Dr. Suresh Venkatesan reports

POET TECHNOLOGIES ISSUES LETTER TO SHAREHOLDERS

Poet Technologies Inc. has issued a letter to shareholders from its chief executive officer, Dr. Suresh Venkatesan, providing a review of recent accomplishments and vision for 2024.

To our shareholders:

Poet is committed to our strategic vision of commercializing our advanced device integration technology, which we believe enables us to solve multiple design, performance and scaling challenges in optoelectronic products and to fill an emerging void in solutions that address bandwidth and latency issues in artificial intelligence networks. Through 2023, we have managed to expand our product portfolio, boost Poet's mind share among leading companies in the market and position ourselves for rapid growth as we introduce leading-edge products to the market in 2024. Despite those accomplishments, it has been a challenging year, at least in part because of a difficult global capital market environment for prerevenue microcap companies. While our recent equity financing fell short of our expectations, resulting in the need to raise additional capital in the relatively near future, we continue to discuss financing alternatives with investors and with partners who share our vision and exhibit confidence in the value of our technology and our technical achievements. Multiple potential avenues to financing remain, and we will continue exploring each of them in parallel over the next few months.

Recent achievements

Within the past two months, Poet has:

• Qualified and released to production 100G CWDM4 and 200G FR4 transmit and receive optical engines, now with two key laser suppliers, San'an Integrated Circuits and Yuanjie Semiconductor Technology Inc., for use by several module customers in China;
• Delivered first production units of custom 4x100G LR4 engines to Adtran in November. Aligning with Adtran's schedule, we expect to ship production volumes of engines in the second half of 2024. In answer to the continuing surge in bandwidth demand, network operators have introduced 400-gigabit-per-second ethernet-based connectivity in their core networks. Adtran's unique pluggable device, with its MicroMux Quattro architecture, coupled with Poet's innovative optical engines, enables network operators to transform a 400GbE port into four 100GbE ports with no change in footprint;
• Released to production Poet's 400G FR4 receiver, with the 800G 2xFR4 receiver currently in qualification and readying for production release. The 800G 2xFR4 receiver has been adopted by LuxshareTech for its 800G module and represents Poet's first optical engine incorporating both electrical and optical die integrated in a chip-scale form factor;
• Prepared to deliver 400G FR4 transmit (Poet Infinity chiplet) beta samples for customers in Q1 2024. The Infinity chiplet is also the basis of the 800G 2xFR4 transmit engine. We expect to release the Infinity chiplets to production for both 400G and 800G applications in the first half of 2024;
• Prepared for shipment the final design of packaged light sources for advanced AI applications. The company expects to ship these samples by the end of 2023 and release these packaged light source modules to production in the second half of 2024.

Poet is currently working with over a half-dozen customers on module designs incorporating Infinity chiplets and our 400G/800G receiver solutions for 400G FR4 and 800G 2xFR4 transceiver modules. In addition to LuxshareTech, we are working with another Tier 1 module company to design an 800G 2xFR4 module complete with Poet's transmit and receive solutions. As is always the case with module customers, Poet is subject to the module companies' timelines for introduction of products to end-users and their ultimate success in the market.

The design and development in 2023 of the Infinity chiplet operating at 400G was a major technical undertaking for Poet and it also forms the basis for designs of 800G, 1.6T and even 3.2T modules. The development included an overhaul of the interposer architecture to expand platform compatibility to Externally Modulated Lasers (EMLs). Over 90 per cent of 800G modules in production today use EML (electro-absorption-modulated) lasers and we expect the expansion of the platform capability to EMLs to have wide appeal with a number of module manufacturers that have already committed to that path. Moreover, EMLs today present the primary path to 200G/lane solutions, and this platform expansion lays the groundwork for a parallel development of 200G/lane engines. The Infinity family of engines enables the use multiple chiplets engineered to operate in combination and within the size constraints of current pluggable module designs. We believe that providing chip-scale integration capability to EMLs will be an unparalleled achievement in the industry and would set us apart from even the largest established competitors in the market. Likewise, our packaged light source modules for AI that will soon go into production are unmatched by others in cost and scalability. High channel count integrated remote light engines, especially those made to enable new disaggregated data centre architectures for advanced AI workloads, are early in their development since the markets they address are still nascent. When these markets emerge, we believe that Poet can maintain and even enhance its technical and commercial advantages.

Goals for 2024

In 2020, Poet established Super Photonics Xiamen (SPX), a joint venture with San'an Integrated Circuits (SAIC), a subsidiary of the giant San'an Optoelectronics Co. Ltd. SPX has since established a world-class assembly and test facility for optical engines without any contribution of capital from Poet. The decision to finance the optical engine manufacturing through a joint venture structure required trade-offs. It gave SPX the right to market and sell 100G, 200G and 400G optical engines to module customers, the large majority of which are based in China. It meant that Poet would have to give up the early revenue associated with these sales, which are now set to flow into SPX beginning in 2024. As we were cutting our teeth on a brand-new technology and a first-of-its-kind integration platform, the company needed to develop and support products that were of interest to smaller suppliers and/or for niche applications. During much of 2022 and 2023, the primary benefit to Poet of this arrangement was to demonstrate the cost, performance, reliability and scalability of the Poet Optical Interposer and the engines on which they are based and to bridge the chasm between development and manufacturing thereby establishing the viability of the interposer architecture. Over the past several months that has changed, as Poet has introduced leading-edge, high-speed engines for 800G and established a road map through 3.2T. This has enabled access and penetration to a substantially larger and growing market fuelled by the insatiable demands of AI.

As Poet's technological advantages become apparent within the industry, we also recognize the need to design, build and sell our own modules targeted for AI, not only to improve time to market but also to establish our own brand in a market that is expected to grow at an almost exponential rate. The semiconductorization of photonics process that is our hallmark provides advantages of cost, scale and power, which should allow us to compete effectively against incumbent solutions.

Our goals for 2024 include:

• Completing a transmit optical engine design that will incorporate EMLs, which have become an industry standard at 400G and 800G, operating at both 100G per lane and 200G per lane;
• Incorporating those engines into an 800G 2xFR4 Poet module;
• Completing a receiver design that operates at 200G per lane with an integrated TIA;
• Initiating production of an eight-channel packaged light source for AI applications;
• Gaining sufficient financing for the company to complete these developments and to continue operations well into 2025 and beyond.

With advanced optical engines that can be produced at scale attracting the attention of leading companies in the industry, we are determined to improve shareholder value through our continued commercialization efforts. Thank you for your support through a difficult period. Everyone at Poet looks forward to a promising 2024 and we appreciate you making the journey with us.

Dr Venkatesan

Chairman and chief executive officer

About Poet Technologies Inc.

Poet is a design and development company offering integration solutions based on the Poet Optical Interposer, a novel platform that allows the seamless integration of electronic and photonic devices into a single multichip module using advanced wafer-level semiconductor manufacturing techniques and packaging methods. Poet's Optical Interposer eliminates costly components and labour-intensive assembly, alignment, burn-in and testing methods employed in conventional photonics. The cost-efficient integration scheme and scalability of the Poet Optical Interposer brings value to any device or system that integrates electronics and photonics, including some of the highest-growth areas of computing, such as artificial intelligence (AI), the Internet of things (IoT), autonomous vehicles, and high-speed networking for cloud service providers and data centres. Poet is headquartered in Toronto, with operations in Allentown, Pa., Shenzhen, China, and Singapore.

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