My take: DenseLight’s capacity for long haul applications will be doubled utilizing larger InP wafer size (economies of scale). This is one of the ways I expect DL to meet the new established targets in 2016. As per the acquisition agreement: Additionally, approximately 1.3 million Poet shares will be issued, subject to monetary exchange rate adjustment at the time of issuance, to the DenseLight shareholders in the event that DenseLight meets or exceeds a predetermined revenue target during calendar 2016.
The DenseLight facility is also being expanded to handle the production volumes out of Wavetek with (slide 11) Test Automation, Database and Data analytics in support of increased wafer volumes from foundry.
Is this a case of people not seeing the forest for the trees? POET is on their way to being a one stop provider to industry with a very complete range of products. This strategy of growth is going to make POET a very big player. It gives POET the distribution channels need to grow independently. DL is also certified to meet automotive standards something that POET can utilize to widen their product offering as well.
It should be noted that packaging for POET products will be done by contract manufacturing as per the statements made in the THM. It will be a combination of both in house and contract work to meet demand…I think Suresh referenced it as a hybrid.
I don’t think we should be surprised by the path POET is taking to become an industry leader through acquisition. I am now just starting to really recognize whet Peter meant when he said “he's over the moon with Suresh and Subhash. They will take the Company in directions no one at the Company has envisioned before and have the technical expertise and product development experience to do it.”
In other words I think it has been Suresh's plan all along to grow through acquisition (if opportunity was available) and build out their product offering independently without the reliance and the strings attached to NRE. The market has to catch up with this and the ultimate benefits that this provides.
