Steve Schiets schreef op 9 januari 2023 21:12:
The Potential
I’m going to preface this post by saying this is not my opinion on revenue guidance and it is just a demonstration to calculate potential revenue here with certain facts we know. Of course some assumptions are being made, but they are based on real world observations from industry participants and data provided by LWLG and market reports. What prompted this exercise was seeing a report that Intel had shipped over 2 million 100G silicon photonic transceivers in 2021. I asked myself what if LWLG was suppling all the modulators for those transceivers and how many wafers would need to be produced to supply the required number of modulators. Could small or medium sized foundries produce enough wafers to supply enough modulators for 2 million transceivers? Could I estimate potential revenue with this information?
What we know:
Modulator systems are designed on individual die/chips which are contained on a wafer.
A 150mm wafer contains 800 individual chips that are 6x3mm long. I’m using 150mm because that is more common, and I want to demonstrate the potential with a model that does not rely on 300mm. NLM Photonics is shown to be using 150mm wafers from VTT (their “first wafer”). If I counted correctly, they had 605 good die out of 800 or 76% yield.
LWLG’s initial products are targeting 800G.
800G can be reached with 8x100G NRZ or 4x200G PAM4.
LWLG’s patents show 4-8 modulators per transceiver (TxRx).
As TxRx speeds increase, the ratio of optics to electronics increases. At 100G, the optics comprise about 20% of the cost of TxRx. Other costs are test/packaging/assembly, R&D and G&A, operational margin.
Market reports and statements by LWLG say at 800G and beyond, the optics could comprise up to 80% of the cost of a TxRx. Lebby stated in the Q&A at the May 2022 meeting that because their modulator provides much of the benefit to the overall optics, they’ll be able to capture that value and it is not just a cost-plus structure.
Per PhotonicsGuy, the modulator portion of the optics should be at least 15%.
Industry goal is $1 per Gbps, however pricing right now shows up to $10 per Gbps for new 800G offerings.
Low quantity MPW runs cost between $20,000 and $100,000 per wafer depending on type and size. Economies of scale will bring the costs down in the future.
As of the end of 2021, there were 728 hyperscale data centers with half operated by Amazon, Google, and Microsoft. At that time, there were over 300 more planned. Each hyperscale DC contains upwards of 100,000 transceivers.
Assumptions:
A 6x3mm die contains a 4-modulator array with the necessary passive waveguides/splitters. Each modulator is .75mm, so size-wise this seems to fit well.
800G will be reached with 4 lanes of 200G PAM4.
Pricing for 800G estimated to be $3.5 per Gbps by 2025, the year of high volume 800G. May or may not be conservative.
Optics account for 65% of the cost of an 800G transceiver. May or may not be conservative.
A cost of $25,000 per wafer. (This is a big unknown, but may be a reasonable assumption and this cost includes design, metals, and other costs on top of a basic wafer.)
LWLG will have 50 employees and a linear growth of burn rate from today equals $3 million monthly burn at mass commercialization. Let’s bump it up to $5 million monthly to account for significant increase in R&D and a buffer.
130,000,000 shares outstanding fully diluted.
Scenario Result:
3,300 wafers are needed to produce enough modulators for two million transceivers. This assumes a 76% good die yield.
Two million 800G transceivers are valued at $5.6 billion. The optics value of those equates to $3.64 billion. The modulator portion equates to $546 million.
It costs LWLG $82,500,000 for the completed wafers. That’s about 85% gross margin (what we expect compared to OLED). We know the actual cost of material is very low and wouldn’t significantly affect COGS.
$462,500,000 in gross profit from selling enough modulators for 2 million transceivers.
$402,000,000 in net earnings from selling enough modulators for 2 million transceivers.
$3 per share in earnings.
This is just one customer and one application.
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