By Lisa Thompson
NASDAQ:POET
READ THE FULL POET RESEARCH REPORT
On August 29th, POET (NASDAQ:POET) announced a partnership with NTT Innovative Devices Corporation (a subsidiary of Japan’s leading telecom company) to develop advanced optical engines to power next-generation networks capable of supporting AI applications on mobile devices. This is a significant new market for POET, and working with NTT ensures a large guaranteed customer for the product as it will be used internally as well as sold to others.
POET will begin development work this year and expects to have prototypes ready in 2026. High volume production is anticipated for 2027. POET will develop a 100G bidirectional optical engine for next-generation mobile front-haul networks using its Optical Interposer™ platform and NTT’s optical components. This 100G bidirectional optical engine would provide four times more bandwidth efficiency than current devices and promises to disrupt the mobile network industry.
The mobile front-haul network connects the radio access network (RAN) components, specifically the remote radio heads (RRHs) or radio units (RUs), to the baseband units (BBUs) or centralized processing units in a mobile network. It enables efficient data transmission between the radio equipment at cell sites and the centralized or distributed processing units. It is particularly significant for AI-driven applications that demand high bandwidth and low latency.
After years of R&D, marketing, and restructuring, POET is about to enter the production phase, having transferred its equipment from China to Malaysia over the past several months, adding additional equipment that it had purchased from the former Rockley fab. Qualification of the production line is now underway, and samples are being produced and sent to customers for incorporation into finished modules. Those modules are being assembled, tested, and shipped to their customers for qualification. Though somewhat delayed, the company expects that some optical engine purchase orders will be announced by the end of the year. In addition to the already announced order from Celestial AI, we expect to hear from Adtran (ADVA), Mitsubishi, Luxshare, FOIT, Lessengers, and all the other companies with which POET has been working. It is even possible that a few of the Chinese module makers could come on board for 800G products.
Both the Globetronics and NationGate facilities have initiated critical qualification processes. The company confirmed that its operation in Globetronics has already shipped its order backlog of 800G optical engine samples to existing customers. POET expects to ship its backlog of 1.6T samples this quarter.
We are lowering full-year 2025 and 2026 revenue estimates as production progress was disrupted by the move out of China, and orders have not materialized as soon as originally expected, but we believe the company has even greater potential for future revenues based on new markets. Moving out of China and regaining full control has come at a cost, but ultimately will prove to be the correct decision for the long run.
The company will be attending the China International Optoelectronics Expo (CIOE) from September 10th to 12th in Shenzhen. It will feature its Blazar (hybrid laser) and 1.6T transmit optical engines, developed in collaboration with Mitsubishi.
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