Himax Technologies Q4 2023 Earnings Call Transcript

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February 6, 2024

There are 4 speakers on the call.

Operator

Good day and thank you for standing by. Welcome to the Himax Technologies 4th Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to turn the conference over to your host, Mr.

Operator

Mark Schwalenberg from MZ Group. Please go ahead.

Speaker 1

Welcome everyone to the Himax 4th Quarter and Full Year 2023 Earnings Call. Joining us from the company are Mr. Jordan Wu, President and Chief Executive Officer Ms. Jessica Pan, Chief Financial Officer and Mr. Eric Lee, Chief IRPR Officer.

Speaker 1

After the company's prepared remarks, we have allocated time for questions in a Q and A session. If you have not yet received a copy of today's results release, please e mail himxmzgroup.us, access the press release on financial portals or download a copy from Himax's website at www.himax.com.tw. Before we begin the formal remarks, I'd like to remind everyone that some of the statements in this conference call, including statements regarding expected future financial results and Industry Growth are forward looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this conference call. A list of factors can be found in the company's SEC filings, Form 20 F for the year ended December 31, 2022 in the section entitled Risk Factors as may be amended. Except for the company's full year of 2022 financials, which were provided in the company's 20 F and filed with the SEC on April 6, 2023, financial information included in this conference call is unaudited and consolidated and prepared in accordance with IFRS Accounting.

Speaker 1

Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and external audits by an independent auditor to which we subject our annual consolidated financial statements and may vary materially from the audited consolidated financial information for the same period. The company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. I would now like to turn the call over to Mr. Eric Li. Eric, the floor is yours.

Speaker 2

Thank you, Mark, and thank you, everyone, for joining us. My name is Eric Li, Chief IR PR Officer at Himax. On today's call, I will first review the Himax consolidated finance performance for the Q4 full year 2023, followed by our Q1 2024 outlook. Jordan will then give an update on the status of our business, after which we will take questions. We will review our financials on an IFRS basis.

Speaker 2

We are delighted to announce that q4 2023 revenues and the profits both surpassed the guidance, while gross margin was in line with the guidance issued on November 9, 2023. This was primarily attributable to better than expected order momentum in major product categories as well as cost improvements. 4th quarter revenues registered $227,700,000 a decrease of 4.5% sequentially, but exceeding our guidance range of 5% to 11% decline. Gross margin came in at 30.3%, We've seen our guidance range of around 30%, but down from 31.4% last quarter. Q4 profit per diluted ADS was $0.135 surpassing the guidance range of $0.09 to 0.13 Revenue from large display driver came in at $33,600,000 reflecting a sequential decrease of 23.1%.

Speaker 2

The decline was predominantly driven by prevailing weak macroeconomic conditions amidst the traditional peak seasonality in the 4th quarter. Our TV IC sales declined mid teens sequentially due to ongoing strict production and inventory control measures of leading customers. Monitors and notebook IC sales Both declined double digits quarter over quarter, caused by slowdown in order momentum as customers put forward their inventory purchases during prior quarter. Sales of large panel driver IC accounted for 14.8% of total revenues for the quarter, compared to 18.3% last quarter and 16.6% a year ago. Exceeding the guidance range, small and the media size display driver segment revenue reached $163,100,000 a sequential increase of 1.2%.

Speaker 2

This was under by outperforming sales, particularly in TDDI products for automotive and the tablet market. Q4 automotive driver sales combining both traditional DDIC and TDDI experienced a slight decline following robust order restocking in both during the Q3. However, Q4 automotive TDDI sales still increased high teens sequentially, Bucking the industry downturn, thanks to our solid pipeline of the Design Wing project. Our industrial leading cutting edge automotive LTDi product started mass production for GE Auto's NEV in the Q3 of 2023. Taken together, this not only solidifies our leadership in next generation automotive display, but also reflects the robust market demand for advanced display technology.

Speaker 2

Jordan will elaborate in a few minutes. 4th quarter automotive business encompassing driver automotive TCOM and OLED sales continued to be our largest revenue contributor at over 45% of total sales. For tablet, Q4 sales grew high teens sequentially, exceeding our guidance, driven by successful new product launches by our customers during the quarter. Conversely, smartphone driver sales declined as expected Amidst a subdued festival season characterized by sluggish demand, The small and the media size driver IC segment accounted for 71.6 percent of total sales for the quarter, compared to 67.6% in the previous quarter and a year ago. 4th quarter Non driver sales also exceeded guidance with revenue of $31,000,000 but declined 8.2% for a quarter ago.

Speaker 2

The better than expected performance is attributable to resurgence in orders from our TCOM product adoption of our automotive local DME T Cup is rapidly expanding as evidenced by hundreds of project awards across the board. This paves the way for robust growth in coming years, mirroring the success seen in our automotive TDDI. Jordan will share some insights shortly. Non driver products accounted for 13.6 percent of total revenue and compared to 14.1% in the previous quarter and 15.8 percent a year ago. 4th quarter Operating expenses were $52,300,000 a decrease of 17.9% of the previous quarter and roughly flat compared to a year ago.

Speaker 2

The substantial sequential decrease was caused mainly by decreased annual bonus and the salary expenses, particularly offset by an increase in R and D expenses. Our standard practice of granting annual bonuses, including cash and ISUs at the end of September each year can lead to higher IFRS operating expenses in the Q3 compared to other quarters of the year. Amidst the prevailing macroeconomic headwinds, We are currently emphasizing strict budget and expense control with full year 2023 OPAPs is climbing 4% compared to the year before. 4th quarter operating income was $16,700,000 or 7.3% of sales compared to 10.5% of sales for the same period last year and 4.6% of sales last quarter. The sequential increase was primarily a result of lower operating expenses for lower annual bonus compensation, partially offset by decreased sales and the gross margin in 4th quarter.

Speaker 2

The year over year decrease was primarily a result of lower sales and the gross margin compared to the same period last year. 4th quarter after tax profit was $23,600,000 or $0.135 per diluted ADS compared to $11,200,000 or $0.664 per diluted ADS last quarter and $42,200,000 or $0.2401 in the same period last year. It's worth noting that the favorable after tax profit Exceeding operating income reflects the positive tax adjustments made to rectify our estimate tax expenses for preceding quarter this year. As a reminder and for the purpose of year over year comparison, We made a divestiture of long term assets during Q4 2022, resulting in a non operating income of around $11,000,000 on an after tax basis. Now, let's quickly review the financial performance for the full year 2023.

Speaker 2

Revenues totaled $945,400,000 reflecting 21.3 percent decline compared to 2022. Persistence subdued global demand coupled with the looming recession concerns presented significant challenges to our operation throughout 2023. This market dynamic adversely affected both demand and the procurement process of panel customers, particularly in the ramp of customers' electronics. Yet, our optimism in the automotive business remains steady fast As automotive TPDI sales witnessed a remarkable surge of over 50%, reflecting the resilience and the potential of our largest business segment. Revenue from large panel display drivers totaled $175,700,000 in 2023, marking a decrease of 33.5 percent year over year and presenting 18.6% of total sales As compared to 22% in 2022, small and the media size driver sales totaled $629,200,000 reflecting a decrease of 19.2% year over year and accounting for 66.5 percent of our total revenues as compared to 64.8% in 2022.

Speaker 2

Non driver product sales totaled $140,500,000 a decrease of 11.2% year over year and representing 14.9% of our total sales as compared to 13.2% a year ago. Inventory Management also presented unique challenges for us throughout the sluggish demand environment this year. To navigate these circumstances, our primary objectives were the strategic Depreciation of excess inventory, while also technically controlling our wafer stock, Following quarters of aggressive destocking, which often involved sacrificing short term gross margin, Inventory decreased to near historical norm by end of 2023. The remaining stock feature promising customer design inks and loan product lifecycles that laid the groundwork for a more stable outlook in 2024. Gross margin in 2023 was 27.9%, decreasing from 40.5 percent in 2022.

Speaker 2

As a reminder, in Q2, We strategically terminated high cost foundry capacity agreement, leading to a depressed Q2 gross margin of just 21.7%. Despite the temporary margin contraction, This decision liberates new wafer starts from minimum fulfillment constraints, positioning us to capitalize on the turnaround in demand. Operating expenses in 2023 were $220,300,000 a decline of 4% from 2022, primarily a result of the lower vested portion of the annual bonus compensation awarded to employees in 2023 and the preceding years, partially offset by increased salary and R and D expenses. 2023 operating income was $43,200,000 or 4.6 percent of sales, a decrease from $257,600,000 or 21.4 percent of sales in 2022. Our net profit for 2023 was $50,600,000 or $0.29 diluted ADS as compared to $237,000,000 or 1.36 dollars per diluted ADS in 2022.

Speaker 2

Turning to the balance sheet, We had $206,400,000 of cash, cash equivalents and other financial assets as of December 31, 2023. This compares to 229 $900,000 at the same time last year and $155,400,000 a quarter ago. We achieved a strong positive operating cash flow of $68,700,000 for the 4th quarter as a result of substantial reduction in the inventory across major product lines. As of December 31, 2023, We had $40,500,000 in long term unsecured loans with $6,000,000 representing the current portion. Our year end inventories were $217,300,000 lower than 259 $600,000 last quarter and $370,900,000 at the end of last year.

Speaker 2

Our inventory level has declined steadily over the last 5 quarters and reached a healthy level by end of 2023. Accounts receivable at the end of December 2023 was $235,800,000 a decline from $248,500,000 last quarter and the down from $261,100,000 a year ago. DSO was 91 days at the quarter end as compared to 95 days last quarter and 79 days a year ago. 4th quarter capital expenditures were $15,100,000 versus $2,600,000 last quarter and $2,300,000 a year ago. 4th quarter CapEx was mainly allocated to in house testers for our IC Design business in addition to other R and D related equipment.

Speaker 2

Total capital expenditures for 2023 was $23,400,000 as compared to $11,800,000 in 2022. As of December 31, 2023, Himax has 174,700,000 ADS outstanding, unchanged from last quarter. On a fully diluted basis, the total number of ADS outstanding for the Q4 was 175, meaning. Now turning to our Q1 2024 guidance. We expect 1st quarter revenues to decline 9% to 16% sequentially.

Speaker 2

Gross margin is expected to be around 28.5 percent depending on the final product mix. The Q1 profit attributable to shareholders is estimated to be in the range of $0.02 to $0.05 per fully diluted ADS. I will now turn the call over to Jordan to discuss our Q1 outlook.

Speaker 3

Traditionally, Business operations in the Q1 decelerate due to the Lunar New Year holidays. This year, Exacerbated conditions due to sluggish demand are causing panel makers to strategically lower factory utilizations. In an attempt to support panel pricing and profitability. In tandem, OEMs and end customers are maintaining their cautious approach with heightened procurement scrutiny. Even with inventories now at more manageable levels, this shift has resulted in Short term forecast and more frequent last minute orders ultimately constraining our visibility, particularly in Consumer Electronics Products.

Speaker 3

To fortify the resilience of our operations, We are actively implementing strategies to optimize costs and diversify suppliers in both foundries and backend sources to enhance supply flexibility and cost effectiveness. The recent partnership with Next Chip for the automotive market illustrated our supplier diversification strategy. It also highlighted Our strategic approach to better align with customers' regional supply policies, particularly addressing the surging demand in China's Automotive Industry. In addition, our recent presence at the CES provided a comprehensive outlook on our strategic focus for the upcoming years, covering Automotive, WiSA AI and Optical Technologies. In Automotive, our primary organ contributor, we remain as optimistic as ever Given our extensive and parallel product portfolio across a broad spectrum of technologies from mainstream LCD technology to the emerging OLED technology.

Speaker 3

Notably, Within the automotive LCD display sector, we have secured 100 of design wins in TDDI and Logotim in T Con and continue to see ongoing expansion in our pipeline. The majority of these design wins are slated for mass production in the next 2 years, underscoring our continued market dominance moving forward. Furthermore, our expansion into automotive OLED displays covering all of DDIC, TCAM and touch controller bolsters our market share leadership by offering customers an integrated bundled solution. As a reminder, our Automotive Driver business represented 36% of our total sales in the full year 2023, And we anticipated we'll expand to well over 40% of watercolor sales in 2024. In the AI domain, we are relentlessly dedicated to our YSci product line, where we have already achieved industry leading ultra low power consumption and AI inference performance.

Speaker 3

Our shipment with YSai is also now further supported through strategic collaborations with ecosystem partners and system integration companies covering a broad range of AI applications. Concurrently, we are actively expanding our easy to adopt WiSAI module offering for the endpoint AI market to cater to its diverse needs and capitalize on the extensive opportunities in endpoint AI. Looking further out on the horizon, while the realization of LCOS may span several years, The ultra illuminance color sequential from the LCOS micro display that we unveiled at the CES marked a major technology breakthrough that we believe will pave the way for the realization of true see through AR goggles. In summary, driven by accelerating growth in our Automotive segment and expanding and expansion beyond our core driver business, We are well positioned for sustainable long term revenue growth and profitability. Furthermore, Our automotive, Whiteside and LCOS product lines have attracted a strong global client base, which significantly extends our reach and strengthens our presence in markets worldwide, while diversifying regional exposure and adding stability to our operations.

Speaker 3

With that, I will now begin with an update on the Large Panel driver IC business. In Q1 2024, we anticipate a sequential decline of single digit in large display driver IC revenue, primarily attributed to weaker than expected sales through during the slow season. As I mentioned, panel makers are deliberately lowering factory utilizations, Striving to safeguard panel prices by constraining panel supply amidst the prevailing sluggish market. We expect Q1 sales for TV and monitor ICs to decline quarter over quarter. However, Q1 notebook IT sales are poised for a decent increase, bolstered by customer restocking, following several quarters of muted demand.

Speaker 3

In the loan book market, as customers strive to differentiate and add value to their products. A discernible trend is unfolding, marked by increasing adoption of touch features and AMOLED displays in premium notebooks and upcoming AI PCs. Touch features enhance user interaction and enrich AI user experience, while AI model display elevates visual enhancements in areas such as gaming and entertainment. It's crucial to emphasize our heightened focus and the growing significance of both technologies. Notably, during CES this year, we unveiled industry leading on sale Air Model Touch controller and in sale TDDI for premium OLED and LCD Notebooks, respectively.

Speaker 3

Our on sale airModal Touch controller is designed to address this demand for accurate touch response and enhanced handwriting capability In the emergent mid sized OLED displays for notebooks, the feature thinner, lighter, brighter and wider color garment visual experience. What distinguishes our touch controller is a comprehensive set of features, which include support for various OLED panel types in rigid, flexible and hybrid. The capability to handle responsive cash operations of up to 10 vendors and compatibility with various industry standard active stylus protocols. By expanding our OLED portfolio to include the touch controller IC along with existing DDIC and TCON, We provide a comprehensive end loaded notebook solution. Meanwhile, our recently launched InCell TDDI for LCD Notebooks offers precise touch sensitivity, vibrant multifinger operation and acute active stylus functionalities, along with support for large size, high resolution, low power consumption and slim bezel designs.

Speaker 3

By leveraging these extensive product portfolios, we are well positioned To capitalize on this market shift through collaborations with key Korean and Chinese panel makers, where Mass production is scheduled to commence in the second half of this year for next generation pre made notebook models. Furthermore, the incorporation of high value added features increases the content value per panel while presenting the new opportunity for Himax. Looking ahead to 2025, We anticipate a decent replacement cycle when armed with leading solutions for higher market launched lately. Himax's presence in the notebook market will be further lifted. Turning to the small and medium sized display driver IC business.

Speaker 3

1st quarter revenue is expected to decline high teens sequentially. On the backdrop of traditional losses analysis, While demand for Consumer Electronics remains sluggish, smartphone and tablet sales are projected to decline single digit and double digit respectively in Q1. Automotive revenue is also expected to decline mid teens sequentially following robust order replenishment in previous quarters. In contrast, Q1 Automotive TDDI sales are still poised for sequential growth, Define recent reports of slower electronic vehicle demand in China. The swift and ongoing expansion of TDDI adoption As evidenced by our over 400 secondured De Linewin projects, positions us significantly ahead of our peers, with approximately 30% of awarded projects currently in mass production and the continuous influx of new pipeline and design wins across the board, our leadership position is reinforced Looking ahead in 2024 and beyond, remarkably, automotive TDDI sales are anticipated to account for almost half of our total Automotive Driver sales in Q1.

Speaker 3

Meanwhile, the prominent trend is emerging as small customers opt for Our TDDI or LTDI coupled with our logo dimming TCAM as their standard development platform for crafting new Automotive Displays of various sizes. This movement has shown the interest of leading panel makers, Tier 1s and car manufacturers across the spectrum, who acknowledge the benefits of our supreme bundle solution to accelerate their new panel development and elevate their product values. Moving on to our industry leading LTE Himax is proud to be pioneering the introduction of the LG DI to the automotive display market. Once again, we stand as the 1st company in the whole in the world to initiate mass production of a LT DI, Starting with JD Autos and EVs in the Q3 of 2023. For displays larger than 30 inches the incorporation of the LCDI signifies increased content value for Himax on a per panel basis, where such large displays usually necessitate 6 or more LCD chips and at least 1 local dimming TCAM.

Speaker 3

This opens a new revenue stream for us and fortifies our market leadership moving forward. During CES this year, Himax presented the most comprehensive product lineup for display semiconductor technologies, ranging from traditional DDIC and TDDI to cutting edge LCD and local dimming T Con for LCD panel and extending into AMOLED display solutions. Our AMOLED portfolio, which used to be comprised of DDIC and TCAM now expands to on sale touch controller. It's important to point out that the automotive industry upholds stringent standards of quality and reliability, surpassing the loss of consumer electronics. In acknowledgment of these heightened requirements, Our recently unveiled AMOLED Touch Control IC is meticulously engineered with an industry leading pass signal to noise ratio exceeding 45 dB, making it the ideal solution to meet the needs of flexible OLED panels often required for Automotive application.

Speaker 3

It also provides improved sensitivity to challenging user conditions such as cloth wearing and wet finger operations, guaranteeing exceptional performance with display quality free from interference by task display actions. Furthermore, our touch controller supports multi finger capacitive touch, is compatible with multiple OLED panel types and has the capability to cascade multiple chips in support of larger than 20 inches displays. With project awards from leading AMOLED panel manufacturers, Our automotive airModed Touch Controller is poised to commence mass production in the upcoming quarters. We continue to strive forward as we continue to strive towards providing the most extensive array of automotive space solutions in the market. This commitment involves fostering robust partnerships with panel makers, Tier 1 suppliers and common vectors across the globe, ensuring comprehensive solutions that cater to a wide spectrum of customer preferences and industry requirements.

Speaker 3

In terms of our smartphone and tablet product lines, we continue to see lackluster demand in the market. On a positive note, our inventory has substantially rebalanced to a satisfactory level. With the distorting process nearly complete, we placed RevaStars for select products starting in Q2 last year. Concurrently, we are diligently working on improving our cost structure through supplier diversification and strategic alliances, thereby positioning ourselves for an anticipated resurgence in demand. Next for an update on our AMOLED business.

Speaker 3

As I mentioned earlier, we are actively venturing into AMOLED market by forging strategic partnerships with panel manufacturers in Korea and China, spanning a diverse range of applications, including automotive, tablet, notebook and smartphones. As I just covered, we have made great progress in automotive, tablet and notebook markets, where we offer comprehensive solutions covering DDIC T Con and Touch controller. Mass production for most of these new solutions is expected to commence in the second half of twenty twenty four. In the smartphone and OLED display driver segment, however, the prevailing slowdown in smartphone market demand has led to adjustments to our initial timeline. Nevertheless, collaborations with customers in Korea and China are ongoing with verification and partnership projects underway.

Speaker 3

I would like to now turn to our Non Driver IC Business update. First, for an update on our TECOM business. We expect Q1 TCON sales to increase by single digit sequentially, driven by increasing TCON shipments for Automotive Displays and OLED displays for tablets. Despite subdued end market demand, We are actively developing next generation T Con IC for OLED tablets, notebooks and automotive applications. The initiative aims to broaden and diversify our product offerings, We are also positioning ourselves to capitalize on a market resurgence.

Speaker 3

Thanks to our cutting edge level driven technology. Himax is the industry leader in automotive T Con with an unchallenged leading position of over 100 design wins projects under our field. At CES 2024, We unveiled our latest level TVTecan, which features advanced image enhancements with White color spectrum, ensuring exceptional visual quality that supports resolutions of up to 12 ksx1 ks an exceptional dynamic contrast enhancement tailored to real time display content, All while adhering to power efficiency and stringent automotive safety standards, The rapid increase in customer adoption reflects the growing traction and trust in our solutions. We expect a decent growth trajectory for the whole team in T Con over the next few years. Switching gears to the Wiseye Smart Image Sensing Color solution, a cutting edge endpoint AI integration featuring Himax's ultra low power AI processor, OS on CMOS image sensor and advanced CNN based AI algorithms.

Speaker 3

During CES this year, we highlighted a range of application demonstrations, which have swiftly GaN adoption across various domains, featuring our industry leading ultra low power and potent AI capabilities. We achieved noteworthy progress with customers, particularly in implementing YSI in smart door locks. The collaboration with the China Smart Dock leader, Desmond marks the groundbreaking future advancement in the door lock industry As our ultra low power WiSAI AI with remarkably low power consumption of just 1 milliwatt enables the world's 1st smart door lock featuring uninterrupted surveillance with 20 fourseven real time Century monitoring, while at the same time significantly extending battery life. We also showcased an adoption of WiSign in a capture endoscope, So highly encouraging advancement in the medical area. Our WiseAI AI solution empowers tiny pill sized capture endoscopes, which are easy to swallow, facilitating smooth medical examination processes.

Speaker 3

The device consumes minimal power to sustain continuous image capture and transmission for up to 12 hours. This creates significantly simplified medical process, which compared when compared to conventional procedures, which often involves the use of invasive endoscope tubes. We are excited about the potential for this transformative development for the healthcare industry and expect to commence production with a customer in 2025. Turning to an update on Wi Fi 2, our new generation AI Processor. We are honored to report that YSci II was awarded the 2023 Best AI Product Award by Double E Awards Asia, further elevating Himasa's WiseAI AI prominence in the industry.

Speaker 3

WaiSai 2 is pioneering a new standard in endpoint AI benchmarks, earning recognition for its outstanding AI Inference capability, industry leading ultra low power efficiency and advanced security features. In the realm of context aware AI, WiDSI 2 facilitates high precision detection with features such as face mesh, facial landmark, hand gesture and human pose and skeleton, which expands the intuitive user friendly scope of interactive applications in real life, all achieved with minimal power plant consumption. Moreover, Wi Fi 2 streamlines the system integration with a reset of peripheral interfaces, effectively lowering the system cost for edge appliances by eliminating the need for costly, power hungry discrete MCUs otherwise required to process various sensor data. Additionally, YSai 2 boasts versatile sensor fusion capabilities, encompassing image, video, audio, vibration and thermal inputs. This enables sophisticated integral and highly accurate detection with low latency, especially suitable in anomaly detection with timely warnings, making it an ideal solution for a range of industrial applications, notably in automated and unmanned factories.

Speaker 3

Alongside our ongoing collaboration with end customers, significant progress is being made in partnerships with major CPU and AP SoC players in preparation for their next generation smart Notebooks, AI PCs, surveillance applications and a host of other endpoint AI applications. We will provide more details as they come about. Concurrently, To meet various application requirements and context and extend market reach, We are in collaborations with numerous ecosystem partners and system integration companies, offering hands on development tools and rigorous AI models to streamline customer development efforts and reduce cost for their AI product introduction. The launch of our production ready WiseLine modules exemplifies this business model. These modules incorporate Himax's low power CMOS image sensor, WiSai 1 or WiSai 2 AI Processor and versatile AI models from either in house or third party partners, meticulously designed with tiny form factors, highly integrated and plug and play characteristics.

Speaker 3

The modules feature user programmable preloaded AI models to facilitate seamless System Integration, lowering the entry barrier and cost for AI development. This initiative is particularly well suited for early stage market engagement applications. Furthermore, we continue to collaborate with ecosystem partners to unveil a spectrum of plug and play AI modules that incorporate advanced no code low code AI solutions. By leveraging their strengths in specific domains and existing channels. These collaborative efforts ensure we can meet diverse development needs for both software and hardware.

Speaker 3

Notably, at CES 2024, our partnership with Seed Studio On its factory powered endpoint AI vision processing module, Glove Vision AI module V2, significantly underscores our dedication to making AI technology easily accessible. After years of dedicated efforts to enhance our AI capabilities in actual low power AI processing and image sensing for endpoint AI applications. We believe that our WiSAI AI business will emerge is a multiyear structure growth driver for Himax. Lastly, I would like to provide an update on our optical product lines. Himax is a distinguished industry leader With a diverse range of optical and optoelectronics products crucial for building emerging metaverse applications, We strive to innovate and advance various technologies in this arena, including level optics, 3 d sensing, thick crystal on silicon among others, pushing the envelope in a variety of fields.

Speaker 3

Our technological expertise and extensive manufacturing experience are evident in our growing clientele for ARVR goggles and ongoing engineering projects. Now let's review some recent progress we have made. 1st, on our investment in LCOS In technology, Hoyer Hymex boasts a decade long expertise and proven track record for shipments for AR goggles with global leading NAMs. Our latest breakthrough color sequential Frontier Cross Micro Display offers unparalleled industry leading brightness of up to 180,000 nits, providing ultra luminance performance in vibrant RGB displays. It also features superior optical power efficiency, a compact form factor and ultra lightweight design, which make it the best choice for the next generation of C2AR devices.

Speaker 3

Currently, we are actively involved in follow-up engineering activities in collaboration with key tech players and anticipate significant opportunities in the coming years. Next, let's discuss the recent introduction of nanoimprint optical film technology in automotive lighting by Himax's subsidiary, CMVT, in collaboration with Star E Industrial, a global leader in automotive lighting manufacturing. The state of the art technology was implemented within a leading edge LED edge lit type automotive lighting. By leveraging our nano imprint optical film, Side emitting LED light is reflected or reflected towards the illumination direction of the automotive lamps, ensuring uniformity, minimizing fixture size enabling precise control of light compared to conventional direct lit type automotive lighting. This results in enhanced efficiency, reduced LED usage and the ability to create versatile patterns at a significantly lower cost.

Speaker 3

This groundbreaking development unlocks not only extensive visual possibilities for automotive lighting, but also interior light decoration design as well as related illumination applications. We will provide more updates as they come about. We believe our optical and Optoelectronics Technologies is poised to play an important enabling role in developing next We are committed to advancing this technology suite, collaboratively Expanding application possibilities with industry leaders who are deeply devoted to advancing They are next generation metaverse related products. For non driver IC business, We expect revenue to decline single digit sequentially in the Q1. That concludes my report for this quarter.

Speaker 3

Thank you for your interest in Himax. We appreciate you joining today's call. And now, ready to take questions.

Operator

I'm showing no questions at this time. I would now like to turn it back to Jordan Wu For closing remarks.

Speaker 3

As a final note, Eric Li, our Chief IRP Officer, will maintain investor marketing activities And continue to attend investor conferences. We will announce the details as they come about. Thank you and have a nice day.

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