POET Technologies Inc.

I have written something like this before. However, many keep stating on this forum that they invest but don’t understand the technology. I state openly this is not meant for long term POET enthusiasts. Additionally, as Warren Buffett states: “understand your investment”. It is for those who have recently joined this forum who may not know what a microprocessor is and are relying on hearsay about how good it is. I hope it helps you grasp what POET offers.

All microprocessors are made up of millions even billions of transistors. A transistor is a switch and is either off or on. If it it's on, it represents the number 1 and off represents 0. If you count numbers in ones and zeroes you are counting in binary terms; so you get a consecutive series of numbers 0; 1; 10;11; 100, 101 110, 111 and these are equivalent to 1; 2; 3; 4; 5; 6; 7; 8; in the number system we are much more familiar with. But, here’s the trick: you can represent lots of things as numbers, such as very big numbers, letters of the alphabet, pixels on a screen, sound frequencies, and photographs. You could ask: why bother with a binary system? Well, computing works very well with binary numbers because transistors have only 2 states: off or on. They do not have 10 aspects to match the decimal system. It is also ever so easy to convert to the decimal system when you want an answer on a screen or a print-out.

The switch part of a transistor is made from a semi-conductor material that can transfer an electrical current under certain conditions. Silicon impregnated with impurities is an example and so is Gallium Arsenide (used in a POET chip). Essentially, in the transistor, the impregnated Silicon has a battery across it (imagine a tiny wafer of Silicon with a voltage difference at each end). By using a second current in the middle of the wafer the Silicon will conduct if the second current is on and stops conducting when it’s off. So it behaves like a light switch – on off; on off.

You can also link transistors to behave logically - back in the 1840’s one George Boole (an Englishman who worked in Ireland) invented a form of Algebra, known now as Boolean Algebra, to express logical circuits mathematically. So you can use words like AND; OR; NOT AND; NOT OR. Thus 1 AND 1 = 10; that sort of thing and represent these statement in circuits. They can add up or take away with ease and, because multiplication is repeated adding, and division repeated taking away, you can see they behave arithmetically. If you use the ones and zeroes in groups you can move the group (called BYTES) around a microprocessor and store them in a memory and use them again them whenever required. So when you programme a computer you simply use a series of very simple instructions (machine code) to tell it what to do, but there are millions of instructions to wade through.

All this is done in a step by step fashion governed by an electrical clock. So, if the clock runs faster, more ones and zeroes are processed in 1 second. If you then transfer these bytes using light, then you move the information around the microprocessor at the speed of light and nothing else can ever go faster than this. Additionally, because light is effectively cool, you don't produce a lot of heat doing it. The real truth about microprocessors is that they do very simple things extraordinarily quickly. Where a microprocessor wins over humans is the speed with which it does very simple arithmetic. Thus, in an ordinary personal computer the clock turns some 3 billion times in 1 second and, if you increase the number of transistors in a microprocessor by miniaturisation you increase this computing power to many more billions of processes per second. It is really as simple as that. What is complex is how do you miniaturise the chip reliably, how do you manufacture it, how do you link it to keyboards, screen, printers etc. and how do you programme it do what you want. But its fundamental concept is very simple – lots of arithmetic, very quickly.

Where POET absolutely devastates Silicon is in its molecular make-up because its microprocessor uses a substance known as Gallium Arsenide on which to print its transistors. It allows the electrons (they are very tiny negative electrical charges inside a transistor) to move more freely because they are more available and are less obstructed compared with Silicon. Thus, if you put a high clock speed and abundant electrons together it makes POET many times faster that Silicon; something like 20 times. Also, because Silicon is impregnated with other elements to make it a better transistor, these impurities interfere with electron movement and forcing them to move faster generates heat which has to be removed by cooling. It’s why you have fans in a computer; if you listen you'll hear them whirring. POET just doesn't have anything like this problem and so there is much less heat. For Silicon heat means power loss and POET uses much less power, consequently, a battery will last 4 to 5 times longer.

If you like a little Algebra and can cope with a little Physics then you may understand why POET is attractive theoretically. Electrical circuits in a microprocessor are governed by Ohm’s law (described in 1827). Algebraically it is V = IR (Voltage V = Current I X Resistance R).

Also W = IV (Watts W = Current X Voltage). Watts are a measure of electrical power and power means heat.

Algebraic manipulation shows that W = V2/R. This means that the heat produced is proportional to the square of the voltage. Because POET voltages are significantly smaller than Silicon voltages (because of its chemistry and molecular arrangement) then there is much less power required to drive a POET chip than a Silicon one. That means batteries last longer to drive a POET chip.

Because a POET microprocessor works so much faster and a lot cooler than Silicon we, as investors, believe the industry can only address the increasing demand for faster processing by using a POET microprocessor; simply stated: there is nothing else. Silicon cannot go faster because of heat effects and is approaching its limits in miniaturisation because of quantum effects. Geoffrey Taylor, the chief scientist for PTK, is confident on this and has stated this as fact; he should know. To give you an idea of this revolution: it took the Silicon industry something like 5 - 8 years to increase clock speeds by a factor of 5 and now it is stuck at around the 3 Giga Hertz clock speed (3 billion turns of the clock per second); this has not changed for some years. It takes a POET microprocessor overnight to increase the clock speed by a further factor of 20 (to 60 GHz). This is devastation on a grand scale and a killer in my view. It is why we use the term a disruptive technology; I truly believe that such a phrase is fully justified.

All this may mean that the initial uses for POET will be at the high and expensive end of computing, I suspect Silicon computing will continue for some time and only be slowly replaced by this technology. Much more importantly, it will allow the development of the gigantic processing required for items like driverless vehicles, robotics, cloud computing, massive data trawls, weather forecasting, espionage, aeronautics and space and who knows what else. There are many extraordinarily capable people who do. But, there are the products that require batteries, such as all mobile technology. If you only have to charge your iPad or mobile phone weekly, and yet undertake more processing you can see what an attractive proposition this is. Guess the size of such a market? Huge is an understatement.

Perhaps you can now gather what the term a disruptive technology means. I can add also add: what opportunities!