Poet Technologies Inc (POET)

[prototype_101]

excerpt from Zacks report, Observers had expected the industry to swiftly move to 400G for at least the past year but high costs and limited availability of certain electronic chips have stymied that transition. The few end users that are forging on are making due with 100G, 200G, 2 X 200G, or even 4 X 100G transceivers rather than pay a premium for the far more expensive current 400G transceivers available. Specifically, Amazon is said to be paying up for 400G, while Facebook has opted to use 100G and 200G for now. Microsoft has said that it refuses to implement 400G until it can use 400GZR to connect its regional data centers so possible not until next year. Widespread deployment has not occurred because data centers also need to figure out the power and cooling distribution to support it. Even with that figured out, costs still need to come down. A 400G transceiver module is still costs more than 7 times the cost of one 100G module for 2+ km reach. While users will pay up for 400G, it is believed prices still need to come down to 3X 100G before sales of 400G will take off, fitting in perfectly with the costs saving POET may be able to provide.

https://s1.q4cdn.com/460208960/files/News/2020/Zacks_SCR_Research_07202020_POETF_Thompson.pdf

timing for Poet is perfect, I only question why the ramp in sales is not expected to occur quicker than the Zacks report suggests here,

In 2021 we expect several million dollars in NREs and the start of production revenues near the tail end of the year. We are starting with what could be a conservative estimate of $5 million, which could ncrease as we see contracts announced and progress on production. We are looking for a loss of approximately $15 million or $0.06 per share.

https://s1.q4cdn.com/460208960/files/News/2020/Zacks_SCR_Research_07202020_POETF_Thompson.pdf