Lightwave Logic : a new data transmission highway for the future.
More data: simpler, faster and with very little power consumption The main reason for this article is to share with you a business perspective on Lightwave Logic and to create some understanding at the enormous task at hand.
Lightwave Logic (OTCQB: LWLG) is a technology platform company, leveraging its proprietary technology platform to develop next-generation electro-optic polymers which increase the efficiency of internet infrastructure by converting data into optical signals, allowing more data to be transmitted at significantly higher speeds and with less power than existing solutions.The need for Lightwave Logic’s proprietary electro-optic polymers is more evident than at any prior point in history, with internet infrastructure coming under increasing strain due to increased online activity. For example, during the recent COVID-19 pandemic, leading platforms such as YouTube prevented high-definition (HD) streaming in Europe due to data throughput issues in existing internet infrastructure. The Company’s current focus is on the datacom and telecommunications hardware supply chain for the 100 Gbps and 400 Gbps fiber optics communications market, seeking to integrate its proprietary materials into the devices that comprise key components in today’s internet infrastructure. Lightwave Logic’s unique value proposition, including ease of manufacture relative to traditional solutions, has driven several tier-1 and tier-2 potential strategic partners in the data and telecommunications markets to enter into non-disclosure agreements (NDAs) with Lightwave Logic to evaluate its technology for use in their devices, validating the demand for the Company’s solution in the marketplace.
Building a business which creates long term value for its shareholders is an arduous process. It may not always be totally clear to the average shareholder what it takes to do this. Shareholders and company leadership may have different expectations and time horizons in mind. Short term expectations on share performance may disappoint, especially in the case of totally new technologies. Lightwave’s CEO, Dr.Michael Lebby, needs to build a future proof business in a very dynamic global market environment, in one of the most important infrastructural sectors of the global economy: data communication and data services. To underline this importance, China declared it wanted to be the number one global leader in the digital economy by 2030. This is a business where hostile global forces send hackers and spies, or may even kill to secure technological dominance and political power. Having an ex US Rear Admiral, Tom Zelibor, as chairman of the board of Lightwave is therefore not just a coincidence. Think about it in the context of Lightwave’s mission.(The highlight of Zelibor’s military career was as Commander Task Force 50, where he led three US carrier battle groups, two Nato carriers, 300 aircraft and thousands of personnel in combat operations in the North Arabian Sea after September 11, 2001).
Moreover Lightwave is not a software company with an unique new service ( like e.g. Google, Paypal, Facebook ), but a chemical company trying to enter in the hardware field of electro optical data transmission, where the incumbent billion dollar semiconductor chip business rules, fights its own global technology and supply chain wars, and where huge financial and commercial interests are at stake. It is an industry under huge pressure to deliver faster and more data with lower power consumption. An industry required to make fundamental technology choices: from using electrons and billions of transistors on a chip to using photons and new materials with excellent light transmission capabilities on photonic integrated chips or PIC’s.This is the industry in which Lightwave wants to dominate with its revolutionary active organic chromophores or active polymers.
Obviously Lightwave’s competition has the funds, the capabilities and the will power to use its full toolbox of marketing and sales tricks to kill off Lightwave Logic in its tracks, including cutting its prices to stop Lightwave from entering its traditional customer base ( the hyperscale data centers of the Facebooks, Microsofts and Amazons or the big telecom companies) or even buying out Lightwave to put it convienently ‘on ice’, a defensive practice not uncommon in the business world. In other words, Lightwave would be eaten ‘ alive’, if it would not be able to offer an unique and sustainable ( hugely profitable ) product line up in a dynamic and changing datacom and telecom business ( the internet). Moreover Lightwave’s polymer technology covers the 1550nm and 1310nm - a first ever R&D achievement- wavelength spectra with its material, making it suitable to be used in data center distances and for distances of 10km and beyond used in the telecom business. Its Polymer Photonic Integrated chip technology ( trademark protected P2IC) is moreover suitable for application in computing, artificial intelligence, machine learning, lidar and other market sectors e.g. medical, automotive, creating a truly complete and unique ecosystem. It is clear that its uniqueness is the key to Lightwave’s future success. Lightwave’s proprietary, active electro optical organic material could revolutionize many market sectors. Its industry wide adoption will be analogous to the OLED development, the organic display material used in modern TV’s and displays replacing LED’s.
Building this new, unique business for the next couple of decades and creating exceptional value for its customers, employees and shareholders starts - like in humans- with a healthy “immune system”. A system that can withstand any attacks from the outside by hostile forces, be it hostile political or hostile competitive forces. In the case of Lightwave, the IP portfolio of 70 patents in polymer photonics is the foundation for this immunity system or the insurance policy for long term continuity. It is built on human ingenuity, the base from which any business starts on its journey to build exceptional value for the shareholders. There are currently plenty of potential big customers ( Tier 1/2 ) in silicon photonics working under NDA with Lightwave. Most of them are competitors of each other and are striving to maximize their own competitive advantage. If necessary at the cost of the other. All of them are and keep developing their own photonic solutions since none of them can afford to lose even the pretension to have the optimal solution for their big, billion dollar downstream customers. With so much at stake small Lightwave will have to steer free of compromising or angering any of its NDA partners.
Cooperation, collaboration and standardization are currently buzz words in the photonic industry. Industry associations like AIM, EPIC, the Ethernet Association and cooperation for co-packaged optics, on board optics - COBO, Lambda 100 MSA - try to align their common interests. The recently adopted ISPR 2020 roadmap is the result of a combined global scientific and industry effort and maps out the needed technology and customer requirements for the next decade ( 2035). Lightwave’s polymer technology figures prominently ahead of all other incumbent technologies in addressing the industry pain points of the next decade.
It is not uncommon that the most powerful companies ultimately determine the direction for standardization and the standards. Since the large data center operators and telecom companies will benefit from ( vendor/ product) standardization in terms of costs, speed, reliability, serviceability and power consumption, they will drive the agenda. For the upstream vendors ( device manufacturers and system integrators), standardization may lead to commoditization, but possibly to the loss of ( brand and product) margin differentiation.The competitive forces at play here are, as we speak, are meeting in virtual conferences to address how to move forward more diligently. Lightwave Logic is not part of the incumbent problem, but is part of the solution. It is a member of OIF and MSA and participated actively in EPIC and global roadmap meetings to promote its polymer photonics technology solution. For the last few years Michael Lebby has created awareness for the unique performance, reliability and power consumption capabilities of Lightwave’s chromophores.
Design simplicity, the use of incumbent CMOS manufacturing practices and the excellent add on to incumbent material technologies, like silicon and indium phosphide, will enable the industry to benefit from Lightwave’s technology in terms of speed, costs and low power. Lebby’s efforts have resulted in many NDA agreements and a rich and all encompassing IP portfolio of 70 polymer related patents. Lightwave Logic is the only supplier of polymer photonics and has patent exclusivity for any application in combination with silicon or indium phosphide. Lightwave itself has moved over the years through various development stages driven by a combination of changing market requirements and new leadership insights. Its strategy and focus evolved from a material chemistry company to a photonics modulator/ device company and is at present ideally positioned to play an active role in the upcoming co-packaging, on board optics and photonic integration ( PIC’s) revolution. Adoption of its polymer technology by one of the current Tier 1 companies would deliver a final stamp of industry approval and would open a treasury chest for its patient shareholders.
Shareholders in Lightwave Logic have exercised great patience over the years. Most have understood the arduous process to build a company with a new technology in one of the most competitive markets in the world. They have understood the need for cautious communication given the competitive dynamics at play. Michael Lebby recently revealed that Lightwave’s technology was used on a silicon photonics platform. This is a milestone in the companies’ history. It means a stamp of approval on performance and reliability by a Tier 1 industry player.
With no debt and just over 100 million shares outstanding the company is able to capture a market position in the growing photonics market. A market which is forecasted to grow to $ 45B in 2025. Lightwave’s management claims it can capture a third of this growing market or at least $ 10B of recurring annual revenue. Well, everybody can do the math and immediately understand that the current $ 1,25 share price is a pittance and waiting to explode upon the announcement of the name of its first Tier 1 silicon photonics partner.
About the author:
The author served a member of the senior corporate technology team of a Fortune 150 company with senior executive responsibility for its global microwave business
