Financial Data and Key Metrics Changes - Fourth quarter revenue was $203.1 million, a sequential increase of 2.0% quarter-over-quarter, with gross margin at 30.4%, consistent with guidance [4][5] - Full year 2025 revenue totaled $832.2 million, a decline of 8.2% compared to 2024, with net profit at $43.9 million, down from $79.8 million in 2024 [11][14] - Operating profit for Q4 was $6.8 million, representing an operating margin of 3.4%, compared to -0.3% in the previous quarter [10] Business Line Data and Key Metrics Changes - Revenue from large display driver IC was $21.7 million, a sequential increase, accounting for 10.7% of total revenue [5] - Small and medium-sized display driver revenue was $139.1 million, reflecting a slight decline of 1.3% sequentially, while automotive driver sales increased approximately 10% quarter-over-quarter [6][7] - Non-driver sales reached $42.3 million, a 7.9% increase from the previous quarter, with T-CON business accounting for over 10% of total sales [8] Market Data and Key Metrics Changes - Automotive driver sales showed resilience, growing single-digit year-over-year despite softness in global automotive markets [6] - The small and medium-sized display driver IC segment accounted for 68.5% of total sales for the quarter, down from 70.8% in the previous quarter [7] - The automotive display IC business is expected to remain strong, with a 40% market share in automotive DDIC and over half in the global TDDI market [20][33] Company Strategy and Development Direction - The company is focusing on expanding into ultra-low power AI for endpoint devices and smart glasses, leveraging advancements in AI technology [21][25] - Himax aims to complete mass production readiness for CPO technologies in 2026, with significant revenue contributions expected starting in 2027 [28][57] - The automotive market is seen as a significant growth area, driven by innovations in smart cabins and advanced display technologies [21][33] Management's Comments on Operating Environment and Future Outlook - The management noted ongoing macroeconomic uncertainties and price increases in memory affecting market sentiment [19] - The first quarter of 2026 is expected to be the trough of the year, with sales anticipated to rebound in the second quarter [19] - Management expressed optimism about long-term growth in the automotive display IC business, supported by a strong design win pipeline [20] Other Important Information - Operating expenses for Q4 were $54.9 million, a decrease of 9.6% from the previous quarter, attributed to reduced annual bonuses [9] - The company had $286.2 million in cash and cash equivalents as of December 31, 2025, an increase from the previous year [14] - Capital expenditure for 2025 was $20.1 million, up from $13.1 million in 2024, primarily for R&D-related equipment [17] Q&A Session Summary Question: What is the outlook for gross margin in Q1? - Management indicated that gross margin is expected to be flat to slightly down due to product mix changes and ongoing material cost pressures [47][48] Question: Can you provide guidance on CPO revenue for 2026 and 2027? - Management stated that revenue contribution from CPO will be limited in 2026, with meaningful contributions expected starting in 2027 as they finalize product validation [52][54] Question: What is the expected contribution of OLED sales in 2026? - Management noted that OLED sales are expected to contribute less than 10% of total sales in 2026, with a significant ramp-up anticipated in 2027 [60][61]

Financial Performance - Fourth quarter revenue was $203.1 million, a sequential increase of 2.0% quarter-over-quarter, with gross margin at 30.4%, consistent with guidance [4][5] - Full year 2025 revenue totaled $832.2 million, a decline of 8.2% compared to 2024, with operating income at $44.1 million or 5.3% of sales [11][13] - Q4 profit per diluted ADS was $0.036, at the high end of the guidance range of $0.02-$0.04 [5] Business Segment Performance - Revenue from large display driver IC was $21.7 million, a sequential increase, accounting for 10.7% of total revenue [5][6] - Small and medium-sized display driver revenue totaled $139.1 million, reflecting a slight decline of 1.3% sequentially, while automotive driver sales increased approximately 10% quarter-over-quarter [6][7] - Non-driver sales reached $42.3 million, a 7.9% increase from the previous quarter, with T-CON business accounting for over 10% of total sales [8] Market Performance - Automotive driver sales showed resilience despite softness in global automotive markets, with full-year growth outpacing the broader market [6][11] - The small and medium-sized display driver IC segment accounted for 68.5% of total sales for the quarter, down from 70.8% in the previous quarter [7] Company Strategy and Industry Competition - The company is focusing on expanding into ultra-low power AI for endpoint devices and smart glasses, leveraging advancements in AI technology [21][25] - Himax aims to capture increasing semiconductor content as automotive display technologies evolve from LCD to OLED, with a strong design win pipeline [35][36] Management Commentary on Operating Environment and Future Outlook - Management noted ongoing macroeconomic uncertainty and price increases in memory affecting market sentiment, but expects sales to rebound in the second quarter [19][20] - The automotive display IC business is projected to remain strong, supported by new technology offerings and a robust design win pipeline [20][21] Other Important Information - Operating expenses for Q4 were $54.9 million, a decrease of 9.6% from the previous quarter, attributed to reduced annual bonuses and currency depreciation [9] - The company had $286.2 million in cash and cash equivalents as of December 31, 2025, an increase from the previous year [14] Q&A Session Summary Question: First quarter gross margin outlook - Management indicated that gross margin is expected to be flat to slightly down due to product mix changes and ongoing material cost pressures [47][48] Question: CPO revenue guidance for 2026 and 2027 - Management stated that revenue contribution from CPO will be limited in 2026 due to validation processes, with potential meaningful contributions starting in 2027 [52][54] Question: OLED sales expectations - Management noted that OLED sales are expected to grow significantly in 2027, with automotive and IT OLED products enjoying better margins compared to smartphone OLEDs [60][63]

Financial Performance - Q4 2025 revenue was $203.1 million, a sequential increase of 2.0% quarter-over-quarter, with a gross margin of 30.4%, consistent with guidance [4][5] - Full year 2025 revenue totaled $832.2 million, a decline of 8.2% compared to 2024, with operating income of $44.1 million or 5.3% of sales [11][13] - Q4 profit per diluted ADS was $0.036, at the high end of the guidance range of $0.02-$0.04 [5] Business Segment Performance - Revenue from large display driver IC was $21.7 million, a sequential increase, accounting for 10.7% of total revenue [5] - Small and medium-sized display driver revenue was $139.1 million, reflecting a slight decline of 1.3% sequentially, with automotive driver sales increasing approximately 10% quarter-over-quarter [6] - Non-driver sales reached $42.3 million, a 7.9% increase from the previous quarter, driven by increased ASP consumption [7][8] Market Performance - Automotive driver sales showed resilience, growing single-digit year-over-year despite global market softness [6] - The automotive display IC business is expected to remain strong, with Himax commanding a 40% market share in automotive DDIC and over half in D-TDDI [19][32] - The company anticipates growth in non-driver IC businesses, particularly T-Con and WiseEye, providing incremental support [18] Company Strategy and Industry Competition - Himax is focusing on advanced display technologies and expanding into ultra-low power AI for endpoint devices, smart glasses, and AR applications [20][24] - The company is strategically investing in non-display IC areas with long-term growth potential, expecting meaningful contributions starting in 2027 [11][19] - Himax is collaborating with leading panel makers to enhance its competitive position in the automotive OLED market [64][66] Management Commentary on Operating Environment and Future Outlook - The management noted ongoing macroeconomic uncertainties and price increases in memory affecting market sentiment [18] - The first quarter of 2026 is expected to be the trough of the year, with sales rebounding in the second quarter [18] - Management expressed optimism about long-term growth in the automotive display IC business, supported by strong design win pipelines and technological advancements [19] Other Important Information - Operating expenses for Q4 were $54.9 million, a decrease of 9.6% from the previous quarter, but an increase of 11.6% year-over-year [9] - The company had $286.2 million in cash and cash equivalents as of December 31, 2025, compared to $224.6 million a year ago [14] Q&A Session Summary Question: What is the outlook for gross margin in Q1? - Management indicated that gross margin is expected to be flat to slightly down due to product mix changes and ongoing material cost pressures [47][48] Question: Can you provide guidance on CPO revenue for 2026 and 2027? - Management stated that revenue contribution from CPO will be limited in 2026 due to validation processes, with potential meaningful contributions starting in 2027 [52][54] Question: What is the expected contribution of OLED sales in 2026? - Management expects OLED sales to contribute less than 10% of total sales in 2026, with a significant ramp-up anticipated in 2027 [61][66]

Drive for better vision 2025 Q4 and Full Year Earnings Updates : HIMX Forward Looking Statements Factors that could cause actual events or results to differ materially from those described in this conference call include, but are not limited to, the effect of the Covid-19 pandemic on the Company's business; general business and economic conditions and the state of the semiconductor industry; market acceptance and competitiveness of the driver and non-driver products developed by the Company; demand for end- ...

Core Viewpoint - Himax Technologies reported Q4 2025 financial results that met guidance expectations, with a sequential revenue increase and a stable gross margin, while providing a cautious outlook for Q1 2026 due to macroeconomic uncertainties and anticipated declines in revenue and gross margin [1][3][4][11]. Financial Performance - Q4 2025 net revenues were $203.1 million, a sequential increase of 2.0%, exceeding the company's guidance of flat quarter-over-quarter [3][4]. - Gross margin for Q4 2025 was 30.4%, consistent with the guidance of flat to slightly up from 30.2% in the previous quarter [3][4]. - Q4 profit per diluted ADS was 3.6 cents, at the high end of the guidance range of 2.0 to 4.0 cents [3][4]. - Full year 2025 revenues totaled $832.2 million, an 8.2% decline compared to 2024, with gross margin slightly up at 30.6% [11][12]. Segment Performance - Revenue from large display drivers in Q4 2025 was $21.7 million, a 14.2% increase from the previous quarter, outperforming guidance [4][5]. - Small and medium-sized display driver segment revenues totaled $139.1 million, reflecting a slight decline of 1.3% sequentially [6]. - Non-driver sales reached $42.3 million, a 7.9% increase from the previous quarter, driven by increased ASIC Tcon shipments [7]. Q1 2026 Guidance - Company expects Q1 2026 revenues to decline by 2.0% to 6.0% quarter-over-quarter, with gross margin anticipated to be flat to slightly down [1][47]. - Profit per diluted ADS for Q1 2026 is projected to be in the range of 2.0 cents to 4.0 cents [1][47]. Industry Outlook - The automotive sector outlook remains limited due to uncertain government policies and consumer sentiment, but sales are expected to rebound in Q2 2026 [2][18]. - Himax is optimistic about its long-term automotive display IC business, supported by a strong design-win pipeline and new technology offerings [19]. - The company continues to expand into ultralow power AI technologies and other emerging areas, which are expected to drive future growth [20][21]. Strategic Initiatives - Himax is focusing on expanding its WiseEye AI technology, which is gaining traction in smart glasses and other applications [24][46]. - The company is also advancing its Co-Packaged Optics (CPO) initiatives, aiming for mass production readiness in 2026 [25][26]. - Himax's automotive display IC business is positioned to benefit from the shift towards OLED technologies and advanced display solutions [33][34].

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Company Overview - Himax Technologies Inc. (NASDAQ:HIMX) is a fabless semiconductor company that specializes in display imaging processing technologies, operating in multiple regions including China, Taiwan, Korea, Japan, and the US [4] Recent Developments - On February 4, Morgan Stanley downgraded Himax from Overweight to Equal Weight while maintaining an $8 price target, citing challenges for display driver integrated circuit vendors [1][6] - On January 7, Himax Technologies and Vuzix Corp. introduced a lightweight, prescription-ready optical component reference design for AR glasses at CES 2026, aiming to accelerate the commercialization of all-day wearable AR glasses [3] Market Challenges - Morgan Stanley anticipates that softened demand in the computer, smartphone, and automotive sectors, along with gross margin pressure and a lack of new growth drivers, will hinder Himax's performance [2] - Rising memory costs are expected to create additional headwinds, contributing to continued downside across primary market segments [2]

Core Insights - Himax Technologies, Inc. has announced the adoption of its HX85200 series on-cell OLED touch controller IC by multiple leading global IT brands, with mass production set to begin in Q1 2026 [1] - The new OLED touch controller IC integrates advanced differential signal processing circuitry and algorithms for enhanced multi-finger capacitive touch performance, supporting various OLED panel architectures [1][2] Product Features - The on-cell OLED touch controller IC is designed to be compatible with different OLED panel types, including rigid, flexible, and hybrid, effectively suppressing background display noise and ensuring stable display performance [2] - It offers configurations of 138-channel and 118-channel to optimize touch accuracy and power consumption for various panel sizes, with the 138-channel version aimed at 13- to 16-inch laptop displays and the 118-channel version tailored for tablets [3] Market Trends - The demand for superior visual quality and intuitive user interaction in high-end IT devices is driving the need for advanced touch technologies, as OLED panel structures become thinner and display environments more complex [4] - Himax is focused on innovation in touch technology and is collaborating with global brands to enhance the integration of display and touch solutions, aiming to improve user experiences across IT applications [4] Company Overview - Himax Technologies is a leading global fabless semiconductor solution provider specializing in display imaging processing technologies, with a diverse product range including display driver ICs and timing controllers [5] - The company holds a significant market share in automotive display technology and is also involved in emerging fields such as tinyML visual-AI and optical technologies, with a total of 2,595 patents granted and 364 patents pending as of December 31, 2025 [5]

Summary of Conference Call on Greater China Semiconductors Industry Overview - **Industry**: Greater China Semiconductors, specifically focusing on Driver ICs - **Current Situation**: The industry is facing challenges due to weaker demand in PCs, smartphones, and automobiles, leading to gross margin pressure and a lack of new growth drivers for DDI vendors, particularly design houses [1][4][64]. Key Points Demand and Growth Drivers - **Shift from COVID-19**: The previous upcycle was driven by strong PC demand during COVID-19, which has now shifted to AI-driven growth through CSP spending, resulting in price hikes across various components [2]. - **AI Exposure**: DDI foundry and OSAT players can gain AI exposure more easily than design houses, which face longer qualification times for new products with CSP customers [3][10]. Financial Performance and Projections - **Earnings Downgrades**: Earnings estimates for Novatek have been cut by 5% for 2026 and 14% for 2027 due to lukewarm consumer tech demand and increased costs [55][58]. - **Revenue Declines**: Smartphone and PC semiconductor customers are expected to decline by 10-20% year-over-year in 2026, impacting overall demand [4][10]. - **Himax's Revenue Exposure**: Himax derives approximately 50% of its revenue from the auto segment, which is also expected to be affected by memory price inflation, potentially adding $100-400 per vehicle [11]. Market Position and Ratings - **Company Ratings**: - Novatek downgraded from Equal-weight to Underweight with a price target reduced from NT$380.00 to NT$323.00 [7][58]. - Himax downgraded from Overweight to Equal-weight due to its exposure to the auto sector and overall lukewarm demand [5][7]. Margin Pressures - **Cost Increases**: Rising memory and CPU costs are expected to further dampen demand in smartphones and PCs, leading to potential earnings declines for DDI design houses [4][10]. - **ASP Pass-Through**: The ability to pass through increased costs to customers may be limited due to weak demand and intense competition [4]. Long-term Outlook - **Novatek's Position**: Despite short-term struggles, Novatek is viewed positively in the long term due to its strong position in advanced DDI and design talent [5][64]. - **Market Share Dynamics**: Increased competition from Chinese vendors in the OLED TDDI space is noted, which may impact Novatek's market share [5][64]. Additional Insights - **Non-DDIC Business**: Himax's non-DDIC business segments are expected to help stabilize margins despite pressures in the DDIC segment [12]. - **Future Risks**: The ongoing memory shortage and pricing pressures could pose structural risks to the auto sector, particularly for premium vehicles with high memory content [11]. This summary encapsulates the key insights and projections from the conference call regarding the semiconductor industry in Greater China, focusing on the challenges faced by DDI vendors and the financial outlook for key players like Novatek and Himax.

Core Viewpoint - Himax Technologies, Inc. will hold a conference call on February 12, 2026, to discuss its fourth quarter and full year 2025 financial results [1]. Company Overview - Himax Technologies, Inc. is a leading global fabless semiconductor solution provider focused on display imaging processing technologies [4]. - The company specializes in display driver ICs and timing controllers, which are widely adopted across various industries, including TVs, PC monitors, laptops, mobile phones, tablets, automotive, and industrial displays [4]. - Himax is recognized as the global market share leader in automotive display technology, offering a range of innovative automotive IC solutions [4]. - The company is also a pioneer in tinyML visual-AI and optical technology, with its WiseEye Ultralow Power AI Sensing technology being deployed in consumer electronics and AIoT applications [4]. - Himax has a significant patent portfolio, with 2,595 patents granted and 364 patents pending approval as of December 31, 2025 [5]. Conference Call Details - The conference call will take place at 8:00 a.m. EST and 9:00 p.m. Taiwan Time on February 12, 2026 [2]. - A live webcast will be available, and a replay will be accessible two hours after the call on the company's website [3].