NASDAQ:HIMX Himax Technologies Q4 2024 Earnings Report $6.68 +0.14 (+2.14%) Closing price 04/15/2025 04:00 PM EasternExtended Trading$6.60 -0.08 (-1.20%) As of 04/15/2025 07:27 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Himax Technologies EPS ResultsActual EPS$0.14Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AHimax Technologies Revenue ResultsActual Revenue$237.22 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AHimax Technologies Announcement DetailsQuarterQ4 2024Date2/13/2025TimeBefore Market OpensConference Call DateThursday, February 13, 2025Conference Call Time8:00AM ETUpcoming EarningsHimax Technologies' Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Annual Report (20-F)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Himax Technologies Q4 2024 Earnings Call TranscriptProvided by QuartrFebruary 13, 2025 ShareLink copied to clipboard.There are 4 speakers on the call. Operator00:00:00Ladies and gentlemen, welcome to the Himax Technologies Incorporation Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. And now, I would like to turn the conference over to Mr. Operator00:00:26Eric Li, Chief IR and PR Officer at Himax. Mr. Li, please begin. Speaker 100:00:36Welcome, everyone, to the Himax Fourth Quarter and Full Year twenty twenty four Earnings Call. My name is Eric Li, Chief IRP Officer at Himax. Joining me today are Jordan Wu, President and Chief Executive Officer J. B. Ka Pan, Chief Financial Officer. Speaker 100:00:57After the Company's prepared comments, 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 hymxncgroup dot us or himaxirhimax dot com. Tw, 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 would like to remind everyone that some of the statements in this conference call, including statements regarding expected future finance results and industrial 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 risk factors can be found in the Company's SEC filings Form 20F for the years ended 12/31/2023, in the session entitled Risk Factors, as may be amended. Speaker 100:02:21Except for the Company's full year of 2023 financials, which were provided in the Company's '20 F and filed with SEC on 04/02/2024, the financial information included in this conference call is unaudited and consolidated and prepared in accordance with IFRS accounting. Such financial information is generated internally and has not been subjected to the bank review and scrutiny, including internal auditing procedures and external audit by an independent auditor, all 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, whereas a result of new information, future events or otherwise. On today's call, I will first review the Himax consolidated financial performance of the fourth quarter and full year 2024, followed by our first quarter twenty twenty five outlook. Jordan will then give an update on the status of our business, after which we will take questions. Speaker 100:03:56You can submit your questions online through the webcast or by phone. We will review our financials on an IFRS basis. We are delighted to announce that the Q4 revenues, gross margin, as well as profits, all surpassed the guidance issued on 11/07/2024, despite prevailing economic challenges. The better than expected financial results were primarily driven by stronger order momentum across product lines along with cost improvements and a better product mix. Fourth quarter revenues led to $237,200,000 an increase of 6.7 sequentially, significantly exceeding our guidance range of a slight decrease to flat and up 4.2% year over year. Speaker 100:04:59Gross margin reached 30.5%, exceeding our guidance flat to slightly up from 30% in the previous quarter and up from 30.3 in same period last year. The sequential increase was driven by a favorable product mix and cost improvement. Q4 profit per diluted ADS was $0.14 considerably above the guidance range of $0.093 to $0.11 thanks to better than expected revenues and improved costs. Revenue for large display drivers came in at $25,000,000 reflecting an 18.6% sequential decline. The decrease was primarily attributed to continued customer destocking after substantial Q2 replenishment for shopping festivals, as well as heightened price competition from China peers. Speaker 100:06:11Sales of large panel driver IC accounted for 10.5% of total revenues for the quarter, compared to 13.8% last quarter and 14.8% a year ago. Revenue from small and medium sized discrete driver segment totaled $166,800,000 an increase of 7.4% sequentially, exceeding our guidance of flat quarter over quarter, thanks to stronger than expected sales in the automotive and the tablet markets. Q4 automotive driver sales, including both traditional DTI and TDDI experienced mid teens increase, significantly outperforming our expectation of a single digit increase with both the DTIC and TDDI showing stronger than expected sales. This surge was primarily driven by continued rush order from Chinese panel customers carried over from Q3. Following the Chinese government's renewed trading stimulus initiatives announced in mid August twenty twenty four to boost automobile consumption. Speaker 100:07:41Remarkably, our Q4 automotive TTTI sales have exceeded the TIC sales for the first time, underscoring the global adoption of our TDDI solution, which are increasingly essential in modern vehicles and reflects the growing demand for more intuitive, interactive and cost effective touch panel features powered by TDDI technology. Our automotive business comprising drivers, Tecan and OLED IC sales accounted for around 50% of total Q4 revenues. Meanwhile, Q4 tablet IC sales exceeded the guidance of a low teens decline with the sales up slightly sequentially, driven by rush orders from leading end customers. Q4 smartphone IC sales declined slightly, in line with our guidance. The small and the media size driver IC segment accounted for 17.3% of total sales for the quarter, compared to 69.9% in previous quarter and 71.6% a year ago. Speaker 100:09:09Q4 non driver sales reached $45,400,000 exceeding the guidance range with a 24.9% increase from the previous quarter. The growth was primarily driven by a one time Kitak product shipment to a leading projector customer in TCAM for monitor application. In Q4, automotive TCAM sales continued to grow sequentially due to the widespread adoption of our market leading local DBT car with over 200 secondured design wing projects across major panel makers, Tier one suppliers and automotive manufacturers worldwide. Non driver products accounted for 19.2% of total revenues as compared to 16.3% in previous quarter and 13.6% a year ago. Fourth quarter operating expenses were $49,200,000 a decrease of 19.1% from the previous quarter and a decrease of 6% from a year ago. Speaker 100:10:27The sequential decrease stemmed primarily from a reduction in annual employee bonuses, partially offset by an increase in R and D expenses. As part of our standard company practice, we grant annual balances, including cash and RSUs to employees at the September each year. This result in higher IFRS operating expenses in third quarter compared to other quarters of the year. The year over year decrease was mainly due to a decline in employee bonus compensation as the annualized proportion of prior year's bonuses for 2023 was higher than that for 2024. Offsetting the higher annual bonus compensation grant for 2024 compared to 2023. Speaker 100:11:29Amid ongoing macroeconomic challenges, we are strictly enforcing budget and expense control with full year 2024 operating expenses declining 5.6% compared to last year. Fourth quarter operating income was $23,100,000 or 9.7% of sales compared to 2.6% of sales last quarter and 7.3% of sales for the same period last year. The sequential increase was primarily result of higher sales, improved gross margin and lower operating expenses. The year over year increase was primarily the result of higher sales, higher gross margin and lower employee bonus compensation due to the amortized portion of high year bonuses. Fourth quarter after tax profit was $24,600,000 or $0.14 per diluted ADS, reflecting a meaningful increase from $13,000,000 or $0.074 per diluted ADS last quarter and up from $23,600,000 or $0.135 in the same period last year. Speaker 100:13:01Now, let's quickly review the financial performance for the full year 2024. Revenues totaled $906,800,000 a slightly decline of 4.1% compared to 2023. Persistent global demand weakness coupled with uncertainty about market trends led to conservative purchasing decisions and inventory management by our panel customers. Even this uncertainty, we implemented strict expense controls, resulting in a 5.6% reduction in operating expenses for the year. However, our optimism in the automotive business remains unwavering with automotive IC sales increasing by nearly 20% year over year in 2024, far outpacing the overall automotive market growth. Speaker 100:14:11Among our automotive product lines, automotive TDDI and the key car sales, both relatively new technology, surged by more than 70%, driven by assisted rated adoption across the board. The growth strengthened our market leadership in the position of us well for continued success as the automotive sector embrace more advanced technology resulting from the mega trend of increasing size, quantity and the sophistication of displays inside vehicles. Revenue for large panel display drivers totaled $125,900,000 in 2024, marking a decrease of 28.3 year over year and representing 13.9% of total sales as compared to 18.6% in 2023. Small and medium sized drivers totaled $625,400,000 reflecting a slight decrease of 0.6 percent year over year and accounting for 69% of our total revenues as compared to 66.5% in 2023. Non driver sales totaled $155,500,000 an increase of 10.6% year over year and representing 17.1% of our total sales as compared to 14.9% a year ago. Speaker 100:16:05Gross margin in 2024 was 13.5%, up from 27.9% in 2023. The margin expansion was driven by a strategic focus on cost improvement and operational efficiency optimization, combined with the favorable product mix that included a higher percentage of high margin products, such as automotive and TCAM. The successful diversification of foundry sources also contributed to margin increase. Operating expenses in 2024 were $2.00 $8,000,000 a decline of 5.6% from 2023, primarily due to lower employee bonus compensation as the amortized portion of bonuses in 2023 was higher than that in 2024. '20 '20 '4 operating income was $68,200,000 or 7.5 percent of sales, an increase from $43,200,000 or $4,600,000 of sales in 2023. Speaker 100:17:28Our net profit for 2024 was $79,800,000 or $0.46 per diluted ADS, slightly significantly up from $50,600,000 or $0.29 per diluted ADS in 2023. Turning to the balance sheet, we had $224,600,000 of cash, cash equivalents and other financial assets as of 12/31/2024. This compared to $206,400,000 at the same time last year and $206,500,000 a quarter ago. We achieved a strong positive operating cash flow of $35,400,000 for the fourth quarter compared to a cash outflow of $3,100,000 in Q3. We made a total of $13,100,000 annual cash bonus to employees, resulting in the low operating cash flow of the quarter. Speaker 100:18:47As of 12/31/2024, we had 34,500,000 in long term unsecured loans, with $6,000,000 representing the current portion. Our year end inventory were $158,700,000 lower than $192,500,000 last quarter and $217,300,000 at the end of last year. Our inventory levels have steadily declined over past couple of quarters and are now at healthy levels. Accounts receivable at the December 2024 was $236,800,000 Little changed from $224,600,000 last quarter and $235,800,000 a year ago. DSO was ninety six days at the quarter end as compared to ninety two days last quarter and ninety one days a year ago. Speaker 100:20:08Fourth quarter capital expenditure were $3,200,000 versus $2,600,000 last quarter and $15,100,000 a year ago. Fourth quarter CapEx was mainly for R and D related equipment for our IFC design business. Total capital expenditures for 2024 were 13,100,000 as compared to $23,400,000 in 2023. The decrease was primarily due to reduced spending on in house pastures for our IC design business in 2024. As of 12/31/2024, Himax had 174,900,000 ADS outstanding, little changed from last quarter. Speaker 100:21:10On a fully diluted basis, the total number of ADS outstanding for the fourth quarter was $175,100,000 Now, turning to our first quarter twenty twenty five guidance. We expect first quarter twenty twenty five revenues to decrease by 8.5% to 12.5% sequentially, reflecting the low season demand due to Lunar New Year holidays. The revenue guidance implies a year over year performance ranging from flat to 4.6% increase. Gross margin is expected to be around 30.5% depending on product mix. This compares to 29.3% of same period last year. Speaker 100:22:12The first quarter profit attributable to shareholders is estimated to be in the range of $0.09 to $0.11 per fully diluted ADS, implying a year over year increase of 26% to 54%. We have noted that some peers' customers placed order early due to tariff factors, especially in the consumer electronics sector, resulting in Q1 revenue forecast, exceeding normal seasonal demand. In contrast, no similar trend has been observed in the automotive semiconductor market. Since Hi Max automotive business accounts for more than half of our total revenues, Our Q1 revenue per cap has not benefited from tariff factors. I will now turn the call over to Jordan to discuss our Q1 twenty twenty five outlook. Speaker 100:23:25Jordan, the floor is yours. Speaker 200:23:38Thank you, Eric. In 2024, our sales revenues in each quarter consistently outperformed guidance. While this strong performance is certainly commendable, we also highlight the challenges we faced such as limited party visibility and conservative customer demand, while many customers rely on rush orders to address their actual demands. On the other hand, rush orders are indicative of the tight inventory position of our panel customers in general. In the past few quarters, we have consistently demonstrated our ability to handle most of such rush orders underscoring our agility, adaptability, strong capabilities in inventory management and swift market responsiveness. Speaker 200:24:36The automobile visor sales remained our largest revenue contributor in 2024, accounting for almost half of total revenues, achieving close to 20% annual growth. This performance highlights Himax's automotive leadership in technological innovations, product development and market share. Looking ahead, we expect our automotive TDDI and T Card technologies to maintain growth momentum, further strengthening our market competitiveness. Beyond LCD technology, Himax is advancing development in the automotive OLED sector with numerous projects currently underway in partnership with leading panel bankers. We anticipate that automotive OLED IC will serve as one of the key growth drivers for Himax in the coming years, further solidifying our leadership in automotive display market. Speaker 200:25:45Meanwhile, Himax's activity is expanding its technology development beyond display ICs. To that end, in the OneSight AI segment, we have made notable progress with leading novel brands and achieved significant breakthroughs in smart door lock, PAND LAN authentication and smart home applications, collaborating with world leading customers to develop new innovations. We anticipate a strong growth trajectory in our Wi Fi business in 2025 and beyond. Himax's proprietary Web Level Optics or WIO counterparts or Core Package Optics or CTO has recently garnered significant attention in the capital markets. In fact, as early as June 2024, Himax and Forsey, a global leader in silicon photonics connectors, jointly announced the industry leading CTO technology. Speaker 200:27:01The collaboration spanning several years utilized Himax's WLO technology with four CCTO solutions for cutting edge AI multi chip modules or MCM. Since the announcement, we have provided updates on the latest progress in each quarterly earnings call. Himax's WLO technology plays a critical role in CTO by providing essential optical coupling capacity, making it a core element of the solution. CTO significantly enhances bandwidth and accelerates data transmission, while reducing signal loss, latency and power consumption. Additionally, it can help drastically decrease the size and cost of MCM. Speaker 200:28:00RISE CTO is still in engineering validation and trial production stage this year, with customers' mass production timelines undisclosed and the recent AI market disruption from DeepSeq. The prospect of CTO remains unchanged. The widespread adoption of CTO for data transmission to be conducted via optics instead of metal wire is on track in high performance AI applications. This is evidenced by the significant increase in customers' recent trial production volume forecast, indicating an accelerated timeline for CPU technology to enter mass production. Furthermore, Himax and 4Sea, in close collaboration with billion air customers and partners, are actively developing future generations of CPU technologies to meet the explosive high speed optical data transmission demand in HPC and AI. Speaker 200:29:13Through WLO and CPU technologies, Himax is well positioned to engage in the high speed AI computing market with high expectations for its growth. We believe that CPU technology beyond core applications will see further adoption in sectors such as automotive and robots in the future. Our current goal is to accelerate CPO adoption in cloud applications, thereby helping drive broader CPU adoption in AI applications. At CES this year, Himax showcased a wide range of innovative achievements, including automotive display technology, Wi Fi AI and advanced optical technologies or ARVR. Notably, a clear trend emerged at this year's CES as the industry demonstrated growing enthusiasm for AR glasses fueled by more companies entering the space and integrating generative AI to accelerate the development of lightweight, compact and all day AI glasses AI glasses rather. Speaker 200:30:42For AR glasses, Himax offers three optical technologies, namely, air cross micro display, WLO Web guide and ultra low power WiFi AI. Our latest patented front end air Cosmango display delivers a period brightness with an industry leading 400 ks mix, exceptional optical power efficiency, compact form factor, lightweight and superior display quality, making it one of the most viable solutions in the see through AR glasses market. In Webguide, in collaboration with leading Techmans, Himax leverages proprietary WO expertise, build of advanced metal imprint technology to offer industry leading optical solutions that optimize light transmission and display efficiency. In the field of AI sensing for AR glasses, Himax's Wi Fi provides always on AI sensing capabilities, which are being applied by developers to significantly enhance AR interactivity while consuming just a few milliwatts of power. In automotive display IC technology, we unveiled the industry's most comprehensive LCD and OLED solutions, at CES, showcasing a range of next generation smart cabin technologies. Speaker 200:32:26These solutions not only improve the intuitive operation of smart cabins, but also enhance driving safety and provide an exceptional user experience. A prime example is the advanced DisplayHMI solution developed in collaboration with AuO, which meets the demand for large size, high resolution and free form automotive displays. At CES, Himax also partnered with several AI ecosystem partners to showcase its ultra low power Wi Fi modules over a range of innovative, production ready IoT applications. These applications include hardware authentication, baby cry detection, people flow management and human sensing detection. The modules are designed for easy integration, making it highly suitable for various AIOP applications. Speaker 200:33:37With that, I will now begin with an update on the large panel driver IC business. In Q1, we anticipate a single digit sequential sales increase for large display driver ICs, driven by demand spurred by Chinese government subsidies for household appliances and as refile demand in the sluggish household sector. Notebook and monitor sales are expected to increase in Q1. In contrast, TVIC sales are set to decline as customers pull forward their inventory purchases in the prior quarter coupled with the seasonal slowdown in Q1. Looking ahead in the notebook sector, we are seeing an increase in demand for premium notebooks to adopt OLED displays and touch features, partially fueled by the rights of the AITC. Speaker 200:34:48HiMesh is well positioned to capitalize on this trend, offering a comprehensive range of ICs for both LCD and OLED notebooks, including DDIC, TCOM, touch controllers and TDDI. The standout innovation is our pioneering in cell touch TDDI for LCD displays, which improves the ease of system integration of system design integration by embedding the touch controller within the TDDI chip while maintaining the conventional display driver setup for TCAM data transmission. This design simplifies the integration for customers, reducing engineering complexity and speeding up product development. This solution also supports high resolution displays up to four ks and larger screens up to 16 inches aligning with the growing demand for advanced visual planning and immersive laptops. With smart production already underway for LED notebook printers, LTC, More projects are lined up. Speaker 200:36:10For OLED notebooks, in addition to our OLED DIC and TCAS solutions, we are also developing on sale touch controller technology with multiple projects underway with top panel makers and notebook vendors. Last but not least, progress we made on the next generation EDP 1.5 display interface for TCAM for both LCD and OLED panels. This interface will support high drive rates, low power consumption, adaptive sync and high resolution, key features essential for next generation ADCs. By delivering innovative combination technologies, Himax is well positioned to lead in the rapidly evolving landscape for AIPC and premium notebooks. Turning to the small and medium sized display driver IC business. Speaker 200:37:13For the full year 2024, our automotive driver IC sales comprising of TDDI and traditional TDIC increased nearly 20% year over year, significantly outpacing global auto market growth, largely driven by the continued adoption of TVDI technology among major customers across all continents. However, we expect Q1 automotive revenue to decline low teens sequentially following two quarters of sales demand. Despite this, Q1 automotive sales are still projected to increase by mid teens on a year over year basis. In the auto market TDDI sector, with cumulative shipments significantly surpassing those of our competitors, We continue to reinforce our market leadership, which currently stands at well over 50%. We see the project secured and a continuous influx of new pipeline and design wins across the board, of which only 20% already mass production. Speaker 200:38:41We expect to sustain this decent growth in the years ahead. While traditional automotive DDIC sales for 2024 declined due to their gradual partial replacement by TDDI. Our DDIC shipment volume still saw a modest increase in the last year. This demonstrates the steady demand for mature DDIC products such as those used in custom displays, SUVs and rear and side view mirrors, which do not require touch functionality. Furthermore, the long term trust and loyalty from our DDIC customers, some of whom have relied on our solutions for over a decade, is indicative of our strong customer retention. Speaker 200:39:39We continue to lead the automotive DDIC market maintaining a global market share of approximately 40%. Himax continues to lead in automotive display ID innovation by pioneering solutions that deliver superior performance, quality efficiency and enhanced user experiences. As part of this ongoing innovation, our latest TET or TCAR embedded driver SIM solution, which combines TDDI with low code gaming TCAR into a single chip, provides a cost effective, flexible and comprehensive solution for our customers. Another new technology worth highlighting is our automotive TDDI with advanced user aware touch control, which differentiates between driver and passenger touches to prevent cross touch and head driver safety. In addition, we offer a unique NAB on in cell display solution that combines a physical NAB on a GDI. Speaker 200:41:01This design seamlessly merges Inseltaz technology with tactile controls, offering drivers a safer, more intuitive interaction that reduces distractions and enhances the overall driver experience. Moving to smartphone and tablet IT sales, we expect a sequential decline in both product lines as is typical during the long season in Q1 due to the Lunar New Year. Next for an update on our OLED business. In the automotive OLED market, we have established strategic partnerships with leading panel makers in Korea, China and Japan. As OLED technology expands beyond premium car models, Himax is well positioned as the preferred partner, leveraging our strong presence and proven track record in the automotive electricity space sector. Speaker 200:42:06Capitalizing on our first mover advantage, we aim to drive the growing adoption of OLED in automotive displays by offering a comprehensive range of solutions, including DDIC, TCAM and sale touch controller. We believe this positions us as a primary beneficiary of the anticipated shift towards OLED displays for high end vehicles in a couple of years, enabling us to capture new growth opportunities and further strengthen our market leadership. Beyond the automotive sector, we have also made strides in the tablet and notebook markets, partnering with leading OLED panel members in Korea and China. All comprehensive OLED product portfolio covering DDIC, key card and touch controllers has driven several new projects that are on track to begin mass production this year. In the smartphone OLED market, we are making solid progress in our collaborations with customers in Korea and China, and we anticipate mass production to start later this year. Speaker 200:43:39First quarter small and medium size display driver IC business is expected to decline low teens sequentially. I would like to now turn to our non driver IG business update, where we expect the first quarter revenue to decrease high teens sequentially. First, for an update on our TCON business. We anticipate Q1 TCON sales to decrease mid teens sequentially, primarily due to the non recurrence of a one time ASIC TCOG shipment to a leading projector customer last year. It's worth a moderation in automotive TCOG shipments followed several quarters of strong growth. Speaker 200:44:34That being said, Himax maintains an unchallenged position in the modem and key car evidenced by growing validation and widespread adoption in both premium and mainstream car models worldwide. We are confident in the continued growth of our automotive teacom business, supported by our strong market presence in lower demand teacom with strong pipelines of over 200 design win projects set to gradually enter production in the coming years. Head up display or is another field getting traction within our commodity displays, driving increased adoption of low beam and TiCar technology and emerging as a particularly promising application. Our industry in novel TiME TiME provides distinct advancements with high contrast ratio and optimized power consumption. It effectively eliminates the so called postcard effect of the C in SUVs caused by backlight leakage typical of traditional conventional TFT LCD panels, ensuring clear and precise images on the windshield. Speaker 200:46:05Additionally, the T TAR features advanced transparency detection to prevent the display from obstructing the driver's view, thereby ensuring driver's effect. Similar, our SUV projects are already in progress and we are excited about the potential opportunities ahead. We are well positioned for continuous growth in automotive teacup over the next few years. Switching gears to the YSI Archi Lok Power AI Sensing solution, the cutting edge endpoint AI integration featuring industry leading Archi Lokal AI processor, OSM, CMOS image sensor and CNN based AI algorithm. One side AI delivers a significant competitive edge in the rapidly growing AI market through its ultra low power consumption and context aware on device AI inferencing that seamlessly integrates vision and other sensing capabilities into endpoint applications, particularly battery powered devices. Speaker 200:47:25This not only enhances intuitive user interaction, but also makes AI more practical and accessible. Additionally, Wanda AI offloads our tax from the NAND processor, effectively extending battery life span and improving overall data processing efficiency. Taking on the success with their notebooks, Himax's Wyze AI is continuing to expand its multi presence with additional use cases expected across other leading notebook brands, some of which are set for production later this year. Whiteside also continues to achieve significant market success across various sectors. For Smartdoor Locks, we collaborated with Specimen, a leading high end brand in China to introduce the world's first Smartdoor Locks with 20 fourseven century monitoring and real time event recording. Speaker 200:48:39Building on this achievement, we are expanding globally by collaborating with other leading door lock makers worldwide to integrate innovative ARVs, including parcel recognition, anti pinch protection and power band biometric access, further extending applications possibilities. Several of these value added solutions are set to enter production later this year. At CES twenty twenty five, Himax joined forces with ecosystem partners to unveil a suite of innovative production ready IoT applications, powered by our tiny form factor quality play website modules. Himax offers a series of modules, which incorporate in an ultra low power website AI processor and an AOS image sensor and advanced algorithms. These modules feature no codeno code AI platform capabilities, simplifying AI integration and supporting diverse use cases such as human presence detection, gender and age recognition, gesture recognition, face mesh, voice command, thermal image sensing, post estimation and people flow management, machine learning development and reducing development costs, website modules opening opportunities for automation, enhance data activity and elevate user experiences across the variety of industries. Speaker 200:50:44The full range of innovative ultra low power Wi Fi modules are also under development in collaboration with ecosystem partners, such as crybaby detection, dynamic gesture recognition and human sensing among others. One standout in our WiZine module portfolio is the Himax WiZine Powerman solution, which has quickly gained traction since its introduction just a year ago. We have secured multiple design wins with smart production already underway by a US customer for smart access applications and the Taiwanese based Bowlock vendor for its leading smart Bowlock brands. To meet the growing customer demand for flexibility across various environments, we upgraded our one side palm vent suite, now features by model authentication, combining both palm vent and face recognition, the Duo Authentication Solution enhances security by offering two layers of biometric verification, which not only increases reliability, but also makes it highly adaptable to various environments. The rise of physical AI agents marks significant shifts in Q1 machine interaction, enabling devices to proceed, process and respond to their surroundings in real time. Speaker 200:52:37The key emerging trend is the integration of cloud based cross language model, which enables these agents advanced reasoning and language understanding, enhancing their ability to interact with and adapt to the physical world. Himax YSai AI is at the forefront of this revolution, delivering over zone sensor fusion, ultra low power on device processing. Wirefin is are interfacing with aerial arms to provide the essential real time AI capabilities for next generation applications. A good illustration of this innovation was showcased at CES twenty twenty five where Hi Max and Seed Studio introduced the SensTech watch, effectively as empowered by Wi Fi AI, Equipped with vision and audio sensor fusion along with a speaker, this factory powered IoT device combines our own device AI with color based ARRAN to interpret commands, recognize objects, respond to events and facilitate real time interaction. Drawing from the success of Senscape Wazia, we are actively working on multiple projects leveraging Wazir AI to further drive advancements in physical AI agent applications. Speaker 200:54:29Separately, we are excited about our collaboration with a leading AI player to integrate OneStar AI into the next generation of AI glasses. As I mentioned earlier, at CES, there was a renewed enthusiasm on AR glasses with AI becoming an integral component to enhance intuitive and seamless human device interaction. WiFi AI addresses two critical challenges in the air glasses, namely real time responsiveness and power efficiency. For example, Wi Fi supports always on hours and sensing, enabling AR glasses to detect and analyze the surrounding environment with real time contents of AR. AR. Speaker 200:55:24This capability empowers instant response, real time object recognition, navigation assistance, sensation and environmental mapping. Enhancing the overall AR experience. Notably, Wanda AI's exceptional solar power consumption measured in single digit mini watts also made it perfectly suited for air glasses for all day wear. In another example, we collaborate with Ganxin on eyeball tracking technology, which powered by WebSight precisely detects subtle eyeball movements, gaze detection, pimple size and blinking, thereby providing clinical data for the enhancement of user interactions in AR glasses. In June 2024, Himax in partnership with Sporsey, the world leader in silicon photonics connection unveiled an industry leading Kokakis Optics' CTO technology, leveraging Himax state of the art WLO technology. Speaker 200:56:50This innovation integrates silicon photonics chips and optical connectors within MCM, replacing traditional methanol wire transmission with high speed optical communication. Speaker 100:57:04The Speaker 200:57:04technology significantly enhances bandwidth, boosts data transmission rates, reduces signal loss and latency, lowers power consumption and significantly minimizes designs and cost of MCM. In working closely with Forsey, we are making significant strides through a solid partnership with building ASM and contemporary companies and pharmacy with small scale production of the first generation CTO solution already underway. As mentioned earlier, the significant increase in Q1 engineering validation and trial production volume combined with the anticipated sample volume increases in the coming quarters is a strong indication that CTO technology is being accelerated towards mass production. In addition, in close collaboration with the AI customers slash partners, we are speeding up the development of CPU technology for the next few generations. We are more optimistic than ever about the outlook for our Lavalier business, which is poised to generate significant growth opportunities and become a major revenue and profit contributor in the years ahead. Speaker 200:58:43Alongside the CTO progress, we are witnessing a rise in engineering collaborations with global technology leaders who are utilizing our WLO expertise to make advanced waveguides for AR glasses, highlighting the growing regulation of our WLO capabilities. For an update on ERCOS, we recently introduced our industry leading 400 ks niche ultra luminance from the ERCOS fiber display, setting a new benchmark for brightness with extremely low power consumption of nearly 300 megawatts. At CES twenty twenty five, we showcased an AR Glasses POC for Proven Control concept featuring the micro display with a third party web guide, achieving over 1,000 nits of brightness to the eyes. This demonstration highlighted its stability for outdoor high mid light conditions with a light weight of just 0.98 grams and ultra compact form factor of less than 0.5cc. Combined with excellent color performance, Himax's front mid air cosmoidal display is ideal for all made AR glasses and underscores the technology's readiness for real world applications. Speaker 201:00:32Following the recent release of our 400 ks new ultra luminous from the LCOS micro display, we are actively engaged in significant projects through strategic collaborations with industry leaders. Himax's proven track record of over a decade in Aerocorp Technology coupled with a history of successful production shipments, highlights our readiness to meet the demands of last year production of AR glasses. That concludes my report for this quarter. Thank you for your interest in Timex. We appreciate you joining today's call and are now ready to take questions. Operator01:01:21Yes. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Now, we'll have our first question, Johnny Tang Nomura. Go ahead please. Speaker 301:02:25Thank you, Jordan and Eric for taking my question. My first question is regarding to CPO. Because maybe in the past few months, some investors were asking about whether the CPO our CPO is firstly adopted by scale up or scale up scale out or scale up server systems. So wondering if you could kindly elaborate more there. And also you mentioned about there has been already some small scale production. Speaker 301:03:02And could you give us some updates on when should we see more sizable mass production scale in the coming years? And also, could you update a little bit on the competition landscape there? It's like how well positioned right now compare with the multiple peers? This is my first question. Thank you. Speaker 201:03:28Thank you, Tony. I'll try to it's not an easy question. I'll try to address the question perhaps from a slightly different angle. But I think, I mean, understandably, you guys are the one issue you guys are really interested in now is that exactly how much contribution this will be for Himax in the foreseeable future and even the long term, right. I assume that is basically the essence of your question. Speaker 201:04:09As I just mentioned, this year 2025 will be a year for engineering validation with only sample shipments for us. So while the sample shipments will accelerate quarter by quarter, the revenue contribution will be rather limited if you compare that with our total revenues. The fourth quarter, which presumably will be the peak of this year, the revenue is said to be in millions of dollars based on current forecast, but again, it's still quite small compared to our total size and things can still change as it is still early. Now, in all likelihood, mass production will commence in 2026, But we don't know how and certainly we won't comment on exactly when in 2026. It's probably still more than a year from now. Speaker 201:05:15There are still many unknowns, like how many customers, how many projects or their revenue curve, etcetera. And therefore, while 2026 is likely to be the first year of mass production, it is still early and it's still difficult to give a revenue indication for the year at this point. Now, if we look further ahead and like ignore the exact timing and ramping curve, etcetera, for the time being, right, And let's just try to kind of paint the picture for an, I would call it, annualized potential revenue for Himax, annualized potential revenue for Himax because the first year production could be just a quarter or whatever, I don't know. But if we let's try to annualize it, right, and annualize the potential revenue for Himax when the CTO business reaches polycore in early stage of mass production, right. So maybe that is how I can try to give you a preliminary indication. Speaker 201:06:35The reason why I say stage of mass production is because I believe the ultimate demand for CPL is probably above and beyond anything we can imagine at this point. So by early stage, I'm thinking probably in the first couple of years when the industry is perhaps still testing the water with semi only premium models equipped with CPL. In making the assessment, we have considered leading AI customers' total advanced GPU shipment outlook, for which you guys have provided a lot, right, and leading Foundry's total coloWatt capacity plan, which is very much a public information. And we have assumed a very low percentage of CPO attached rate for both, right. So when I say early stage of mass production is what I mean by the tax rate for both is still very, very low percentage wise. Speaker 201:07:52So with such conservative assumptions, I can say that our annualized CPO revenue could still reach hundreds of millions of dollars when we get there. Again, this is early stage and this is the best I can do in terms of providing a revenue indication. So to me, this is not really a question of whether or even when it will happen because it will definitely be happening in our view, but rather how fast the CPU technology will penetrate. While we believe with all these benefits like raising transmission bandwidth and lower report consumption at relatively very low cost, The CTO technology has the potential of ramping quickly, we believe, because of all these benefits, right. It has the potential of ramping quickly. Speaker 201:08:59However, I didn't update that is still a decision to be made by our end customers. So, all we can do is to get ourselves well prepared to meet any customer demand or rapid plan and that's exactly what we'll do. I don't know if that answers your question. Speaker 301:09:25Yes. Thank you, Jordan, for sharing this variable information. Yes, but just maybe I'm wondering, maybe if we talk about maybe 2026, do you think that CPU is mainly used for the on rack switches or it can be directly used for the connection between GPUs and GPUs? Speaker 201:09:51Okay. We are so upstream. We are probably not the best person to answer such questions. However, as far as we are told, it will be firstly adopted in switches and is going to account for the bulk of the volume in early stage. That's what we're told, although again you're probably not asking the right person. Speaker 201:10:24Because at the outset, that is our I mean, all we provide is those critical optical components, right, and how our customers are going to use it for whatever application, it's really their call and they don't necessarily need to share such a promotion with us. However, we also know as we, as I mentioned in my prepared remarks, right, in addition to qualification, we believe eventually this will also have great potential for things like automotive robot. I mean, when it comes to very consumer products, CPU technology is low cost compared to those applications. But if you're talking about like notebook or smartphone, it is still relatively high cost, right? So I don't know about those potentials and I'm certainly not counting those in our assessment. Speaker 201:11:19I'm not even counting automotive or robot or whatever. I'm just saying, in the long term, we believe those are also good areas to use CPO. However, so I want to emphasize in our assessment, we are only counting color application, we are only assuming a very low attach rate for the college education only. And that can easily result in hundreds of millions of annual sales for us. Back to you, Tommy. Speaker 301:12:02Thank you, Peter. Yes, my second question is related to the core driver IC business. So for the multi driver IC, Speaker 201:12:11it looks like to Speaker 301:12:14be sequentially declining into the first quarter as you just guided. I'm wondering, Steve, it is just like the previous quarters that customers have some normal inventory adjustment or order adjustment or is there anything change in terms of the competition landscape? And looks like gross margin in the first quarter remains at similar level in fourth quarter, but with lower sales contribution from automotive. So do we have better product mix in the first quarter versus fourth quarter or there are other reasons behind that gross margin can still hang over there similarly as fourth quarter? Thank you. Speaker 201:12:54Right. So basically two questions. The first question is about Q1 outlook, the sales. I think the sequential decline really just reflects the seasonal factor, the Lunar New Year long holidays. If you take into consideration, if you compare this revenue guidance with any other previous years, I think this is not necessarily a better first quarter for us. Speaker 201:13:27I mean, again, we're very much we mentioned that we noticed some of our peers, their customers are giving them rush are pulling orders because of tariff considerations, right. We are not seeing the same in automotive. I guess for a variety of reasons, I won't I don't want to comment exactly on the reasons, but because I truly don't know exactly in detail. But I mean, we have certainly checked with our customers and that's the feedback we get from them. I mean, we are getting back normal level orders without customers considering tariff factor for their pull in orders for Q1. Speaker 201:14:18So I think the sequential decline is just a fair reflection of the Chinese New Year low holidays. And also I said quite specifically in our prepared remarks, we believe across the automotive display IC ecosystem, the inventory level is quite healthy, right? So that is definitely good news for us as we look forward to the whole year's outlook. And you also mentioned gross margin. Yes, it is a result of product mix. Speaker 201:15:08And specifically, we are seeing TDDI still remains quite strong, although TDDI, we are seeing some decline. Again, I mean, it's just one single quarter phenomena. I'm not sure I should speculate on the reasons or comment on why the change of direction in both product areas is for a single quarter phenomena. So, I don't see anything unusual there. Just that it just happens that DDIC is going to be up slightly, but DDI will be down slightly. Speaker 201:15:49So all in all consider our gross margin is going to remain above flat. Speaker 301:15:59Okay. I'm not sure. Thank you, Jordan. Speaker 201:16:03Thank you. Operator01:16:06Thank you. Speaker 201:16:19There are a few questions from online Q and A box. They are three d through that they are all related to automotive. So you guys may quickly repeat their questions. Question one, automotive revenue mix between Chinese and non Chinese cars. No obvious difference there. Speaker 201:16:45I mean, given our market share, we have to do both. In fact, for the so called non Chinese cars, we are talking about Europe, USA, Japan, Korea, all these major car markets. Our market share, I would say, is quite evenly spread across all major markets. Although Chinese customers tend to be more aggressive in terms of bringing our newest technology to mass production, which is a clear trend we are observing. Other than that, in terms of market share, we don't see a significant difference between Chinese and non Chinese. Speaker 201:17:39Top three automotive customers in Riyadh, their respective revenue percentage contributions, our direct customers, our paying customers are panel makers. And we also get to a lesser extent because of Hutch business, we also get some businesses from towards much less expense from Tier 1s and we don't really get the revenues from OEM and customers, right? So in this regard, if you ask me the top three automotive customers, they are obvious customers with LCD makers with the biggest capacity. So I don't want to name their names right now, but it's probably not too difficult to guess. They are major panel makers with the biggest capacity. Speaker 201:18:46Percentage of the remaining 70% of auto TDF design wins, those that have not yet entered NP, is expected to appear to twenty twenty five, not necessarily. Typically, we have customers will get inquiries and there could be a bidding process or customer will just grant us the design win. But anyway, at some point, there will be the official kickoff and that is when we define it as design win, right, it's the official kickoff, typically involving tier ones, right? So it is panel makers equipped with our ICs promoting to Tier 1s. And when Tier 1s get their own inquiries from OEMs and they make the decision which panel to use and which IC to use. Speaker 201:19:43And they've gone through the evaluation stage and they finalize it and they make the final call. And that's when the official design process gets kicked off and that's how we define design win, right. So when we are getting inquiries and we don't count that or even approval concept, we call it design win, but they are not defined as our number of project design win. So our number of project design win is actually quite strict. And so from design win, meaning project kickoff to mass production, it varies quite a lot depending on how whether it's a very new technology or it's very, very new technology. Speaker 201:20:33Although it depends on the type of customers. And I would say indeed Chinese customers tend to be quicker with shorter design cycles compared to others. So the time can vary from as far as very exceptional, but we have seen as far as nine months to two point five years for some time to be longer, right? So, this pipeline then so you imagine they probably spread across almost evenly across this period between one year to two plus years. So 2025 will only be a portion of it. Speaker 201:21:22Some will still wait until later. Question, are you working with one or multiple CPO customers to utilize your WLO solution? I mean, we have made announcement with HOSI, so HOSI is our clear customerpartner. And while we've been approached by others, I think this is a bit sensitive question to answer. I think certainly, I would just say, obviously, is our very strong solid and close partner and their requested demands R and D or ramping or otherwise is of the highest utmost priority to us for any foreseeable future effect. Speaker 201:22:35So I think I would just say that without directly answering your question. And I think the two of us together, we should be able to take up I mean, we are to be honest, we are seeing little competition. So the issue for us is to work together and resolve all issues for customer entering to mass production, right, and making sure we have a smooth delivery and quality and whatnot, right, rather than thinking about diversifying our customer or supplier base, that is definitely not a priority for the foreseeable future. Operator01:23:31Okay. Thank you. Then there are no questions at the moment. Thank you. Speaker 201:23:37Thank you. As a final note, Eric Li, our Chief IRB Officer will maintain Mr. Marketing activities and continue to attend Mr. Conferences. We will announce the details as they come about. Speaker 201:23:51Thank you and have a nice day. Operator01:23:54Thank you, Jordan. And ladies and gentlemen, this concludes fourth quarter and full year twenty twenty four earnings conference call. You may now disconnect. We thank you and goodbye.Read moreRemove AdsPowered by Conference Call Audio Live Call not available Earnings Conference CallHimax Technologies Q4 202400:00 / 00:00Speed:1x1.25x1.5x2xRemove Ads Earnings DocumentsSlide DeckPress Release(8-K)Annual report(20-F) Himax Technologies Earnings HeadlinesHimax chief IR/PR officer Eric Li retires, Karen Tiao succeedsApril 8, 2025 | markets.businessinsider.comHimax Announces Leadership Transition in Investor and Public RelationsApril 8, 2025 | globenewswire.comIs it CRAZY to still want reliable profits, despite this market?Larry Benedict, the acclaimed "Market Wizard," is calling an emergency briefing now... The same Larry who – while everyone else watched their retirement get cut in half in 2008... Performed 103% better than the market. And the one who crushed the market by 4X during the COVID meltdown.April 16, 2025 | Brownstone Research (Ad)Himax Technologies: A Stock On Sale Despite Many CatalystsApril 8, 2025 | seekingalpha.comHimax Technologies, Inc. Schedules First Quarter 2025 Financial Results Conference Call on ...April 7, 2025 | gurufocus.comHimax Technologies, Inc. Schedules First Quarter 2025 Financial Results Conference Call on Thursday, May 8, 2025, at 8:00 AM EDTApril 7, 2025 | globenewswire.comSee More Himax Technologies Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Himax Technologies? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Himax Technologies and other key companies, straight to your email. Email Address About Himax TechnologiesHimax Technologies (NASDAQ:HIMX), a fabless semiconductor company, provides display imaging processing technologies in China, Taiwan, the Philippines, Korea, Japan, Europe, and the United States. The company operates in two segments, Driver IC and Non-Driver Products. It offers display driver integrated circuits (ICs) and timing controllers that are used in televisions, PC monitors, laptops, mobile phones, tablets, automotive, ePaper devices, industrial displays, and other products. The company also provides automotive IC solutions, including traditional driver ICs; advanced in-cell touch and display driver integration; large touch and display driver integration; and local dimming timing controllers, as well as active matrix organic light-emitting diode (AMOLED) solutions, including AMOLED drivers, timing controllers, and touch controller ICs. In addition, it offers application specific IC services; liquid crystal on silicon and micro-electro mechanical system products; Power ICs; complementary metal oxide semiconductor image sensor products; wafer level optics products; 3D sensing products; and ultralow power WiseEye smart image sensing products. The company markets its display drivers to panel manufacturers, mobile device module manufacturers, and manufacturers of end-use products. Himax Technologies, Inc. was incorporated in 2001 and is headquartered in Tainan City, Taiwan.View Himax Technologies ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Why Analysts Boosted United Airlines Stock Ahead of EarningsLamb Weston Stock Rises, Earnings Provide Calm Amidst ChaosIntuitive Machines Gains After Earnings Beat, NASA Missions AheadCintas Delivers Earnings Beat, Signals More Growth AheadNike Stock Dips on Earnings: Analysts Weigh in on What’s NextAfter Massive Post Earnings Fall, Does Hope Remain for MongoDB?Semtech Rallies on Earnings Beat—Is There More Upside? 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There are 4 speakers on the call. Operator00:00:00Ladies and gentlemen, welcome to the Himax Technologies Incorporation Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. And now, I would like to turn the conference over to Mr. Operator00:00:26Eric Li, Chief IR and PR Officer at Himax. Mr. Li, please begin. Speaker 100:00:36Welcome, everyone, to the Himax Fourth Quarter and Full Year twenty twenty four Earnings Call. My name is Eric Li, Chief IRP Officer at Himax. Joining me today are Jordan Wu, President and Chief Executive Officer J. B. Ka Pan, Chief Financial Officer. Speaker 100:00:57After the Company's prepared comments, 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 hymxncgroup dot us or himaxirhimax dot com. Tw, 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 would like to remind everyone that some of the statements in this conference call, including statements regarding expected future finance results and industrial 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 risk factors can be found in the Company's SEC filings Form 20F for the years ended 12/31/2023, in the session entitled Risk Factors, as may be amended. Speaker 100:02:21Except for the Company's full year of 2023 financials, which were provided in the Company's '20 F and filed with SEC on 04/02/2024, the financial information included in this conference call is unaudited and consolidated and prepared in accordance with IFRS accounting. Such financial information is generated internally and has not been subjected to the bank review and scrutiny, including internal auditing procedures and external audit by an independent auditor, all 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, whereas a result of new information, future events or otherwise. On today's call, I will first review the Himax consolidated financial performance of the fourth quarter and full year 2024, followed by our first quarter twenty twenty five outlook. Jordan will then give an update on the status of our business, after which we will take questions. Speaker 100:03:56You can submit your questions online through the webcast or by phone. We will review our financials on an IFRS basis. We are delighted to announce that the Q4 revenues, gross margin, as well as profits, all surpassed the guidance issued on 11/07/2024, despite prevailing economic challenges. The better than expected financial results were primarily driven by stronger order momentum across product lines along with cost improvements and a better product mix. Fourth quarter revenues led to $237,200,000 an increase of 6.7 sequentially, significantly exceeding our guidance range of a slight decrease to flat and up 4.2% year over year. Speaker 100:04:59Gross margin reached 30.5%, exceeding our guidance flat to slightly up from 30% in the previous quarter and up from 30.3 in same period last year. The sequential increase was driven by a favorable product mix and cost improvement. Q4 profit per diluted ADS was $0.14 considerably above the guidance range of $0.093 to $0.11 thanks to better than expected revenues and improved costs. Revenue for large display drivers came in at $25,000,000 reflecting an 18.6% sequential decline. The decrease was primarily attributed to continued customer destocking after substantial Q2 replenishment for shopping festivals, as well as heightened price competition from China peers. Speaker 100:06:11Sales of large panel driver IC accounted for 10.5% of total revenues for the quarter, compared to 13.8% last quarter and 14.8% a year ago. Revenue from small and medium sized discrete driver segment totaled $166,800,000 an increase of 7.4% sequentially, exceeding our guidance of flat quarter over quarter, thanks to stronger than expected sales in the automotive and the tablet markets. Q4 automotive driver sales, including both traditional DTI and TDDI experienced mid teens increase, significantly outperforming our expectation of a single digit increase with both the DTIC and TDDI showing stronger than expected sales. This surge was primarily driven by continued rush order from Chinese panel customers carried over from Q3. Following the Chinese government's renewed trading stimulus initiatives announced in mid August twenty twenty four to boost automobile consumption. Speaker 100:07:41Remarkably, our Q4 automotive TTTI sales have exceeded the TIC sales for the first time, underscoring the global adoption of our TDDI solution, which are increasingly essential in modern vehicles and reflects the growing demand for more intuitive, interactive and cost effective touch panel features powered by TDDI technology. Our automotive business comprising drivers, Tecan and OLED IC sales accounted for around 50% of total Q4 revenues. Meanwhile, Q4 tablet IC sales exceeded the guidance of a low teens decline with the sales up slightly sequentially, driven by rush orders from leading end customers. Q4 smartphone IC sales declined slightly, in line with our guidance. The small and the media size driver IC segment accounted for 17.3% of total sales for the quarter, compared to 69.9% in previous quarter and 71.6% a year ago. Speaker 100:09:09Q4 non driver sales reached $45,400,000 exceeding the guidance range with a 24.9% increase from the previous quarter. The growth was primarily driven by a one time Kitak product shipment to a leading projector customer in TCAM for monitor application. In Q4, automotive TCAM sales continued to grow sequentially due to the widespread adoption of our market leading local DBT car with over 200 secondured design wing projects across major panel makers, Tier one suppliers and automotive manufacturers worldwide. Non driver products accounted for 19.2% of total revenues as compared to 16.3% in previous quarter and 13.6% a year ago. Fourth quarter operating expenses were $49,200,000 a decrease of 19.1% from the previous quarter and a decrease of 6% from a year ago. Speaker 100:10:27The sequential decrease stemmed primarily from a reduction in annual employee bonuses, partially offset by an increase in R and D expenses. As part of our standard company practice, we grant annual balances, including cash and RSUs to employees at the September each year. This result in higher IFRS operating expenses in third quarter compared to other quarters of the year. The year over year decrease was mainly due to a decline in employee bonus compensation as the annualized proportion of prior year's bonuses for 2023 was higher than that for 2024. Offsetting the higher annual bonus compensation grant for 2024 compared to 2023. Speaker 100:11:29Amid ongoing macroeconomic challenges, we are strictly enforcing budget and expense control with full year 2024 operating expenses declining 5.6% compared to last year. Fourth quarter operating income was $23,100,000 or 9.7% of sales compared to 2.6% of sales last quarter and 7.3% of sales for the same period last year. The sequential increase was primarily result of higher sales, improved gross margin and lower operating expenses. The year over year increase was primarily the result of higher sales, higher gross margin and lower employee bonus compensation due to the amortized portion of high year bonuses. Fourth quarter after tax profit was $24,600,000 or $0.14 per diluted ADS, reflecting a meaningful increase from $13,000,000 or $0.074 per diluted ADS last quarter and up from $23,600,000 or $0.135 in the same period last year. Speaker 100:13:01Now, let's quickly review the financial performance for the full year 2024. Revenues totaled $906,800,000 a slightly decline of 4.1% compared to 2023. Persistent global demand weakness coupled with uncertainty about market trends led to conservative purchasing decisions and inventory management by our panel customers. Even this uncertainty, we implemented strict expense controls, resulting in a 5.6% reduction in operating expenses for the year. However, our optimism in the automotive business remains unwavering with automotive IC sales increasing by nearly 20% year over year in 2024, far outpacing the overall automotive market growth. Speaker 100:14:11Among our automotive product lines, automotive TDDI and the key car sales, both relatively new technology, surged by more than 70%, driven by assisted rated adoption across the board. The growth strengthened our market leadership in the position of us well for continued success as the automotive sector embrace more advanced technology resulting from the mega trend of increasing size, quantity and the sophistication of displays inside vehicles. Revenue for large panel display drivers totaled $125,900,000 in 2024, marking a decrease of 28.3 year over year and representing 13.9% of total sales as compared to 18.6% in 2023. Small and medium sized drivers totaled $625,400,000 reflecting a slight decrease of 0.6 percent year over year and accounting for 69% of our total revenues as compared to 66.5% in 2023. Non driver sales totaled $155,500,000 an increase of 10.6% year over year and representing 17.1% of our total sales as compared to 14.9% a year ago. Speaker 100:16:05Gross margin in 2024 was 13.5%, up from 27.9% in 2023. The margin expansion was driven by a strategic focus on cost improvement and operational efficiency optimization, combined with the favorable product mix that included a higher percentage of high margin products, such as automotive and TCAM. The successful diversification of foundry sources also contributed to margin increase. Operating expenses in 2024 were $2.00 $8,000,000 a decline of 5.6% from 2023, primarily due to lower employee bonus compensation as the amortized portion of bonuses in 2023 was higher than that in 2024. '20 '20 '4 operating income was $68,200,000 or 7.5 percent of sales, an increase from $43,200,000 or $4,600,000 of sales in 2023. Speaker 100:17:28Our net profit for 2024 was $79,800,000 or $0.46 per diluted ADS, slightly significantly up from $50,600,000 or $0.29 per diluted ADS in 2023. Turning to the balance sheet, we had $224,600,000 of cash, cash equivalents and other financial assets as of 12/31/2024. This compared to $206,400,000 at the same time last year and $206,500,000 a quarter ago. We achieved a strong positive operating cash flow of $35,400,000 for the fourth quarter compared to a cash outflow of $3,100,000 in Q3. We made a total of $13,100,000 annual cash bonus to employees, resulting in the low operating cash flow of the quarter. Speaker 100:18:47As of 12/31/2024, we had 34,500,000 in long term unsecured loans, with $6,000,000 representing the current portion. Our year end inventory were $158,700,000 lower than $192,500,000 last quarter and $217,300,000 at the end of last year. Our inventory levels have steadily declined over past couple of quarters and are now at healthy levels. Accounts receivable at the December 2024 was $236,800,000 Little changed from $224,600,000 last quarter and $235,800,000 a year ago. DSO was ninety six days at the quarter end as compared to ninety two days last quarter and ninety one days a year ago. Speaker 100:20:08Fourth quarter capital expenditure were $3,200,000 versus $2,600,000 last quarter and $15,100,000 a year ago. Fourth quarter CapEx was mainly for R and D related equipment for our IFC design business. Total capital expenditures for 2024 were 13,100,000 as compared to $23,400,000 in 2023. The decrease was primarily due to reduced spending on in house pastures for our IC design business in 2024. As of 12/31/2024, Himax had 174,900,000 ADS outstanding, little changed from last quarter. Speaker 100:21:10On a fully diluted basis, the total number of ADS outstanding for the fourth quarter was $175,100,000 Now, turning to our first quarter twenty twenty five guidance. We expect first quarter twenty twenty five revenues to decrease by 8.5% to 12.5% sequentially, reflecting the low season demand due to Lunar New Year holidays. The revenue guidance implies a year over year performance ranging from flat to 4.6% increase. Gross margin is expected to be around 30.5% depending on product mix. This compares to 29.3% of same period last year. Speaker 100:22:12The first quarter profit attributable to shareholders is estimated to be in the range of $0.09 to $0.11 per fully diluted ADS, implying a year over year increase of 26% to 54%. We have noted that some peers' customers placed order early due to tariff factors, especially in the consumer electronics sector, resulting in Q1 revenue forecast, exceeding normal seasonal demand. In contrast, no similar trend has been observed in the automotive semiconductor market. Since Hi Max automotive business accounts for more than half of our total revenues, Our Q1 revenue per cap has not benefited from tariff factors. I will now turn the call over to Jordan to discuss our Q1 twenty twenty five outlook. Speaker 100:23:25Jordan, the floor is yours. Speaker 200:23:38Thank you, Eric. In 2024, our sales revenues in each quarter consistently outperformed guidance. While this strong performance is certainly commendable, we also highlight the challenges we faced such as limited party visibility and conservative customer demand, while many customers rely on rush orders to address their actual demands. On the other hand, rush orders are indicative of the tight inventory position of our panel customers in general. In the past few quarters, we have consistently demonstrated our ability to handle most of such rush orders underscoring our agility, adaptability, strong capabilities in inventory management and swift market responsiveness. Speaker 200:24:36The automobile visor sales remained our largest revenue contributor in 2024, accounting for almost half of total revenues, achieving close to 20% annual growth. This performance highlights Himax's automotive leadership in technological innovations, product development and market share. Looking ahead, we expect our automotive TDDI and T Card technologies to maintain growth momentum, further strengthening our market competitiveness. Beyond LCD technology, Himax is advancing development in the automotive OLED sector with numerous projects currently underway in partnership with leading panel bankers. We anticipate that automotive OLED IC will serve as one of the key growth drivers for Himax in the coming years, further solidifying our leadership in automotive display market. Speaker 200:25:45Meanwhile, Himax's activity is expanding its technology development beyond display ICs. To that end, in the OneSight AI segment, we have made notable progress with leading novel brands and achieved significant breakthroughs in smart door lock, PAND LAN authentication and smart home applications, collaborating with world leading customers to develop new innovations. We anticipate a strong growth trajectory in our Wi Fi business in 2025 and beyond. Himax's proprietary Web Level Optics or WIO counterparts or Core Package Optics or CTO has recently garnered significant attention in the capital markets. In fact, as early as June 2024, Himax and Forsey, a global leader in silicon photonics connectors, jointly announced the industry leading CTO technology. Speaker 200:27:01The collaboration spanning several years utilized Himax's WLO technology with four CCTO solutions for cutting edge AI multi chip modules or MCM. Since the announcement, we have provided updates on the latest progress in each quarterly earnings call. Himax's WLO technology plays a critical role in CTO by providing essential optical coupling capacity, making it a core element of the solution. CTO significantly enhances bandwidth and accelerates data transmission, while reducing signal loss, latency and power consumption. Additionally, it can help drastically decrease the size and cost of MCM. Speaker 200:28:00RISE CTO is still in engineering validation and trial production stage this year, with customers' mass production timelines undisclosed and the recent AI market disruption from DeepSeq. The prospect of CTO remains unchanged. The widespread adoption of CTO for data transmission to be conducted via optics instead of metal wire is on track in high performance AI applications. This is evidenced by the significant increase in customers' recent trial production volume forecast, indicating an accelerated timeline for CPU technology to enter mass production. Furthermore, Himax and 4Sea, in close collaboration with billion air customers and partners, are actively developing future generations of CPU technologies to meet the explosive high speed optical data transmission demand in HPC and AI. Speaker 200:29:13Through WLO and CPU technologies, Himax is well positioned to engage in the high speed AI computing market with high expectations for its growth. We believe that CPU technology beyond core applications will see further adoption in sectors such as automotive and robots in the future. Our current goal is to accelerate CPO adoption in cloud applications, thereby helping drive broader CPU adoption in AI applications. At CES this year, Himax showcased a wide range of innovative achievements, including automotive display technology, Wi Fi AI and advanced optical technologies or ARVR. Notably, a clear trend emerged at this year's CES as the industry demonstrated growing enthusiasm for AR glasses fueled by more companies entering the space and integrating generative AI to accelerate the development of lightweight, compact and all day AI glasses AI glasses rather. Speaker 200:30:42For AR glasses, Himax offers three optical technologies, namely, air cross micro display, WLO Web guide and ultra low power WiFi AI. Our latest patented front end air Cosmango display delivers a period brightness with an industry leading 400 ks mix, exceptional optical power efficiency, compact form factor, lightweight and superior display quality, making it one of the most viable solutions in the see through AR glasses market. In Webguide, in collaboration with leading Techmans, Himax leverages proprietary WO expertise, build of advanced metal imprint technology to offer industry leading optical solutions that optimize light transmission and display efficiency. In the field of AI sensing for AR glasses, Himax's Wi Fi provides always on AI sensing capabilities, which are being applied by developers to significantly enhance AR interactivity while consuming just a few milliwatts of power. In automotive display IC technology, we unveiled the industry's most comprehensive LCD and OLED solutions, at CES, showcasing a range of next generation smart cabin technologies. Speaker 200:32:26These solutions not only improve the intuitive operation of smart cabins, but also enhance driving safety and provide an exceptional user experience. A prime example is the advanced DisplayHMI solution developed in collaboration with AuO, which meets the demand for large size, high resolution and free form automotive displays. At CES, Himax also partnered with several AI ecosystem partners to showcase its ultra low power Wi Fi modules over a range of innovative, production ready IoT applications. These applications include hardware authentication, baby cry detection, people flow management and human sensing detection. The modules are designed for easy integration, making it highly suitable for various AIOP applications. Speaker 200:33:37With that, I will now begin with an update on the large panel driver IC business. In Q1, we anticipate a single digit sequential sales increase for large display driver ICs, driven by demand spurred by Chinese government subsidies for household appliances and as refile demand in the sluggish household sector. Notebook and monitor sales are expected to increase in Q1. In contrast, TVIC sales are set to decline as customers pull forward their inventory purchases in the prior quarter coupled with the seasonal slowdown in Q1. Looking ahead in the notebook sector, we are seeing an increase in demand for premium notebooks to adopt OLED displays and touch features, partially fueled by the rights of the AITC. Speaker 200:34:48HiMesh is well positioned to capitalize on this trend, offering a comprehensive range of ICs for both LCD and OLED notebooks, including DDIC, TCOM, touch controllers and TDDI. The standout innovation is our pioneering in cell touch TDDI for LCD displays, which improves the ease of system integration of system design integration by embedding the touch controller within the TDDI chip while maintaining the conventional display driver setup for TCAM data transmission. This design simplifies the integration for customers, reducing engineering complexity and speeding up product development. This solution also supports high resolution displays up to four ks and larger screens up to 16 inches aligning with the growing demand for advanced visual planning and immersive laptops. With smart production already underway for LED notebook printers, LTC, More projects are lined up. Speaker 200:36:10For OLED notebooks, in addition to our OLED DIC and TCAS solutions, we are also developing on sale touch controller technology with multiple projects underway with top panel makers and notebook vendors. Last but not least, progress we made on the next generation EDP 1.5 display interface for TCAM for both LCD and OLED panels. This interface will support high drive rates, low power consumption, adaptive sync and high resolution, key features essential for next generation ADCs. By delivering innovative combination technologies, Himax is well positioned to lead in the rapidly evolving landscape for AIPC and premium notebooks. Turning to the small and medium sized display driver IC business. Speaker 200:37:13For the full year 2024, our automotive driver IC sales comprising of TDDI and traditional TDIC increased nearly 20% year over year, significantly outpacing global auto market growth, largely driven by the continued adoption of TVDI technology among major customers across all continents. However, we expect Q1 automotive revenue to decline low teens sequentially following two quarters of sales demand. Despite this, Q1 automotive sales are still projected to increase by mid teens on a year over year basis. In the auto market TDDI sector, with cumulative shipments significantly surpassing those of our competitors, We continue to reinforce our market leadership, which currently stands at well over 50%. We see the project secured and a continuous influx of new pipeline and design wins across the board, of which only 20% already mass production. Speaker 200:38:41We expect to sustain this decent growth in the years ahead. While traditional automotive DDIC sales for 2024 declined due to their gradual partial replacement by TDDI. Our DDIC shipment volume still saw a modest increase in the last year. This demonstrates the steady demand for mature DDIC products such as those used in custom displays, SUVs and rear and side view mirrors, which do not require touch functionality. Furthermore, the long term trust and loyalty from our DDIC customers, some of whom have relied on our solutions for over a decade, is indicative of our strong customer retention. Speaker 200:39:39We continue to lead the automotive DDIC market maintaining a global market share of approximately 40%. Himax continues to lead in automotive display ID innovation by pioneering solutions that deliver superior performance, quality efficiency and enhanced user experiences. As part of this ongoing innovation, our latest TET or TCAR embedded driver SIM solution, which combines TDDI with low code gaming TCAR into a single chip, provides a cost effective, flexible and comprehensive solution for our customers. Another new technology worth highlighting is our automotive TDDI with advanced user aware touch control, which differentiates between driver and passenger touches to prevent cross touch and head driver safety. In addition, we offer a unique NAB on in cell display solution that combines a physical NAB on a GDI. Speaker 200:41:01This design seamlessly merges Inseltaz technology with tactile controls, offering drivers a safer, more intuitive interaction that reduces distractions and enhances the overall driver experience. Moving to smartphone and tablet IT sales, we expect a sequential decline in both product lines as is typical during the long season in Q1 due to the Lunar New Year. Next for an update on our OLED business. In the automotive OLED market, we have established strategic partnerships with leading panel makers in Korea, China and Japan. As OLED technology expands beyond premium car models, Himax is well positioned as the preferred partner, leveraging our strong presence and proven track record in the automotive electricity space sector. Speaker 200:42:06Capitalizing on our first mover advantage, we aim to drive the growing adoption of OLED in automotive displays by offering a comprehensive range of solutions, including DDIC, TCAM and sale touch controller. We believe this positions us as a primary beneficiary of the anticipated shift towards OLED displays for high end vehicles in a couple of years, enabling us to capture new growth opportunities and further strengthen our market leadership. Beyond the automotive sector, we have also made strides in the tablet and notebook markets, partnering with leading OLED panel members in Korea and China. All comprehensive OLED product portfolio covering DDIC, key card and touch controllers has driven several new projects that are on track to begin mass production this year. In the smartphone OLED market, we are making solid progress in our collaborations with customers in Korea and China, and we anticipate mass production to start later this year. Speaker 200:43:39First quarter small and medium size display driver IC business is expected to decline low teens sequentially. I would like to now turn to our non driver IG business update, where we expect the first quarter revenue to decrease high teens sequentially. First, for an update on our TCON business. We anticipate Q1 TCON sales to decrease mid teens sequentially, primarily due to the non recurrence of a one time ASIC TCOG shipment to a leading projector customer last year. It's worth a moderation in automotive TCOG shipments followed several quarters of strong growth. Speaker 200:44:34That being said, Himax maintains an unchallenged position in the modem and key car evidenced by growing validation and widespread adoption in both premium and mainstream car models worldwide. We are confident in the continued growth of our automotive teacom business, supported by our strong market presence in lower demand teacom with strong pipelines of over 200 design win projects set to gradually enter production in the coming years. Head up display or is another field getting traction within our commodity displays, driving increased adoption of low beam and TiCar technology and emerging as a particularly promising application. Our industry in novel TiME TiME provides distinct advancements with high contrast ratio and optimized power consumption. It effectively eliminates the so called postcard effect of the C in SUVs caused by backlight leakage typical of traditional conventional TFT LCD panels, ensuring clear and precise images on the windshield. Speaker 200:46:05Additionally, the T TAR features advanced transparency detection to prevent the display from obstructing the driver's view, thereby ensuring driver's effect. Similar, our SUV projects are already in progress and we are excited about the potential opportunities ahead. We are well positioned for continuous growth in automotive teacup over the next few years. Switching gears to the YSI Archi Lok Power AI Sensing solution, the cutting edge endpoint AI integration featuring industry leading Archi Lokal AI processor, OSM, CMOS image sensor and CNN based AI algorithm. One side AI delivers a significant competitive edge in the rapidly growing AI market through its ultra low power consumption and context aware on device AI inferencing that seamlessly integrates vision and other sensing capabilities into endpoint applications, particularly battery powered devices. Speaker 200:47:25This not only enhances intuitive user interaction, but also makes AI more practical and accessible. Additionally, Wanda AI offloads our tax from the NAND processor, effectively extending battery life span and improving overall data processing efficiency. Taking on the success with their notebooks, Himax's Wyze AI is continuing to expand its multi presence with additional use cases expected across other leading notebook brands, some of which are set for production later this year. Whiteside also continues to achieve significant market success across various sectors. For Smartdoor Locks, we collaborated with Specimen, a leading high end brand in China to introduce the world's first Smartdoor Locks with 20 fourseven century monitoring and real time event recording. Speaker 200:48:39Building on this achievement, we are expanding globally by collaborating with other leading door lock makers worldwide to integrate innovative ARVs, including parcel recognition, anti pinch protection and power band biometric access, further extending applications possibilities. Several of these value added solutions are set to enter production later this year. At CES twenty twenty five, Himax joined forces with ecosystem partners to unveil a suite of innovative production ready IoT applications, powered by our tiny form factor quality play website modules. Himax offers a series of modules, which incorporate in an ultra low power website AI processor and an AOS image sensor and advanced algorithms. These modules feature no codeno code AI platform capabilities, simplifying AI integration and supporting diverse use cases such as human presence detection, gender and age recognition, gesture recognition, face mesh, voice command, thermal image sensing, post estimation and people flow management, machine learning development and reducing development costs, website modules opening opportunities for automation, enhance data activity and elevate user experiences across the variety of industries. Speaker 200:50:44The full range of innovative ultra low power Wi Fi modules are also under development in collaboration with ecosystem partners, such as crybaby detection, dynamic gesture recognition and human sensing among others. One standout in our WiZine module portfolio is the Himax WiZine Powerman solution, which has quickly gained traction since its introduction just a year ago. We have secured multiple design wins with smart production already underway by a US customer for smart access applications and the Taiwanese based Bowlock vendor for its leading smart Bowlock brands. To meet the growing customer demand for flexibility across various environments, we upgraded our one side palm vent suite, now features by model authentication, combining both palm vent and face recognition, the Duo Authentication Solution enhances security by offering two layers of biometric verification, which not only increases reliability, but also makes it highly adaptable to various environments. The rise of physical AI agents marks significant shifts in Q1 machine interaction, enabling devices to proceed, process and respond to their surroundings in real time. Speaker 200:52:37The key emerging trend is the integration of cloud based cross language model, which enables these agents advanced reasoning and language understanding, enhancing their ability to interact with and adapt to the physical world. Himax YSai AI is at the forefront of this revolution, delivering over zone sensor fusion, ultra low power on device processing. Wirefin is are interfacing with aerial arms to provide the essential real time AI capabilities for next generation applications. A good illustration of this innovation was showcased at CES twenty twenty five where Hi Max and Seed Studio introduced the SensTech watch, effectively as empowered by Wi Fi AI, Equipped with vision and audio sensor fusion along with a speaker, this factory powered IoT device combines our own device AI with color based ARRAN to interpret commands, recognize objects, respond to events and facilitate real time interaction. Drawing from the success of Senscape Wazia, we are actively working on multiple projects leveraging Wazir AI to further drive advancements in physical AI agent applications. Speaker 200:54:29Separately, we are excited about our collaboration with a leading AI player to integrate OneStar AI into the next generation of AI glasses. As I mentioned earlier, at CES, there was a renewed enthusiasm on AR glasses with AI becoming an integral component to enhance intuitive and seamless human device interaction. WiFi AI addresses two critical challenges in the air glasses, namely real time responsiveness and power efficiency. For example, Wi Fi supports always on hours and sensing, enabling AR glasses to detect and analyze the surrounding environment with real time contents of AR. AR. Speaker 200:55:24This capability empowers instant response, real time object recognition, navigation assistance, sensation and environmental mapping. Enhancing the overall AR experience. Notably, Wanda AI's exceptional solar power consumption measured in single digit mini watts also made it perfectly suited for air glasses for all day wear. In another example, we collaborate with Ganxin on eyeball tracking technology, which powered by WebSight precisely detects subtle eyeball movements, gaze detection, pimple size and blinking, thereby providing clinical data for the enhancement of user interactions in AR glasses. In June 2024, Himax in partnership with Sporsey, the world leader in silicon photonics connection unveiled an industry leading Kokakis Optics' CTO technology, leveraging Himax state of the art WLO technology. Speaker 200:56:50This innovation integrates silicon photonics chips and optical connectors within MCM, replacing traditional methanol wire transmission with high speed optical communication. Speaker 100:57:04The Speaker 200:57:04technology significantly enhances bandwidth, boosts data transmission rates, reduces signal loss and latency, lowers power consumption and significantly minimizes designs and cost of MCM. In working closely with Forsey, we are making significant strides through a solid partnership with building ASM and contemporary companies and pharmacy with small scale production of the first generation CTO solution already underway. As mentioned earlier, the significant increase in Q1 engineering validation and trial production volume combined with the anticipated sample volume increases in the coming quarters is a strong indication that CTO technology is being accelerated towards mass production. In addition, in close collaboration with the AI customers slash partners, we are speeding up the development of CPU technology for the next few generations. We are more optimistic than ever about the outlook for our Lavalier business, which is poised to generate significant growth opportunities and become a major revenue and profit contributor in the years ahead. Speaker 200:58:43Alongside the CTO progress, we are witnessing a rise in engineering collaborations with global technology leaders who are utilizing our WLO expertise to make advanced waveguides for AR glasses, highlighting the growing regulation of our WLO capabilities. For an update on ERCOS, we recently introduced our industry leading 400 ks niche ultra luminance from the ERCOS fiber display, setting a new benchmark for brightness with extremely low power consumption of nearly 300 megawatts. At CES twenty twenty five, we showcased an AR Glasses POC for Proven Control concept featuring the micro display with a third party web guide, achieving over 1,000 nits of brightness to the eyes. This demonstration highlighted its stability for outdoor high mid light conditions with a light weight of just 0.98 grams and ultra compact form factor of less than 0.5cc. Combined with excellent color performance, Himax's front mid air cosmoidal display is ideal for all made AR glasses and underscores the technology's readiness for real world applications. Speaker 201:00:32Following the recent release of our 400 ks new ultra luminous from the LCOS micro display, we are actively engaged in significant projects through strategic collaborations with industry leaders. Himax's proven track record of over a decade in Aerocorp Technology coupled with a history of successful production shipments, highlights our readiness to meet the demands of last year production of AR glasses. That concludes my report for this quarter. Thank you for your interest in Timex. We appreciate you joining today's call and are now ready to take questions. Operator01:01:21Yes. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Now, we'll have our first question, Johnny Tang Nomura. Go ahead please. Speaker 301:02:25Thank you, Jordan and Eric for taking my question. My first question is regarding to CPO. Because maybe in the past few months, some investors were asking about whether the CPO our CPO is firstly adopted by scale up or scale up scale out or scale up server systems. So wondering if you could kindly elaborate more there. And also you mentioned about there has been already some small scale production. Speaker 301:03:02And could you give us some updates on when should we see more sizable mass production scale in the coming years? And also, could you update a little bit on the competition landscape there? It's like how well positioned right now compare with the multiple peers? This is my first question. Thank you. Speaker 201:03:28Thank you, Tony. I'll try to it's not an easy question. I'll try to address the question perhaps from a slightly different angle. But I think, I mean, understandably, you guys are the one issue you guys are really interested in now is that exactly how much contribution this will be for Himax in the foreseeable future and even the long term, right. I assume that is basically the essence of your question. Speaker 201:04:09As I just mentioned, this year 2025 will be a year for engineering validation with only sample shipments for us. So while the sample shipments will accelerate quarter by quarter, the revenue contribution will be rather limited if you compare that with our total revenues. The fourth quarter, which presumably will be the peak of this year, the revenue is said to be in millions of dollars based on current forecast, but again, it's still quite small compared to our total size and things can still change as it is still early. Now, in all likelihood, mass production will commence in 2026, But we don't know how and certainly we won't comment on exactly when in 2026. It's probably still more than a year from now. Speaker 201:05:15There are still many unknowns, like how many customers, how many projects or their revenue curve, etcetera. And therefore, while 2026 is likely to be the first year of mass production, it is still early and it's still difficult to give a revenue indication for the year at this point. Now, if we look further ahead and like ignore the exact timing and ramping curve, etcetera, for the time being, right, And let's just try to kind of paint the picture for an, I would call it, annualized potential revenue for Himax, annualized potential revenue for Himax because the first year production could be just a quarter or whatever, I don't know. But if we let's try to annualize it, right, and annualize the potential revenue for Himax when the CTO business reaches polycore in early stage of mass production, right. So maybe that is how I can try to give you a preliminary indication. Speaker 201:06:35The reason why I say stage of mass production is because I believe the ultimate demand for CPL is probably above and beyond anything we can imagine at this point. So by early stage, I'm thinking probably in the first couple of years when the industry is perhaps still testing the water with semi only premium models equipped with CPL. In making the assessment, we have considered leading AI customers' total advanced GPU shipment outlook, for which you guys have provided a lot, right, and leading Foundry's total coloWatt capacity plan, which is very much a public information. And we have assumed a very low percentage of CPO attached rate for both, right. So when I say early stage of mass production is what I mean by the tax rate for both is still very, very low percentage wise. Speaker 201:07:52So with such conservative assumptions, I can say that our annualized CPO revenue could still reach hundreds of millions of dollars when we get there. Again, this is early stage and this is the best I can do in terms of providing a revenue indication. So to me, this is not really a question of whether or even when it will happen because it will definitely be happening in our view, but rather how fast the CPU technology will penetrate. While we believe with all these benefits like raising transmission bandwidth and lower report consumption at relatively very low cost, The CTO technology has the potential of ramping quickly, we believe, because of all these benefits, right. It has the potential of ramping quickly. Speaker 201:08:59However, I didn't update that is still a decision to be made by our end customers. So, all we can do is to get ourselves well prepared to meet any customer demand or rapid plan and that's exactly what we'll do. I don't know if that answers your question. Speaker 301:09:25Yes. Thank you, Jordan, for sharing this variable information. Yes, but just maybe I'm wondering, maybe if we talk about maybe 2026, do you think that CPU is mainly used for the on rack switches or it can be directly used for the connection between GPUs and GPUs? Speaker 201:09:51Okay. We are so upstream. We are probably not the best person to answer such questions. However, as far as we are told, it will be firstly adopted in switches and is going to account for the bulk of the volume in early stage. That's what we're told, although again you're probably not asking the right person. Speaker 201:10:24Because at the outset, that is our I mean, all we provide is those critical optical components, right, and how our customers are going to use it for whatever application, it's really their call and they don't necessarily need to share such a promotion with us. However, we also know as we, as I mentioned in my prepared remarks, right, in addition to qualification, we believe eventually this will also have great potential for things like automotive robot. I mean, when it comes to very consumer products, CPU technology is low cost compared to those applications. But if you're talking about like notebook or smartphone, it is still relatively high cost, right? So I don't know about those potentials and I'm certainly not counting those in our assessment. Speaker 201:11:19I'm not even counting automotive or robot or whatever. I'm just saying, in the long term, we believe those are also good areas to use CPO. However, so I want to emphasize in our assessment, we are only counting color application, we are only assuming a very low attach rate for the college education only. And that can easily result in hundreds of millions of annual sales for us. Back to you, Tommy. Speaker 301:12:02Thank you, Peter. Yes, my second question is related to the core driver IC business. So for the multi driver IC, Speaker 201:12:11it looks like to Speaker 301:12:14be sequentially declining into the first quarter as you just guided. I'm wondering, Steve, it is just like the previous quarters that customers have some normal inventory adjustment or order adjustment or is there anything change in terms of the competition landscape? And looks like gross margin in the first quarter remains at similar level in fourth quarter, but with lower sales contribution from automotive. So do we have better product mix in the first quarter versus fourth quarter or there are other reasons behind that gross margin can still hang over there similarly as fourth quarter? Thank you. Speaker 201:12:54Right. So basically two questions. The first question is about Q1 outlook, the sales. I think the sequential decline really just reflects the seasonal factor, the Lunar New Year long holidays. If you take into consideration, if you compare this revenue guidance with any other previous years, I think this is not necessarily a better first quarter for us. Speaker 201:13:27I mean, again, we're very much we mentioned that we noticed some of our peers, their customers are giving them rush are pulling orders because of tariff considerations, right. We are not seeing the same in automotive. I guess for a variety of reasons, I won't I don't want to comment exactly on the reasons, but because I truly don't know exactly in detail. But I mean, we have certainly checked with our customers and that's the feedback we get from them. I mean, we are getting back normal level orders without customers considering tariff factor for their pull in orders for Q1. Speaker 201:14:18So I think the sequential decline is just a fair reflection of the Chinese New Year low holidays. And also I said quite specifically in our prepared remarks, we believe across the automotive display IC ecosystem, the inventory level is quite healthy, right? So that is definitely good news for us as we look forward to the whole year's outlook. And you also mentioned gross margin. Yes, it is a result of product mix. Speaker 201:15:08And specifically, we are seeing TDDI still remains quite strong, although TDDI, we are seeing some decline. Again, I mean, it's just one single quarter phenomena. I'm not sure I should speculate on the reasons or comment on why the change of direction in both product areas is for a single quarter phenomena. So, I don't see anything unusual there. Just that it just happens that DDIC is going to be up slightly, but DDI will be down slightly. Speaker 201:15:49So all in all consider our gross margin is going to remain above flat. Speaker 301:15:59Okay. I'm not sure. Thank you, Jordan. Speaker 201:16:03Thank you. Operator01:16:06Thank you. Speaker 201:16:19There are a few questions from online Q and A box. They are three d through that they are all related to automotive. So you guys may quickly repeat their questions. Question one, automotive revenue mix between Chinese and non Chinese cars. No obvious difference there. Speaker 201:16:45I mean, given our market share, we have to do both. In fact, for the so called non Chinese cars, we are talking about Europe, USA, Japan, Korea, all these major car markets. Our market share, I would say, is quite evenly spread across all major markets. Although Chinese customers tend to be more aggressive in terms of bringing our newest technology to mass production, which is a clear trend we are observing. Other than that, in terms of market share, we don't see a significant difference between Chinese and non Chinese. Speaker 201:17:39Top three automotive customers in Riyadh, their respective revenue percentage contributions, our direct customers, our paying customers are panel makers. And we also get to a lesser extent because of Hutch business, we also get some businesses from towards much less expense from Tier 1s and we don't really get the revenues from OEM and customers, right? So in this regard, if you ask me the top three automotive customers, they are obvious customers with LCD makers with the biggest capacity. So I don't want to name their names right now, but it's probably not too difficult to guess. They are major panel makers with the biggest capacity. Speaker 201:18:46Percentage of the remaining 70% of auto TDF design wins, those that have not yet entered NP, is expected to appear to twenty twenty five, not necessarily. Typically, we have customers will get inquiries and there could be a bidding process or customer will just grant us the design win. But anyway, at some point, there will be the official kickoff and that is when we define it as design win, right, it's the official kickoff, typically involving tier ones, right? So it is panel makers equipped with our ICs promoting to Tier 1s. And when Tier 1s get their own inquiries from OEMs and they make the decision which panel to use and which IC to use. Speaker 201:19:43And they've gone through the evaluation stage and they finalize it and they make the final call. And that's when the official design process gets kicked off and that's how we define design win, right. So when we are getting inquiries and we don't count that or even approval concept, we call it design win, but they are not defined as our number of project design win. So our number of project design win is actually quite strict. And so from design win, meaning project kickoff to mass production, it varies quite a lot depending on how whether it's a very new technology or it's very, very new technology. Speaker 201:20:33Although it depends on the type of customers. And I would say indeed Chinese customers tend to be quicker with shorter design cycles compared to others. So the time can vary from as far as very exceptional, but we have seen as far as nine months to two point five years for some time to be longer, right? So, this pipeline then so you imagine they probably spread across almost evenly across this period between one year to two plus years. So 2025 will only be a portion of it. Speaker 201:21:22Some will still wait until later. Question, are you working with one or multiple CPO customers to utilize your WLO solution? I mean, we have made announcement with HOSI, so HOSI is our clear customerpartner. And while we've been approached by others, I think this is a bit sensitive question to answer. I think certainly, I would just say, obviously, is our very strong solid and close partner and their requested demands R and D or ramping or otherwise is of the highest utmost priority to us for any foreseeable future effect. Speaker 201:22:35So I think I would just say that without directly answering your question. And I think the two of us together, we should be able to take up I mean, we are to be honest, we are seeing little competition. So the issue for us is to work together and resolve all issues for customer entering to mass production, right, and making sure we have a smooth delivery and quality and whatnot, right, rather than thinking about diversifying our customer or supplier base, that is definitely not a priority for the foreseeable future. Operator01:23:31Okay. Thank you. Then there are no questions at the moment. Thank you. Speaker 201:23:37Thank you. As a final note, Eric Li, our Chief IRB Officer will maintain Mr. Marketing activities and continue to attend Mr. Conferences. We will announce the details as they come about. Speaker 201:23:51Thank you and have a nice day. Operator01:23:54Thank you, Jordan. And ladies and gentlemen, this concludes fourth quarter and full year twenty twenty four earnings conference call. You may now disconnect. We thank you and goodbye.Read moreRemove AdsPowered by