Leading the Way to Chip-Scale Integrated Photonics Meeting...POET Vision – Global Leadership in...

© POET Technologies Inc. | CONFIDENTIAL 1© POET Technologies Inc. | TSXV: PTK.V | CONFIDENTIAL

Leading the Way to Chip-Scale Integrated Photonics

September 20, 2019

Suresh VenkatesanChief Executive Officer


• POET Vision

• Strategy﹘Market Overview﹘Product Roll-out Strategy

• Fab-Light Manufacturing Strategy

• Technology & Business Update

• Conclusion

• Q&A

Agenda


POET – A Focus on Creative Disruption

• As a company, POET Technologies has always been focused on disruptive potential

• The Optical Interposer was invented with…

• Deep understanding of semiconductor design, fabrication and integration

• Insight into the complexities and costs of traditional assembly and test procedures for optical devices

• Knowledge of laser and waveguide design, simulation and fabrication

• Appreciation for an unmet market need

• Instinct for finding the disruptive potential in technology

• The perseverance to assemble, integrate and prove out unique materials, process technologies, and innovative packaging techniques

• The expertise to pull everything together and transform a vision into reality


POET Vision – Global Leadership in Chip-scale Photonics

To become the global leader in chip-scale integrated photonics

solutions by deploying our Optical Interposer technology, enabling

seamless integration of electronics and

photonics for a broad range of vertical market

applications.

• With a truly unique set of features, the POET Optical Interposer has disruptive potential and can open new markets for the Company

• What makes the Optical Interposer so unique?• Low-loss, singe mode passive waveguides with unique properties

facilitating integration• Total CMOS compatibility for exploiting true wafer-scale assembly -

driving down cost and complexity• An elegant design and assembly scheme that is flexible, scalable and

applicable to a wide range of applications.

As new architectures emerge for AI and ML, traditional methods are being supplanted by new ideas and concepts. The driving factor for moving optics closer to the data source is to reduce power hungry interfaces of today. On-board optics are the first step towards building systems of the future where photons and electronics operate at wafer scale.

- Brad Booth, Chairman and President, Consortium for On-Board Optics


• POET Vision




• Conclusion

• Q&A

Agenda


Data Communications & Telecom Infrastructure Spending

Telecom35%

Cloud13% Enterprise

52%

ICT Infrastructure spending~ $1 Trillion total in 2017

Telecom30%

Cloud49%

Enterprise21%

ICT Infrastructure spending> $1.3 Trillion total by 2024

Cloud Computing Infrastructure Spending – Data CentersProjected to Increase from $129B in 2017 to $640B by 2024!

ICT: Information & Communication TechnologySource: LightCounting


Top 5 Companies Driving Data Center Growth?

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

$ m

illio

ns

Top 5 Cloud All Other Cloud

Google, 473

Facebook, 475

Amazon, 498

Microsoft, 116

Alibaba, 181

2019 installed bandwidthGoogle, 3,383

Facebook, 2,799

Amazon, 3,741

Microsoft, 484

Alibaba, 2,682

2024 installed bandwidthSource: LightCounting


Examples of Facebook Data Center Investments

Facebook Data Center in Fort Worth, TXFacebook Data Centers in 2018

Source: Facebook


Ethernet Spending for Cloud Computing Dominates Growth

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

$ m

illio

ns

Ethernet Revenues

Enterprise Telecom Cloud

Data Center Investments in Ethernet TransceiversRepresents the Largest Near-Term Market Opportunity for POET

Source: LightCounting


Data Center Market Dynamics

q Market data illustrates 5-7 year technology cycle (10G, 100G, then 400G)q 100GbE volumes continue to growq 100GbE revenue growth leveling off q 400GbE will be the next generation high-volume technology

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Revenues ($M)10 GbE 100GbE 200GbE 400 GbE

-

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Shipments10 GbE 100GbE 200GbE 400 GbE

POET Opportunity #1 (400G)

POET Opportunity #2(100G)



$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2017 2018 2019 2020 2021 2022 2023 2024

400Gb Market(2018 vs. 2019 Forecast)

2018 Forecast 2019 Forecast

400G Market Timing – One Year Push

q 400G technology has experienced a one-year delay in introduction

q Strengthens POET’s position to intersect the market window with Optical Interposer based products

Dat

a C

ente

r 400

G ($

M)



Data Center Transceiver Market Dynamics

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Sale

s ($M

)

100GbE

200GbE

400, 2x400 GbE

Market Entry Window

q 400Gb data center transceivers represents the next wave of optics investment

q Catching the wave at the right time, with a differentiated technology platform and with the right partners is key to capturing a leadership position



POET Product Roll-Out Strategy

q Intersect Data Center market with 400G products (DR4 and FR4)o 400G market has been delayed, working to POET’s advantage to capture leadership positiono Current strategic customer partnerships are #1 priority and opportunity

q Leverage cost advantage of POET Optical Interposer to penetrate the high-volume 100G Data Center marketo 100G unit volumes projected to continue to increase over the next several yearso Further economies of scale from multiple Optical Interposer applications

q Leverage disruptive cost advantage of POET Optical Interposer to penetrate 5G wireless telecommunications o Lower complexity 25G optical engineo POET is well positioned from a market timing and technology platform perspective to

participate in the 5G wireless growth opportunity


q POET Vision

q Strategyo Market Overviewo Product Roll-out Strategy

q Fab-Light Manufacturing Strategy

q Technology & Business Update

q Conclusion

q Q&A

Agenda


POET Optical Engine Manufacturing Supply Chain [FAB-LIGHT MODEL]

Product DesignBusiness Development

Process IntegrationProduction Monitoring

Dielectric Waveguide Design and Simulation

Assembly & Test

Solder DepositionDie Attach

EncapsulationDicing

Final TestShip

Dielectric Waveguides

Interposer WafersSilTerra Malaysia8” Silicon Foundry

Dielectric Deposition and Patterning on Silicon Wafers

Wafer/Die Supply

Agreement

Lasers, Detectors, Gain Chips

Active Devices2”- 4” Compound Semi Fab

BH Lasers and Modulators

Active Devices3” Compound Semi Fab

Active Devices8” Si Photonics Fab

Modulators

Performed by subcontractorsto POET specifications


POET’s Manufacturing Strategy: Fab-Light Benefits

FOCUS• Enables focus on optical interposer design and active device design to meet growing demands in

multiple applications

• Dedicate investments in the design, development, marketing and sales of our Optical Interposer solutions

CAPITAL EXPENSES• Effectively leverage our existing assets

• Minimize spend on capital equipment and maintenance of facilities

• Targeted investments in Assembly and Test

BUSINESS MODEL• Inject capital into POET through the divestiture

• Accelerate the path to profitability and positive cash flow from operations

• Strengthen balance sheet and P&L


• POET Vision




• Conclusion

• Q&A

Agenda


The Optical Interposer: Platform Technology

CMOS Compatible Waveguide Passives

Low Loss ; Single Mode waveguides

O band and C band

External Cavity Lasers

Low cost; High Scalability

Vertical MirrorsWafer level test and

characterization

Compatibility to top entry Optical devices

InP Known Good Die Passive Assembly

Compatible with different types of InP

active devices

Wafer Level Hermetic Seal

Expands applications to Telecom and 5G

Si Photonics Compatibility

Compatible for use with Si Photonics Modulators

POET’s Optical Interposer Platform Unlocks Tremendous Market Potential


What is a “Transceiver” ?

TRANSCEIVER = TRANSMITTER + RECEIVER

Optics Electronics

Modulator

MultiplexerFiber

LaserDriver

PhotodiodeAmplifier

De-MultiplexerRECEIVER

TRANSMITTER

PINDiode


The Power of Wafer-Scale Integration: Cost and Scale

>400 Optical Engines on a single wafer!

8 inch wafer


Technology Progress Over the Past Year

Process/ Tools

• Process development complete• Prototype production flow in validation

Quad PIN Detector

• Component reliability completed through 5000 hours• Performance for 400Gbps achieved on second learning cycle since focus shift to 400G

Optical Interposer

• Process development for base modules complete• Platform expansion development (vertical mirrors, hermetic seal, external cavity) initiated

Packaging & Assembly

• Multi Die Assembly optimization for cost improvement

Dielectric Filters and Waveguides

• Mux and DeMux designs meeting 400G FR4 bandwidth and cross talk requirements • Industry first wafer level integration compatible FR4 DeMux

Lasers • 25G Directly Modulated Lasers sampled• Distributed Feedback Lasers with Spot Size Converter demonstrated and entering final optimization

phase for Interposer assemblyModulators • Completed 100G and 400G modulator designs – in validation

• First results expected in 2019


Laser Development: A key requirement for the Transmit Chain

Laser Development for 400G ApplicationsLaser Development for 100G Applications

Large Spot Ridge Laser

Achieved

25Gbps (for 100G)

Laser development on track to complete in 2019 for 100G and 400G applications


Wafer-Scale FR4 Filters: An Industry First

Conventional WDM Filters

• Not compatible with integration

• Not compatible with high channel counts

POET’s Arrayed Waveguide Solution

2019 2018

FR4 : Most difficult combination of Cross talk and BandwidthPOET Filters meet the stringent FR4 requirements with wafer scale integration capability


Product Roadmap & Business Outlook

• Platform building blocks for 400G on track for completion in 2019

﹘Lasers, PIN Detectors, FR4 Filters, and Optical Interposer

• Focused on complete 400G Transmit (Tx) / Receive (Rx) optical engines

﹘Strategic customer funded program for 400G products provides POET with a platform for additional high-value applications (100G Data Center TxRx, 5G Wireless, etc.)

• 2020 Business Outlook

﹘ 2020 1H: Strategic Customer Product Development and Qualification

﹘ Chip-scale photonics integration for 400G TxRx

﹘Wafer-scale assembly & test

﹘ 2020 2H: Assembled Product Qualification / Supply Chain Readiness

NRE Revenue

Product Revenue

© POET Technologies Inc. | CONFIDENTIAL 25© POET Technologies Inc. | TSXV: PTK.V | Public 25

Ø Establishing an industry leadership position with chip-scale integrated photonics• Validated disruptive, IP protected, Optical Interposer platform components

Ø Well positioned to participate in large, high-growth datacom and telecom markets• 400G TxRx (DR4 & FR4), 100G TxRx & 5G Wireless

Ø Low-cost leadership with highly scalable wafer-level manufacturing strategy• Leveraging innovative Optical InterposerTM platform architecture & proprietary dielectric waveguides

Ø Fab-light strategy transforms the company’s financial performance• Strengthens balance sheet, reduces expenses, accelerates path to profitability & positive cash flow

Ø Strong customer pull for our technology from tier-one industry leaders• Leveraging complementary strengths to establish a leadership position in the 400G market

POET Technologies – Company Highlights

POET is well positioned with right technology and the right customers at the right time

Leading the Way to Chip-Scale Integrated Photonics Meeting...POET Vision – Global Leadership in...

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