24 November 2021
POET’s Q3 sample deliveries slowed by industry supply chain challenges
For third-quarter 2021, POET Technologies Inc of Toronto, Ontario, Canada — a designer and developer of the POET Optical Interposer and photonic integrated circuits (PICs) for the data-center and telecom markets — has reported a net loss of $3.5m ($0.01 per share), level with a year ago but cut from $4.4m ($0.02 per share) last quarter. This included R&D costs of $1.2m, down from $1.8m last quarter, driven by the current contraction in the global semiconductor chip supply chain. The current supply environment has resulted in slower deliveries of orders made by POET.
Debt-related finance costs have fallen further, from $244,000 a year ago and $95,000 in Q2 to $20,000 in Q3.
Other income (including interest) was $208,000 (up from $14,000 a year ago and $20,000 in Q2). This included $187,000 of COVID-19-related PPP loan that was forgiven.
During the quarter, POET recognized a gain of $0.4m on its investment in the Super Photonics Xiamen (SPX) joint venture with Sanan Integrated Circuit Co Ltd of Xiamen City, Fujian province (a subsidiary of Sanan Optoelectronics Co Ltd, China’s first 6-inch pure-play compound semiconductor wafer foundry).
On a non-IFRS basis, cash outflow from operating activities was -$2.8m, down slightly on -$2.9m a year ago but up from -$2.6m last quarter.
POET says that it continues to execute on its stated strategic plan and achieved the following milestones during and subsequent to Q3/2021:
- Shipped its first 100G Transmit (Tx) Optical Engine sample to a leading European optical systems company;
- Participated in the two optoelectronics conferences/exhibitions in China (CIOE 2021 and ICCSZ) that generated numerous customer engagements in both its announced Optical Engine products and its Optical Interposer platform. Notably, transceiver module supplier Shenzhen Fibertop Technology Co Ltd committed to incorporating POET Optical Engines in its line of optical modules as soon as production Optical Engines are available;
- Secured a commitment from a leading network systems company for a unique multi-engine design for 100G CWDM4 and 100G LR4 Optical Engines based on the Optical Interposer. The combined value of the NRE (non-recurring engineering) and the purchase order for initial units exceeds US$1.2m;
- Agreed the first phase of a supply agreement with a leading global supplier of lasers and other components used in high-speed optical networking equipment. The firms will collaborate on the design and production of flip-chippable continuous-wave high-power lasers for use in POET’s 400G Optical Engines;
- Converted all but $8000 of convertible debentures issued during 2019;
- Improved the cash position as a result of 97% of previously outstanding 2 November warrants being exercised prior to their expiration;
- Ended the quarter with cash and cash equivalents of $20.3m (up from $6.9m at the end of 2020);
- Reported an unaudited cash position subsequent to quarter-end of $23.7m (as of 3 November).
“The supply chain challenges facing the industry have definitely impacted our schedules for delivery of initial samples to customers. Nevertheless, we are now producing samples in the volumes we had expected and are shipping those samples to customers,” says chairman & CEO Dr Suresh Venkatesan. “While it has been a long time in coming, we delivered the first complete Optical Engine to an initial customer,” he adds. “We had a great showing at CIOE in China, with both Super Photonics Xiamen (SPX) and our Shenzhen team following up on the interest in our industry-standard Optical Engine designs,” Venkatesan continues. “In addition to our standard products, we are seeing substantial interest in novel architectures and in our 400G/800G and co-packaged optics designs. To move these projects forward, we are collaborating with one of the world’s leading laser suppliers, as part of a determined effort to meet and surpass the expectations of the industry for advanced products as we enter the new year.”