Q1 2020 Earnings Call
[music], Hello, ladies and gentlemen.
Welcome to the high makes technology.
Corporation first quarter Twin true Twentytwenty earnings conference call at this time, all participants religion only mode.
Later, we'll conduct a question answer session and instructions will follow at that time, if anyone should require any assistance. During the conference. Please press star zero on your Touchtone phone.
As a reminder, this conference is being recorded.
Oh, no extra <unk> conference over to you.
Finally, Buckminster MZ group.
Welcome everyone Kinda back this first quarter 2020 earnings call.
Joining up to the company Mr., George <unk>, President and Chief Executive Officer, and Ms., Jackie Chang Chief Financial Officer. After the company's prepared remarks, we've allocated claims the question in acuity session.
Not received a copy of today's results. Please email Himax MZ group Dot U.S.
Or access to press release on financial portal portals or download a copy from Himaxs website at Www Dot IMAX dotcom Dot tw.
Before we begin the formal remarks I'd like to remind everyone that some of the statements in this conference call, including statements regarding future expected future financial results and industry growth are forward looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this conference call.
Factors that could cause actual events or results to differ materially from those described in this conference call include but are not limited to general business and economic conditions. The state of the semiconductor industry market acceptance and competitiveness of the driver and non driver products developed by her that demand for any application products.
Uncertainty continued success in technology innovation as well as other operational and market challenges and other risks described from time to time in the Companys atrophy filings, including those risks identified intersection entitled risk factors in its form 20-F for the year ended December 31.
2019 file with the FCC in March 2020.
Except for the company's full year 2019 financials, which were provided in the company's 20-F as filed with the FCC on March 26, 2020. The financial information included in this conference call is on auditing and consolidate and prepared in accordance with I ask or ask the county.
Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and external audit findings kind of auditor to which we subject our annual consolidated financial statements and may vary materially from that audited consolidated financial information on the same period.
The company our takes no obligation to publicly update or revise any forward looking statements, whether as a result of new information future events or otherwise.
I will now turn the call over to Mezz Jackie Chan the floor is yours.
Thank you Mary Thank you everybody for joining.
Today's call will first review with the Himax consolidated financial performance for the first quarter.
Oh by the second quarter Twentytwenty Aldo.
Gordon would they gave an update on the status of all business.
After a week, we would take Christian.
We will review our financials on both <unk> and non <unk> basis.
Now I'd like his financial excludes share based compensation and acquisition related charges.
Like Oh, the prevailing Oh certainties clouding, the global financial market.
We decided to pre announced preliminary key financial result, with the first quarter on April 3rd Party 20 with revenue met guidance, while gross margin <unk> both exceeded the guidance issued on February 13 preneed country.
Today, our reported results for revenue gross margin, yes, well in line with the pre announce results.
For the first quarter, we recorded net revenues <unk> hundred 84.6 million, an increase of 5.5% sequentially any increased 13% compared to the same period last year.
Historically, the first quarter has seasonally being the bottom of the year in terms of sales due to the lunar new year holiday.
Open down by more than 10% sequentially.
Corona virus outbreak has prompted more didn't have opened up provinces in China to extend the new your holiday by at least a week in an effort to contend to spread the virus.
The Benjamin Oh from objectives, including worldwide cooked and operations in various reports in the supply chain wouldn't I could significantly during this period of time.
Despite this dramatic I, when we were able to de lever strong financial results into first quarter, specifically when double digit revenue.
Rose year over year.
5.5% sequential increase of revenue was at the mid range of phone carry than all the increase of between 1% to 10% quarter over quarter.
Gross margin was 22.7%.
Leading to prior guidance, hoping increase of 1% to 2% from the turnkey, 0.6% de lever the previous quarter.
More favorable product mix, among small display products improved w. old factory utilization and higher than expected engineering fees from new project engagements intends to gross margin for the first quarter.
I find it private per diluted eating it was one point nice to.
Beating our guidance all mine that we fight Singh for 1.8 cents <unk>.
<unk> gross margin and lower than expected operating expenses contributed to the more positive earnings.
No I as far as copper price I lose yes was 2.2 thing.
Beating our guidance minus 22 cents to 2.1 thing.
Revenue from large display driver was 61.4 million up 6% sequentially and down 12.3% year over year.
The sequential growth was driven by Chinese panel customers ramping up new LCD SAP as well as the a building inventories in anticipation of growing demand higher panel prices in 20 clunky. The revenue was however, lower didnt level off the same quarter last year when the paradox.
And output so panel makers reached the peak things Dan did have cut back their production each quarter to address overall weakness PBT men industrial industry wide capacity oversupply.
Large panel driver IC accounted for 33.2% of total revenue for the quarter compared to 33.1 person in the fourth quarter of 2019, and 42.9 CRE since a year ago.
Revenue for small and medium sized display driver was 87.5 million.
Up 7.9% sequentially and 29.5% year over year.
Segment accounted for 47.4% of total sales for the quarter compared to 46.4% in the fourth quarter of 2019, and 41.4% a year ago. The sequential sales growth was driven private have primarily by a surge in cabinets cells.
Except by increasing smartphone keeping the I don't like most itself.
The strong year over year growth was attributed by both capital Okamoto itself.
So with into smartphone work down 7.6% sequentially, but up 6.3% year over year. The sequential decline was caused mainly by lower T. I shouldn't be fracking surgeon customers delayed into the second quarter, what their new product launches with our TBD I.
Solution.
The Corona virus outbreak caused serious disruptions and customers engineering work after the lunar new year how degree.
Leading to delay new carve out there occasion and launch time people.
The first quarter sales of traditional TV I see declined by 5.7% sequentially, but increased 13.5% from last year.
Display drivers and keep the eye for tablets and other consumer products were up 51.7% sequentially and doubled year over year. It's worth many due to customer strong demand from you. What do you launched tablets you can keep you guys, it's well a surging need for online education.
Hi, I'm working.
We should emphasize that tablet TPP I was one of the main growth drivers, what Q1 and will represent significant growth opportunity for our business through the rest of Twentytwenty.
While we only started metrics from them so.
So keep an eye for tablet this quarter.
Do you represented the wrong fight for several of our total revenues into first quarter Jordan what you elaborate on this later.
Our driver IC revenue for the automotive application was down 9.7% sequentially.
It was up 6.2 person from the since your last year.
Revenue from our non driver businesses were 35.7 million down 26% sequentially, the up 38.7% year over year non driver products accounted for 19.4% of total revenue as compared to 20.5% <unk> fourth quarter.
All the 19th and 15, 27% a year ago.
Gross margin for the first quarter was 22.7% up 210 basis points sequentially and 10 basis point from the same pure it last year.
Gross margin outperformed our guidance all the increase of 1% to 2% compared to the turnkey 0.6% of the fourth quarter of 2019.
A more favorable product mix, among small and medium sized display driver products.
Improve W. O F utilization higher engineering fees from project engagement word the factors behind the sequential growth.
Increased shipment of W. Okada twin anchor customer led to higher capacity utilization of our W. old fat and therefore, better gross margin compared to the same pure at last year.
<unk> operating expenses were 37.3 million in the first quarter down 24% from the preceding quarter in down 7.4% from a year ago that year over year decrease was a result decrease salary in R&D expenses.
No I ever as operating expenses for the first quarter, what 36.7 million down 25% from the previous quarter and down 7.8% from the second quarter 2019.
I have <unk> operating margin for the first quarter was 25% up from minus 8.8% in the prior quarter and minus 2.1 person in the same period last year.
The sequential and year over year improvement were primarily a result, higher sells better gross margin and lower operating expenses.
First quarter non I, if I, if operating profit was 5.3 million or 2.9 personal cells.
From now I buy as operating loss of 27 million or minus 24% Upsells last quarter and minus 1.8% for the same period last year.
Both sequential and year over year improvement work with the same reason stated about.
Hi, its profit for the first quarter was three point threemillion or 1.9 cents per diluted a yes.
Compared to profit of 1 million 4.6 cents per diluted share ideas in the previous quarter and loss of 2.3 million or minus 1.3 cents per dilute AG as a year ago.
Our bias earnings per diluted EPS exceeded prior guidance of occurred diluting 80, it's all a wrong minus 25 to one point leasing.
Whether they expected earnings what do you want to improve gross margin lower operating expenses.
The sequential and year over year increase were a result of higher sales better gross margin lower operating expenses.
First quarter non profit was 3.8 million or 2.2 cents per diluted 80 years compared to non I advised profit of 1.5 million 4.9 cents per diluted share ideas last quarter and now our vice loss of 2 million or minus 1.1 fin.
Paradigm, who the indias, what's in pure at last year.
No I ever as earnings per diluted eight years exceeded prior guidance of around minus one Q2 2.1 thing.
Turning to the balance sheet, we had hundred 26.6 million of cash cash equivalents other financial assets. That's the end of March 2020.
Compared 208.2 million at the same time last year and hundred 12.1 million a quarter ago, we de lever in operating cash inflow of 10.6 million during the first quarter the higher cash balance from the last quarter was mainly due to additional unsecured borrowing.
Of 10.6 million during the quarter.
On top of the cash position restricted cash was 154 million at the end over the quarter, that's in the preceding quarter in a year ago <unk>.
The restricted cash many used to guarantee the second the secure short term borrowing for the same amount. We had 67.9 million Unsecure short term loan at the end of Q1 compared to the 57.3 million a quarter ago and 14 media I just in time last year.
Oh inventories at March 31st 2020, 148.4 million little changed from Hungary, and 43.8 million last quarter, but down from 189.3 million a year ago.
Accounts receivable at the end of March 2020, 486.7 million up from 164.9 million last quarter in Hungary, and 76.2 million a year ago.
Days sales outstanding was 92 days at the end of the pause or as compared to 97 days a year ago. It 90 days at the end of last quarter.
As highlighted in the last few earnings call.
In response to capacity shortage at funky and certain packaging material, we have to keep the inventory level higher than usual in 2018, even the on favorable market conditions and easing of foundry capacity in 2019, we have started to control our inventory level.
The first quarter of 2019, we believe inventory has reach and healthy level by now, but even the prevailing market conditions, we will monitor on inventory.
Carefully.
Net cash inflow from operating activities for the first quarter was 10.6 meeting as compared to an outflow of 22.1 million well the same period last year inflow of 23.4 million last quarter.
First quarter capital expenditures, among the two or 3.1 million versus 6.3 million a year ago, and 2.7 million last quarter.
Reported in the last earnings call. The Capex for both new building construction industry. He sensing capacity expansion were concluded in the fourth quarter 2019.
The first quarter Capex was for R&D related equipment for our IC design business.
As of March 31st Twentytwenty, Himax had hunky 72.2, Amelia, Yes outstanding no change from last quarter I'm, a 40 diluted basis. The total number of Adss outstanding 173.3 million.
As we mentioned in the last earnings call. The Corona virus outbreak created a major uncertainties in the marketplace and new challenges for our operation.
We have taken sweet action and work extremely closely with both our customers and suppliers <unk> effort to adapt to new circumstances.
Among other things we have actively monitor the logistics and customs operations in various ports in China to identify any potential impact to the supply chain and quickly adjust to the production and shipping planes accordingly.
At this time, we try not to be opening and other countries moving in the same direction the market appears to be stabilizing but business outlook remains Merck.
The second quarter, we're confident in the smooth operation of our supply chain and the current driver IC Shipman pipeline remains strong for notebook monitor smartphone and tablet. However, TV auto businesses on the pressure scope of consumption appears to have shrunk but.
Oh drastically.
Among our non driver IC product W. O sales would reduce significantly from the last quarter door than what you elaborate and is a few humans.
The second quarter gross margin is likely to be lower than that of the first quarter.
Notably the automotive display driver, which enjoys the best gross margin among all drive IC product.
Being shipped by the Corona virus, while the monitor business, which is spending in volume right now is relatively low in gross margin.
Addition, as mentioned above the second quarter W. O cells would drop significantly. This will also lead to much reduced gross margin of W. O <unk> lower fab utilization.
For the second quarter, we expect revenue to decrease slightly by within 5% sequentially gross margin is expected to be between turnkey point, you to 20.6% depending on our final product mix.
I have I S loss attributable to shareholders are expected to be in the range of around 1.5 cents 2.5 cents per diluted ideas.
No I thought as loss attributable to shareholders are expected to beating the range of 1.3 cents to zero.
2.8, 0.3 cents per 40, dilute the AG it I.
Well now turn the call over to Jordan, Jordan the voice yours.
Thank you Jackie.
Since the Q4 19, we're starting to see a major it's from their own meets or were they all aspects of what pieces is positive momentum as a strong I'll look.
<unk> has been do who design wins with new and existing customers accruals.
And your product lines.
However, the strong momentum was interrupted.
The time open.
Holidays.
In many areas of China started to imposed a strict CLO managers in the face of the Cobiz 19 help bridge.
Hi, Susan Mcgee plays has continued since.
Despite supply chain disruptions caused by China locals.
Deavers decent results in the first quarter.
Although the results could that be better with other can or other buyers.
China has recently reopened.
Other countries seemingly.
So the first quarter hoskin quota.
Pieces being affected by the Cobiz 19.
Especially for TV.
Well go multi related products.
However.
Homeworking and online education.
A surge.
And for notebook monitor antibodies related products.
We also very strong momentum you know smartphone TBR business Olympic dropped almost sluggish global smartphone market.
GDF will template.
Has made the decent contribution to offers called the result is the major highlight pieces right now.
So technology speed adopted and put into mass production rapid city.
We speak.
We are the dominant TDR supplier to global tier one enjoy antibody bankers.
Hi mix the monkeys, either margin trend towards placed a few additional design of having two large teach them.
In Q2.
Throughout the rest so Oh 2020.
Despite the Corona virus, we're still making great progress I remain committed to.
R&D projects for forward looking products, notably also low Poland's small image sensing.
Automotive three D sensing in a moment.
This new product areas accruals opportunities with great potential.
We have taken proactive steps to strategically manage the business through the current prices and I'll comment than that.
Both top and bottom line grills.
2020.
Now.
Let me take you through each of our major pieces areas.
That's always the loss.
Most panel display driver IC business.
For the second quarter, we spent the last few states Robin Saatchi segment revenue decreased Spice high single digit sequentially.
Although we delivered strong results into one Oh visibility is low for the city.
Well the night.
<unk>.
So these are you supplier for the Chinese panel market.
Yes, we're positioned to benefit from the increase demand coming out of the major Chinese lush display players.
Sure.
If we look into specific product segments.
The global team continues to face challenges, we reduce end market demand, it's worth supply chain disruptions.
Conversely.
Sure all girls momentum, we experienced in Q1 for local.
You see expected tweaks to too.
The second house.
Homework in online education have created new demand for these products.
In addition, the Chinese government has returned to the mandated that all public offices fuchsias replace following hardware and software we try these alternatives.
The next three years.
This has boosted the need no need for losses. Please try licensed by those little timing controller confidence.
Oh businesses.
Monitor and new generation low power and noble products, where we are the market leader.
And on T. Tom.
Benefited significantly from this trends.
On the supply side unity in anticipation of there being foundry capacity shortage of age silicon wafers.
Spreads are advisory fees, we strategically prepare twelveone sponsoring this whereas associate the big ticket peg it shouldn't anticipate.
The head of all tiers to cover the potential eight inch capacity shortfall.
Oh design project coverage cereal across all the Chinese panel makers.
The additional capacity has enabled us to accommodate customers rush orders from monitors.
We are very strong.
Global.
Looking at technology development. Despite a 30 day of the lead on the tolling pitch.
Our top tier TV brands continue to promote hgtvs.
Keep design activities, both acreage space right I mean control devices, which we are lumpy you need.
The AK TV timing controller technology enables that these played to bring more realistic and visvis images.
During universities viewing experience, especially for high resolution companies such as Ken.
We sent to the there have been multiple customer funnels, India. They tees hgtvs habits I missed technology inside.
Although the penetration that we hit the low we expect these to be accruals opportunities for high mix. That's HSBC is with Bose.
Now let me.
Fourth Rob I see files with having control of confidence for the Portland HST.
Much higher.
[noise] no this tend to the small and medium sized display driver IC business.
Beginning with an update almost smartphone sick.
Our PVA product roadmap as was.
New design wins within customers and the phones or Conversely advantage.
Hi, its position high mix to get mortgage.
Well furniture.
Yes, hi, refresh rate Tvs solutions for which Hi makes you said the technology provides.
Also the demand for Fiveg, China is expected to stimulate smartphone demand.
On the which will in time charter drills.
You spent 10 aggressive Chinese government subsidies for Fiveg to post economy smartphone makers continue to aggressively developed fiveg products.
Hi mix would benefit from all these trends.
Although global smartphone market demand has been severely impacted initial term by them and then Mike.
Yes on the current pipeline, we specialty the smartphone shipments to grow significantly in Q2 due to the deal design wins into a so the new.
Last models, it's worse.
Ongoing strength.
He is scheduled for probably Ponzi must production.
Okay, the shown headwind of declining global small smartphone monkey.
Covington, though a small hopefully the pieces will grow strongly from last year.
For the reasons mentioned above saw specific to high mix.
The price erosion of TD over the past you see spirit fate.
For the 20.
This is only because the new high refrigerate products will enjoy today's Pete.
Also that the industry wide tightening of foundry capacity for TV.
I'd like to be provides the price support.
Although we are currency facing some pricing pressure, we expect these to stabilize in the second half we school bus gross margin improvement for smartphones.
[noise], we're prepare the capacity to mid shown TBD I forgot the man.
Have you lies on the opportunities for smartphones.
Whereas others.
Yeah if occasions.
I was just happened.
<unk>.
Due to the strong demand we stick.
Q2, and the second hubs.
We foresee the potential for capacity tightness okay.
We are there for working diligently to enable additional capacity.
Oh through those sales into the April smartphone is expected to inquiries well 40%.
Question.
Our traditional discretes rebadged sales into smartphones posted the slight sequential decline for the first quarter.
We spent traditional spot full display driver IC shipment to continue to decline.
Due to.
This will be more than offset by the increase this level Tvs shipments.
The traditional discretes or otherwise people smartphone for a second quarter is expected to decrease by around 60% sequentially.
As discussed previously.
At this time.
We are encouraged by the progress we have made collaborating.
We'll see which the panel makers across China for example in product development.
We expect a small volume of smartphone them all the TV I see shipments in Twentytwenty.
Additionally, we see Oems aggressively gearing up to provide to produce.
Wearable devices.
You'll smartphone we've made progress wearable and all that display driver IC is horrible high mix is very active.
Overall, we believe and molded display thrive icees will soon become one of the main share.
Engines for small panel thrive icy bits.
Turning to the automotive sector. The war why although sales remained sluggish was highly uncertain consumer demand in a second house.
Hi, Miss commands more than 30% of the global markets.
Commodity space or otherwise.
EBITDA for this business has been impacted.
Revenue.
I don't know these 9.7% sequentially in Q1, and we stick to see around 15% decline in Q2.
[laughter], even so comparing to two quarters, we're still up 4% year over year.
The year over year girls, you spend the Doodle Chinese panel makers increased market share globally for which we benefit.
Oh Chinese customers ambition to get much year. Although these please combined with technology without technology.
Oh and leadership.
Yes physician automotive presented pieces for for the growth.
Expected to et cetera into cute too and through all the rest of 2020.
The business scrolls, where we truly been primarily by leading Android heavily bronze repeat adoption of the newly developed you can say with D.V.D.S. solutions.
In sales T.V.D.I. is quickly becoming mainstream for temple is due to use low cost and the simplify supplied Shan as wars faster and easy integration for these spray manufacturers.
At the same time <unk> for these shipper steamer lighter and more stylish type place.
Huh.
<unk> is the primary supplier for or enjoy type of at U.C.L.C.D.D.I. products right now.
Or we only study must production to what you already represents over 30% of what type of everything.
Around 5% of October revenue for the quota.
We continue to see growing demand into two further posted by the current trends of homework in on education, and the Chinese governments planned to replace I.D. equipment.
Furthermore, we see time, T.V.D.S. heavyweights with active stylists, becoming a new mainstream and Himax he sold them out in either you space.
It is wars highlighting but.
[noise] <unk> smaller than smart phone.
The S.P. a number of units for T.V.D.I., each type lit much higher than that <unk>.
You know so didn't hold her T.D.I. for template feces spent.
Oh 80 per cent sequentially.
But they shouldn't have the <unk> <unk> pedal design.
<unk> package.
Toward eating Chinese sprang customer and you spectrum shipments in cute too.
We spent the scroll momentum you'd know what type of the products, both it spreads where am I see a D.V.D.
To be one of the men gross drivers in cute too and throughout plenty plenty.
Federally T.V. a P.D.I.C.N.T.D.I. sales.
Quarter, I expected to inquiries about <unk>, 40%.
Initially and the 150% you over a year.
Well the second quarter revenue for the small and medium sized piece, where I drove I.C.S. expect the increased by low single digits.
<unk>.
Now, let me share some of the progress we made on the non drove I see businesses in the last quarter.
For us on that are real W.O. business.
They live or it's very strong results in Q1, almost toppling the business you over a year, despite a modest decline sequentially.
However, we speculate significant decline Q2 sequentially.
Due to the <unk> outbreak.
The factory to which we usually ship this product.
Has speed in order to shut them by the lower government as part of their disease containment measures.
The must reduce <unk> <unk> <unk> <unk>, we're also have a negative impact <unk>.
That the man for this product is likely to remain uncertain for awhile.
Even after the fact, where you reopens.
Despite the short term disruption, we continue to make progress with all going R. and D. projects for next generation products Center Romo exceptional. These I know how it must production expertise in W. old technology [noise].
Next it's an update on the street essential pieces.
In a smartphone segment, we have advanced O.W. optics solution to cover both.
<unk> and commercial flight or t. or if she decency.
We are seeing inquisitive <unk> have adoption by small homemakers for war facing camera to enable advised photography. These things <unk> slash dimension measurement and three D.F.C. formation generation voice.
In the past few months.
I believe the <unk> industry D.D.N.T.O.X. three d.
Tim Robbins, there to develop new and give us to have solution pocket didn't enjoy smart phones.
<unk>.
Meant great progress provided the partner was a spot projector for their reference design, which has been ready for the d. enjoy <unk> evaluation is quarter.
Slide delay from two one due to the pandemic.
[noise], we have received positive feedback from our partner as have ongoing activity design activities, providing optical component or projector tall to you on a small young customers.
Three D. says he remains one of them and girls drivers for us.
Oh, well known smartphones resist any engagements continue to focus on smart dog and industrial automation applications, where we provide socialized based sweetie sense in total solution.
We're being clever.
Projects, we several small though.
Up and customers.
In addition to provide you know total solution.
We also over eat the video key components, including optics and all of a par three three d. decoder a sick.
We have received pretty clean varies from customer.
For various applications industry these things [noise].
Well you also continue to work with partners in shoe automation to optimize these manufacturing process for both costs and production efficiency.
I'm pleased to report that prototypes of L.C.D. since he may both automatic robotic cement insist that already now for but for production optimization has <unk>.
Yeah, you may both.
I was for a little poem intelligent sense in [noise].
Yeah, especially markets such as home I <unk> home appliances, <unk> <unk> T.V. notebook building can show and security.
Why site.
I would pull solution for a base ultra low post my sense [noise].
<unk> unique airbase awkward isn't on top of high mindful par three computervision processor.
And see multimedia sensor or equipped with ultra low power design [noise].
Currently the laptop used the monkey the focus.
Oh, Hi, Mike <unk> 2.0, no books solution.
Provides a lot of type <unk> <unk> <unk> RGB I.R.A.I. solution.
Respect him privacy or you hadn't seen insecurity for mobile users.
The number of D.D. notebook, Oh, <unk>, Oh, D.M.'s demonstrated all wise I ennobled solution.
In the next generation premium notebooks, we use the positives feedbacks.
<unk>.
We have also made progress we small U.M.C.N.Y. solution into this place.
Although the whole we'd 19 disrupted.
<unk>.
We see customers or these studied a product promotion [noise].
In order for a while <unk> spent semen potential.
We have adopted <unk> <unk> whereby.
In addition to the puzzle solution approach mentioned above.
We also all for individual key pause both hardware and software.
[noise] towards choice the customer service specific needs [noise].
For customers cool own their own technology and wished to develop their own applications.
We can provide oh I'll show low power, Yeah, I processor, Amy since we thought Oh <unk>.
The customer <unk>, Oh, I'll take laws, she and focus their efforts on bring A.I. intuition devices and to transform insensitive data [noise].
Into a <unk> actionable information for <unk> solved a T.V.T. gesture temperature pressure and biometrics among others.
Always extremely dope hall consumption.
We continue to collaborate with Google a pencil flow like.
And now the <unk> provide this you know they'll fall Weiss I processor, you me says a platform.
To post the for his performance and shorten the time to market for the customers targeting a wide variety of reality applications.
Moreover, we also collaborating with cloud computing service providers in deploying the high Miss Wise I play for <unk> to cloud certified I.L.P. devices.
We believe it will be a long term <unk> retail as my beauty applications.
Moreover for those customers Slash partners, who spent business is to provide a processor.
We can all for <unk> sensors, we'd all yeah processor and not worry though.
We are pleased to report that Oh industry first Oslo power Excitable mean, I.D.V.G.A.C. multi me since or has already been commercialized.
You see site, we slow latency, an autonomous moles fall with intelligent visual sense, either occasions, which enables we <unk>, we saw extremely low power consumption <unk> detection and checking.
Gauge detection behaviour notices impose estimation for growing markets, such as smart homes Smart beauty his code smartphone and they have yacht devices.
The V.C. <unk> also suppose greater than 90 degree white fuel few plants like mixes ideally money Corinne detecting.
<unk> capturing.
Well you spent demand for the ultra low power since you <unk> to explode <unk> and numerous customers <unk> ecosystem <unk> <unk>, you know unique pick while she <unk>, we have met each frozen already progress in L.A.T.V.
<unk> home appliance.
<unk> <unk> applications 90, great voice and all the old activation beyond facial recognition.
<unk> device.
Next almost seems to see me sense of business update.
Cover Oslo <unk> Bucks.
No Oh this time to L.C. multi mean sends a business update we expect to see <unk> due to the et cetera. They did adoption they'll have more king and online education.
Oh industry first two in the once he wants to me since which is another critical part of the wise I 2.0 novel solution.
He's currently available for partners slash customers.
This hybrid see mostly me says combines high quality s. the image capabilities, we ultra low power output full A.I.V. shows such applications, specifically designed for notebooks.
Featured in unique design and small form factor.
<unk> to achieve I'll show narrow baysal design, which is on track to become the mainstream you know next couple of years.
[noise] Oh says there has also incorporated in all she'd be our design to enable windows Hello facial recognition.
He helps reduce costs by eliminating the need to add that they should know camera.
Well you spend a small than ship and for this prototype <unk>, we <unk> mushy expensive all the you know years after.
For the <unk> traditional human the beach in segments, we see a strong demands he notebooks, where we are one of the monkey beaters and have experienced increase shift buttons for multimedia applications, such as car recall, the civilians <unk> home appliances and consumer electronics.
<unk>.
Lost in the only old calls we continue to focus on.
Inside the <unk>.
Yes, we've positive monkey feedbacks.
Oh, what technology leadership improvement venturing expertise have made us prefer a partner for customers in these emerging monkeys and they'll go in engineering projects inhale goggles, an issue the fourth of multi vacations.
[noise] phone on survivor icy business, we spent probing into decreased by Oh, 15% sequentially in the second quarter.
Aside from the the real sales, which are expected to be though.
<unk> other products to grow sequentially.
That concludes my report for these quarter. Thank you for into the in high mix. We appreciate you'll join in today's call and we'll get now ready to type questions.
<unk>.
Please.
And the number one on your touch tone telephone.
Question has been.
Q.
The pound key.
You first response.
Yeah.
[noise], Hi, Tango, taking the question I know they said they ladies maybe no but you should mention that cat notebook demand was expected to be <unk> into the second <unk> three could you give us a bit more qataris, which you're hearing.
From customers in terms of demands to sum up your other and not catching two Q3, whether you expect.
More segments, two weekends for it or or do you see any ariane stood up potentially going to be rebounding and Q3.
[noise] right. Thank you Chris than.
The sushi is evolving.
I think Ah, yes, there'll be a bit east low and people are cautious.
But I think he's he's although phase will say that.
Oh It seems right now is that people call me things.
Are growing.
It's supposed to a month ago for example.
<unk> or aspects of a all businesses qualifications.
<unk> one of the areas and also Dole <unk> I I also mentioned monitor repeated to be <unk>. We just happened to be a major try wise you supplier into the into the.
The the the the segment.
So are we are looking right now he's shall then are you grills <unk> two two.
And another very strong growth you over <unk> although.
Because the you know the the the the the <unk> our production so fast that it is likely that.
If you look at a second topic as far as half the money to be since he's likely to to be flat or size eat, though but only although you have bases universal. So I'm told me I have talked about.
No booklet monitor and one thing we we like to highlight <unk> the template market.
<unk> <unk> <unk>, Okay and pull the same reason the pandemic right people working from home and so.
And <unk>, you, especially meaningful Boeheim x. because.
As I said earlier, we we we we have a told me that position E.T.V.D. eating you know enjoyed <unk> pulled traditional so why why c. at now we are almost a sole supplier well T.V.D.I. until they please point enjoyed.
For which we have seen <unk> exception of the <unk> girls.
Production study Q1, very strong closing cute too yeah. Another very strong growth Kikuyu three ain't useful so bolsa <unk> <unk>, why Oh why and.
Like all the multi.
The menu for the.
<unk> eventful queue for its I would say children that are the hi.
I I would say.
No. The reasons one of the reasons, obviously you used the effect that Oh, a monkey shoe in China.
I'm talking about with a multi display market among shade in China, It's very very hot although we also enjoy peace among shoe is for all monkey shading tries very very hot China.
In terms of global among shoe or Ethiopia, hi.
Taiwan, Japan, and Korea in automotive sector.
Although in other places such as T.V. at Molitor, they they've already foaming at the market. So it's it's an area automotives displays it everytime you spend on Bocca makers very keen to catch up all.
So we kind of take advantage of that so I I, we have all physical confidence that although the automotive just like to visit a P.D. These limited full of second house or.
<unk>.
Oh mocking shear can actually grow even a second house because of the reason I mentioned, even the follow the revenue for setting off now you, who if I look at the focus <unk>.
You sent girls for the first half, although it is something to be able to you watched because of the economy stages.
T.V. he's he's he's the area who are.
I I I I've been hearing customers, saying, you know <unk> I'm switching my production into those areas and I'm coming back my T.V. production.
<unk>.
So we if we look at the.
<unk> <unk> TVT men.
We are likely to see some decline.
Soul.
I think.
Yes.
We don't want to.
Solace <unk> all over the optimistic because the <unk> indeed, very very high. So we all appreciate but if we look at our product Oh focus pipeline and a low wage because of high Mississippi reasons, we actually feel pretty positive <unk> outlook compare.
<unk> <unk> <unk>.
So we are looking at.
You know.
We have <unk> looking to achieve.
<unk> girls for the whole year compared to last year and <unk> grills.
<unk>, okay as far as Huff.
Okay. That's maybe you should take care and then just a quick photo lab, where did you give you a bout a inventory management in you know at your customer they studying <unk> headwinds income just hand demand.
How do you hate infantry, Dave old snapping to supply chain and how they think you think they would be trendy and give it the next couple of quarters insanity.
Do you see any changes in your D. times, <unk> or expect any changes in the coming quarter.
<unk>, the only time I'll get picked to humans always level.
You know in the minute.
We do suffer from.
And them to the new so.
<unk> <unk> pretty I would say pretty amazing the soul.
Oh.
You know as as I speak right now I I think in terms of almost supply side, and they'll say six customers customs and so.
I think.
<unk> has been fairly.
To a very large extent eliminated.
Only even Tory management, what's very interesting is that.
We have seen.
Customers when we saw why portfolio products.
It's just <unk> very very quickly to address the new market demands.
<unk>.
So.
And and and for US we also have to.
You know just all sales they production and plenty you know very fast to to to to to meet their demands.
So on this the beating a few areas, we actually seen Ah.
Kind of tightness of supply because of the <unk>.
So I hope I mean, certainly.
Again, the the visibility limited, but the what we're seeing these blog watching extremely closely a pain much more attention than usual in terms of a monkey men changes and try to let them for their production. According to Oh, it's very fast speed.
And we tried to also accommodates <unk>.
Such a such quick action sense. So hopefully we don't have seen Ah.
Yeah.
Was fine.
So so far not to worry about that even Tory idle amusement totally people build up so to speak.
Quite that's very useful thank you very much.
Thank you Chris than.
Thank you your next week.
That's crazy.
I I totally things for picking my question.
I just want to follow up large size <unk>, yeah, I did a rapid decline hi single digit to to but if we look at you know you go with your comments about the notebook <unk> quite strong.
So are you seeing the very big <unk> T.V., because if we look at these supply chain awfully pin homemakers or your other peers alright, I don't think this sounds like a T.V. how about you should <unk>. The kind of you know decline interest become quarters, So can't help us under.
Oh, Oh Oh.
<unk>. Thank you.
Thank you Cherry cream d.'s.
Lush panel, we said you know high single digit <unk>.
Decline and each Mandy.
You may need a T.V.
And the T.V. income so <unk>, so they must be good in our money to notebook.
And [noise].
So.
So <unk>.
If I.
If I if I, if I shall we see with the the the the whole you picture.
T.V. based on the current full cousin pipeline you'd likely to be down you over a year by high single digit too you know high teens.
Right, what only till you start getting to be up by more than 20%.
<unk> I'll buy you know.
By double digit <unk>.
Price so.
So however, although the <unk> T.V.
You know, we're we're a cost the whole whole sick by novelist used to play drive last penalties by driver to beat though a high single digits. So these are these I remember the T.V., although as I said, we just have to <unk> you know actually just oh, the it's what they <unk> you know.
One of the wall major customers in China.
Which previously announced to us the suppliers not the industry. They they they are planes to come pick their T.V. production.
Now they say, they're changing their mind and they've actually got holders for for the T.V. outputs. So they say two three T.V.'s likely to be at the level of similar so cute too and so on so as I said earlier when you know.
Inserting ER Tristan stuff questions I said.
The monkeys evolving and.
Appears to be.
Looking more positive no they didn't even a month ago, even two weeks ago.
But I think or steal a T.V.
It's the second so that these these are likely to be to suffer from some decline.
This year.
Oh, Thank you and ask the question Yeah up yellow I think mentioned your your customers off this to the to eat on.
Oh shut down Okay <unk>.
Called it on bad in which regional country Uh Huh and then when do we expect that you know that shut down what the fuck <unk> we start.
I can only tell you that the other countries not China.
These the most you'll effects free that we are instructed to ship I'll optics into right.
And he has been the way since day, one o'clock production.
And I pulled since the.
The towards the end don't choose three that country starting to impose the very strict.
Incoming flies Ah restrictions, so we we actually.
Together with our customers, who you rush hour.
Oh shipment.
Towards the end of <unk> in the two one or the to to.
And they off to some where are you in April.
<unk> how region with the F. factories located was completely shut down so there's actually no no <unk> just not even people to receive all goods.
And therefore, nobody can ship anything and I mean that that kind of instruction on this the you know.
<unk> shipments in operation.
Well, it's very rare.
<unk>.
<unk>.
So I I would say <unk> one for the wheel, we probably although shaped.
And that's the that probably Europe is there some cushion of some bottle couldn't even Tory for the customers to use for the <unk> <unk> <unk> production I would say.
So.
And thank you too because of these unfortunate incident that'd be all should be used likely to be rather dramatically to reduce from q. what.
And on this yes, nothing we could do about.
Okay.
Yeah.
<unk>.
Thank you.
I'm showing to find a question that is time, Oh like a <unk>.
[laughter].
It's a fine on the old Jackie Chan I'll see if people were maintained Mr marketing activities and couldn't use will attain missed the conference.
Well and also details as they come about thank you and have a nice thing.
<unk>.
Hmm.
Thank you for participating in haven't wonderful.
Didn't you told the line.
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