Exited TSP for PON tech27 Mar 2024 18:27
1 Aug 2023 07:00
RNS Number : 8122H
Ethernity Networks Ltd
01 August 2023
1 August 2023
ETHERNITY NETWORKS LTD.
("Ethernity" or the "Company")
Strategy and trading update
and update on $1.5 million order
Ethernity Networks (AIM: ENET.L; OTCQB: ENETF), a leading supplier of data processing semiconductor technology for networking appliances, announces an update on its recent $1.5 million purchase order and the following update on the Company's strategy and trading.
$1.5m purchase order
The Company is pleased to report that it has completed the delivery of the Company's data processing system-on-chip ("SoC") devices to its existing fixed wireless customer pursuant to the $1.5 million purchase order announced on 29 June 2023. The Company delivered c. 40% of the order in June 2023 and has received the payment for this portion, with the balance delivered in July 2023 and due for payment by the end of August 2023.
Strategy update
Ethernity's Passive Optical Network ("PON") controller technology can be used in different broadband network configurations and platforms including in fiber-to-the-premises ("FTTP"), fiber-to-the-building ("FTTB") and fiber-to-the-home/fiber-to-the-room ("FTTH"/"FTTR") (together, "FTTx"). This provides Ethernity with the opportunity to offer its PON solutions for a variety of different scenarios.
There is significant global investment in improving fiber connectivity, particularly in the EU, USA and India. FTTH Council Europe has estimated that by 2027 approximately 300 million homes will be connected to fiber. In the USA, $42.5 billion has been allocated to investment in broadband infrastructure projects pursuant to the "Broadband Equity, Access, and Deployment (BEAD) Program". With certain of those territories banning the use of products manufactured by Chinese system vendors, this has provided the opportunity for new vendors to enter the market.
Ethernity's go to market strategy is to provide an alternative source of PON technology for system vendors, by offering the Company's PON controller both on Field Programmable Gate Arrays ("FPGAs") and in application specific integrated circuits ("ASICs"), whilst combining its PON technology and flow processor switch technology onto a single ASIC, thereby delivering a complete Optical Line Terminal ("OLT") on a chip.
The Company's customized PON solution on FPGAs will be offered on a licensing model which, the Directors believe, will provide a more cost-effective solution to prospective customers for certain PON applications, compared to the existing devices in the market. ASIC sales are expected to represent a larger portion of the total addressable market and will be targeted on a revenue sharing model with ASIC vendors. This new revenue sharing model, which the Company has already begun to discuss with certain customers, should improve the Company's gross margin compared to its existing produ