HIMX

Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. Himax Technologies stock has delivered very strong gains over the last few years, yet the broad valuation checks now lean expensive and suggest the recent share price strength may be running ahead of fundamentals. Himax Technologies has returned 157.9% over the last 3 years, which puts extra focus on whether the current share price still reflects a reasonable long term entry point. The key support for the valuation can come from how sustainably Himax Technologies converts revenue into cash flow, while any pressure on margins or large new investment needs may weigh on what investors are willing to pay. The stock scores 0 out of 6 on Simply Wall St's broader valuation checks, which means Himax Technologies does not screen as a clear bargain on traditional metrics (0/6). The issue now is whether the recent share price, after a strong 3 year run, still offers an attractive entry point for Himax Technologies or leaves only a narrow margin for error. Himax Technologies delivered 98.8% returns over the last year. See how this stacks up to the rest of the Semiconductor industry. P/E is often the go to multiple for Himax Technologies because earnings are a key focus for semiconductor investors. On this measure, Himax Technologies trades on a P/E of 72.5x, compared with an industry average of 51.4x and a peer group average of 63.4x. That puts the stock at a clear premium both to the broader semiconductor group and to more closely comparable companies. The Simply Wall St model suggests a fair P/E ratio of 54.4x for Himax Technologies, based on its characteristics relative to its sector. Against that benchmark, the current 72.5x multiple looks stretched and implies investors are paying a higher price for each dollar of earnings than the model would indicate. For anyone considering the stock now, that gap leaves less room for disappointment if earnings or sentiment soften. On the P/E multiple, Himax Technologies currently screens as overvalued compared with both its tailored fair ratio and sector benchmarks. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives pick up where this valuation puzzle for Himax Technologies leaves off and explain what kind of future in terms of growth, margins and earnings would need to occur for the stock to be worth significantly more or less than today's price. Each narrative links its number to a concrete view of how Himax Technologies' growth, profitability and risks might change, which you can revisit as new information becomes available on the Community page. One of the top community narratives on Himax Technologies: 51% undervalued Read one of the top narratives on Himax Technologies Do you think there's more to the story for Himax Technologies? Head over to our Community to see what others are saying! Himax Technologies now looks overvalued on the main market multiples, with the P/E premium leaving little room for earnings or sentiment to soften without putting pressure on the share price. The broader valuation checks are weak, which means the burden of proof now sits with Himax Technologies to keep delivering the kind of cash generation and margin profile that can justify this richer tag. The key question for investors is whether current expectations for profitability and capital needs prove realistic or whether the valuation resets closer to sector norms. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include HIMX. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 8:00 a.m. ET President and Chief Executive Officer - Jordan Wu Chief Financial Officer - Jessica Pan Head of IR/PR - Karen Tiao Operator: Hello, ladies and gentlemen. Welcome to Himax Technologies, Inc. Second Quarter 2026 Earnings Conference Call. [Operator Instructions] And as a reminder, this conference call is being recorded. I would now like to turn the conference over to Ms. Karen Tiao, Head of IR/PR at Himax. Ms. Tiao, please go ahead. Karen Tiao: Welcome, everyone. My name is Karen Tiao, Head of IR PR at Himax. Joining me today are Jordan Wu, President and Chief Executive Officer; and Jessica Pan, Chief Financial Officer. After the company's prepared comments, we have allocated time for questions in the Q&A section. If you have not yet received a copy of today's results release, please e-mail [email protected] or [email protected] or download a copy from Himax's website. 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 financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause the actual events or results to differ materially from those described in the conference call. A list of risk factors can be found in the company's latest SEC filings, Form 20-F in the section titled Risk Factors as maybe amended. Except for the company's full year of 2025 financials, which were provided in the company's 20-F and filed with the SEC on March 27, 2026. The financial information included in this conference call is unaudited and consolidated and prepared in accordance with IFRS accounting. Such financial information is generally -- is generated internally and has not been subjected to the same review and scrutiny and may vary materially from the audited consolidated financial information for the same period. On today's call, I will first review Himax's consolidated financial performance for the second quarter 2026, followed by our third quarter outlook. Jordan will then give an update on the status of our business and after which, we will take questions. You can submit your questions online through the webcast or by phone. We will review our financials on an IFRS basis. The rapid rise in AI demand is placing unprecedented strain on memory chip supply and affecting many non-AI applications, creating a more challenging cost and capacity environment across the industry. Against this backdrop, we are pleased to report that our second quarter revenues, gross margin and profit all exceeded the guidance we provided on May 7, 2026. Second quarter revenues registered $227.4 million, representing a sequential increase of 14.2% and up 5.9% compared to the same period last year. Q2 revenues exceeded our guidance range of a 10% to 13% increase, primarily driven by better-than-expected automotive IC sales. Gross margin was 33.1%, substantially exceeding the guidance of around 32%, up from 30.4% in the previous quarter and 31.2% a year ago. This is primarily due to a more favorable product mix with increased sales from higher-margin automotive IC products. Q2 profit per diluted ADS was $0.114, significantly exceeding the guidance range of $0.086 to $0.103, up from $0.046 in the previous quarter and $0.095 a year ago. Revenue from large display driver came in at $19.2 million, representing a decline of 21.0% from the previous quarter, attributable to panel makers pulling forward their inventory purchases for high-end TV ICs in prior quarters. In contrast, sales for both the monitor and notebook IC products increases quarter-over-quarter due to higher legacy product shipments to key customers. Sales of large panel driver IC accounted for 8.4% of total revenues for the quarter compared to 12.2% last quarter and 11.6% a year ago. Revenue from small- and medium-sized display driver IC segment totaled $162.3 million, reflecting an increase of 19.6% sequentially. Q2 automotive driver sales, including both traditional DDIC and TDDI, increased by double-digit quarter-over-quarter, primarily driven by broad-based customer replenishment of TDDI and DDIC following seasonally lower shipment during the Lunar New Year in Q1. The ramp-up of new TDDI and DDIC projects for a leading panel customer also contributed to the sequential increase. Customers continue to operate under a make-to-order model while maintaining lean inventory levels. Our automotive business comprising DDIC, TDDI, Tcon and OLED IC sales remained the largest revenue contributor in the second quarter, representing well over 50% of total revenues. Second quarter tablet IC sales covering both LCD and OLED products also increased sequentially, attributable to customers' early pull in demand against the backdrop of the rising memory price sentiment in the market, together with the continued shipment for our customers' premium OLED model. In contrast, smartphone IC sales decreased sequentially following the initial ramp-up of an OLED IC for leading smartphone brand's midstream model in Q1. The small and medium-sized driver IC segment accounted for 71.4% of total sales for the quarter compared to 68.2% in the previous quarter and 67.3% a year ago. Q2 non-driver sales reached $45.9 million, a 17.7% increase from the previous quarter, attributable to robust automotive Tcon shipment supported by replenishment across a board customer base. Tcon business accounted for over 10% of the total sales with more than half contributed by automotive Tcon. As the market leader in automotive Tcon, particularly in solution featuring local dimming functionality, we expect strong growth momentum to continue into next year. Non-driver products accounted for 20.2% of total revenues as compared to 19.6% in the previous quarter and 21.1% a year ago. Second quarter operating expenses were $15.7 million, an increase of 0.8% from previous quarter and 3.6% compared to the same period last year. The year-over-year increase was mainly attributable to higher tape-out expenses. We remain disciplined in managing costs while continuing to invest strategically in select non-driver IC business with compelling long-term growth potential. Second quarter operating income was $24.6 million, representing an operating margin of 10.8% compared to 5.1% in the previous quarter and 8.4% for the same period last year. Both the quarter-over-quarter and year-over-year changes were primarily driven by higher revenues and gross margin. Second quarter after-tax profit was $19.9 million or $0.114 per diluted ADS compared to $8.0 million or $0.046 per diluted ADS last quarter and up from $15.5 million or $0.095 in the same period last year. Turning to the balance sheet. We had $298.7 million of cash, cash equivalents and other financial assets as of June 30, 2026. This compared to $332.8 million at the same time last year and $287.6 million a quarter ago. The sequential increase was mainly driven by operating cash flow of $17.5 million in the second quarter. Before moving on, I would like to highlight one point regarding this quarter's cash flow. As is our usual practice, income tax payments are made in the second quarter. Under a new Taiwan government policy, we are entitled to defer approximately $11.0 million of this payment for 1 year without interest. Excluding this deferral, second quarter operating cash flow would have been approximately $6.5 million. Looking ahead to Q3, we anticipate a decline in cash, cash equivalent and other financial assets, primarily due to the payment of the $44 million for the annual dividend to shareholders made on July 10. In addition, subject to the final Board decision, we will distribute around $11.7 million, the immediately vested portion of this year's employee bonus awards at the end of the Q3. Our quarter end inventory as of the June 30, 2026, were $151.5 million, about the same as the $151.7 million last quarter, but higher than the $134.6 million in the same period last year. After maintaining lean inventory levels for several years, we proactively adjusted our inventory strategy about a year ago, selectively building inventory in anticipation of the tightening supply across the industry. Accounts receivable at the end of the June was $220.3 million, up from $190.9 million last quarter and $290.0 million a year ago. DSO was 93 days at the quarter end as compared to 86 days last quarter and 92 days a year ago. Second quarter capital expenditure, primarily for R&D-related equipment for our IC design business was $4.3 million versus $2.9 million last quarter and $4.6 million a year ago. As of the June 30, 2026, Himax had 174.4 million ADS outstanding, unchanged from last quarter. On a fully diluted basis, the total number of ADS outstanding for the second quarter was 174.4 million. During the quarter, on July 1, we announced the proposed divestiture of investment in one of our equity method investees. Based on the information provided by the said investee company, we expect to recognize a pretax gain of approximately $23 million to $24 million upon closing. The transaction is expected to close in the fourth quarter of this year, subject to customary closing conditions and regulatory approval. We will provide more updates as appropriate as the transaction progresses. Now turning to our third quarter 2026 guidance. We expect Q3 revenue to increase 7% to 11% sequentially. Gross margin is expected to be around 34%, depending on the product mix. Q3 profit attributable to shareholders is estimated to be in the range of $0.08 to $0.10 per fully diluted ADS. As we have done historically, we will grant employees annual bonus, including RSUs and cash awards on or around September 13 this year. The third quarter guidance for profit per diluted ADS has taken into account the expected 2026 annual bonus, which subject to Board approval, is now estimated to be around $13 million, out of which $11.7 million will be vested and expensed immediately on the grant date. As a reminder, the total annual bonus amount and the immediately vested portion are our current best estimates only and the actual amount could vary materially depending on, among other things, our Q4 profit expectation and the final board decision for the total bonus amount and its vesting scheme. It is also worth noting that the $13 million expected annual bonus does not yet include the above-mentioned gain on investment from divestiture of the equity method investee as the transaction is pending regulatory approval and has not yet closed. As is the case for previous years, we expect the annual bonus grant in 2026 to lead to higher third quarter operating expenses compared to the other quarters of the year. In comparison, the annual bonus for 2025 and 2024 were $7.7 million and $12.5 million, respectively, of which $7.5 million and $11.2 million vested immediately. In providing our Q3 financial guidance, the Q3 expense related to the employee bonus is estimated to be $11.8 million, representing $0.068 per diluted ADS before tax, comprising of the $11.7 million of the immediately vested portion of this year's bonus stated above and $0.1 million of the amortized portion of the unvested bonuses from previous years. By comparison, employee bonus expenses in each of the last 3 quarters was around $0.2 million. I will now turn the call over to Jordan to discuss our Q3 outlook. Jordan, the floor is yours. Jordan Wu: Thank you, Karen. The ongoing surge in AI demand continues to impact non-AI applications. It has rippled across the broader semiconductor supply chain, resulting in capacity constraints at foundry, packaging and testing facilities on the mature process nodes where many of our products are manufactured. Consequently, we are experiencing higher manufacturing and procurement costs, extended lead times and increased difficulty in securing sufficient capacity across a broad range of our product lines. We expect the supply environment to remain challenging in the near term. To enhance our production flexibility and secure the capacity needed to meet our customer needs and support upcoming production ramps. We continue to leverage our established supply chain in Taiwan, while further strengthening our presence across China, Singapore, Korea, Japan and Malaysia. In parallel, as we mentioned last quarter, we have been working closely with customers on pricing adjustments to share this increased costs. Some adjustments took effect in the second quarter with additional pricing adjustment possibly implemented over time as the market conditions warrant. Notwithstanding this industry-wide supply constraints, we remain optimistic about the long-term growth prospects of our automotive display IC business. We continue to view automotive as one of the industry's most attractive secular growth markets, driven by rapid advancements in smart vehicle interiors. This trend is characterized by, among other things, a growing number of displays per vehicle now averaging more than 3 and continuing to rise, along with larger, higher resolution displays and more diverse vehicle cabin configurations, including curved integrated multi-display and pillar-to-pillar designs. Himax is well positioned to capitalize on these industry trends through our comprehensive automotive display portfolio, spanning both LCD and OLED technologies, a broad and diversified global customer base and a robust design win pipeline. We further differentiate ourselves by continuously introducing next-generation automotive display technologies, including LTDI solutions for ultra large displays, advanced Tcon solutions for head-up displays, OLED driver and touch controller ICs and microLED display technologies. Our portfolio also includes Knob-on-Display solutions and capacitive physical buttons where customer interest continues to grow, driven in part by regulatory and vehicle safety initiatives in key automotive markets, including China and Europe, where greater emphasis is being placed on intuitive physical controls to enhance driving safety and reduce driver distraction. The industry's ongoing pursuit of richer human machine interfaces, immersive infotainment and enhanced in-cabin user experiences is driving adoption of a broader range of our display technologies. This not only increases Himax's dollar content per vehicle, but also creates multiple long-term growth opportunities. In addition, our well-established global supply chain provides us with greater flexibility to navigate the current supply environment while securing the capacity needed to support both existing projects and upcoming production ramps. We are also seeing an important trend in the automotive industry with automakers introducing new vehicle models at an accelerated pace and intensifying competition. As a result, product life cycles are becoming shorter, creating greater pressure to improve engineering efficiency, reduce development costs and shorten time to market for new car models. These challenges are driving broader adoption of platform standardization across multiple vehicle models, favoring suppliers with comprehensive and validated technology portfolios and proven track records. Himax is one such supplier boasting the industry's most compelling automotive display IC offerings, market-leading positions across automotive DDIC, TDDI and Tcon and continued leadership in next-generation technologies such as LTDI and OLED technologies. By adopting Himax solutions as part of their standardized platforms, customers can quickly deploy validated display IC products across multiple new vehicle developments, reducing engineering efforts, lowering system costs and shortening development cycle of each project. In addition to automotive, we are also making solid progress across several strategic growth areas, including smart glasses, ultralow power AI and CPO. These emerging businesses diversify our revenue base into markets with attractive long-term growth prospects and margin profiles while strengthening our overall competitive position. We believe they are poised to become increasingly meaningful contributors to our future growth. First, on smart glasses, an area we remain particularly optimistic about. Himax is one of the few companies offering both ultra-low power AI sensing and micro-display technologies, both critical building blocks for next-generation smart glasses. On the AI sensing front, WiseEye enables ultra-low power always-on outward and inward sensing, supporting an expanding range of AI use cases, including contextual awareness, real-time visual assistance and personalized user experiences. Recently, a leading global brand just launched a smart glasses product powered by our WiseEye technology, and we continue to see strong design-in momentum across customers worldwide. In particular, we are seeing growth -- we are seeing growing engagement with leading global brands, technology platform providers, ODMs as well as hyperscalers who traditionally do not offer hardware products, but are now entering smart glasses market with some projects poised to enter mass production as we move into 2027. On the display side, our Front-lit LCoS micro-display delivers an optimal balance of size, weight, resolution, image quality, power consumption and cost. It can also be configured to operate in the high brightness, ultra-low power green-only mode and seamlessly switch to full color operation as needed. This flexibility differentiates our solution from alternative display technologies, helping customers optimize power efficiency while maintaining visual performance and meeting their system design and cost targets. Together, these capabilities make our Front-lit LCoS a compelling display platform for next-generation AI glasses equipped with see-through displays. Currently, we are working closely with multiple waveguide partners across Asia, Europe and North America to deliver integrated AR display solutions that simplify system integration and shorten customers' development cycles. This is driving broader customer engagement and positioning us to convert more opportunities into design wins, backed by well over a decade of LCoS expertise and a proven track record of successful production shipments. We are well positioned to support the next generation of AR glasses. Now I would like to provide a brief update on our progress in CPO. Customer development time lines remain aggressive with demand showing no signs of slowing. Together with our strategic partner, FOCI, we continue to deepen customer engagement by offering a flexible portfolio of solutions, including customized designs tailored specifically for our customers' needs as well as a standardized technology platform developed in collaboration with a leading foundry partner. Our solutions support both co-packaged and pluggable packaging architectures to address diverse customer needs. Our primary focus for the second half of this year remains on achieving mass production readiness, including key customer qualification milestones while continuing to improve manufacturing yields and establish stable mass production capabilities. We have already made encouraging progress towards these objectives. Both our Gen 1 product supporting 1.6T and 3.2T transmission bandwidths and Gen 2 product designed for 6.4T bandwidth have begun engineering production ramps as scheduled in the third quarter. These products are expected to drive sequential shipment growth quarter-over-quarter, laying the foundation for a more meaningful volume shipment beginning in 2027. The official mass production timing remains subject to customer deployment schedules. Nevertheless, we expect our shipments in 2027 to be significantly higher than in 2026, starting to make meaningful contributions to our financials. At the same time, we are also codeveloping next-generation optical solutions with customers, featuring higher fiber count architectures, enhanced optical precision and increasingly sophisticated designs such as CWDM or Coarse Wavelength Division Multiplexing to address the explosive bandwidth demands of HPC and AI data center applications. With that, I will now begin with an update on the large panel driver IC business. In Q3, large display driver IC sales are expected to decline by single digit from last quarter. Monitor IC sales are expected to decline quarter-over-quarter as customers already pull forward inventory purchases in prior quarters. In contrast, TV IC sales are poised for sequential increases driven by higher legacy product shipments to key customers. Looking ahead in the notebook market, we are seeing encouraging design momentum, particularly in OLED notebooks with several industry trends creating favorable tailwinds. Rising memory prices are accelerating the shift from entry-level to premium notebook models, while the scheduled ramp-up of new Gen 8.6 OLED fabs in China later this year and into 2027 is expected to further drive OLED penetration in the notebook market. Himax is well positioned to capitalize on these favorable industry trends with our comprehensive notebook supply notebook display OLED IC portfolio, spanning DDIC, Tcon, power management IC and touch controllers. This one-stop offering lets us serve customers with a complete solution while increasing our value content per device. Turning to the small and medium-sized display driver IC business. In Q3, small- and medium-sized display IC business is expected to increase by high single digits from last quarter. Q3 automotive driver IC sales, including TDDI and traditional DDIC are set to increase by a solid double-digit quarter-over-quarter. This increase reflects broader customer demand for DDIC and TDDI products, together with the mass production of multiple LTDI projects across car brands worldwide. Strong sequential growth underscores the accelerated adoption of larger and more sophisticated automotive displays with Chinese automakers leading the charge. We continue to see healthy underlying customer demand, supported by multiple new projects entering mass production in the coming quarters. We expect our full year 2026 automotive IC sales -- automotive driver IC sales to grow by double digits from last year with strong growth momentum extending into next year as adoption of smart car interiors continue to drive increases in the number, size and sophistication of displays in both electric and conventional vehicles. As I noted earlier, the industry shift towards platform standardization is creating meaningful opportunities for Himax. This is evidenced by the growing number of customers adopting our industry pioneering LTDI and local dimming Tcon solutions as the standard platform for their ultra large automotive displays. Following years of customer engagement, several of these projects are now entering mass production across multiple car brands. These ultra-large display panels typically require 4 or more LTDI chips and in some cases, more than 10, together with at least 1 local dimming Tcon per panel. As customers increasingly adopt our solution across multiple ultra-large display platforms, this not only strengthens customer stickiness and makes it more difficult for competitors to compete with us, but also increases our content value on a per panel and per vehicle basis. Looking ahead, the accelerating adoption of OLED displays in automotive presents a compelling long-term growth opportunity and is poised to become a key pillar of our automotive business. For several years, we have been collaborating closely with leading OLED panel makers in Korea and China and our comprehensive portfolio of DDICs, Tcons, touch controller ICs and customized ASIC solutions gives customers the flexibility to select the solutions that best meet their specific requirements. This broad product coverage and our early customer engagements have already translated into numerous development programs, providing a solid foundation for future growth as premium automotive displays transition from LCD to OLED. With OLED adoption underway, we continue to introduce innovative IC solutions to address evolving customer needs. For example, our latest TED or Tcon Embedded Driver IC solution which integrates DDIC and Tcon into a single chip, offers a cost-effective, flexible and highly integrated solution ideal for smaller, lower resolution automotive displays. Our TED technology is now being adopted across a diverse range of applications, including automotive, robotics and IT applications with several projects involving customized ASIC solutions codeveloped with leading global end customers. Moving to smartphone IC sales. We expect Q3 smartphone revenue to increase quarter-over-quarter, driven by continued shipments for leading smartphone brands mainstream models and inventory buildup for its upcoming premium models. For tablet ICs, Q3 sales are expected to decrease sequentially as capacity constraints limit our ability to support additional shipments. I would like to now turn to our non-driver IC business update, where we expect Q3 revenue to increase by low teens sequentially. First, for an update on our Tcon business. We anticipate Q3 Tcon sales to increase by double digits quarter-over-quarter. Our automotive Tcon business is expected to deliver decent double-digit growth in Q3, extending the strong momentum from Q2 and far outpacing our corporate average. This growth is driven by continued legacy product shipments across a broad diversified customer base, along with several new projects entering mass production. Despite ongoing industry-wide capacity constraints, we are confident in the strong growth trajectory of our automotive Tcon business. With hundreds of design wins already secured and new design wins continuing to expand, we are well positioned for another robust growth year in automotive Tcon as we move into 2027. During the quarter, we are pleased to announce that our T2000 Tcon has been adopted into E Ink's next-generation color ePaper platform. Himax's proprietary parallel processing architecture is at the core of this ASIC product, enabling simultaneous display refresh and data transmission, significantly enhancing dynamic display performance while preserving the ultra-low power advantage of ePaper technology. This breakthrough enables smoother display of dynamic content on large-format e-paper displays, helping accelerate the transition from traditional static signage to dynamic applications such as retail advertising, public information displays and smart commercial environments. Switching gears to the WiseEye product line, a cutting-edge ultra-low power AI sensing total solution, targeting battery-powered endpoint devices. WiseEye differentiates itself with an industry-leading ultra-low power architecture, consuming only a few milliwatts while delivering on device AI inferencing, 24/7 always-on image and voice sensing and an exceptionally compact form factor. This unique combination enables endpoint AI devices that were previously impractical due to power and size constraints, driving broad adoption across applications, including notebooks, surveillance systems, access control, PalmVein authentication, smart office and smart glasses, with design activities continuing to expand across leading customers worldwide. On the WiseEye module front, design activities continue to expand, driven by its plug-and-play architecture, ultra-low power consumption and on-device AI capabilities. During the quarter, we are pleased to announce that our WiseEye biometric PowerVein modules achieved the certification of TÜV Rheinland, one of the world's leading and most credible independent testing inspection and certification organizations. The assessment validated our recognition accuracy, response speed and liveness detection. This verification, together with our early achievement of GDPR compliance, one of the world's strictest data privacy standards reinforces the privacy, security and performance of our biometric authentication solutions, giving customers greater confidence to accelerate development across security sensitive applications. We are seeing expanding design-in activities for our PalmVein modules across smart access, workforce management, smart door locks and more -- and more recently, computer monitors and smart office solutions. Built on the same core hardware platform as the WiseEye technology, our WiseGuard module is specifically designed for security applications, delivering ultra-low power operation, a wide field of view, long-range detection and exceptional low light performance. WiseGuard accurately detects and continuously tracks multiple individuals, including their presence, location and movement, substantially reducing the false triggers commonly associated with traditional PIR-based solutions. Its proactive 24/7 sensing capability enables security systems to detect and continuously track activity from the outset, capturing the full sequence of events rather than only the moment motion is detected, providing a significant advantage over traditional reactive solutions. WiseGuard delivers up to 5 years of battery life while maintaining high-precision detection over long distances even in environments with illumination as low as 1 lux. Since its debut just 6 months ago, WiseGuard has seen encouraging customer engagement across a wide range of applications, including surveillance cameras, access control, IoT and wildlife monitoring. We are also pleased to share that WiseGuard has already been adopted by a U.S. customer for surveillance applications with mass production scheduled to begin towards the end of this year. As mentioned earlier, WiseGuard is gaining broad market recognition for smart glasses as a compact ultra-low power always on AI perception front end. WiseGuard -- WiseEye supports outward-facing environmental sensing first through scene understanding by analyzing the users' contextual surroundings and environment, followed by object classification to recognize and identify specific objects typically associated with the identified scene. We also support inward-facing capabilities, including eyeball tracking for intuitive gaze-based interaction and iris authentication security -- for secure identity verification. Together, these capabilities enable AI glasses to continuously capture visual snapshots of the real world and enable intelligent, responsive, low-latency human machine interaction while consuming only a few milliwatts of power. With the leading global brand launching WiseEye-powered smart glasses this fall, we are seeing growing engagement from platform providers, OEMs and consumer electronics companies worldwide. Some of these projects are expected to enter mass production in the coming quarters. That concludes my report for this quarter. Thank you for your interest in Himax. We appreciate you joining today's call and are now ready to take questions. Operator: [Operator Instructions] And our first question will be coming from Donnie Teng, Nomura. Donnie Teng: My first question is regarding to the CPO revenue outlook into 2027. As you mentioned about the revenue could be more meaningful for next year. Can you classify how do you define meaningful for 2027? And maybe you can also provide us with the overall business outlook in 2027 as well. Jordan Wu: Thank you, Donnie. Perhaps let me start with your second question, the outlook for next year. As you know, we don't usually provide guidance beyond 1 quarter, but we are well positioned, I think, to see robust sales growth for next year with continuously improved gross margin. As you know, our gross margin this year has improved from last year, and we believe the trend is likely to continue next year. Before I elaborate further, there is one important thing for clarification. And as you mentioned in your question, Donnie, we are going to do for the time being and before CPO starts mass production officially, it's a good idea that we kind of separate our CPO for our outlook discussion because while CPO is arguably a once-in-a-lifetime opportunity for Himax at the pre mass production stage, its outlook will be too uncertain, to quantify at least for the purpose of all the comments. So what I'm about to say below does not include contributions from CPO. And I will leave the comments on CPO for the next question, which you already just raised. So we start now back to our view on 2027. I think a very important trend for next year, our financials is that the nondriver areas will likely outgrow driver ICs with revenue contribution approaching 30% from around 20% at present. This is driven mainly by automotive Tcon, which will enjoy another year of very strong growth, thanks to our robust design pipeline. And the WiseEye product line where new applications such as smart glasses, WiseEye module and PalmVein authentication, which I mentioned in my prepared remarks, are all well positioned to contribute to growth momentum. As to our kind of mainstream automotive business, now over half of our sales, it will continue to grow as well on top of a year of double-digit growth this year. In saying so, we are assuming a flattish year for global vehicle shipment, which I think is a fair assumption, implying our confidence to outperform the overall market again like we do this year and actually the last few years. Our positive outlook is driven by 2 factors: one, the continuous growth of number of displays per vehicle, which has already exceeded 3 this year from almost now 15 years back. And two, more importantly, the fast rise in IC content per display per automotive display. In other words, both the number of display and content value per display will continue to -- will continue the favorable trend that we have experienced over the last few years. So I'll take HUD as an example. We mentioned about HUD in our prepared remarks. HUD used to be a tiny niche market that did not use LCD for image projection. Starting just a few years ago, HUD has become one of the strongest segments, growth segments within our design win pipeline. Now we have many, many such design wins for HUD waiting for lineup for mass production starting this year and over the next few years. Every new HUD in the car represent an increase in the number of LCD displays per vehicle as almost all new HUDs now use LCD for image projection and i.e. requiring our solution. Himax has been leading the charge in supporting the industry's new SUV designs, which require not only traditional DDIC, but also very sophisticated Tcons for so-called dewarping and the elimination of so-called postcard effect. Perhaps for those who are not familiar with this, dewarping is a feature in our HUD Tcon that kind of mathematically cut of distortion caused by the curved surface of windshield, okay? That's dewarping. And postcard effect is a visual artifact, so to speak, visual artifact where the rectangular borders of the projection become kind of illuminated and visible by the driver which is bad, right? So our Tcon can get rid of that artifact. Such advanced features add significantly to our IC content value and have become a strong moat that helps fend off competitors. And I would say LTDI, which, again, we also mentioned in our prepared remarks, is also a good example where we pioneered the technology concept a few years back, targeting ultra large size automotive displays requiring touch functionality. We are now the exclusive supplier of the solution in the market right now, which numbers at least 5 chips per panel, including one Tcon and for higher-end designs, more than 10. Our LTDI solution is ramping nicely this year across several leading auto brands with a solid and still expanding design win pipeline. Perhaps the last but certainly not the least important example is the higher value for display content for IC is OLED display for automotive. There we offer DDIC, Tcon, TED and discrete touch controller, each of them having higher ASP compared with those using LCD panels because of the more complicated features required of OLED displays. And because OLED is now projected to replace LCD over time over the next few years with -- for high-end auto displays, we are working closely with several leading OLED panel makers in Korea and China with major ramping expected starting from probably second half next year and certainly well into 2028. So in short, while -- again, we don't give official guidance for next year. So I'm not going to be able to quantify the growth, but we are quite positive about the prospect of our automotive business for next year. Having said that, the industry supply will remain tight with literally all major foundries, including indicating further price hikes next year, certainly all foundries in Taiwan and to a great extent, major foundries in China as well. So it's just something we will need to continue to manage like we have done so far this year. So I hope that -- that addresses your second question for next year's outlook. And your first question is about the CPO, sales indication, right, sales outlook for next year. Again, I will not be able to quantify that. But so qualitatively, what I can say is that for sure, CPO will see very significant growth next year, but we'll be comparing with the low base this year, right? But the growth will be very significant. The extent of CPO's contribution to our overall financial next year will depend on when the end customer kick off mass production and obviously, the ramping curve. For now, it is too early to say. But as I said earlier, even in the most conservative scenario, CPO will make a meaningful contribution to our financials, especially the bottom line starting 2027 with volume growth quarter-over-quarter starting from this quarter, next quarter and throughout the whole of next year. While the volume indication from end customers is actually extremely, extremely high. So we start the main goal for us this year is still for us and our partner, FOCI is still to complete the validation of our products by key customer/partner in terms of both quality and manufacturability. But as I said earlier, revenue contribution during this year will still be limited. However, we are seeing quite significant growth this quarter and another very significant growth next quarter out of engineering runs. Again, while we don't comment on the exact timing of mass production because the ecosystem is far too complicated for us to even speculate the exact timing of mass production, we should be able to see meaningful top and bottom line contribution from the CPO product starting in 2027. And actually, even before we reach mass production, early shipments for engineering runs will already have positive impact on our financials starting 2027. Now you asked me to quantify what is meaningful. I guess meaningful means meaningful, right? Meaningful means it's not going to be like low single-digit percentage certainly not for the bottom line, right? So meaningful is something we can actually -- when it happens, we can categorize it and elaborate further. It's not going to be like marginally negligible addition to our financials. But again, where some early indication for next year's volume has been kind of provided by end customers, I think it's -- again, this year, we should focus on validation. And once we are -- we have a solid footing on that with customers firmer indication of mass production timetable and ramping curve, hopefully, in not-too-distant future, we'll be able to better quantify the impact to our financials. But I guess it is fair to say that our confidence level towards success of mass production continues to rise -- our confidence level continues to rise. It has surely risen to another level compared to even just a quarter ago. And I guess the last point I want to say is that in close collaboration with a few top customers for us, we are focusing on what we call Gen 2 products right now, which is a high-end product supporting 6.4T bandwidth or higher. And it is a spec for the time being, that is positioned for the market with the biggest volume potential. And actually, we will continue to make innovative designs for optics to meet the ever rising needs of higher transmission bandwidth with the next target, next goal being 12.8T. So it's going to be a long road ahead. And again, I said earlier, I think it's once a lifetime opportunity for Himax, the CPO opportunity. I hope that addresses your question, Donnie. Operator: Next one, Tiffany Yeh, Morgan Stanley. Hsin Yeh: So I would like to follow up on the CPO front. I think there are many peers or emerging players that will want to tap into this FAU or I would say, WLO market. May I ask how you will address this competition and what are Himax's key advantages over the peers? Yes. Jordan Wu: Okay. Thank you, Tiffany. It's a good question. I think as far as we know, we are probably the only one providing optics using wafer-level optics or wafer-based solution, where the so-called competition actually use traditional molding glass type of technology. So I think that's a key difference. And we certainly believe our technology offers a lot of advantages. But again, nobody has proven itself by having a big volume mass production yet. So I think it's -- we just have to prove it by actually doing it successfully. Now having said that, I think we are -- our technologies together with FOCI is much more mature compared to the peers as far as we can tell. So we -- but having said that, I think, again, our focus for now is we -- the mindset for now for us is not to worry too much about competition. But we are the enemy. We are our own enemy for the time being, we focus on getting our products validated this year solidly and with customers' request for volume, try to ramp the volume successfully with good yield and good outcome to meet their demands. And I think -- so again, we -- I guess, also it's a policy for us not to comment about our competition. But I think for the time being, the most important thing for us is to focus our sales efforts for successful mass production. Having said that, I think, again, I said this is a market, a once-in-a-lifetime opportunity kind of market. The market is so big. I cannot imagine a few years down the road, Himax and FOCI will be the only player, the only vendor in the market. It's just unthinkable because the market is so big, and I don't think anybody can take 100% of the market, right? So for us, I think it's the mindset, again, is focused on our own efforts, bring successful mass production and hope it will be one of the earliest and we'll be serving among the best customers, and we'll take it from there. And I think -- and lastly, certainly, we have a lot of analysis on the pros and cons of our technology versus others. But again, I'm not going to comment on that publicly. And last but not least, the market is too big for anybody to try to take it 100%. And it's a market big enough for actually quite a few players to prosper tremendously, I think. And now the important thing is to bring it up successfully and to prove it. It's a real technology, it's a real team. Hsin Yeh: All right. Very clear. I have a question regarding the overall CPO industry. Yes, as you guys have been working with FOCI on all these mass production preparations for so many years, I think you're also in talk with other guys in the supply chain. What do you think are the biggest bottlenecks for CPO mass production right now? And do you think -- how much time it would take for this to be conquered? Jordan Wu: We are very, very upstream, right? So I mean, you probably asked the wrong person to make a comment for the so-called bottleneck throughout the entire ecosystem. I mean what I can say, I want to emphasize is that the ecosystem admittedly is actually quite complicated. And our focus for now is to, again, make sure we are not going to be the bottleneck, right? So we don't want to be the bottleneck ourselves technology-wise, that's step one. And once the mass production gets started, we don't want to be the bottleneck for capacity as well, and that's the goal. As to the bottleneck of the whole ecosystem, to be honest, I really don't know because what I can say is the engineering -- the so-called engineering, which will have some meaningful volume, right, by us at over the next -- by the end of this year, let's say, by the end of this year. It's not just to validate our solution, but also to validate the whole ecosystem. So our technology will be used -- will be taken to validate our end customers, the major GPU and CPU makers of the world, their total solution. And with that, they will also take their solution to their server customers. And certainly, the back-end house or OSAT houses do have to put the CoWoS or whatnot, right, the FAU together with the COUPE -- TSMC COUPE solution and all that, right? So over the next -- by the end of this year, at least, I think there will be a lot of efforts in this regard. But we've been the very upstream to provide our FAU and for that, our optics within FAU first. And our FAU has to be validated in itself. Then with good FAU, the ecosystem can start to validate the packaging, the assembly of the whole module and then the all the way down to servers and eventually probably change your algorithm to -- because transmission methodology will be different, right, compared to traditional metal-based transmission. So I think to be honest, it's far too complicated for me to comment. And all I can say is we don't want to be the bottleneck ourselves. That's the goal. One question from online box. How do you expect your smart glasses revenue to trend in '27? Do you expect smart glasses revenue to be launched next year? We are talking about WiseEye, right, which we -- I'm not going to repeat it. We have mentioned, elaborated in our prepared remarks. LCoS will be for the future, right? LCoS for now is to seek design win. So that is not going to be a mass production story for next year. WiseEye, however, will very much a story for next year for smart glasses. We mentioned there's a major customer which just launched its product a while back with our WiseEye serving the function of always-on visual understanding of the surroundings. We actually asked the major end customer about volume potential. And the response from them is it's -- they're just getting started, right, promotion-wise. So they have to wait a while for them to give us a more meaningful feedback. So we are not getting one or the other conservative or pessimistic or positive feedback from them yet for understandable reasons. I think what's equally exciting is that there are quite a number of major design-in or design win projects in the pipeline that we certainly -- we haven't announced because the customer is not fully ready yet. They involve, in some cases, major hyperscalers who have not known to be offering like hardware devices like smartphone, as part of their business portfolio, but they are very much into smart glasses because they are all seeing smart glasses as a very good conduit for their AI models, right, to get useful data, [ useful information ] of the actual users. So I think we are seeing very strong design momentum and each major customer, they are how they use WiseEye are not totally identical. Everybody is trying to be innovative. And in our prepared remarks, what we mentioned is, broadly speaking, a typical like use case concept where we are always watching the surroundings on a continuous basis. And then first, we determine the scene that you are standing in. And then with that, we then do object classification. And with that, you can have AI interaction, right? So that is a common thing. So all I can say is probably give us 2 or more quarters, we should be able to quantify it better. But for now, we can see the momentum. But even with the first customer, a major with a very high-profile launch, we are not really getting feedback yet in terms of number of chips they need for next year or the year after. So the momentum is very strong, but I'm afraid it's too early for me to give a quantitative comment yet. Hopefully, in a few quarters' time, we will be able to provide better answers. Operator: Thank you, Jordan. And there are no questions at the moment. We thank you for all your questions. And I'll pass the call back to Mr. Jordan Wu. Please proceed. Thank you. Jordan Wu: Thank you. As a final note, Karen Tiao, our Head of IR/PR, will maintain investor marketing activities and continue to attend investor conferences. We'll announce the details as they come about. Thank you, and have a nice day. Operator: Thank you, Jordan. And ladies and gentlemen, this concludes Second quarter 2026 Earnings Conference. You may now disconnect. Thank you again. Goodbye. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Himax Technologies. The Motley Fool has a disclosure policy. Himax (HIMX) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Himax Technologies, Inc.? Here are five stocks we like better. Himax exceeded second-quarter guidance: Revenue rose 14.2% sequentially to $227.4 million, while gross margin improved to 33.1% and profit attributable to shareholders increased to $19.9 million. Strong automotive IC demand and a favorable product mix drove the gains. Automotive remains the primary growth engine. Small- and medium-sized display-driver revenue climbed 19.6% sequentially to $162.3 million, and Himax expects automotive driver IC sales to grow at a solid double-digit rate in the third quarter. Himax projects continued third-quarter growth but faces cost pressures: Revenue is expected to rise 7%–11% sequentially, with gross margin near 34%, despite AI-related semiconductor capacity constraints and higher manufacturing costs. The company is also advancing co-packaged optics, smart-glasses sensing and security products, with CPO expected to contribute more meaningfully from 2027. 5 Semiconductor stocks under $10 Himax Technologies (NASDAQ:HIMX) reported second-quarter 2026 results that exceeded its prior guidance, as stronger-than-expected automotive integrated-circuit sales lifted revenue, gross margin and profit. Revenue for the quarter totaled $227.4 million, up 14.2% sequentially and 5.9% from a year earlier. The company had forecast a sequential revenue increase of 10% to 13%. Gross margin rose to 33.1%, from 30.4% in the first quarter and 31.2% a year earlier, aided by a more favorable product mix and greater sales of higher-margin automotive IC products. → 3 Drone Stocks That Should Soar After the Summer Slump 5 Computer Vision Stocks with a Clear Path to Growth Profit attributable to shareholders reached $19.9 million, or $0.114 per diluted American depositary share, compared with $8.0 million, or $0.046 per diluted ADS, in the prior quarter and $16.5 million, or $0.095 per diluted ADS, a year earlier. Operating income was $24.6 million and the operating margin was 10.8%, up from 5.1% in the prior quarter. Small- and medium-sized display driver IC revenue increased 19.6% sequentially to $162.3 million, representing 71.4% of quarterly sales. Himax said automotive display-driver revenue, including traditional display driver ICs and touch-and-display driver integration products, increased by double digits as customers replenished inventories after seasonally lower first-quarter shipments and as new programs ramped for a major panel customer. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth 3 Undervalued Small-Cap Stocks for Your Labor Day Watchlist Automotive products, including display drivers, timing controllers and OLED IC sales, represented well over half of total revenue during the quarter. Chief Executive Officer Jordan Wu said the company sees continued long-term expansion in automotive displays as vehicles add more screens, larger panels and more sophisticated configurations. “The industry’s ongoing pursuit of richer human-machine interfaces, immersive infotainment, and enhanced in-cabin user experiences is driving adoption of a broader range of our display technologies,” Wu said. → Jersey Mike's Serves Fresh Gains After IPO Stumble Non-driver revenue rose 17.7% sequentially to $45.9 million, supported by automotive timing-controller shipments. Timing-controller products accounted for more than 10% of total sales, with automotive applications contributing more than half of that business, according to the company. Large display-driver IC revenue, meanwhile, declined 21% sequentially to $19.2 million. Himax attributed the decline to panel makers pulling forward inventory purchases for high-end television ICs in previous quarters. Monitor and notebook IC sales increased during the quarter on higher legacy-product shipments to key customers. For the third quarter, Himax expects revenue to increase 7% to 11% sequentially and gross margin to be about 34%, depending on product mix. The company projected profit attributable to shareholders of $0.08 to $0.10 per fully diluted ADS. The forecast includes an estimated $11.8 million third-quarter expense related to the company’s annual employee bonus program. Himax expects the total 2026 bonus to be about $13 million, subject to board approval, with $11.7 million expected to vest and be expensed immediately. Management expects large display-driver IC sales to decline by a single-digit percentage sequentially in the third quarter, while small- and medium-sized display-driver IC revenue is projected to rise by a high-single-digit percentage. Automotive driver IC sales are expected to increase by a “solid double-digit” percentage, aided by broader demand and mass production of several large-display LTDI projects. Non-driver revenue is expected to increase by a low-teens percentage, with timing-controller sales forecast to rise by a double-digit percentage. Smartphone IC sales are also expected to increase on shipments for a leading smartphone brand’s mainstream models and inventory building for upcoming premium models. Tablet IC sales are expected to decline because capacity constraints are limiting additional shipments. Wu said demand tied to artificial intelligence is straining capacity at foundries, packaging facilities and testing providers serving mature semiconductor process nodes. The conditions have increased manufacturing and procurement costs, extended lead times and complicated efforts to secure adequate capacity across product lines. Himax is using supply-chain relationships in Taiwan while expanding its presence in China, Singapore, Korea, Japan and Malaysia, he said. The company has also worked with customers on pricing adjustments to share increased costs. Some adjustments took effect in the second quarter, while further changes could be implemented as market conditions warrant. Himax ended the quarter with $298.7 million in cash, cash equivalents and other financial assets, up from $287.6 million in the preceding quarter. Operating cash flow was $17.5 million, though the company said it had deferred approximately $11 million in Taiwan income-tax payments for one year under a new government policy. Excluding the deferral, operating cash flow would have been approximately $6.5 million. The company expects cash balances to decline in the third quarter following a $44 million annual dividend payment made July 10 and a potential distribution of the immediately vested portion of the employee bonus award. Wu said Himax and strategic partner FOCI began engineering production ramps in the third quarter for co-packaged optics products supporting 1.6T, 3.2T and 6.4T transmission bandwidths. The company’s priority for the second half is achieving customer qualification milestones, improving manufacturing yields and establishing stable mass-production capabilities. Himax expects CPO shipments to grow sequentially, but said official mass-production timing remains dependent on customer deployment schedules. Wu said the business is expected to make a more meaningful contribution beginning in 2027, although he declined to quantify expected revenue. The company also highlighted WiseEye, its ultralow-power AI sensing technology, as a growth opportunity in smart glasses, security and biometric applications. Wu said a leading global brand has launched smart glasses using WiseEye technology, and several additional projects could enter mass production in coming quarters. Himax’s WiseGuard security module has been adopted by a U.S. surveillance customer, with mass production scheduled to begin toward the end of 2026. Separately, Himax announced July 1 a proposed divestiture of an investment in an equity-method investee. Based on information from that company, Himax expects to recognize a pretax gain of approximately $23 million to $24 million if the transaction closes. Closing is expected in the fourth quarter, subject to customary conditions and regulatory approval. Himax Technologies, Inc (NASDAQ: HIMX) is a fabless semiconductor company specializing in display imaging technologies. The company designs and develops a comprehensive portfolio of display driver integrated circuits (DDICs), timing controllers, and other high-speed interface chips that enable high-resolution panels for a wide array of electronic devices. Himax's solutions are tailored to support both LCD and OLED displays, ensuring compatibility with television sets, desktop monitors, laptops, tablets, smartphones and wearable devices. In addition to core display driver products, Himax offers wafer-level optics and liquid crystal on silicon (LCOS) microdisplay solutions for applications in augmented reality (AR) and virtual reality (VR) headsets. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Himax Technologies Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Revenue: $227.4 million, a sequential increase of 14.2% and up 5.9% year-over-year, exceeding guidance. Gross Margin: 33.1%, up from 30.4% in the previous quarter and 31.2% a year ago, exceeding guidance of around 32%. Profit per Diluted ADS: $11.04, significantly exceeding guidance of $8.6 to $10.03, up from $4.06 in the previous quarter and $9.05 a year ago. Large Panel Driver IC Revenue: $19.2 million, a decline of 21.0% from the previous quarter, accounting for 8.4% of total revenues. Small and Medium-Sized Display Driver IC Revenue: $162.3 million, an increase of 19.6% sequentially, accounting for 71.4% of total sales. Non-Driver Sales: $45.9 million, a 17.7% increase from the previous quarter, accounting for 20.2% of total revenues. Operating Expenses: $15.7 million, an increase of 0.8% from the previous quarter and 3.6% year-over-year. Operating Income: $24.6 million, representing an operating margin of 10.8%, compared to 5.1% in the previous quarter and 8.4% a year ago. Profit Attributable to Shareholders: $19.9 million, or $11.4 cents per diluted ADS, compared to $8.0 million last quarter and $16.5 million in the same period last year. Cash and Other Financial Assets: $298.7 million as of June 13, 2026, compared to $332.8 million a year ago and $287.6 million a quarter ago. Operating Cash Flow: $17.5 million in the second quarter; approximately $6.5 million excluding an $11.0 million tax payment deferral. Inventory: $151.5 million, about the same as the $151.7 million last quarter, but higher than the $134.6 million a year ago. Accounts Receivable: $220.3 million, up from $190.9 million last quarter and $219.0 million a year ago. DSO: 93 days at quarter end, compared to 86 days last quarter and 92 days a year ago. Capital Expenditure: $4.3 million, versus $2.9 million last quarter and $4.6 million a year ago. Q3 2026 Guidance: Revenue expected to increase 7% to 11% sequentially; gross margin expected around 34%; profit attributable to shareholders estimated in the range of $0.08 to $0.10 per fully diluted ADS. Warning! GuruFocus has detected 6 Warning Signs with HIMX. Is HIMX fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Himax Technologies Inc (NASDAQ:HIMX) reported Q2 2026 revenue, gross margin, and profits all exceeding guidance, with revenue up 14.2% sequentially and gross margin at 33.1%. The automotive business remains the largest revenue contributor, with strong growth in automotive TCON and driver ICs, and the company expects full-year 2026 automotive driver IC sales to grow by double-digits. The company is making significant progress in its CPO business, with Gen 1 and Gen 2 products beginning engineering production ramps and expected to make meaningful financial contributions starting in 2027. Himax Technologies Inc (NASDAQ:HIMX) is seeing strong design-in momentum for its WiseEye ultra-low power AI sensing technology, particularly for smart glasses, with a leading global brand launching a product powered by this technology. The company is well-positioned for growth in the OLED notebook and automotive display markets, with a comprehensive portfolio and new design wins, including the adoption of its T2000 TCON into e-paper platforms. Himax Technologies Inc (NASDAQ:HIMX) expects Q3 2026 revenue to increase 7% to 11% sequentially, with gross margin improving to around 34%. Himax Technologies Inc (NASDAQ:HIMX) is facing industry-wide supply chain constraints due to the surge in AI demand, leading to higher manufacturing costs, extended lead times, and difficulty securing capacity. Large panel driver IC sales declined 21% sequentially in Q2 2026 due to customers pulling forward inventory purchases, and Q3 sales are expected to decline further. The company anticipates a decline in cash equivalents in Q3 due to dividend payments and employee bonus distributions. Tablet IC sales in Q3 are expected to decrease sequentially due to capacity constraints limiting the company's ability to support additional shipments. The company's inventory levels remain high compared to the same period last year, reflecting a proactive strategy to build inventory amid tightening supply, which could pose a risk if demand softens. The Q3 2026 profit guidance is negatively impacted by an estimated $11.8 million employee bonus expense, which is significantly higher than the typical quarterly expense. Q: Can you clarify how you define "meaningful" for CPO revenue in 2027, and provide an overall business outlook for 2027? A: Jordan Wu (President and CEO): For 2027, excluding CPO, we expect robust sales growth with continuously improved gross margins. Non-driver areas will likely outgrow driver ICs, approaching 30% of revenue from around 20% currently, driven by automotive T-Cons and the WiseEye product line. Our automotive business will continue to grow on top of this year's double-digit growth, assuming a flattish year for overall vehicle shipments. For CPO, while we can't quantify it, we expect very significant growth next year from a low base. Even in the most conservative scenario, CPO will make a meaningful contribution to our financials, especially the bottom line, starting in 2027, with volume growth quarter over quarter. Our focus this year is on completing validation of our products with key customers. Q: How will you address competition in the CPO/FAU market, and what are Himax's key advantages over peers? A: Jordan Wu (President and CEO): We are likely the only one providing optics using wafer-level optics technology, while our competitors use traditional molding glass technology. We believe our technology offers many advantages, but it needs to be proven through successful mass production. Our technology, together with our partner FOSI, is much more mature compared to peers. Our mindset is not to worry about competition but to focus on getting our products validated and ramping volume successfully. The market is so large that it's unthinkable we will be the only player; it's big enough for quite a few players to prosper. Q: What are the biggest bottlenecks for CPO mass production right now, and how long will it take to overcome them? A: Jordan Wu (President and CEO): We are very upstream, so it's hard to comment on the entire ecosystem's bottlenecks. Our focus is to ensure we are not the bottleneck ourselves, both in technology and capacity. The ecosystem is complicated, and our engineering runs by the end of this year will validate not just our solution but the whole ecosystem, including packaging, assembly, and eventually server-level integration. It's too complicated to speculate on timing, but our goal is to ensure we are not the bottleneck. Q: How do you expect your smart glasses revenue to trend in 2027? A: Jordan Wu (President and CEO): WiseEye will be a story for next year for smart glasses. A major customer has launched a product with our WiseEye for always-on visual understanding. We are seeing strong design momentum with major hyperscalers and platform providers, with some projects expected to enter mass production in the coming quarters. However, it's too early to quantify revenue. We need two or more quarters to provide better numbers, as we haven't received feedback on chip demand from the first customer yet. Q: Can you elaborate on the Q2 financial performance and the Q3 guidance? A: Karen Tiao (Head of IR/PR): Q2 revenues were $227.4 million, up 14.2% sequentially and 5.9% year-over-year, exceeding guidance due to better-than-expected automotive IC sales. Gross margin was 33.1%, substantially exceeding guidance, due to a favorable product mix. Profit per diluted ADS was $11.04, significantly exceeding guidance. For Q3, we expect revenue to increase 7% to 11% sequentially, with gross margin around 34%. Q3 profit per diluted ADS is estimated to be between $0.08 and $0.10, which includes the expected annual employee bonus of around $13 million. Q: What is driving the growth in the automotive business, and what is the outlook? A: Jordan Wu (President and CEO): Automotive remains our largest revenue contributor, representing well over 50% of revenue. Q2 automotive driver sales increased by double-digits quarter-over-quarter, driven by customer replenishment and new project ramps. We expect full-year 2026 automotive driver IC sales to grow by double-digits. The growth is driven by the increasing number of displays per vehicle (now averaging more than three), larger and higher-resolution displays, and the adoption of advanced technologies like LTDI and OLED. We are seeing strong momentum from platform standardization, with customers adopting our LTDI solutions as standard platforms for ultra-large displays. Q: Can you provide an update on the T-Con business and its growth prospects? A: Jordan Wu (President and CEO): Q2 T-Con sales accounted for over 10% of total sales, with more than half from automotive T-Cons. We expect Q3 T-Con sales to increase by double-digits quarter-over-quarter, with automotive T-Con growing at a solid double-digit pace. We have hundreds of design wins secured, and we are well positioned for another robust growth year in 2027. We also announced that our T2000 T-Con has been adopted into E Ink's next-generation color e-paper platform, enhancing dynamic display performance. Q: What is the current status of the supply chain and cost environment? A: Jordan Wu (President and CEO): The surge in AI demand is placing pressure on mature process nodes, causing capacity constraints and higher manufacturing costs. We are experiencing extended lead times and difficulty securing sufficient capacity. We are working with customers on pricing adjustments to share increased costs, with some taking effect in Q2 and more possibly implemented. We are leveraging our supply chain in Taiwan while strengthening our presence in China, Singapore, Korea, Japan, and Malaysia. We expect the supply environment to remain challenging in the near term. Q: Can you provide an update on the WiseEye product line and its applications? A: Jordan Wu (President and CEO): WiseEye is gaining broad market recognition for smart glasses as an ultra-low power AI perception front-end. A leading global brand launched a smart glasses product powered by our WiseEye technology. We are seeing growing engagement from platform providers, ODMs, and hyperscalers, with some projects expected to enter mass production in the coming quarters. We also announced that our WiseEye Biometric PowerMan modules achieved TUV Rheinland certification, validating recognition accuracy, response speed, and liveness detection. Our WhiteScar module has been adopted by a US customer for surveillance applications, with mass production scheduled for the end of this year. Q: What is the outlook for the large panel driver IC business in Q3? A: Jordan Wu (President and CEO): In For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Q2 2026 Revenue, GM and EPS All Exceeded the Guidance Issued on May 7, 2026Company Q3 2026 Guidance: Revenues to Increase 7% to 11% QoQ, Gross Margin is Expected to be around 34%. Profit per Diluted ADS to be 8.0 Cents to 10.0 Cents Q2 2026 revenues were $227.4 million, a sequential increase of 14.2%, exceeding the guidance range of a 10.0% to 13.0% increase QoQ, primarily driven by better-than-expected automotive IC sales Q2 GM reached 33.1%, substantially exceeding the guidance of around 32%, primarily due to a more favorable product mix, with increased sales from higher-margin automotive IC products Q2 2026 after-tax profit was $19.9 million, or 11.4 cents per diluted ADS, exceeding the guidance range of 8.6 to 10.3 cents Himax Q3 2026 revenues to increase 7% to 11% QoQ. GM to be around 34%. Profit per diluted ADS to be in the range of  8.0 cents to 10.0 cents Himax remains optimistic about the long-term growth of automotive display IC business and is well positioned to capitalize on the secular growth of smart vehicle interiors through its comprehensive LCD and OLED portfolio, broad global customer base, and robust design-win pipeline Automakers are accelerating new vehicle launches, driving broader platform standardization across vehicle models. Himax is well positioned to benefit through its comprehensive and validated automotive display IC portfolio, enabling customers to rapidly deploy proven solutions across multiple vehicle models while reducing engineering effort, lowering system costs, and shortening product development cycles Himax expects full-year 2026 auto IC sales to grow by double digits YoY, with strong growth momentum extending into 2027 as adoption of smart car interiors continues to drive increases in number, size, and sophistication of displays in both EV and conventional vehicles Himax remains particularly optimistic about smart glasses market and is one of the few companies offering both ultralow power AI sensing and microdisplay technologies. A leading global brand launching WiseEye powered smart glasses this fall, with growing engagement from platform providers, ODMs, and consumer electronics companies worldwide, and several projects poised to enter MP in 2027 Aggressive CPO customer development timelines, with demand showing no signs of slowing. CPO products entered engineering production ramps as scheduled in Q3. 2027 CPO shipments significantly exceed 2026, with meaningful financial contribution starting in 2027 TAINAN, Taiwan, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Himax Technologies, Inc. (Nasdaq: HIMX) (“Himax” or “Company”), a leading supplier and fabless manufacturer of display drivers and other semiconductor products, announced its financial results for the second quarter 2026 ended June 30, 2026. “Notwithstanding industry-wide supply constraints, we remain optimistic about the long-term growth prospects of our automotive display IC business. We continue to view automotive as one of the industry's most attractive secular growth markets, driven by rapid advancements in smart vehicle interiors, characterized by a growing number of displays per vehicle, along with larger, higher-resolution displays and more diverse vehicle cabin configurations. Himax is well positioned to capitalize on these industry trends through our comprehensive automotive display portfolio spanning both LCD and OLED technologies, a broad and diversified global customer base, and a robust design-win pipeline. The industry's ongoing pursuit of richer human-machine interfaces, immersive infotainment, and enhanced in-cabin user experiences is driving the adoption of a broader range of our display technologies. This not only increases Himax's dollar content per vehicle but also creates multiple long-term growth opportunities,” said Mr. Jordan Wu, President and Chief Executive Officer of Himax. “We remain particularly optimistic about the smart glasses market. Recently, a leading global brand just launched a smart glasses product powered by our WiseEye technology. We are seeing growing engagement with leading global brands, technology platform providers, ODMs, as well as hyperscalers, with some projects poised to enter mass production as we move into 2027. Meanwhile, Himax’s CPO products have begun engineering production ramps as scheduled in Q3. These products are expected to drive sequential shipment growth quarter over quarter, laying the foundation for a more meaningful volume shipment beginning in 2027. The official mass-production timing remains subject to customer deployment schedules. Nevertheless, we expect our shipments in 2027 to be significantly higher than in 2026, starting to make meaningful contribution to our financials,” concluded Mr. Jordan Wu. Second Quarter 2026 Financial Results Himax net revenues registered $227.4 million, representing a sequential increase of 14.2%, exceeding the guidance range of a 10.0% to 13.0% increase, primarily driven by better-than-expected automotive IC sales. Gross margin was 33.1%, substantially exceeding the guidance of around 32%, up from 30.4% in the previous quarter. Q2 profit per diluted ADS was 11.4 cents, significantly exceeding the guidance range of 8.6 to 10.3 cents. Revenue from large display drivers came in at $19.2 million, representing a decline of 21.0% from the previous quarter, attributable to panel makers pulling forward their inventory purchases for high-end TV ICs in prior quarters. In contrast, sales for both monitor and notebook IC products increased quarter-over-quarter due to higher legacy product shipments to key customers. Sales of large panel driver ICs accounted for 8.4% of total revenues for the quarter, compared to 12.2% last quarter and 11.6% a year ago. Revenue from the small and medium-sized display driver segment totaled $162.3 million, reflecting an increase of 19.6% sequentially. Q2 automotive driver sales, including both traditional DDIC and TDDI, increased by double digits quarter over quarter, primarily driven by broad-based customer replenishment of TDDI and DDIC following seasonally lower shipments during the Lunar New Year in Q1. The ramp-up of new TDDI and DDIC projects for a leading panel customer also contributed to the sequential increase. Customers continued to operate under a make-to-order model while maintaining lean inventory levels. Himax’s automotive business, comprising DDIC, TDDI, Tcon, and OLED IC sales, remained the largest revenue contributor in the second quarter, representing well over 50% of total revenues. Second quarter tablet IC sales, covering both LCD and OLED products, also increased sequentially, attributable to customers’ early pull-in demand against the backdrop of rising memory price sentiment in the market, together with continued shipments for a customer’s premium OLED model. In contrast, smartphone IC sales decreased sequentially following the initial ramp up of an OLED IC for a leading smartphone brand’s mainstream model in Q1. The small and medium-sized driver IC segment accounted for 71.4% of total sales for the quarter, compared to 68.2% in the previous quarter and 67.3% a year ago. Q2 non-driver sales reached $45.9 million, a 17.7% increase from the previous quarter, attributable to robust automotive Tcon shipments, supported by replenishment across a broad customer base. Tcon business accounted for over 10% of total sales, with more than half contributed by automotive Tcon. As the market leader in automotive Tcon, particularly in solutions featuring local dimming functionality, Himax expects strong growth momentum to continue into next year. Non-driver products accounted for 20.2% of total revenues, as compared to 19.6% in the previous quarter and 21.1% a year ago. Second quarter operating expenses were $50.7 million, an increase of 0.8% from the previous quarter and 3.6% compared to the same period last year. The year-over-year increase was mainly attributable to higher tape-out expenses. Himax remains disciplined in managing costs while continuing to invest strategically in select non-driver IC businesses with compelling long-term growth potential. Second quarter operating income was $24.6 million, representing an operating margin of 10.8%, compared to 5.1% in the previous quarter and 8.4% for the same period last year. Both the quarter-over-quarter and year-over-year changes were primarily driven by higher revenues and gross margin. Second-quarter after-tax profit was $19.9 million, or 11.4 cents per diluted ADS, compared to $8.0 million, or 4.6 cents per diluted ADS last quarter, and up from $16.5 million, or 9.5 cents in the same period last year. Balance Sheet and Cash Flow Himax had $298.7 million of cash, cash equivalents and other financial assets as of June 30, 2026. This compares to $332.8 million at the same time last year and $287.6 million a quarter ago. The sequential increase was mainly driven by operating cash flow of $17.5 million in the second quarter. As is the Company’s usual practice, income tax payments are made in the second quarter. Under a new Taiwan government policy, Himax is entitled to defer approximately $11.0 million of these payments for one year without interest. Excluding this deferral, second-quarter operating cash flow would have been approximately $6.5 million. Looking ahead to Q3, Himax anticipates a decline in cash, cash equivalents, and other financial assets, primarily due to a payment of $44 million for annual dividends to shareholders made on July 10. In addition, subject to the final Board decision, Himax will distribute around $11.7 million, the immediately vested portion of this year's employee bonus awards, at the end of Q3. Himax’s quarter-end inventories as of June 30, 2026 were $151.5 million, about the same as $151.7 million last quarter but higher than $134.6 million in the same period last year. After maintaining lean inventory levels for several years, Himax proactively adjusted its inventory strategy about a year ago, selectively building inventory in anticipation of tightening supply across the industry. Accounts receivable at the end of June was $220.3 million, up from $190.9 million last quarter and $219.0 million a year ago. DSO was 93 days at the quarter end, as compared to 86 days last quarter and 92 days a year ago. Second quarter capital expenditure, primarily for R&D-related equipment for Himax’s IC design business, was $4.3 million, versus $2.9 million last quarter and $4.6 million a year ago. Outstanding Share As of June 30, 2026, Himax had 174.4 million ADS outstanding, unchanged from last quarter. On a fully diluted basis, the total number of ADS outstanding for the second quarter was 174.4 million. Investment Portfolio Update During the quarter, on July 1, Himax announced the proposed divestiture of investment in one of the Company’s equity-method investees. Based on the information provided by the said investee company, Himax expects to recognize a pre-tax gain of approximately $23 to $24 million upon closing. The transaction is expected to close in the fourth quarter of this year subject to customary closing conditions and regulatory approvals. Himax will provide more updates as appropriate as the transaction progresses. Q3 2026 Outlook The ongoing surge in AI demand continues to impact non-AI applications. This has rippled across the broader semiconductor supply chain, resulting in capacity constraints at foundry, packaging and testing facilities on the mature process nodes where many of Himax’s products are manufactured. Consequently, Himax is experiencing higher manufacturing and procurement costs, extended lead times, and increased difficulty in securing sufficient capacity across a broad range of its product lines. Himax expects the supply environment to remain challenging in the near term. To enhance production flexibility and secure the capacity needed to meet customer needs and support upcoming production ramps, Himax continues to leverage its established supply chain in Taiwan while further strengthening its presence across China, Singapore, Korea, Japan and Malaysia. In parallel, as Himax mentioned last quarter, the company has been working closely with customers on pricing adjustments to share these increased costs. Some adjustments took effect in the second quarter with additional pricing adjustments possibly implemented over time as market conditions warrant. Notwithstanding these industry-wide supply constraints, Himax remains optimistic about the long-term growth prospects of its automotive display IC business. Himax continues to view automotive as one of the industry's most attractive secular growth markets, driven by rapid advancements in smart vehicle interiors. This trend is characterized by, among other things, a growing number of displays per vehicle, now averaging more than three and continuing to rise, along with larger, higher-resolution displays and more diverse vehicle cabin configurations, including curved, integrated, multi-display, and pillar-to-pillar designs. Himax is well positioned to capitalize on these industry trends through its comprehensive automotive display portfolio spanning both LCD and OLED technologies, a broad and diversified global customer base, and a robust design-win pipeline. Himax further differentiates itself by continuously introducing next-generation automotive display technologies, including LTDI solutions for ultra-large displays, advanced Tcon solutions for head-up displays, OLED driver and touch controller ICs and Micro LED display technologies. Himax’s portfolio also includes Knob-on-Display solutions and capacitive physical buttons where customer interest continues to grow, driven in part by regulatory and vehicle safety initiatives in key automotive markets, including China and Europe, where greater emphasis is being placed on intuitive physical controls to enhance driving safety and reduce driver distraction. The industry's ongoing pursuit of richer human-machine interfaces, immersive infotainment, and enhanced in-cabin user experiences is driving the adoption of a broader range of Himax’s display technologies. This not only increases Himax's dollar content per vehicle but also creates multiple long-term growth opportunities. In addition, Himax’s well-established global supply chain provides the Company with greater flexibility to navigate the current supply environment while securing the capacity needed to support both existing projects and upcoming production ramps. Himax is also seeing an important trend in the automotive industry with automakers introducing new vehicle models at an accelerating pace amid intensifying competition. As a result, product lifecycles are becoming shorter, creating greater pressure to improve engineering efficiency, reduce development costs, and shorten time to market of new car models. These challenges are driving broader adoption of platform standardization across multiple vehicle models, favoring suppliers with comprehensive and validated technology portfolios and proven track records. Himax is one such supplier, boasting the industry's most compelling automotive display IC offerings, market-leading positions across automotive DDIC, TDDI, and Tcon, and continued leadership in next-generation technologies such as LTDI and OLED technologies. By adopting Himax’s solutions as part of their standardized platforms, customers can quickly deploy validated display IC products across multiple new vehicle developments, reducing engineering effort, lowering system costs, and shortening development cycle of each project. In addition to automotive, Himax is also making solid progress across several strategic growth areas, including smart glasses, ultralow power AI, and CPO. These emerging businesses diversify Himax’s revenue base into markets with attractive long-term growth prospects and margin profiles while strengthening its overall competitive position. Himax believes these businesses are poised to become increasingly meaningful contributors to the Company’s future growth. Smart glasses market is an area Himax remains particularly optimistic about. Himax is one of the few companies offering both ultralow power AI sensing and microdisplay technologies, both critical building blocks for next-generation smart glasses. On the AI sensing front, WiseEye enables ultralow power, always-on outward and inward sensing, supporting an expanding range of AI use cases, including contextual awareness, real-time visual assistance, and personalized user experiences. Recently, a leading global brand just launched a smart glasses product powered by Himax’s WiseEye technology, and the Company continues to see strong design-in momentum across customers worldwide. In particular, Himax is seeing growing engagement with leading global brands, technology platform providers, ODMs, as well as hyperscalers who traditionally do not offer hardware products but are now entering smart glasses market, with some projects poised to enter mass production as Himax moves into 2027. In microdisplays for AR glasses, Himax’s Front-lit LCoS microdisplay delivers an optimal balance of size, weight, resolution, image quality, power consumption, and cost. It can also be configured to operate in a high-brightness, ultralow power green-only mode and seamlessly switch to full-color operation as needed. This flexibility differentiates Himax’s solution from alternative display technologies, letting customers optimize power efficiency while maintaining visual performance and meeting their system design and cost targets. Together, these capabilities make Himax’s Front-lit LCoS a compelling display platform for next-generation AR glasses equipped with see-through displays. Currently Himax is working closely with multiple waveguide partners across Asia, Europe, and North America to deliver integrated AR display solutions that simplify system integration and shorten customers' development cycles. This is driving broader customer engagement and positioning Himax to convert more opportunities into design wins. Backed by well over a decade of LCoS expertise and a proven track record of successful production shipments, Himax is well positioned to support the next generation of AR glasses. In the field of Co-Packaged Optics (CPO), customer development timelines remain aggressive with demand showing no sign of slowing. Together with Himax’s strategic partner, FOCI, the Company continues to deepen customer engagements by offering a flexible portfolio of solutions, including customized designs tailored specifically for customers’ needs as well as a standardized technology platform developed in collaboration with a leading foundry partner. Himax and FOCI’s solutions support both co-packaged and pluggable packaging architectures to address diverse customer needs. Himax’s primary focus for the second half of this year remains on achieving mass production readiness, including key customer qualification milestones, while continuing to improve manufacturing yields and establish stable mass-production capabilities. The Company has already made encouraging progress toward these objectives. Both Gen 1 product, supporting 1.6T and 3.2T transmission bandwidths, and Gen 2 product, designed for 6.4T bandwidth, have begun engineering production ramps as scheduled in the third quarter. These products are expected to drive sequential shipment growth quarter over quarter, laying the foundation for a more meaningful volume shipment beginning in 2027. The official mass-production timing remains subject to customer deployment schedules. Nevertheless, Himax expects its shipments in 2027 to be significantly higher than in 2026, starting to make meaningful contribution to the Company’s financials. At the same time, Himax and FOCI are also co-developing next-generation optical solutions with customers, featuring higher fiber-count architectures, enhanced optical precision, and increasingly sophisticated designs such as CWDM (Coarse Wavelength Division Multiplexing), to address the explosive bandwidth demands of HPC and AI data center applications. Display Driver IC Businesses LDDIC In Q3 2026, Himax anticipates large display driver IC sales to decline by single digit from last quarter. Monitor IC sales are expected to decline quarter over quarter, as customers already pulled forward inventory purchases in prior quarters. In contrast, TV IC sales are poised for sequential increases, driven by higher legacy product shipments to key customers. Looking ahead in the notebook market, Himax is seeing encouraging design-in momentum, particularly in OLED notebooks with several industry trends creating favorable tailwinds. Rising memory prices are accelerating the shift from entry-level to premium notebook models, while the scheduled ramp-up of new Gen 8.6 OLED fabs in China later this year and into 2027 is expected to further drive OLED penetration in the notebook market. Himax is well positioned to capitalize on these favorable industry trends with its comprehensive notebook display OLED IC portfolio, spanning DDIC, Tcon, power management IC and touch controllers. This one-stop offering lets Himax serve customers with a complete solution while increasing the Company’s value content per device. SMDDIC Q3 small and medium-sized display driver IC business is expected to increase by high-single-digits from last quarter. Q3 automotive driver IC sales, including TDDI and traditional DDIC, are set to increase by a solid double-digit quarter-over quarter. This increase reflects broader customer demand of DDIC and TDDI products, together with the mass production of multiple LTDI projects across car brands worldwide. Strong sequential growth underscores the accelerating adoption of larger and more sophisticated automotive displays, with Chinese automakers leading the charge. Himax continues to see healthy underlying customer demand, supported by multiple new projects entering mass production in the coming quarters. Himax expects its full-year 2026 automotive driver IC sales to grow by double digits from last year with strong growth momentum extending into next year as adoption of smart car interiors continues to drive increases in the number, size, and sophistication of displays in both electric and conventional vehicles. Meanwhile, the industry's shift toward platform standardization is creating meaningful opportunities for Himax. This is evidenced by the growing number of customers adopting Himax’s industry-pioneering LTDI and local dimming Tcon solutions as the standard platform for their ultra-large automotive displays. Following years of customer engagement, several of these projects are now entering mass production across multiple car brands. These ultra-large display panels typically require four or more LTDI chips, and in some cases more than ten, together with at least one local dimming Tcon per panel. As customers increasingly adopt Himax’s solution across multiple ultra-large display platforms, this not only strengthens customer stickiness and makes it more difficult for competitors to compete with the Company, but also increases Himax’s content value on a per-panel and per-vehicle basis. Looking ahead, the accelerating adoption of OLED displays in automotive presents a compelling long-term growth opportunity and is poised to become a key pillar of Himax’s automotive business. For several years, Himax has been collaborating closely with leading OLED panel makers in Korea and China, and the Company’s comprehensive portfolio of DDICs, Tcons, touch controller ICs, and customized ASIC solutions gives customers the flexibility to select the solutions that best meet their specific requirements. This broad product coverage and Himax’s early customer engagements have already translated into numerous development programs, providing a solid foundation for future growth as premium automotive displays transition from LCD to OLED. With OLED adoption on the way, Himax continues to introduce innovative IC solutions to address evolving customer needs. For example, Himax’s latest TED (Tcon Embedded Driver IC) solution, which integrates DDIC and Tcon into a single chip, offers a cost-effective, flexible, and highly integrated solution ideal for smaller, lower-resolution automotive displays. Himax’s TED technology is now being adopted across a diverse range of applications, including automotive, robotics, and IT applications, with several projects involving customized ASIC solutions co-developed with leading global end customers. Himax expects Q3 smartphone IC revenue to increase quarter over quarter, driven by continued shipments for a leading smartphone brand's mainstream models and inventory build-up for its upcoming premium models. Q3 tablet IC sales are expected to decrease sequentially, as capacity constraints limit Himax’s ability to support additional shipments. Non-Driver Product Categories Q3 non-driver IC revenues are expected to increase by low-teens sequentially. Timing Controller (Tcon) Himax anticipates Q3 2026 Tcon sales to increase by low-teens quarter over quarter. Himax’s automotive Tcon business is expected to deliver decent double-digit growth in Q3, extending the strong momentum from Q2 and far outpacing the Company’s corporate average. This growth is driven by continued legacy product shipments across a broad, diversified customer base, along with several new projects entering mass production. Despite ongoing industry-wide capacity constraints, Himax is confident in the strong growth trajectory of its automotive Tcon business. With hundreds of design wins already secured and new design-ins continuing to expand, Himax is well positioned for another robust growth year in automotive Tcon as the Company moves into 2027. During the quarter, Himax was pleased to announce that its T2000 Tcon has been adopted into E Ink's next-generation color ePaper platform. Himax's proprietary parallel-processing architecture is at the core of this ASIC product, enabling simultaneous display refresh and data transmission, significantly enhancing dynamic display performance while preserving the ultralow power advantage of ePaper technology. This breakthrough enables smoother display of dynamic content on large format ePaper displays, helping accelerate the transition from traditional static signage to dynamic applications such as retail advertising, public information displays, and smart commercial environments. WiseEye™ Ultralow Power AI Sensing On the update of WiseEye™ ultralow power AI sensing solution, a cutting-edge ultralow power AI sensing total solution, targeting battery-powered endpoint devices. WiseEye differentiates itself with an industry-leading ultralow power architecture, consuming only a few milliwatts while delivering on-device AI inferencing, 24/7 always-on image and voice sensing, and an exceptionally compact form factor. This unique combination enables endpoint AI devices that were previously impractical due to power and size constraints, driving broad adoption across applications including notebooks, surveillance systems, access control, palm vein authentication, smart office, and smart glasses, with design-in activities continuing to expand across leading customers worldwide. WiseEye modules’ design-in activities continue to expand, driven by its plug-and-play architecture, ultralow power consumption, and on-device AI capabilities. During the quarter, Himax’s WiseEye biometric palm vein modules achieved the verification of TÜV Rheinland, one of the world's leading and most credible independent testing, inspection, and certification organizations. The assessment validated recognition accuracy, response speed and liveness detection. This verification, together with Himax’s earlier achievement of GDPR compliance, one of the world's strictest data privacy standards, reinforces the privacy, security, and performance of Himax’s biometric authentication solutions, giving customers greater confidence to accelerate deployment across security-sensitive applications. Himax is seeing expanding design-in activities for its PalmVein modules across smart access, workforce management, smart door locks, and, more recently, computer monitors and smart office solutions. Built on the same core hardware platform as the WiseEye technology, Himax’s WiseGuard module is specifically designed for security applications, delivering ultralow power operation, a wide field of view, long-range detection, and exceptional low-light performance. WiseGuard accurately detects and continuously tracks multiple individuals, including their presence, location, and movement, substantially reducing the false triggers commonly associated with traditional PIR-based solutions. Its proactive, 24/7 sensing capability enables security systems to detect and continuously track activity from the outset, capturing the full sequence of events rather than only the moment motion is detected, providing a significant advantage over traditional reactive solutions. WiseGuard delivers up to 5 years of battery life while maintaining high-precision detection over long distances, even in environments with illumination as low as 1 lux. Since its debut just six months ago, WiseGuard has seen encouraging customer engagement across a wide range of applications, including surveillance cameras, access control, IoT, and wildlife monitoring. Himax is also pleased to share that WiseGuard has already been adopted by a U.S. customer for surveillance applications, with mass production scheduled to begin toward the end of this year. Meanwhile, WiseEye is gaining broad market recognition for smart glasses as a compact, ultralow power, always-on AI perception front end. WiseEye supports outward-facing environmental sensing, first through scene understanding by analyzing the user’s contextual surroundings and environment, followed by object classification to recognize and identify specific objects typically associated with the identified scene. It also supports inward-facing capabilities, including eyeball tracking for intuitive gaze-based interaction and iris authentication for secure identity verification. Together, these capabilities enable AI glasses to continuously capture visual snapshots of the real world and enable intelligent, responsive, low-latency human-machine interaction while consuming only a few milliwatts of power. With a leading global brand launching WiseEye powered smart glasses this fall, Himax is seeing growing engagement from platform providers, ODMs, and consumer electronics companies worldwide. Some of these projects are expected to enter mass production in the upcoming quarters. As Himax has done historically, the Company will grant employees’ annual bonus, including RSUs and cash awards, on or around September 30 this year. Q3 guidance for profit per diluted ADS has taken into account the expected 2026 annual bonus, which, subject to Board approval, is now estimated to be around $13 million, out of which $11.7 million will be vested and expensed immediately on the grant date. As a reminder, the total annual bonus amount and the immediately vested portion are Himax’s current best estimates only and the actual amounts could vary materially depending on, among other things, the Company’s Q4 profit expectations and the final Board decision for the total bonus amount and its vesting scheme. The $13 million expected annual bonus does not include the above-mentioned gain on investment from divestiture of an equity-method investee, as the transaction is pending regulatory approvals and has not yet closed. As is the case for previous years, Himax expects the annual bonus grant in 2026 to lead to higher third quarter operating expenses compared to the other quarters of the year. In comparison, the annual bonus for 2025 and 2024 were $7.7 million and $12.5 million respectively, of which $7.5 million and $11.2 million vested immediately. In providing Himax’s Q3 financial guidance, the Q3 expense related to employee bonus is estimated to be $11.8 million, representing 6.8 cents per diluted ADS before tax, comprised of $11.7 million of the immediately vested portion of this year’s bonus, and $0.1 million of the amortized portion of the unvested bonuses from previous years. By comparison, employee bonus expense in each of the last three quarters was around $0.2 million. If you choose to attend the call by dialing in via phone, please enter the Participant PIN Code 1116006# after the call is connected. A replay of the webcast will be available beginning two hours after the call on www.himax.com.tw. This webcast can be accessed by clicking on this link or visiting Himax’s website, where it will remain available until August 6, 2027. About Himax Technologies, Inc.Himax Technologies, Inc. (NASDAQ: HIMX) is a leading global fabless semiconductor solution provider dedicated to display imaging processing technologies. The Company’s display driver ICs and timing controllers have been adopted at scale across multiple industries worldwide including TVs, PC monitors, laptops, mobile phones, tablets, automotive, ePaper devices, industrial displays, among others. As the global market share leader in automotive display technology, the Company offers innovative and comprehensive automotive IC solutions, including traditional driver ICs, advanced in-cell Touch and Display Driver Integration (TDDI), local dimming timing controllers (Local Dimming Tcon), Large Touch and Display Driver Integration (LTDI) and OLED display technologies. Himax is also a pioneer in tinyML visual-AI and optical technology related fields. The Company’s industry-leading WiseEye™ Ultralow Power AI Sensing technology which incorporates Himax proprietary ultralow power AI processor, always-on CMOS image sensor, and CNN-based AI algorithm has been widely deployed in consumer electronics and AIoT related applications. Himax optics technologies, such as diffractive wafer level optics, LCoS microdisplays and 3D sensing solutions, are critical for facilitating emerging AR/VR/metaverse technologies. Additionally, Himax designs and provides touch controllers, OLED ICs, LED ICs, EPD ICs, power management ICs, and CMOS image sensors for diverse display application coverage. Founded in 2001 and headquartered in Tainan, Taiwan, Himax currently employs around 2,200 people from three Taiwan-based offices in Tainan, Hsinchu and Taipei and country offices in China, Korea, and the US. Himax has 2,555 patents granted and 318 patents pending approval worldwide as of June 30, 2026. http://www.himax.com.tw Forward Looking Statements Factors that could cause actual events or results to differ materially from 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-use applications products; reliance on a small group of principal customers; the uncertainty of continued success in technological innovations; our ability to develop and protect our intellectual property; pricing pressures including declines in average selling prices; changes in customer order patterns; changes in estimated full-year effective tax rate; shortage in supply of key components; changes in environmental laws and regulations; changes in export license regulated by Export Administration Regulations (EAR); exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; our ability to collect accounts receivable and manage inventory and other risks described from time to time in the Company's SEC filings, including those risks identified in the section entitled "Risk Factors" in its Form 20-F for the year ended December 31, 2025 filed with the SEC, as may be amended. Company Contacts:Karen Tiao, Head of IR/PRHimax Technologies, Inc.Tel: +886-2-2370-3999Fax: +886-2-2314-0877Email: [email protected] Mark Schwalenberg, DirectorInvestor Relations - US RepresentativeMZ North AmericaTel: +1-312-261-6430Email: [email protected] -Financial Tables-

TAINAN, Taiwan, July 06, 2026 (GLOBE NEWSWIRE) -- Himax Technologies, Inc. (Nasdaq: HIMX) (“Himax” or the “Company”), a leading supplier and fabless manufacturer of display drivers and other semiconductor products, today announced that it will hold a conference call with investors and analysts on Thursday, August 6, 2026 at 8:00 a.m. US Eastern Daylight Time and 8:00 p.m. Taiwan Time to discuss the Company's second quarter 2026 financial results. Participant PIN Code: 1116006# If you choose to attend the call by dialing in via phone, please enter the Participant PIN Code 1116006# after the call is connected. A replay of the webcast will be available beginning two hours after the call on http://www.himax.com.tw. This webcast can be accessed by clicking on this link or visiting Himax’s website, where it will remain available until August 6, 2027. About Himax Technologies, Inc. Himax Technologies, Inc. (NASDAQ: HIMX) is a leading global fabless semiconductor solution provider dedicated to display imaging processing technologies. The Company’s display driver ICs and timing controllers have been adopted at scale across multiple industries worldwide including TVs, PC monitors, laptops, mobile phones, tablets, automotive, ePaper devices, industrial displays, among others. As the global market share leader in automotive display technology, the Company offers innovative and comprehensive automotive IC solutions, including traditional driver ICs, advanced in-cell Touch and Display Driver Integration (TDDI), local dimming timing controllers (Local Dimming Tcon), Large Touch and Display Driver Integration (LTDI) and OLED display technologies. Himax is also a pioneer in tinyML visual-AI and optical technology related fields. The Company’s industry-leading WiseEyeTM Ultralow Power AI Sensing technology which incorporates Himax proprietary ultralow power AI processor, always-on CMOS image sensor, and CNN-based AI algorithm has been widely deployed in consumer electronics and AIoT related applications. Himax optics technologies, such as diffractive wafer level optics, LCoS microdisplays and 3D sensing solutions, are critical for facilitating emerging AR/VR/metaverse technologies. Additionally, Himax designs and provides touch controllers, OLED ICs, LED ICs, EPD ICs, power management ICs, and CMOS image sensors for diverse display application coverage. Founded in 2001 and headquartered in Tainan, Taiwan, Himax currently employs around 2,200 people from three Taiwan-based offices in Tainan, Hsinchu and Taipei and country offices in China, Korea, and the US. http://www.himax.com.tw Forward Looking Statements Factors that could cause actual events or results to differ materially from 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-use applications products; reliance on a small group of principal customers; the uncertainty of continued success in technological innovations; our ability to develop and protect our intellectual property; pricing pressures including declines in average selling prices; changes in customer order patterns; changes in estimated full-year effective tax rate; shortage in supply of key components; changes in environmental laws and regulations; changes in export license regulated by Export Administration Regulations (EAR); exchange rate fluctuations; regulatory approvals for further investments in our subsidiaries; our ability to collect accounts receivable and manage inventory and other risks described from time to time in the Company's SEC filings, including those risks identified in the section entitled "Risk Factors" in its Form 20-F for the year ended December 31, 2025 filed with the SEC, as may be amended. Company Contacts: Karen Tiao, Head of IR/PRHimax Technologies, Inc.Tel: +886-2-2370-3999Fax: +886-2-2314-0877Email: [email protected] Mark Schwalenberg, DirectorInvestor Relations - US RepresentativeMZ North AmericaTel: +1-312-261-6430Email: [email protected]

Image source: The Motley Fool. Thursday, May 7, 2026 at 8 a.m. ET Chief Executive Officer — Jordan Wu Chief Financial Officer — Karen Tiao On today's call, I will first review Himax's consolidated financial performance for the first quarter 2026, followed by our second quarter outlook. Jordan will then give an update on the status of our business and after which we will take questions. You can submit your questions online through the webcast or by phone. We will review our financials on an IFRS basis. Despite the typical seasonal slowdown during the Lunar New Year holidays, we are pleased to report that our Q1 profit exceeded the guidance range announced on February 12, 2026, while both revenue and gross margin were at the high end of the projected range. First quarter revenues registered $199.0 million, representing a slight sequential decline of 2.0%, reaching the high end of our guidance range of a decline of 2.0% to 6.0%. Gross margin was 30.4%, also at the high end of our guidance of flat to slightly down from 30.4% in the previous quarter. Q1 profits per diluted ADS was $0.046, exceeding the guidance range of $0.02 to $0.04. Revenues from large display driver came in at $24.2 million, representing an increase of 11.7% from the previous quarter, outperforming our guidance range of a single-digit increase sequentially. This was primarily driven by better-than-expected restocking of high-end TV ICs by a leading panel maker. Sales of large panel driver ICs accounted for 12.2% of total revenues for the quarter, compared to 10.7% last quarter and 11.6% a year ago. Revenue from the small and medium-sized display driver segment totaled $135.8 million, reflecting a slight decline of 2.4% sequentially amid a typical low season. In line with guidance, Q1 automotive driver sales, including both traditional DDIC and TDDI, declined double digits sequentially, reflecting Lunar New Year seasonality, customers' inventory control following 2 consecutive quarters of restocking, and the tapering of automotive subsidy programs in major markets including China and the U.S. In contrast, revenues for smartphone, covering both LCD and OLED products, increased sequentially primarily due to the new OLED solutions that began mass production with a top-tier panel maker for a leading smartphone brand's mainstream model. Q1 tablet IC sales also increased sequentially, driven by renewed demand for mainstream models from leading customer following several quarters of softness, as well as the commencement of IC shipments for a customer's new premium OLED tablet. The small and medium-sized driver IC segment accounted for 68.2% of total sales for the quarter, compared to 68.5% in the previous quarter and 70.0% a year ago. Q1 non-driver sales reached $39.0 million, a 7.7% decrease from the previous quarter, reflecting a decline in ASIC Tcon shipments to a leading projector customer, along with a moderation in automotive Tcon shipments following several quarters of solid growth. However, underlying demand for automotive Tcon business remains robust, supported by a strong pipeline of hundreds of design-win projects poised to enter mass production in the coming quarters. Non-driver products accounted for 19.6% of total revenues, as compared to 20.8% in the previous quarter and 18.4% a year ago. First quarter operating expenses were $50.3 million, a decrease of 8.4% from the previous quarter, but an increase of 9.9% compared to the same period last year. Both the quarter-over-quarter and year-over-year changes were primarily driven by differences in tape-out expenses, reflecting the timing of major project tape-outs. The year-over-year increase was also attributable to salary expenses and the appreciation of the NT dollar against the U.S. dollar. Against a backdrop of ongoing macroeconomic challenges, we continue to maintain strict cost and expense discipline, while strategically investing in selected non-driver IC areas with compelling growth potential, some of which are poised to ramp meaningfully starting in 2027. First quarter operating profit was $10.2 million, representing an operating margin of 5.1%, compared to 3.4% in the previous quarter and 9.2% for the same period last year. The sequential increase was the result of the lower operating expenses. The year-over-year decline reflected the lower sales and gross margin, coupled with higher operating expenses. First-quarter after-tax profit was $8.0 million, or $0.046 per diluted ADS, compared to $6.3 million or $0.036 per diluted ADS last quarter, and down from $20.0 million or $0.114 in the same period last year. Turning to the balance sheet, we had $287.6 million of cash, cash equivalents and other financial assets as of March 31, 2026. This compares to $281.0 million at the same time last year and $286.2 million a year ago. As of March 31, 2026, we had $27.0 million in long-term unsecured loans, with $6.0 million being the current portion. Our quarter-end inventories as of March 31, 2026, were $151.7 million, slightly lower than $152.7 million last quarter, but higher than $129.9 million the same period last year. Having maintained lean inventory levels in prior years, we made a strategic decision about a year ago to selectively loosen inventory control in response to an industry-wide shift toward tight supply. Accounts receivable at the end of March 2026 was $190.9 million, down from $200.9 million last quarter and $217.5 million a year ago. DSO was 86 days at the quarter end as compared to 88 days last quarter and 91 days a year ago. First quarter capital expenditures were $2.9 million, versus $4.0 million last quarter and $5.2 million a year ago. First quarter CapEx was mainly for R&D-related equipment for our IC design business. Prior to today's call, we announced an annual cash dividend of $0.252 per ADS, totaling $44 million and payable on July 10, 2026 with a payout ratio of 100% of the previous year's profit. The high payout ratio reflects our healthy balance sheet and positive outlook for cashflow generation over the next few years. For business areas where we have in-house manufacturing capacity such as WLO and LCoS, existing capacity is in place to support the strong growth anticipated for the next few years. Himax will continue to focus on maintaining a healthy balance sheet and driving sustainable long-term growth, while delivering shareholder value through high dividends and share repurchases. As of March 31, 2026, Himax had 174.4 million ADS outstanding, unchanged from last quarter. On a fully diluted basis, the total number of ADS outstanding for the first quarter was 174.4 million. Now turning to our second quarter 2026 guidance. We expect Q2 revenues to increase 10.0% to 13.0% sequentially. Gross margin is expected to be around 32%, mainly reflecting a more favorable product mix, with increased sales from higher-margin non-driver products and reduced sales from lower-margin products. Q2 profit attributable to shareholders is estimated to be in the range of $0.086 to $0.103 per fully diluted ADS. I will now turn the call over to Jordan to discuss our Q2 outlook. Jordan, the floor is yours. Jordan Wu: Thank you, Karen. The rapid rise in AI demand is placing unprecedented strain on memory chip supply, impacting many non-AI applications. This, in turn, has led to capacity tightness across foundry, packaging, and testing in mature process nodes where we are anchored, putting upward pressure on our cost structure. Rising gold prices have further compounded these cost pressures. With cost pressure expected to persist, we are actively working with customers on pricing adjustments to share rising costs, with some price increases already taking effect in Q2. Market conditions remain dynamic, compounded by ongoing geopolitical tensions, and the market's visibility remains limited on both consumer electronics and automotives for the second half of the year. That said, as indicated in our last earnings call, the first quarter marked the trough with the second quarter recovery tracking as anticipated, primarily driven by customer inventory restocking. We expect upward momentum through the remainder of 2026, supported by a meaningful number of new automotive projects scheduled to enter mass production in the second half, a view consistent with our outlook from last quarter's call. The positive outlook is also supported by the anticipated growth in our non-driver IC businesses, particularly Tcon and WiseEye AI. In our display IC business for automotive, we remain confident in our long-term growth prospects, as automotive is an area relatively insulated from memory price impact compared to consumer electronics products such as smartphone and notebook. The long-term positive outlook is underpinned by our leading technology portfolio, broad and diversified customer base, strong design-win pipeline across DDIC and TDDI, and substantial lead over competitors. Our display IC portfolio spans a comprehensive range of solutions which enable novel and stylish automotive displays. Such technologies include automotive Tcon with advanced local dimming functionality, LTDI for ultra-large displays, advanced Tcon solutions for state-of-the-art head-up displays, as well as automotive OLED and Micro LED technologies. Customer adoption of these advanced display technologies continues to accelerate across new vehicle models, driving higher content value per vehicle for us and creating new growth momentum for Himax's automotive display IC business in the years ahead. Despite ongoing macro uncertainty, Himax continues to expand beyond its traditional display IC business, focusing on key growth areas including smart glasses, ultralow power AI and CPO. These emerging technologies present significant growth opportunities that help diversify our revenue base into areas with attractive gross margin profiles and profitability while also strengthening our overall competitiveness. Starting with smart glasses, a key strategic focus area we are quite optimistic about. Himax is uniquely positioned as one of the few companies with both ultralow power AI capabilities and microdisplay, both critical for smart glasses. WiseEye provides ultralow power always-on AI sensing capabilities, targeting a broad range of smart glasses, while our LCoS microdisplay solutions enable display functionality critical for AR glasses with see-through displays. We are pleased to share that a leading brand has adopted our WiseEye for its smart glasses, with mass production expected later this year and additional prominent brands are expected to follow. In microdisplays for AR glasses, built on the debut of our proprietary Front-lit LCoS microdisplay at Display Week last year, Himax returned to Display Week 2026 with a new-generation upgrade that significantly enhances contrast, dynamic range, and optical efficiency. These advances, driven by Himax's proprietary technologies, deliver a substantial increase in contrast performance while effectively eliminating the postcard effect commonly seen for microdisplays in dark environments. Himax's Front-lit LCoS solution offers an optimal balance among weight, size, resolution, image quality, power consumption, and cost, positioning it as a compelling choice for AR glasses. For both WiseEye and LCoS microdisplay, supported by expanding customer engagements across technology heavyweights and smart glasses specialists globally, we are increasingly optimistic about the new space, even compared to just a few quarters ago. We expect revenues from AI and AR glasses applications to grow substantially over the next few years. Now I would like to provide a brief update on our progress in CPO. Together with FOCI, our strategic partner, we continue to make steady progress on both the Gen 1 and Gen 2 products as planned. Our Gen 1 solution, supporting 1.6T and 3.2T transmission bandwidth, is now ready with small quantity shipments expected to commence in the second half of this year. Meanwhile, our Gen 2 solution, targeting 6.4T bandwidth with significant volume potential, is nearing completion of customer product validation for AI data center applications. Building on this momentum, our main goal for 2026 is to achieve mass-production readiness, with only limited shipments expected during the year, followed by an accelerating volume ramp starting 2027. At the same time, in close partnership with FOCI, we continue to advance multiple future-generation high-speed optical transmission technologies and CPO architectures in collaboration with leading global customers and partners, focusing on higher fiber channels, more advanced optical designs, and enhanced optical precision to meet the explosive bandwidth demands of HPC and AI data center applications. In early March, FOCI completed a TWD 3.16 billion rights issue to support R&D, equipment purchases and preparations for CPO mass production. Himax, already a shareholder through 2 earlier tranches of share offerings in 2023 and 2024, participated in the rights issue, which not only demonstrates our continued support for our partner and further strengthens collaboration between the 2 companies, but also underscores that advancing CPO technology requires highly integrated efforts through close collaboration and joint development. With an average acquisition cost of TWD 120.6 per share, our equity stake, representing 5.36% of FOCI, now totals TWD 4.96 billion or USD 156 million as of May 7 when the market closed at TWD 815 per share. As a reminder, our FOCI investment has been booked as a so-called "financial asset measured at fair value through other comprehensive income" on the balance sheet since day 1 of investment. As such, based on accounting rules, FOCI's share price fluctuations are recognized in our books as so-called "accumulated other comprehensive income", a balance sheet item under owners' equity, and do not affect our profit and loss. Likewise, upon disposal, any resulting gain or loss will be recognized only on the balance sheet through change of retained earnings and, again, will have no impact on the profit and loss. This accounting treatment we chose underscores our long-term commitment to the FOCI investment. We expect CPO to become a major revenue and profit contributor in the years ahead. With that, I will now begin with an update on the large panel driver IC business. In Q2, large display driver IC sales are expected to decrease by high-teens quarter-over-quarter, attributable to customers pulling forward their inventory purchases for TV applications in prior quarters. In contrast, both monitor and notebook IC products are poised for sequential increases due to higher legacy product shipments to key customers. Looking ahead to the notebook market, our focus is on premium models featuring OLED displays and LCD displays with touch functionality. We offer a full spectrum of IC solutions for both LCD and OLED notebooks, including DDIC, Tcon, touch controller, and TDDI, enabling us to provide customers with a comprehensive one-stop solution while increasing our content per device. We continue to see strong design-in momentum, particularly in OLED for notebooks, where rising memory prices are depressing lower-end demand and accelerating the shift to premium segments. The scheduled ramp-up of new Gen 8.6 OLED fabs later this year and in 2027 in China adds another tailwind, further driving higher OLED adoption in notebooks. Turning to the small and medium-sized display driver IC business. In Q2, small and medium-sized display driver IC business is expected to increase high-teens from last quarter. Q2 automotive driver IC sales, including TDDI and traditional DDIC, are set to increase by a double digit quarter-over-quarter. Both DDIC and TDDI sales are expected to increase sequentially, driven mainly by the broad-based replenishment from panel customers with lean inventories, as well as the ramp-up of new TDDI and DDIC projects for a leading panel customer. Despite global softness in automotive sales, our long-term competitive position remains solid, supported by hundreds of design wins already secured across TDDI, DDIC, Tcon, and an expanding OLED portfolio. In addition, Himax is deepening its well-established supply chain in Taiwan while expanding across China, Singapore, Japan, Korea and Malaysia. This ensures production flexibility and cost competitiveness, while also addressing customers' geopolitical considerations. We continue to lead the global automotive display market with a 40% share in DDIC, well over half in TDDI, and an even higher market share in local dimming Tcon. We also continue to lead in automotive display IC innovation, pioneering solutions across a wide range of panel types while addressing diverse design requirements and cost considerations. Recent evidence of such efforts is our LTDI technology for ultra-large touch displays where multiple projects have entered mass production in several car brands across different continents. After years of engagement with customers globally, we expect meaningful revenue contributions from LTDI starting this year. Our integrated single-chip solution combining TDDI and local dimming Tcon represents another such innovation. Targeting smaller and lower resolution automotive touch displays, it delivers a compelling option for cost- and space-constrained applications without compromising performance. Design-in activities continue to expand globally, with multiple projects underway across leading panel customers, Tier 1s and OEMs. Looking ahead, the accelerating adoption of OLED displays in automotive creates significant opportunities for Himax. Our ASIC OLED DDIC and Tcon solutions have already been in mass production for several years, with continued customer adoption. We now also offer new standard DDIC and Tcon products to support scalable deployment. In parallel, collaborations are underway with leading panel makers on new custom ASICs, positioning us well to address diverse customer requirements across a wide range of automotive display applications. Together, these efforts position Himax to capture increasing semiconductor content as premium automotive displays evolve from LCD to OLED. In addition, Himax's advanced OLED touch ICs are a key pillar of our automotive OLED portfolio, delivering industry-leading signal-to-noise performance and high-precision multi-finger touch capability, enabling reliable operation even when wearing thick gloves or with wet fingers. Our OLED touch ICs started mass production in 2024. Since then, they have been increasingly adopted by leading panel makers and end customers across Korea, China, the U.S., and Europe. Multiple new projects are poised to enter mass production in the coming quarters. Moving to smartphone IC sales, we expect Q2 smartphone revenue, covering both LCD and OLED products, to decrease quarter-over-quarter following the initial ramp up of an OLED IC for a leading smartphone brand's mainstream model in the prior quarter. For tablet ICs, Q2 sales are expected to increase sequentially, driven by customers' early pull-in demand against the backdrop of rising memory price sentiment in the market, with ongoing shipments for a customer's premium OLED tablet also contributing to sequential growth. I'd like to now turn to our non-driver IC business update where we expect Q2 revenue to increase by double-digit sequentially. First for an update on our Tcon business. We anticipate Q2 Tcon sales to increase by double-digit quarter-over-quarter. Our automotive Tcon business is expected to deliver decent double-digit growth in Q2, driven by shipments from prior design-wins across the board. Despite automotive market headwinds, Himax continues to enjoy strong growth momentum in automotive Tcon. Particularly in solutions featuring local dimming functionality, backed by hundreds of secured design-wins across a broad and diversified customer base, we are well positioned for sustained growth. In Q2, we expect Tcon to account for over 12% of total sales, with more than half contributed by automotive Tcon. Meanwhile, head-up displays are poised to become an integral part of new-generation smart cockpits, driving demand for sophisticated Tcon technologies, an area where Himax holds a strong leadership position. Our multifunctional Tcon not only delivers excellent contrast, eliminating the so-called postcard effect often seen in HUDs, it also supports full-area selectable local de-warping to correct image distortion caused by windshield curvature and/or projection angle. In addition, integrated On-Screen Display function ensures that critical safety information remains visible even when the system is malfunctioning and/or powered down. Together, these features make our Tcon a compelling solution for customers' HUD applications, as evidenced by fast expanding design-in activities with leading panel makers and Tier 1 players. This growing HUD pipeline positions us well for broader deployment and meaningful revenue contribution starting in 2027. Switching gears to the WiseEye product line, a cutting-edge ultralow power AI sensing total solution, targeting endpoint device markets. WiseEye stands out due to its industry-leading, ultralow power design, operating at merely a few milliwatts, combined with an extremely compact size, on-device AI inferencing, and 24/7 always-on image and voice sensing. This combination enables advanced AI capabilities in endpoint devices that were once constrained by power and size limitations and has already been widely adopted across a wide range of applications, including notebooks, surveillance systems, access control devices, palm vein authentication, smart home solutions, and smart glasses, with further customer engagements currently underway. On the WiseEye modules front, design-in activities continue to expand, driven by their plug-and-play architecture, combined with ultralow power consumption and on-device AI capabilities. These features help developers accelerate innovation and scale their products from prototypes to commercial deployment. This broad applicability has led to adoption across a wide range of domains, including smart access control, space management, computer monitor, automotive, and bicycle applications. In particular, our PalmVein module is rapidly securing design wins, offering a touchless, high-security solution with high accuracy and advanced liveness detection. Combined with GDPR-compliant architecture, one of the world's strictest data privacy laws, our PalmVein solution ensures robust data privacy and protection of user biometric information through privacy centric on-device processing. We are seeing growing PalmVein module adoption across applications such as smart access control, workforce management, and smart door locks, with multiple projects progressing toward mass production in the coming quarters. As mentioned earlier, WiseEye is gaining broad market recognition in smart glasses as a compact, ultralow power, always-on perceptual front end. WiseEye supports both outward-facing environmental sensing, mainly object classification and scene understanding, and inward-facing capabilities, including eyeball tracking and iris authentication, delivering environment-aware vision AI and responsive, low-latency human-machine interaction for smart glasses. This combination of capabilities makes WiseEye ideally suited for wearable devices requiring real-time responsiveness with minimal battery impact and is a key factor driving design-in momentum among smart glasses players. Moving on to our latest advancements in LCoS microdisplay technology. At Display Week 2026 this week in Los Angeles, we showcased our ultra-luminous, high-contrast miniature Dual-Edge Front-lit LCoS microdisplay. We were also invited to deliver an in-depth presentation at the symposium, highlighting Himax's recognized expertise and leadership in LCoS microdisplay technology. Our LCoS solution is a full color microdisplay that integrates illumination optics and LCoS panel into an exceptionally compact form factor of just 0.09 cc and 0.2 grams, delivering up to 350,000 nits of brightness and 1 lumen output at just 200 mw total power consumption. It can also be configured for high-brightness, low-power, green-only mode and frictionlessly switched back upon command from the central processor, allowing for improved power efficiency across different ambient light conditions while supporting customers' cost targets. In addition, its ultra-high luminance ensures excellent visibility in bright environments, while our proprietary technologies significantly enhances contrast and reduce the postcard effect frequently observed in low-light conditions. Himax is currently working closely with multiple waveguide partners across China, Europe, Israel, Japan, Taiwan, and the U.S. to bundle these technologies into display systems for AR glasses, streamlining system integration and driving future design-in opportunities. We will provide further updates in due course. That concludes my report for this quarter. Thank you for your interest in Himax. We appreciate you joining today's call and are now ready to take questions. Operator: [Operator Instructions] We'll have our first question, Donnie Teng, Nomura. Donnie Teng: I have 2 questions. The first question is regarding your automotive business. So wonder if, Jordan, if you can give us a full year outlook regarding your automotive-related business growth. And also what could be the possible quarterly revenue pattern into the second half this year? Because it looks like customers still maintain pretty low inventory. So I'm not sure whether it will be still like restocking, destocking coming off for the coming quarters. And the second question is regarding to the CPO. So you have mentioned about the Gen 1 and Gen 2 products. Wondering if you can share with us regarding to the competition landscape for the Gen 1 product and Gen 2 products. Are you seeing different competitors? And also another thing is I'm curious is like the overall optical communication supply chain is facing supply tightness at upstream, like indium phosphide substrate for lasers, et cetera. Are you seeing other components are facing the short supply as well? For example, whether the micro lens will be under shortage. Jordan Wu: Thank you, Donnie. If I may, I will address your second question first on CPO on competition or potential supply shortage of other components, et cetera. They are not really our major concern to be honest because for now, once the mass production gets started and is successful, what we're seeing is with the multiple customers we have already in hand, I'm talking about major customers that we really, really focus on, they are actually other customers. I mean they are all very big match, but they are still, so to speak, priorities internally. So with their demand, actually based on the opportunity [ made ] is much, much bigger than what we can supply for now. So we are not worried about competition. I'm not saying whether they are good or whether they exist. What I'm saying is we just need to focus on our completion of validation and that's mostly enter mass production. And once that happens, the customers have put all right to us that the potential demand in the early stage and that actually much always what we can supply. So I think competition, I mean, for now is not really an issue. I mean I can say the same to answer your question on the potential shortage of other components. And I think, I said in the prepared remarks earlier that 2027 is likely we can see meaningful revenue contribution for us. So well, I like to manage that even before the official mass production, early shipments for engineering rise were already have positive impact on our financials. And as I said earlier, the customer demand almost always what we can supply. So once all the shipments get started, the drills will likely be explosive because of demand driving this there. And one small production in case we believe CPO will deliver the strongest growth among all our product lines, a drill that is likely to sustain for the years to come. So that is my answer to your CPO question and automotive. For the full year outlook, I mean bear in mind, we don't actually provide full year guidance. So I'm not going to give numerical projections. But we can say quite comfortably we are well-positioned to see sales growth for the year, obviously gross margin compared to last year, and that is primarily among other things driven by automotive outlook. So the overall automotive industry outlook, as we all know, remains muted which I think most market surveys project for a flattish, normally a shipment year-over-year. However, I think we believe we will be able to outperform the market like we did last year. And I did say in the prepared remarks that we expect sales automotive to grow quarter-by-quarter this year. So that is a response to your question. Yes, the customers' inventory level remains fully, but even that they seem to historically handle automobile and then [indiscernible] such a cycle, but I cannot predict whether this cycle will repeat this year in the second half, but our confidence level for the after quarter drills comes mainly from a few major projects with our customers, which are 24 months for exchange second half. Maybe they are after years of design-in [indiscernible]. So we are now also projecting some growth for this year's automotive sales. And again, I think our automotive business is well positioned to beat the market like last year in terms of growth. Donnie Teng: And a follow-up on CPO -- the power and CPO is like are you able to quantify the sales contribution for this year and next year potentially? And I'm also curious that are you -- do you require to expand the capacity for the demand coming in 2027 or you will utilize the existing sale first? Jordan Wu: Well, you realize how this is [Indiscernible], which actually is fully utilized for this application, can already generate hundreds of millions of annual sales for us with a very decent profit. Our partner, FOCI, actually, I cannot comment on their behalf, but they did say in their prospectus issued a few months back in their recent rights issue that -- I mean, they too have plan to continually spend a capacity. As we all know, the positive purpose for the right to issue recent deals to build capacity for this purpose for mass production. So in the prospectus, that is something you would rely on to -- given the right conditions, they would certainly continue to expand the capacity. And that is what they say in their prospectus. And, I mean, certainly beyond that, I cannot say anything more on their behalf. But what I can say is our capacity actually outweighs their capacity. So, to be honest, they have to expand first. But given where they are at the moment, I think we again feel confident that somehow [indiscernible] mass production progressing, they will sort the issue as well. But yes, our capacity is more than sufficient to support up to hundreds of millions of annual sales for us. And with that, I'm afraid I am not able to quantify sales contribution for this year or next for now. But this year is still small. They are primarily sampling and engineering shipments. They are not -- I mean quarter-over-quarter, good growth, but they come from a very small base. So for overall group perspective, they are still not meaningful. But next year, as I said, regardless of when mass production will commence, so like the -- even before mass production, the engineering runs will contribute meaningfully to our top line and especially bottom line growth. Operator: Thank you. And there are no questions at the moment. We thank you for all your questions. I'll pass the call back to Mr. Jordan Wu. Thank you. Jordan Wu: As a final note, Karen Tiao, our Head of IR/PR, will maintain investor marketing activities and continue to attend investor conferences. We will announce the details as they come about. Thank you and have a nice day. Operator: Thank you, Mr. Wu. And ladies and gentlemen, this concludes first quarter 2026 earnings conference. You may now disconnect. Thank you again. Goodbye. Before you buy stock in Himax Technologies, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Himax Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Himax Technologies. The Motley Fool has a disclosure policy. Himax (HIMX) Q1 2026 Earnings Transcript was originally published by The Motley Fool