Aiming to become the global leader in chip-scale photonic solutions by deploying Optical Interposer technology to enable the seamless integration of electronics and photonics for a broad range of vertical market applications
Message: Is it shelled?
I am posting this on the Off Topic Forum instead of on the Discussion Forum because I don't want to generate a nasty debate. It will be mostly ignored here, but it does give someone who isn't blinded by the New Car Hypnosis a chance to look at things from a broader perspective.
Let me briefly explain the tittle: Is it shelled?
My grandfather, some 90 years ago or more, attempted to do a good thing and respond in a generous way to a poor neighbor who had barely enough to eat for himself and his wife and kids. Grandpa hitched the horses to a wagon full of corn and traveled the mile or so over to his neighbor's house and announced that he had a gift of food for his hungry neighbor family. The man of the house met him and his wagon in front of the house and after my grandfather explained that he was gifting food to him the man gave that specific reply: "Is it shelled" The point being that regardless of the fact that his family was hungry the man didn't want the gift if he had to look a little closer and do the work of shelling the corn.
A common expression in the Western U.S. implies a similar meaning when someone says that someone else is "Looking a gift horse in the mouth".
In essence these two examples are those about individuals who a reluctant to accept a good thing because of a fear that something that seems so very beneficial to them on the surface might, in fact, have detrimental consequences.
I have a minority opinion about any deals between POET and Chinese companies and that is a very unpopular position within the POET investment community. I understand how it might be perceived by most POET investors as if I were asking either "Is it shelled?" or if I were looking this "Gift Horse" in the mouth to see if it had bad dentition or some other obvious flaws.
On the other hand, I remain a POET suporter and POET investor, although that dichotomy may seem incongruent to most other POET investors. What keeps me enthused about POET involves both the developments of POET within the borders of China and the potential for the development of partnerships with companies in other countries outside the confines of influence and potential control by the CCP.
Specifically, the comment by POET CEO Suresh Venkatesan on 21 June 2024, : "While it’s not clear where this is headed, it would be prudent to project that we will require optical engine manufacturing outside Super Photonics and outside China."
Poet has now joined with some huge companies within China and nothing illustrates that achievement more than the recent arrangement with Luxshare. It is no small achievement and it opens the door to potential future sales at an order of magnitude difficult to imagine as far as the ultimate result. It is a "Big Deal", no question.
One might conceivably be pilloried or, at least, tarred and feathered, for looking this gift horse in the mouth or for asking if it is shelled. Understandably so. That would constitute blashphemy in the eyes of many POET faithful, unless they had the gift of true circumspection. Not everyone is able to cast off the Shiny New Car Hypnosis and exercise a significant degree of circumspection, especially when one is bathing in the light of a current "Big Deal", such as the Luxshare Big Deal.
How could anything possibly spoil the sweet taste of success, especially when Luxshare is "Turning a Chinese Brand into a European company"!
I won't waste time expounding on my own reservations about hoping in bed with the CCP on a frequency that is turning out to be more than just a "One Night Stand". We have now gone forward to the process of selecting the rings, the groomsmen and bridesmaids and picking out the bedroom furniture. Soon we will be selecting names for our potential children. A marriage made in heaven?
Below are some links that expound much better than I could do so on why circumspection is not a dirty word when the girl you are dating has the initials: CCP. It is a measly collection of articles, far from a definitive array on the subject. You really don't have to look very hard to find authoritative and detailed essays that caution Western business about the potential pitfalls of doing buisness with domestic Chinese companies, whether those companies are S.O.E. or non S.O.E.
My hope remains that POET will eventually widen its manufacturing geographical and political associations to other countries such as more in Singapore or new ones in Thailand, Viet Nam, the U.S. or even genuine European origins as opposed to "European" chameleons who focus on "Turning a Chinese Brand into a European company"!
JMO, not one that I expect remotely to be popular, especially now in the glow of Luxshare.
Links for your consideration, or not:
US Companies Are Supercharging the Chinese Communist Party - BlackOps Partners
In fairness and "full disclosure" China still outwardly is committed to "opening up the economy": China Communist Party policy meeting endorses leader Xi's high-tech vision for economy | AP News
Policy dilemmas for the CCP are included in this article: China's Communist Party charts technology- and security-focused development for reviving the economy | AP News
A circumspective individual might want to know exactly what is meant by the statement "the party must prevent any “ideological risks.” China Communist Party Policy Meeting Endorses Leader Xi's High-Tech Vision for Economy (usnews.com)
The U.S. government, Congress, gives the signal that it is focused on Reset, Prevent and Build in regard to future U.S. relationships with China. What will the "Prevent" portion of that focus mean in terms of economic limitations in the future, if anything. Maybe it is all just "smoke" for the home constituents and means nothing? Or will it make it more difficult for at least U.S. businesses to work in China? POET is a Canadian company so it may have no bearing, unless POET were to apply for opening a manufacturing plant here in the U.S. At least it opens for discussion some of the issues of concern: Reset, Prevent, Build: A Strategy to Win America's Economic Competition with the Chinese Communist Party | Select Committee on the CCP (house.gov)
Now this is an interesting outliar, probably will never happen, but it is happening for some companies in China: Major companies in China are setting up their own volunteer armies | CNN Business
Super Photonics Army? Preposterous, right? It seems so ridiculous to consider. Almost as ridiculous as would be the situation if the CCP demanded Artificial Intelligence companies in China to "back the Communist System", right?
China adopts interim AI rule requiring technology to back the communist system - Washington Times
Beijing has vowed to fix “chokepoints”. Could Super Photonics be used to fix one of those "checkpoints"?
"However, even as Beijing pushes innovation under a centralised model, it has kept the details largely under wraps. Observers say this is to prevent more targeted hurdles being set up by the US.
Little has been revealed to the public about the actions taken by the commission. Nonetheless, it is expected to play a bigger role after the plenum in identifying R&D direction and resource allocation, while continuing to maintain a low profile.
“The commission is the top body to take stock of China’s tech resources, to decide on the key R&D directions that are most critical to China, to coordinate the military and civilian technology development balances,” said Xie Maosong, a senior researcher at the National Institute of Strategic Studies, Tsinghua University.
“All this is highly sensitive information,” Xie said. “China is keeping a low profile because it wants to avoid unwanted attention. If China makes its science and tech development agenda clear, it will be very easy for the US to set up more targeted obstacles to undermine China’s goals.”
With the commission at the helm, China’s R&D will be more “policy-driven”, according to Zeng Liaoyuan, associate professor at the University of Electronic Science and Technology of China.
“We’ll see more government efforts to boost development of ‘bottleneck technologies’,” Zeng said. “Researchers will be pushed to work like crazy” to help China grasp the technology to produce advanced chips, he added.
Much of the text above and below is from this link taken from the South China Morning Post article:
However, the country is not yet capable of mass-producing advanced chips – such as 5nm and 3nm varieties crucial for AI models and top-of-the-line smartphones. Supplies from the US, South Korea and Taiwan, which it once relied on, have been largely cut off as the tech war against Beijing intensifies.
AI is seen as crucial for the revolutionary changes China envisages for its industry, services sector and military.
A pressing issue after the plenum would be deciding on a targeted AI strategy, according to Sun Ninghui, a computer scientist with the Chinese Academy of Sciences. The question was whether to integrate into a US-led system, introduce a specialised and closed system, or be a part of the world’s open-sourced system, Sun told a top legislative meeting in April.
At the end of May, Beijing announced the largest-ever outlay for its chip investment fund, underlining its resolve to build a self-sufficient semiconductor sector under a whole-nation system."
So, one might ask, if one were truly circumspective if companies such as Super Photonics or Luxshare might maintain independence from the CCP. "“While the US mainly relies on private companies to innovate, China favours the top-down approach,” Zeng said. “Inevitably the latter has an efficiency problem. Anyway, it’s the way to ensure China will make it.”
"Richard Suttmeier, a University of Oregon researcher looking at science and technology in the context of US-China relations, said China had studied the innovation systems of the US and other advanced countries, “but successful foreign experience has to be fit into China’s political economy”.
“Critical components of [this] are to maintain the political dominance of the [communist] party and the commitment to a state- owned and directed economy.”
The resulting “hybrid” has some distinctive strengths, such as the capacity to mobilise human and financial resources in support of national priorities. But notable weaknesses included red tape, corruption, and the absence of a liberal environment for creative initiatives and error correction, Suttmeier said.
Breitbart may or may not be considered by you to be a legitimate news source, but they do raise some interesting issues in this article:
Report: China’s ‘Private’ Companies Expand Use of Communist Party Censorship A.I. (breitbart.com)
It is sort of a "Well, duh!" thing to take notice that the U.S. government might have some reservations about dealing with any A.I. company that has ties to China:
A.I. Giant Tied to China Under Scrutiny - The New York Times (nytimes.com)
On the other hand, it appears that tons of U.S. companies are dealing with those companies anyway. It is an area that might be replete with quicksand in the future, even though many companies are slipping through the U.S. national security efforts at the present:
Well, surely we can rest any anxiety about dealing with China by assuring ourselves that China would never impose alignment with the goals of the CCP on any Western country's business, right? Not so fast, Bucko!
Chinese Communist Party Demands Employees At Western Firm Show Their Support (forbes.com)
OK, you have just a smattering of articles that cast at least a small shadow on the business of doing business with China. If you are still mesmerized by the prospect of dating a company focused on "Turning a Chinese Brand into a European company" then you have not made it this far into my post. I can only hope that Suresh gives more than lip service to his previous pronouncement that would essentially put in practice a China + 2 or more business practice.
So far, all of the news from POET is focused on China + 1 and the majority of that news is focused on China and not the " + 1 ".
Best wishes to all POET investors, even the ones who will now list me as "the enemy" of some other unflatering eponym.
Okiedo
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