I suspect he was confused about the market and what he was possibly told regarding the first generation PSM4 and the current roll out of CWDM4 for 100G.

The highlighted portion is supported by LightCounting, “Mega Datacenter Optics”, June 2018.

Slide 14 https://poet-technologies.com/docs/presentations/POET%20Investor%20Deck_December%202018_FINAL-Web.pdf

As per Suresh on Nov 29.

 100G capable transceivers began volume adoption in 2017 replacing prior 40G devices. In the United States, data center operators decided to adopt the standard which did not require the multiplexing of signals onto a single fiber, so-called PSM4, which stands for Parallel Single Mode 4 channel.

The existing markets for these first generation 100G devices are now saturated. Data center operators in China began adopting 100G transceivers this year, but have largely been demanding a transceiver protocol that can handle multiplexing. So, the industry is now at the beginning of the introduction of a second generation of 100G adoption based on this coarse wavelength division multiplexing, also called the CWDM standard.

Market adoption of the first, second and any subsequent generation of 100G transceivers is projected to continue through 2026. As a result, 100G represents the largest near-term market opportunity for transceiver manufacturers and, therefore, POET as well.

Starting in 2019 and likely continuing through 2020, many transceiver manufacturers will also begin designing their first generation of 400G transceivers, which are expected to be delivered in volume beginning sometime after 2020, entering a high growth phase in 2022 and beyond, eventually replacing 100G devices.

This is typically how speed transitions occur in the industry and there is an industry term for it called the “S Curve.” There is a period of design-in and adoption, a period of growth and, finally, the period of saturation and decline. The market for second generation 100G CWDM devices is just now beginning a period of sustained growth with a forecast to grow from 1 million units per year in 2017 to 9 million units per year in 2023. This period is typically characterized by intense competition, falling prices and declining margins.

The 400G market is still in an initial design-ins and an adoption phase, a phase where early movers lock in their architectures. This period is typically characterized by high margins and low volume prior to entering the main stream growth phase.

In 2019, POET will intersect the market for transceivers with optical engines on two vectors. One, the second generation 100G CWDM delivering a significant cost advantage to manufacturers who are already experiencing margin pressure; and two, the first generation of 400G DR4 and FR4 devices where we can be designed- in and provide the benefits of both lower cost and higher performance from the very outset. The recent customer orders for products and services have resulted in an acceleration of our plan to develop lasers that will be incorporated in a full “transmit-and-receive optical engine” and to furthermore address the requirements of 400G implementations.