Himax(HIMX)2025-02-13 17:33Financial Performance - Q4 2024 revenues reached $237.2 million, a sequential increase of 6.7% and a year-over-year increase of 4.2%, exceeding guidance [8] - Gross margin for Q4 was 30.5%, up from 30% in the previous quarter and 30.3% a year ago, driven by a favorable product mix and cost improvements [8] - Q4 profit per diluted ADS was $0.14, significantly above the guidance range of $0.09 to $0.11, attributed to better-than-expected revenues and improved costs [9] - Full year 2024 revenues totaled $906.8 million, a decline of 4.1% compared to 2023, with net profit increasing to $79.8 million or $0.46 per diluted ADS, up from $50.6 million or $0.29 in 2023 [17][21] Business Line Performance - Revenue from large display drivers was $25 million, an 18.6% sequential decline due to customer destocking and price competition [9] - Small- and medium-sized display driver segment revenues totaled $166.8 million, a 7.4% sequential increase, driven by strong sales in automotive and tablet markets [10] - Non-driver sales reached $45.4 million, a 24.9% increase from the previous quarter, primarily due to a one-time Tcon product shipment [13] - Automotive driver sales saw a mid-teens increase, with TDDI sales surpassing DDIC sales for the first time, reflecting strong demand for TDDI technology [11] Market Performance - Automotive IC sales increased nearly 20% year-over-year in 2024, significantly outpacing overall automotive market growth [18] - Revenue for large panel display drivers decreased by 28.3% year-over-year, while small and medium-sized drivers saw a slight decrease of 0.6% [19] - Non-driver sales increased by 10.6% year-over-year, representing 17.1% of total sales [19] Company Strategy and Industry Competition - The company is focusing on automotive TDDI and Tcon technologies, anticipating continued growth in these areas [32] - Himax is advancing in the automotive OLED sector, with numerous projects underway in partnership with leading panel makers [32] - The company is also expanding its technology development beyond display ICs, particularly in the WiseEye AI segment [33] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the automotive business despite ongoing macroeconomic challenges, with strict budget and expense controls implemented [16][18] - The company expects Q1 2025 revenues to decrease by 8.5% to 12.5% sequentially due to seasonal demand, but year-over-year performance is expected to range from flat to a 4.6% increase [27] - Management noted that while some peers are experiencing order pullbacks due to tariff factors, this trend has not been observed in the automotive sector [104] Other Important Information - The company had $224.6 million in cash and equivalents as of December 31, 2024, with a strong positive operating cash flow of $35.4 million for Q4 [22] - Inventory levels have declined to a healthy level of $158.7 million, down from $217.3 million a year ago [23] Q&A Session Summary Question: Update on CPO adoption and competition landscape - Management indicated that 2025 will focus on engineering validation with limited revenue contribution expected, while mass production is likely to commence in 2026 [86][91] - The potential annualized revenue for CPO could reach hundreds of millions of dollars, depending on customer demand and market penetration [91][92] Question: Automotive driver IC business outlook - The sequential decline in automotive driver IC sales is attributed to seasonal factors, with inventory levels remaining healthy [102][104] - Gross margin is expected to remain flat, influenced by product mix changes between DDIC and TDDI [105] Question: Automotive revenue mix and design wins - Management noted no significant difference in automotive revenue mix between Chinese and non-Chinese customers, with a strong market presence across major regions [108] - The design win process involves a strict definition, with timelines varying based on technology maturity and customer type [112][115]