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Slide 27 clearly states "Polymer PDK operational in foundry" under the "EO polymer PDK status" column. So they met their time guidance.
More important to me is slide 29 (Technology roadmap) where it clearly shows they are exceeding their time guidance. Their technology roadmap is ahead of schedule by a lot, an entire device generation. The first slide below is from one month ago and shows that they expected to have a 200G product in the next six months and 3200G sometime in 2023. Now they show they will reach 400G in the next six months and 6400G by the end of 2023. Progress is accelerating. "When this rolls, it's gonna roll."
Old:
New:
I bet you judge the barber halfway through your haircut. They aren’t finished. Patience my friend.
Listen from 50:45 until 57:30 to hear the specifics of power consumption savings, low power DSPs, removing drivers from the ASIC. Anything and everything that has been discussed today is old news that was addressed 13 months ago and is in the final stages of qualification.
LWLG presentation 12 Nov 2021
Great analysis Lewrock. I've personally been involved in BTU calculations for air conditioning capacity of a server room full of hundreds of server racks when I worked over in Europe. These buildings were tens of thousands of square feet, which is still quite small compared to the hyperscale data centers of Amazon, Google, etc.. Davisa, a colleague of mine, helped oversee one of these server room buildouts as well. The calculations include every component and device being installed in the room. It is a very tedious process, but also extremely precise.
I can guarantee, without a doubt, that hyperscale data centers know the precise current power and HVAC requirements of their datacenters. I can also guarantee they have a team responsible for calculating future power requirements and BTU calculations for cooling of new architecture changes using the next generation of devices.
Essentially, my point is that the end users we are working with have the ability to calculate precisely the amount of power savings from a polymer modulator, packaged inside a transceiver, plugged into a switch, positioned at the top of a server rack, installed inside their datacenter.
They do NOT simply calculate the 5% power savings of a polymer modulator compared to a silicon modulator. They calculate the entire power savings of the new architecture it enables.
We have heard estimates from many companies. Broadcom, Cisco, Inphi (now acquired by Marvell), and LWLG all state 25% to 30% power savings when the next generation of photonics rolls out using 400 and 800Gbps transmission speeds.
I hope this helps potential investors realize the grand scheme of progress and the billions in power savings coming our way. The ability of LWLG to capture that power cost savings in the form of revenue will be the ultimate success story of this company. The first news is due any day now to show results from foundries. The news shortly following will be contracts to transfer the tech for production. The news shortly following that will be revenue from some combination of foundries, tier 1's, and hyperscale datacenters. This is happening. Place your bets.
That answer makes so much sense to the initiated.
StevenDice,
That is a GREAT book that clearly spells out what we are seeing with LWLG. If I were the CEO of a disruptive startup, I would not give a second thought about whether options gamblers made any money speculating on my company's success. I also would not care much to attract swing traders or day traders to increase trading volume. The decisions I made would only satisfy two types of investors.
1) Institutional investors with large long-term positions.
2) Retail investors with a long investment horizon.
If you don't fall in either of these two categories, your interests probably are not aligned with the ultimate success of the company and you will likely not make money in a publicly traded startup moving from R&D to commercialization. It is simply too difficult to time the progress due to the thousands of variables.
I wish the best of luck to the gamblers, but in my opinion the only people here that will continue to make real money will be the long term investors whose interests are aligned with the vision set out by the CEO of LWLG. This is how it should be and this is how it will be.
Lewrock, that is my understanding as well based on Jeunke's first hand experience when he attended the PIC Summit a couple weeks ago.
Xena,
I wish I knew. There is probably a lot of latitude to the structure of the deals. One thing is for sure, it will come into focus in the next six months.
From wikipedia:
"They are usually loaned to OEM manufacturers prior to the chip's commercial release to allow product development or display. Engineering samples are usually handed out under a non-disclosure agreement or another type of confidentiality agreement."
https://en.wikipedia.org/wiki/Engineering_sample
Based on this excerpt, it seems that the system integrators and OSATs will use (or are using) these beta prototypes to build and test their final packaged systems. Once this is signed off, we get the license and tech transfer finalized and can start production.
Beta prototypes, also known as engineering samples, are expected in 2H22/1H23. According to the company presentation slide "Commercialization with timing", these samples are built "using silicon foundry fabrication".
Simply put, these are beta prototypes that were built inside the foundries on their wafers and are expected anytime in the second half of 2022 (now) and until the end of the first half of next year (end of June 2023). We are five months into the twelve month time window to expect these beta prototypes, so this is why I stated we can expect them "any day now".
Let me summarize my last post:
(1) Alpha prototypes built in foundries, expected in the next five weeks.
(2) Beta's, literally any day now.
(3) Licensing agreement, also could be any day now.
(4) Tech transfer to foundries, expected any day after January 1st, 2023.
Revenue could be recognized in step 3, step 4, or shortly following step 4 when full scale production begins.
My favorite slide "Commercialization with timing" from the shareholder meeting last May and my commentary below.
(1) "Proof of concept prototypes with fabrication from silicon foundries" are expected by the end of this year (in the next five weeks).
Proof of concept prototypes, also called the alpha version.
(2) "Engineering samples using silicon foundry fabrication" are expected in the current window from now until June 30, 2023.
From wikipedia:
"Engineering samples are the beta versions of integrated circuits that are meant to be used for compatibility qualification or as demonstrators.[1] They are usually loaned to OEM manufacturers prior to the chip's commercial release to allow product development or display. Engineering samples are usually handed out under a non-disclosure agreement or another type of confidentiality agreement."
https://en.wikipedia.org/wiki/Engineering_sample
It seems reasonable to expect the partners to remain unnamed under NDA until the beta evaluation is complete. We all know what comes after beta versions. It is full scale manufacturing and commercialization starting with signed licensing and tech transfer agreements.
(3) "Licensing/supply agreement" is expected anytime from now until June 30, 2023.
(4) "Technology Transfer definition and qualification" is expected anytime between January 1, 2023 until June 30, 2023.
This company provided timeline is the only timeline. All of us long term investors should not give a second thought to how people on a message board feel. How someone feels does not change the facts. Just investigate the industry, competition, and the company to come to the right conclusion. This is a great short term investment opportunity with a time horizon of six months. This is a once in a lifetime opportunity with a time horizon of three years.
Below is a spreadsheet developed and updated quarterly by Lewrock and his commentary on the topic of Institutional Ownership:
"The short interest changes are driving everything. Remember the "retail ownership" is Total shares outstanding (130,277,842) minus reported Institutional Ownership (24,891,091). As noted two institutions have not reported.
What I think is most interesting is the year to date changes. The growth in Institutional Ownership has been 98.3% funded by the short interest growth. The growth in Retail Ownership has absorbed 85.6% of the new shares issued to Lincoln Park Capital."
Here's a new research paper commissioned by GlobalFoundries. We are finally watching this emerging industry take center stage. Some early investors admittedly jumped in 10 to 20 years too soon, but it's finally go-time.
"Silicon photonic technology is quickly advancing to replace traditional silicon electronics, and GF is one of the companies leading the way.
Check out the latest research paper from Patrick Moorhead and Moor Insights & Strategy for a look at how silicon photonics and the #GFFotonix platform are changing the future of computing"
https://moorinsightsstrategy.com/wp-content/uploads/2022/11/Silicon-Photonics-Are-Here-And-GlobalFoundries-Is-Innovating-By-Moor-Insights-And-Strategy2.pdf
For the record, I'm not replying to you to help you conduct proper due diligence. I'm only posting this because it may be of use to others lurking on the board. That said, I would encourage you (and others) to view the 2021 shareholder meeting. This is where the "leading the pack" statement first appeared.
You just stated, "I don't think Dr Lebby even has said so. His statement that they are 'leading the pack' I believe was referring to polymers only."
Your statement is false.
Dr. Lebby was in fact referring to InP, LN, and Silicon. These are the other three modulator technologies and polymers are clearly "leading the pack".
I fully agree with you Jorge. My opinion on a fact is purposefully being conflated with the fact itself. My opinion should not be cited as a factual source. Everyone should do their own due diligence.
I even said at the end of my post that I don’t fully understand the implications of different wafer sizes, but that part of my post is being conveniently ignored.
There are very few people on earth that understand the intricacies of bringing polymers to a CMOS foundry. We know who they are. They all have PhD in their title and work for LWLG.
Thank you for taking the time and for sharing this good find.
Thanks Jeunke, for this additional insight.
First Western Trust Bank disclosed a new $1.7 million investment in LWLG yesterday. They only have 167 total holdings. LWLG meets their obviously stringent criteria.
https://fintel.io/so/us/lwlg
Thank you! Enjoy your night.
The more I think of it, it has to be SilOriX. If it was a foundry or packaging partner it would be recognized on the 10q as an R&D expense, not a loan. An established foundry or packaging partner might charge LWLG money to proceed through development, but they wouldn't ask for a loan.
SilOriX is a spinoff of Karlsruhe Institute of Technology and early stage startup.
That's a great idea. I'll take a look for patents too. Forztnt2 is the best person here at finding patents. Maybe he can help?
Polariton is in Switzerland. Switzerland uses the Swiss Franc.
Conversely, SilOriX is a German company. Germany uses the Euro. This loan from LWLG was either to SilOriX or a European foundry/packaging partner.
I hope to hear more on this from the company soon. One thing is for sure, there is some serious movement towards commercialization going on behind the curtain.
Thank you. Many people appreciate your perspective and your willingness to counter illogical and dishonest information with facts.
I know KCCO as well as myself and others have continuous communication with industry participants, both analysts and engineers. I would recommend connecting with these people on LinkedIn if you want to know the truth about the state of the photonics industry.
Those who know much about the semiconductor (electronics) industry do not necessarily know much about the current state of photonics. They know even less about the future state.
Michael Lebby, Fred Leonberger, and Jim Marcelli were at OFC San Diego in March. I saw them. They were leaving Corporate Village "a private meeting space to connect with your customers".
https://www.ofcconference.org/en-us/http/ofc-cmsstaging2001-osa-org/library/images/ofc/2021/2022-ofc-corporate-village-contract-pdf/
I approached and spoke to Michael Lebby briefly. He was on his way to yet another meeting. They were very present and very active at OFC 2022.
LWLG is positioned as a materials supplier at the first point in the supply chain. Merck didn't have a booth. Umicore didn't have a booth. Both of these companies sell billions worth of materials into the semiconductor industry via foundries.
Your analysis and conclusions are lacking.
To answer your question, President Biden will be at Viasat Headquarters today here in Carlsbad, CA, my former employer that I spoke of yesterday.
"The President delivers remarks at an American technology company that will benefit from passage of the President's CHIPS and Science Act and more chips being made in America (11:45 AM Local)"
https://factba.se/biden/calendar
Thanks Jeunke. Really looking forward to hearing your notes from the PIC event and hope you enjoy dinner with Walter and Lebby.
No worries Killercliff. I never learned it either until sitting in on some of the sales funnel meetings with my last employer. It was pretty interesting stuff to see how rigorous the process was. As you know, missing a revenue forecast is a HUGE deal.
They had very stringent metrics to calculate the probabilities to avoid missing a forecast. Even so, we did have times where the opportunity would reach 100% probability based on customer interaction even months before the contract was finalized. Maybe we should have called it 99.9% since the deal isn't done until it's signed, but we rounded up to 100. I think that's what Lebby is doing.
A business opportunity is measured in probabilities. For example, my last employer was a publicly listed company. The VPs needed to provide the CEO with all of our open opportunities, expected sales, contracts, etc. with an attached probability that they would close by the end of quarter. This funnel forecasting is where revenue forecasts come from in a publicly listed company.
So when Lebby states an opportunity is guaranteed. He is saying he expects there is a 100% probability that LWLG will be designed-into the high-speed, low-power modulator market opportunity that moved front and center starting with OFC back in March of this year. This guaranteed opportunity statement is a big deal in the context of corporate business. It was not stated in the context of lottery tickets.
LWLG was a spin-off of DuPont some twenty years ago. Now DuPont, a thirty billion dollar company, is pushing polymers for applications in datacom and telecom. Polymers are breaking the dam and LWLG is sitting in the middle of a small stream that is about to become The Nile.
Jose Pozo states, "One of the attractions of the first ever Optica Industry Summit, was that it was hosted at DuPont Silicon Valley Technology Center. Another good reason to come to the event, to give us a tour of how to use the polymer material to enable many markets. Among them, of course, datacom and telecom solutions."
At 33 minutes Lebby made an unprecedented statement (in bold). And like other's have said, the timeline remains in-tact to publish results from two foundries in the next 60 days.
"The thing that I want everybody to realize is that earlier this year, the whole field of modulators that work with really high speed and low power really opened up. There's a bunch of technologies out there. We are actually leading the pack. Part of the field that the customers realize that if they want to add value to their customers, which is the service providers, then they are going to have to have faster modulators working at lower power. So this is like a guaranteed opportunity. It's huge. This is where the internet needs to go. We are engaged in this quite deeply. And it is just a really exciting vehicle right now."
https://www.iheart.com/podcast/269-the-drill-down-81530167/
I wonder why Lebby agreed to go on this podcast again. He participated in this podcast after LD Micro last year as well. The host, Cory Johnson, did the exact same thing. He had a pleasant conversation with Lebby. Then after closing out the interview, he insinuated the company would be a good short target.
He wasn't wrong because the short interest spiked to 20 million shares over the following eight months. However, what a cowardice act to have such a forthright interview, let the interviewee drop off the call, and then immediately bash them. He could have simply asked the CEO of the company why they have spent $100 million in R&D over the last 15 years. There is a simple answer. This is just Cory's M.O..
Original podcast 10-13-2021:
https://www.iheart.com/podcast/269-the-drill-down-81530167/episode/ep-116-lightwave-logic-ceo-dr-87996792/
During the recent LD Micro presentation Lebby stated, “Being on the NASDAQ, being on the majors, that’s allowed us to put a universal shelf in place of a hundred million last year. So we’re working through that little bit.”
It doesn’t sound like we should discount the likelihood of using the shelf.
At 1 minute 10 seconds:
In Lebby’s LD presentation yesterday, he said LWLG’s fab uses 4 inch wafers (100mm). This is news to me. We do know the large fabs like GlobalFoundries use 300mm wafers in production. This might not seem like a noteworthy difference since the diameter is only three times larger. However, traveling back in time to my high school geometry class, the area of a circle is p * r^2. This means the surface area of each wafer is 7854 square millimeters for the 100mm and 70686 square millimeters for the 300mm wafer. So, the 300mm wafer produced by GlobalFoundries fits nearly ten times the amount of chips on it.
For me, this is one more data point that helps explain why they are having daily calls with the foundries and partners to work towards completion of these PDKs. Perhaps they need to ensure the polymer is consistent across the entire wafer that has about ten times the surface area compared to the prototypes produced at LWLG’s fab. I can’t imagine what this would entail, but I am looking forward to the announcement that this work is complete.
Thanks for sharing this great info LR. Also, there are formulas defined by the National Institute of Standards and Technology to help determine if a sample size of N=1,000 is statistically significant. It is.
https://www.itl.nist.gov/div898/handbook/prc/section2/prc222.htm
Also, you initiated a discussion about the new restrictions on selling chips to China. I believe the restrictions must be viewed in context with the CHIPS Act.
Here's what I would call my text book answer and I think that's what we are seeing here. When the government prevents companies from selling products or services to foreign companies in a free-market economy, the government must also provide subsidies to remain competitive with the foreign companies that are not subject to those restrictions.
For example, Applied Materials (AMAT) has about 25% of their $23 billion in annual revenue coming from China. AMAT's R&D budget is about $2.5 billion. The lost revenue from these new restrictions are greater than AMAT's entire R&D budget. As you know, R&D is the main thing ensuring a tech company will still exist a decade from now. By restricting AMAT's ability to recognize revenue from China, AMAT will realize a huge reduction in R&D budget. If the federal government wants to remain technologically competitive to China, they carry the burden of writing laws that create a market environment for innovation to be created. Since companies need money to invest in innovation, the government is then responsible to provide that.
More plainly, the US government took away AMAT's R&D budget, but plans to reimburse it via the CHIPS Act. My conclusion is this is a good long term strategy for both industry and the security of the American public. China doesn't get American chips and American companies still get the money they need to stay in the lead.
As this pertains to LWLG, they seem to have seen the writing on the wall extremely early and decided not to engage with Chinese companies. LWLG is only conducting business with US and Europe to gain market acceptance. A great proactive strategy put in place years ago.
By the way, I hadn't heard of the CHIP WARS book you referenced. Thanks for the great recommendation.
Hi Cincinnatus,
Great question. The company did not state they will have a signed deal by the end of 2022. That optimistic statement came from members of this message board. The company stated they will have foundry results for volume scale by the end of 2022. This expectation is for results from two foundries in 2022 and several more to follow in 2023. These results may or may not include a signed deal and that potential signed deal may or may not include initial revenue.
However, the company did state they will have two signed deals by May 2023. These deals are the revenue generating commercial deals we are waiting for. According to the company's 2022 shareholder meeting presentation, the deals are for the sale, licensing, royalty, or tech transfer of LWLG's product. One deal will be with a partner and one deal will be with a foundry. These deals can come anytime between tomorrow and the 2023 annual shareholder meeting next May.
I am not interpreting any statements, I am sharing the exact information that was released during the investor presentation linked below at the 42 minute mark.
“Richard attempted to respond, and got exasperated after a few issues..and said it wasn't worth his time, and stuck to that position.“
Exasperated: intensely irritated and frustrated.
You think replying to lies on a message board made me exasperated? No sir. I am sad this once great message board has become a place of despair and untruth.
-Less than three months for published foundry results.
-One commercial deal with a partner within seven months.
-One commercial deal with a foundry within seven months.
The rest is noise. No matter how loud they yell their opinion, it’s still just noise.
Yeah a very wise shareholder we both know told me what makes a good investor is the ability to make the right decisions without all the facts. By the time the market has all the facts, the price has already realized its full appreciation. If you can’t connect the missing dots correctly, you should not be investing in a pre revenue startup.
Fully agree. It is far more meaningful to take a look at the companies that uplisted without a reverse split or help from investment bankers and still do NOT have 25% institutional ownership. My guess is that LWLG is the only company that falls into this meaningful category. They are in a class of their own.