POET Technologies Inc. of Toronto, Ontario, Canada, a developer of optical interposers, photonic integrated circuits (PICs) and lighting solutions for the data center, telecommunications and artificial intelligence (AI) markets, announced that it will significantly increase its optical engine production capacity in Malaysia.
At the same time, POET signed a legally binding memorandum of understanding (MOU) with Quanzhou SAIC through which POET will acquire its 24.8% stake in the joint venture Xiamen Superphotonics Technology Co., Ltd. (SPX), as well as all production equipment previously supplied by SAIC to SPX. Through this partnership, POET will be able to take effective control of SPX and flexibly advance its strategic plans, in particular by setting up its wafer-level assembly business outside of China to achieve its "Mid+1" strategic layout.
Expansion of production base in Malaysia
POET is in talks with several contract manufacturers in Malaysia to centralise its wafer-level optical engine assembly operations locally. The agreement is expected to be signed in November 2024 and aims to commence operations by the end of the year. Once officially launched, the new manufacturing facility in Malaysia will significantly increase POET's production capacity and help the company meet the growing global demand for high-performance optical engines.
Dr. Suresh Venkatesan, Chairman and CEO of POET, said: "By adding wafer-level equipment to our assembly and test business, we will significantly expand our production capacity to address customer demand for 800G optical engines by 2026, especially in AI network sales. He further noted, "We expect to have an annual production capacity of more than 1 million optical engines, all of which are dedicated to 800G and higher transceivers for AI clusters." POET'S 800G FR4 and DR4 Transmission Optical Engines (OEs) include high-speed external cavity lasers (EMLs), an integrated EML driver (ISG-D9616), and an optical multiplexer (for FR4). The driver and laser are connected at the wafer level via flip chips and passively aligned to the waveguide and multiplexer. It is reported that POET's 800G optical engine is designed to provide low-power, cost-effective and highly scalable 800G and 1.6T pluggable transceivers for the hyperscale data center market.
Figure: POET scales capacity to meet AI infrastructure needs
SPX controlling stake transfer and "China+1" strategy
With the acquisition of a 24.8% stake in SPX, POET will become the sole shareholder of SPX, further consolidating control over its optical engine production. SPX will continue to operate in China, continue to assemble optical engines, and will be marketed under the brand name POET. This acquisition not only strengthens POET's production capacity in the Chinese market, but also provides more flexible strategic execution for its global expansion.
It is worth mentioning that POET's "China+1" strategy aims to reduce dependence on a single market by setting up production bases outside of China, thereby diversifying potential geopolitical and trade risks. The production base in Malaysia will be an important part of this strategy, helping the company optimize its supply chain globally and improve its responsiveness to the global market.
Future outlook: Meet AI and data center needs
With the explosion of global data volumes and the rapid development of AI technology, the demand for high-performance optical engines continues to grow. With its innovative optical interposer technology and efficient photonic integrated circuits, POET has become a key supplier to meet these needs. By expanding its production capacity and optimizing its supply chain, POET expects to be able to become a key technology provider to the global data center, AI network, and telecommunications industries in the coming years.
In the Chinese market, POET will continue to expand its presence in the field of optical engines through SPX, while the new production site in Malaysia will help enhance the company's competitiveness in the global market and ensure that the company can respond quickly to changing market demands.
