B&C:  "When POET manufactures its own 800G+ modules, the manufacturing will be outsourced to SPX and/or in a foundry in a safer country."

It is your phrase "in a safer country" that is the focus of my own post. 

I believe there was some past discussion about POET proposing eventually to have a manufacturing facility in "North America".  Certainly turning that proposal into a reality would indeed mitigate the liability that presently exists in leaving the situation of the JV up to the vicissitude and uncertainty engendered by present and future whims of the CCP on a Chinese-Canadian JV with facilities in Xiamen, Fujian Province and manufacturing in Shenzhen, Guangdong Province, China.

Some mitigation of the liability to the vicissitude and whims of the CCP in the instance of the POET-Sanan IC JV may, in fact, be provided by the limitations outlined in the POET-Sanan IC Proposed FAQs document previously published by POET Technologies that, among other things, notes:  

"What Intellectual Property does POET plan to license and/or transfer to the proposed JV, and will it include any POET Optical Interposer IP?

Once formed under a definitive agreement, the JV will receive appropriate licenses from both parties to allow it to assemble, package and test Optical Engines based on the POET OI. The JV will not be licensed to make POET Optical Interposers and the JV will not be exposed to any fundamental POET Optical Interposer IP or any knowhow related to the basic design and processing of the POET OI.

Will the JV have any exclusive rights?

The JV will have the exclusive rights to assemble and sell 100G/200G Optical Engines globally and exclusive rights to assemble and sell 400G Optical Engines within the Greater China territory (PRC, Taiwan, Hong Kong and Macau) in the fields of data and telecommunications applications. POET may independently assemble and sell 400G Optical Engines outside of the Greater China territory, based on customer requirements.

What will be the ownership, control and governance model of the JV?

The JV will be formed under a definitive JV agreement subject to the laws of the PRC in Xiamen, PRC. The combined contributions of working capital and value of intellectual property will exceed US$50M once the products of the JV begin to be produced in volume. At that point, the JV will be 53% owned by SANAN IC and 47% owned by by POET. The JV will be governed and operated as a true joint venture and not on the basis of equity ownership.

Has POET considered the potential difficulty in getting POET’s capital out of China and what are the potential exit strategies for the JV?

The Company has investigated the process for repatriating capital and believes it can do so without undue difficulty. There are multiple exit strategies for a successful venture, among them a scenario of taking the JV public on the Shanghai stock exchange. Over the short-term, the priority is to avoid structures or policies that would preclude any specific exit strategy.

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As for the topic of "Manufacturing":  "Super Photonics intends to design, manufacture and sell products for a variety of applications, including optical engines for transceivers used in data centers and for the fiber-based segments of the 5G communications market, each among the highest growth segments of the data communications and telecommunications markets."

“Sanan IC is dedicating significant capital and management talent to this new joint venture,” said Raymond Cai, Chief Executive Officer of Sanan IC. “We strongly believe that by combining Sanan IC’s manufacturing capabilities and devices with POET’s advanced optical engine designs, Super Photonics will be able to offer highly attractive solutions to the data communications and telecommunications markets.”

The above 2 paragraphs come from that 22 October 2020 POET PR.

It is my opinion that having manufacturing facilities in the People's Republic of China incorporates a certain degree of risk for joint venture companies whereby one of the members of the JV is from a country other than Zhongguo, the "Middle Kingdom" self described eons ago as the Civilized Center of the World. 

I don't expect everyone to agree with that opinion, I would be surprised if they did.  My purpose was not to castigate China's PRC inter-relatonship with foreign linked JVs, just to point out that there is no such thing as an over abundance of caution in the intrinsic commercial agreements between companies where the members of the JV have origins in two divergent political systems.

The afterglow of seeing Super Photonics start sales and begin to bring in revenue will be an exciting period for POET investors, but it doesn't erase all of the costs involved, whether those costs are self evident or hidden somewhere in the tea leaves of politics that can never be put "aside" when dealing with the PRC.  Are there not presently several examples of U.S., Canadian and European companies who have experienced the political reality of limitations when operating in China as a JV and who have had to make "modifications" by yielding in one way or another to political reality?  I would love to know of one western company operating in China who has been able to stay oblvious and impervious to the force of political winds.  It doesn't happen.  If such a company were to claim immunity then that claim would just be one where it hasn't happened...... yet!  Professor Hawes views to the contrary.

Now that the Super Photonics JV is in production and has gone beyond mere conception it might just be a valuable thing for POET Technologies to take steps beyond conception in bringing a North American manufacturing center for POET products to the front burner.

POET is a Canadian company and I doubt many U.S. investors would have the same reasons for caution should POET suddenly announce groundbreaking on a POET manufacturing center in Ontario, for example.  I expect such an announcement would be greeted with alacrity and enthusiasm, but then again, I reserve the right to be wrong and I respect anyone who subscribes to the opposite opinion.  Only time can arbitrate the difference.

Okiedo