), Karlsruhe Institute of Technology (KIT), Karlsruhe, Germany
They all disagree with you.
"Based on these findings, we believe that PerkinamineTM-based SOH devices may open path towards long-term stable MZM that offer unprecedented efficiency and compactness and that can be seamlessly integrated into state-of-the art SiP circuits... Based on our experiments, we believe that long-term stable SOH devices offer an attractive path towards highly scalable ethernet transceivers with lane rates in excess of 200 Gbit/s."
It did not happen in the past, therefore it will not happen in the future. That's your argument?
What you just stated is an "argument from ignorance." The term is was coined by philosopher John Locke 400 years ago.
"A proposition is false because it has not yet been proven true."
https://en.wikipedia.org/wiki/Argument_from_ignorance
Hi Polymer Paul,
Revenue and market penetration is a good idea. That is what the company is working towards. They are not "chasing 800Gbps". They are being designed into the 800Gbps ecosystem that requires dozens of companies along the value chain.
To say they need to box off some deals at a lower data rate is missing the entire point of how the industry is structured. See the attached slide from Microsoft Azure.
800G began its GA (General Availability) by hardware manufacturers in 2022, with more companies continuing to release their 800G products in 2023/24. As you can see in the chart, Microsoft is nearly complete with their 400G rollout to all their datacenters, with only approximately 10% of their network needing to be upgraded from 100G to 400G. This means there is not much money to be made in 400G when compared to 800G's imminent rollout.
The conclusion is that we are right on time for 800Gbps nodes to include LWLG's technology. It is important to zoom out and view this industry as an entire ecosystem that must converge at a single point in time to transition to the next node. This convergence is happening right now and LWLG positioned right in the middle of it at exactly the right time.
Here is the full video. The slide I attached is shown at 34 minutes.
I don't have an opinion on that. The company is having daily calls with foundries to complete the required work. The company has stated they expect to announce a commercial deal with a foundry by the ASM in May 2023. We are in the window for this announcement.
The end-user commercial deals are not a gating factor for a tech transfer to a foundry. The deals are worked in parallel, not in series.
That said, the commercialization timeline released by the company does in fact state the order to expect these deals. Tech transfer to the first foundry is scheduled for 1st half of 2023. Commercial acceptance and ramp is scheduled for 2024.
Did anyone notice the Chromosol PR (November 29) states that they plan to enter the 800Gbps integrated photonics marketplace? Meanwhile the Polariton PR (December 13) states the world-class results are well suited for transceivers beyond 800Gbps.
So it looks like we will see LWLG tech at the next node of 800Gbps and the Polariton partnership is for the following generation of product. LWLG is working on locking down partnerships for decades of competitive advantage.
https://finance.yahoo.com/news/lightwave-logic-polariton-technologies-announce-133100292.html
https://finance.yahoo.com/news/lightwave-logic-acquires-polymer-technology-133100327.html
We do know exactly why the company expanded the lab by 9,000 square feet. It is to "focus exclusively on reliability testing - all with the goal of expediting data sets that are needed for commercialization with end-users. We expect to have this data in hand during 2023, laying the foundation for performance demonstrations in 2023." (shareholder letter, paragraph 4)
https://s3.amazonaws.com/b2icontent.irpass.cc/2586/rl114556.pdf
End-users are the data center and telecom operators. The companies in the far right column.
This was my biggest takeaway from the shareholder letter. Transceiver partners and foundries are not the only groups in discussion on test results prior to implementation. We are actively engaged in discussion with end-users to provide reliability and performance demo's this year. Once they are satisfied, these end-users will put in the huge contract orders with the foundries.
All levels of the supply chain are working in parallel towards approving LWLG's material systems. These approvals are expected to be finalized prior to the customer acceptance and ramp in 2024. All of this is public information.
Great. Now personal attacks from an anonymous message board poster against a PhD in Electrical Engineering. Today has been pretty entertaining.
Jose Pozo could have chosen any of the 500+ Optica member corporation CEOs, but he chose Dr. Lebby to lead a discussion on “Scaling PICs for Volume Production.“
Bio:
Based in the Netherlands, Jose Pozo is the architect of Optica's strategy to serve corporations around the globe. In his role as Optica's chief technology officer, Pozo leads the organization's corporate engagement efforts with a focus on building relationships across the industry’s diverse community of optics and photonics companies, giving a voice to innovators, and working directly with CEOs to expand their trusted network of contacts, collaborators, and partners.
https://events.photonics.com/Presentation.aspx?EID=9&PID=373
Photonics Spectra Conference
January 12, 2023
11:00AM EST
PANEL DISCUSSION: Lessons Learned When Scaling PICs for Volume Production
Moderated by: Jose Pozo, Optica
Presented by:
Hanjo Rhee, Sicoya GmbH
Claudia Hoessbacher, Polariton Technologies
Michael Lebby, Lightwave Logic
Michael Geiselmann, LIGENTEC
An all-star panel discussion hosted by Optica’s Jose Pozo and featuring experts from the entire PIC value chain to discuss lessons learned when scaling PIC production for volume applications.
12:05PM EST
How Electro-Optic Polymers Boost PIC Speed and Power Efficiency
Presented by: Michael Lebby, Lightwave Logic
Steadily growing demand for bandwidth continues to put pressure on data centers and optical networks to increase the speed of their optoelectronic components while decreasing overall power consumption. This pressure has fueled interest in electro-optic polymer materials, enabling a new generation of modulators demonstrating ultrahigh speed and ultralow power in transceivers, line cards, servers, and routers. Further, these electro-optic polymers offer expanded latitudes for hybrid integrated photonic chips by allowing integration with incumbent silicon or indium phosphide photonic chip platforms.
The current class of polymer modulators enabled by this technology can deliver 3-dB bandwidths over 100 GHz with sub-1-V voltages in devices with extremely small (<1-mm length) footprints. The modulators are highly suitable for powering optical engines designed for pluggable transceivers and/or co-packaged modules.
Lebby reviews the potential solutions that electro-optical polymer modulators offer to integrated and hybrid photonics integrated chips (PICs), and he discusses their relevance to PIC packaging operations.
https://events.photonics.com/Schedule.aspx?EID=9&TID=44&OC=LI
Great question pitcook. According to the company, they will enter the market at the 800G node. Moving from 400G to 800G is the point where current technology is stretched too thin and higher risk will be realized by incumbent technologies, i.e. moving to 8 lane PAM-4 or increasing to 4 lane PAM-8 or even moving to coherent optics for short reach.
1) Moving to 8 lanes increases complexity and increased probability of failure with the higher number of components.
2) Moving to PAM-8 or coherent requires more sensitive and costly DSPs. These components are higher in money cost as well as power budget. This is why coherent has only been used in high capacity long reach telecom links, not short reach data center applications.
With LWLG 100G modulators, 800G can be reached by 4 lane PAM-4 or 8 lane simple NRZ signaling, removing the need for a driver chip and using a lower cost DSP.
800G is the "fork lift upgrade" where hyper scale datacenters are looking to completely redesign their network architecture and are actively looking for disruptive technology to implement in the new designs. This will be done over the next three years, exactly lining up with LWLG's stated commercialization timeline.
Again, the exact timing of groundbreaking news will be impossible to guess. Those who sell now will regret it forever and those that are just buying in will think they are the best stock picker in the world by this time next year.
From the company:
"The advanced fabrication processes of ALD with temperatures below 100C will solidify the company's market position with both the company's manufacturing foundry partners as well as end-users as it prepares to enter the 800Gbps integrated photonics marketplace."
https://finance.yahoo.com/news/lightwave-logic-acquires-polymer-technology-133100327.html
Thanks for that expert insight Jeunke. It sounds like all of the experts agree with one another and disagree with anonymous message board posters. Seems about right.
Many of the long term shareholders have a mutual friend who is a materials research scientist and inventor. He shared his insight on testing today. Hopefully this settles it.
"In a commercial operation, reliability and stability testing increase as the process matures towards scale up. In the beginning, many process tests are done as experiments to define the tests needed to achieve the goals. Towards the end, fewer experiments are done and more demonstrations to prove the the materials are right and the tests of those materials are right to provide a robust product. This is for one product. Many products will have many process testing activities. Each product will likely have some variation in process testing path focused on the specification needs of the product. Two reasons come to mind with the need for increased testing. First, product is closer to scale up. Second, more products are being developed. The naysayers want you to believe more testing is indicative of more problems. This absolutely cannot be concluded from evidence of more testing activities."
News was just released from COBO (Consortium for On-Board Optics) including presentations from Microsoft and META(Facebook) during their closed meeting two months ago.
All of the largest data center operators are now repeating Lebby’s 2017 presentation almost verbatim. Below is Microsoft and META(Facebook) calling for radical innovation. This is the opportunity Lebby spoke of that "only comes around once in a blue moon”. He had the vision five years ago and positioned the company perfectly for what we started seeing in 2022.
Microsoft
It’s a huge deal and very uncommon for behemoths like Microsoft to call for market disruption. Incumbents don't like disruption because of the perceived high cost of switching to new technology. There are only a few scenarios where these large companies make the switch.
1) The current development path will not satisfy the market need. (check)
2) Ignoring or dismantling the disruption will cost more than adopting it. (check)
3) There is a clear and long roadmap for multiple generations of the new technology. (check)
4) The new technology is not incrementally better, but orders of magnitude better than incumbent. (check)
"Incremental scaling of link bandwidths are not sustainable. Next gen data center networks will require new approaches." - Microsoft at the Optica + COBO Summit Oct 2022
https://www.linkedin.com/posts/consortium-for-on-board-optics_microsoft-datacenter-fiberoptics-activity-7014084925289107456-pYvN?utm_source=share&utm_medium=member_ios
META (Facebook)
META's hyperscale data centers are now looking to get rid of the driver on their chips to reduce power consumption. This will require low-power high-bandwidth modulators like the ones LWLG is developing. I know of no other modulator technology or material that can remove the driver chip. Again, something Lebby has been talking about for several years.
"Integration has Power Advantage" - Meta at the Optica + COBO Summit Oct 2022
https://www.linkedin.com/posts/consortium-for-on-board-optics_fiberoptics-datacenter-power-activity-7014089042380169216-Y_OM?utm_source=share&utm_medium=member_ios
Hi MNGA,
Great question. It takes a lot of discipline to stay invested right now. I am not moving a muscle until that licensing deal and commercialization happens. I told myself years ago that I would not begin to sell my shares until two things happened.
1) Uplist to a major exchange (completed last year)
2) First commercial deal signed (will complete in the next six months)
Everyone should have an investment thesis and stick to it until new information voids that thesis. My thesis is still fully intact. So to answer your question, I do not like seeing the share price at this level, but I expect a full rebound in the next six months so I am not fretting in the slightest.
Like I said before, judging an R&D startup just before commercialization is like judging your barber halfway through your haircut. It might look bad in that single snapshot of time, but he's not finished. To use a poker reference, all my chips are on the table until I see the cards. It would be foolish to fold now. We are on the river.
Look at almost any publicly traded disruptive startup just before commercialization. Most of them have stock price decreases and give new investors one last chance to jump in just before product launch. This anomaly is due to many factors. A big one is the fact that management must balance the information flow as to not give away their competitive edge while still providing a satisfactory answer to current shareholders. The need to protect the competitive edge increases as commercialization becomes imminent. You don't want to tip your hand to competition that could possibly stifle the disruption you're about to cause in their market share.
It is clear that Lebby expects competition, customers, and partners (future and present) to read the shareholder letter. If you read through some of the passages, it becomes clear that certain information is meant to signal specific progress to these different parties while keeping other paragraphs targeted towards satisfying shareholder demand for information.
Anyone who jumps in now will think they are the best stock picker in the world by next year. Anyone who bails out now will regret it for the rest of their life by this time next year. The exact moment of groundbreaking news will be impossible to time, so best to stay fully invested over the next year. That's my summary of the situation.
This is a great, honest, informed, and balanced summary of the current state of affairs. Thanks.
I agree with your statement that it is good to disagree. Best of luck with your trades as well as your investment holdings.
Since we fundamentally disagree, there is no use debating the details when we can't even agree on the broad strokes. If this company realizes strong long term share price growth, we will know the CEO did a good job. I am simply saying an option trader with a finite time frame for success will probably not be happy with this company or the stock and should move on.
Many of us have been here for over a decade and have built friendships with one another. I hope to continue to do so. This is why we post on this message board. I have met a few dozen really smart long term investors through this message board. I have met some traders too. It is interesting that the long term investors I've met are rich while the traders are not. The long term investors I've met are optimistic and kind while the traders are stressed and pessimistic. This is just anecdotal evidence, but for me it has been enough to know who my tribe is.
Again, I fundamentally disagree with your entire sentiment. LWLG's CEO is certainly serving the long term shareholder base by creating long term stable share price appreciation and acting is such a manner to completely disregard short term benefits. He is doing a great job at this. Lebby is a CEO, not a CTO. He does not serve stock and options daytraders.
If you read the board, it is clear that daytraders are upset while long term shareholders are not. The value creation here is very evident and is at a culmination point.
I posted this a couple days ago. It was stated over twenty years ago and it is even applicable here.
We fundamentally disagree. What you suggest is not a good use of the company's time. Your needs as an options trader is different than my needs as a long term investor.
I just need the company to commercialize and begin generating revenue in a multi-billion dollar market. The share price will follow. You need the share price to increase or decrease in a specific time frame.
You are focused on share price. I am focused on the company's business progress. We will see in time who's strategy is correct.
The price in six months will not be under four dollars because the company will have a signed deal with both a partner and a foundry. I did not invent that time frame, the company did.
“I think he probably has incentive(as public CEO's do) to portray things to sound more positive than they really are, which may not always be in the shareholder's best interest.”
-tedpeele, anonymous message board member
“In the long term, there is never any misalignment between customer interests and shareholder interests.“
-Jeff Bezos, Founder of Amazon
Conclusion: So long as Dr. Michael Lebby is working tirelessly to satisfy the data center customers, he has the shareholder’s best interest at the heart of the company. He probably does not and should not have an option trader’s best interest in mind. This is where the difference in perspective lies.
Proto, thanks! Even better! This means both the devices AND the material systems are one generation ahead of schedule.
Here you go:
2022 ASM
Start at 42 minutes. The goals you referenced are for the twelve months following May 2022 until May 2023.
That's a fair point Farmsara. I personally believe we will see a PR explaining the significance of the progress before year end. If you are reading this board and watched today's presentation, perhaps you can consider yourself a lucky first adopter before a formal PR is issued.
I watched a Warren Buffett interview recently where he said you don't need inside information to be successful in the market. Most people don't even read the annual report before investing in a company. You can do a lot with what he called "outside information". Everyone who just saw this presentation now has first mover advantage on this outside information.