Release Date: February 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Himax Technologies Inc (HIMX, Financial) reported Q4 2024 revenues of $237.2 million, a 6.7% sequential increase, surpassing guidance.
- Gross margin for Q4 2024 reached 30.5%, exceeding guidance and reflecting favorable product mix and cost improvements.
- Automotive driver sales significantly outperformed expectations, driven by strong demand in the automotive and tablet markets.
- Non-driver sales increased by 24.9% from the previous quarter, driven by a one-time product shipment to a leading projector customer.
- Operating expenses for Q4 2024 decreased by 19.1% sequentially, reflecting effective budget and expense control.
Negative Points
- Large display driver revenues declined by 18.6% sequentially, impacted by customer de-stocking and heightened price competition from Chinese peers.
- Full-year 2024 revenues declined by 4.1% compared to 2023, due to persistent global demand weakness and market uncertainty.
- Q1 2025 revenue is expected to decrease by 8.5% to 12.5% sequentially, reflecting low seasonal demand due to Lunar New Year holidays.
- Automotive revenue is projected to decline sequentially in Q1 2025, following two quarters of strong demand.
- Smartphone display driver sales declined slightly in Q4 2024, in line with guidance, reflecting ongoing market challenges.
Q & A Highlights
Q: Can you provide more details on the adoption and production timeline for CPO technology?
A: (Jordan Wu, CEO) In 2025, we will focus on engineering validation with sample shipments. Mass production is likely to commence in 2026, but exact timing is uncertain. We anticipate CPO technology will eventually generate hundreds of millions in annual revenue, though initial contributions will be limited. The technology is expected to ramp up quickly due to its benefits, but the pace will depend on customer decisions.
Q: Will CPO technology be used for on-rack switches or direct GPU connections in 2026?
A: (Jordan Wu, CEO) Initially, CPO will be adopted in switches, which will account for the bulk of early-stage volume. While we see potential in automotive and robotics, our current focus is on cloud applications, where we expect significant growth.
Q: What is causing the sequential decline in automotive driver IC sales in Q1 2025?
A: (Eric Lee, Chief IR and PR Officer) The decline is primarily due to seasonal factors, such as the Lunar New Year holidays. Despite this, inventory levels across the automotive display IC ecosystem remain healthy, which is positive for the year's outlook.
Q: How does the gross margin outlook for Q1 2025 compare to Q4 2024, given the lower automotive sales?
A: (Jordan Wu, CEO) The gross margin is expected to remain flat due to a favorable product mix. While TDDI sales may decline slightly, TDIC sales are projected to increase, balancing the overall margin.
Q: Can you elaborate on the automotive revenue mix between Chinese and non-Chinese markets?
A: (Jordan Wu, CEO) Our market share is evenly spread across major markets, including Europe, USA, Japan, and Korea. Chinese customers tend to adopt new technologies more aggressively, but there is no significant difference in market share between Chinese and non-Chinese markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
