Q2 2023 Himax Technologies Inc Earnings Call

Good day, and thank you for standing by.

Hi, Max technologies fourth quarter, and full year 2023 earnings conference call.

At this time all participants are in a listen only mode.

After the speaker's presentation, there will be a question and answer session.

To ask a question during the session you will need a press star one one on your telephone you will then hear an automated message advising your hand is raised.

Your question. Please press star one again.

Please be advised that today's conference is being recorded.

I would now like to turn the conference over your host Mr. Mark Swanberg from MZ Group. Please go ahead.

Welcome everyone to the IMAX fourth quarter and full year 2023 earnings call joining us from the company are Mr. Jordan, well, President and Chief Executive Officer.

Chief Financial Officer.

Mr Clean shape, IR PR officer.

After the company's prepared remarks, we have allocated time for questions in a Q&A session.

If you've not yet received a copy of todays results release, please email H I am ex U.

U S access the press release on financial portals or download a copy from imax's website at Www Dot IMAX Dot com tw.

Before we begin our formal remarks I'd like to remind everyone that some of the statements in this conference call.

Statements regarding expected future financial results and industry growth.

Our 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.

A list of factors can be found in the company's SEC filings on form 20-F for the year ended December 31, 2022 in the section entitled Risk factors as may be amended.

Except for the company's full year of 2022 financials, which were provided in the company's 20-F.

And filed with the SEC on April six 2023, the financial information included in this conference call.

Audited and consolidated and prepared in accordance with <unk>.

Our S accounting such.

Very materially from the audited consolidated financial information for the same period.

The company undertakes 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 like to turn the call over to Mr. Eric Lee Eric the floor is yours.

Thank you Mark and thank you everyone for joining us my.

My name is Eric Lee Chief <unk> Officer, a high Max on today's call I will first review the high mass consolidated finance performance for the fourth quarter and full year 2023, followed by our first quarter 2020 for all dogs.

Jordan will then give an update on the status of our business after which we will take questions.

We will review, our financials and ISI spaces.

Yeah.

We are delighted to announce that Q4 2023 revenues and the profit both surpassed the guidance.

Gross margin was in line with the guidance issued on November nine 2023.

This was primarily attributable to better than expected order momentum in major product categories as well as the cost improvements.

Fourth quarter revenues registered $227 7 million, a decrease of four 5% sequentially by exceeding our guidance range.

5% to 11% decline.

Gross margin came in at 33%, we think our guidance range of around 30%, but down from 31, 4% last quarter.

Q4 profit per diluted ads.

While 13 five cents.

Passing the guidance range of nine to 13.

Revenue from large display driver came in at $33 6 million, reflecting a sequential decrease of 23, 1%. The decline was predominantly driven by prevailing weak macroeconomic conditions.

The traditional peak seasonality in the fourth quarter.

Our T V. I E sales declined mid teens sequentially due to ongoing strict production and inventory control majors of leading customers.

Monitors and notebook sales both declined double digits quarter over quarter caused by slowdown in order momentum as customers put forward their inventory purchases during prior quarter.

Sales of large panel driver IC accounted for 14, 8% of total revenue for the quarter.

Compared to 18, 3% last quarter, and 16, 6% a year ago.

Exceeding the guidance range small and medium sized display drivers segment revenue reached 163.1, meaning a sequential increase of one 2%.

This was underpinned by outperforming sales, particularly in TDI products for automotive and the type of the market.

Q4, automotive driver cells, combining both traditional DDI and the TDI experienced a slight decline following robust order restocking in both during the.

In the third quarter, However, Q4, automotive TVD ICL still increased high teens is gradually bucking the industry downturn, thanks to our solid pipeline of the design win projects.

Meanwhile, our.

Our industrial leading cutting edge automotive L TDI products.

<unk> is a mass production for TD auto and EV.

In the third quarter of 2023.

Taken together this.

Only satisfies our leadership in next generation automotive display, but also reflect the robust market demand for advanced display technology.

Jordan will elaborate in a few minutes.

First quarter automotive business in contracting driver automotive telecom and Olay sales continued to be our largest revenue contributor at over 45% of total sales.

For tablet Q4 sales grew high teens sequentially exceeding our guidance driven by successful new product launches by our customers during the quarter.

Conversely smartphone driver sales declined as we expected.

Amidst a sub subdued.

Festival season characterized by some sluggish demand.

Small and medium sized driver IC segment accounted for 71, 6% of total sales for the quarter.

Compared to 67, 6% in the previous quarter and a year ago.

Fourth quarter non driver sales also exceeded guidance with revenue of 31 meetings, but declined to eight 2% for a quarter ago.

The better than expected performance is attributable to a resurgence in orders from our telecom paradigm for the line.

<unk> of our automotive local <unk> com is rapidly expanding as evidenced by hundreds of project awards across the board.

This paves the way for robust growth in coming years mirroring the success.

In our automotive TVD I G.

Jordan will share some insights shortly.

Driver product accounted for 13, 6% of total revenues and compared to 14, 1% in the previous quarter and a 15, 8% a year ago.

Fourth quarter operating expenses were $52 $3 million, a decrease of 17, 9% of the previous quarter and roughly flat compared to a year ago.

The substantial sequential decrease was caused mainly by a decrease to annual bonus and salary expense us particular.

Offset by an increasing R&D expenses.

Our standard practice of <unk>.

Ranting annual bonuses, including cash and ICU.

At the end of September each year can lead to higher <unk>.

<unk> expenses in the third quarter compared to other quarters of the year.

Amidst the prevailing macroeconomic headwinds we are currently exercising strict budget and expense control with full year 2023, OPEC is kind of 4% compared to the year before.

Fourth quarter operating income was $16 $7 million or seven 3% of sales compared to 10, 5% of sales.

For the same period last year, and a four 6% of sales last quarter.

The sequential increase was primarily a result of lower operating expenses for lower annual bonus compensation, partially offset by decreased sales and the gross margin in fourth quarter.

The year over year decrease was primarily a result of lower sales and gross margin compared to the same period last year.

Fourth quarter after tax profit was $23 6 million or 13 five.

Per diluted ads compared.

Compared to $11 $2 million or $6.04 per diluted ads last quarter, and $42 $2 million or 24 one.

In the same period last year.

It's worth noting that the favorable after tax profit exceeding operating income reflects the positive tax adjustment made to rectify overestimate tax expenses for preceding quarter. This year.

As a reminder, and for the purpose of year over year comparison, we made divestiture of long term asset during Q4, 2024 22, resulting in a non operating income of around $11 million.

And after tax basis.

Now, let's quickly review the financial performance for the full year 2023.

Revenue totaled.

$945.

$4 million, reflecting 21, 3% decline compared to 2022.

Persistent subdued global demand coupled with the looming recession concerns.

Presented significant challenges to our operation throughout 2023.

This market dynamic adversely affected both demand and the procurement process of panel customers, particularly in the ramp of customers study the tonics.

Yes.

Optimism in the automotive business remain steadfast as automotive TBD icl's witnessed.

Marketable surge of over 50%.

<unk> received the resilience.

And the potential of our largest business segment.

Revenue from large panel display drivers totaled $175 $7 million in 2023.

Marking a decrease of 33, 5% year over year, and representing 18, 6% of total sales compared to 22% in 2022.

Small and the media sites drivers sales totaled $629 $2 million.

Reflecting a decrease of 19, 2% year over year and accounting for 66, 5% of our total revenues as compared to 64, 8% in 2022.

Non driver products sales totaled $145 million.

Decrease of 11, 2% year over year, and representing 14 point.

90% of our total sales as compared to nine <unk>.

13, 2% a year ago.

Inventory management also presented unique challenges for us throughout the sluggish demand environment. This year.

To navigate these circumstances.

Our primary objective.

Objectives, where the strategic depression of access inventory, while also typically controlling all wafer stock.

Following quarters to offer a great safety stocking, which often involve sacrificing short term gross margin.

Inventory decreased to Nir historical norm by end of 2023.

The remaining stock feature a promising customer design inks and the loan product life cycles.

That lays the groundwork for a more stable outlook in 2024.

Gross margin in 2023 was 27, 9% decreasing from 40.

5% in 2022 as a reminder, in Q2, we strategically terminated high cost the foundry capacity agreement leading to a depressed our Q2 gross margin of 21, 7%.

Despite the temporary margin contraction.

This decision labor rates, new wafer starts from minimum fulfillment constraints quiet position us this.

<unk> us to capitalized on the turnaround in demand.

Operating expenses in 2023 were 220.

$3 million a decline of 4% from 2022 primary a result of the lower density the portion of the annual bonus compensation are worthy to employee in 2023 and the preceding years.

Partially offset by increased salary and R&D expenses.

2023, operating income was $43 2 million or four 6% of sales.

A decrease from 257, six meaning or 21, 4% of sales in 2022.

Our net profit for 2023.

<unk> $56 million or <unk> 99 diluted.

That's compared to $237 million or $1 36.

Per diluted ads in 2022.

Yes.

Turning to the balance sheet, we had 206.4.

$4 million of cash cash equivalents and other financial assets.

At December 31, 2023.

This compares to 220 to $29 9 million at the same time last year.

$155 4 million.

A quarter ago.

We achieved a strong positive operating cash flow of $68 $7 million for the fourth quarter as a result of substantial reduction in the inventory across major product lines.

As of December 31, 2023, we had 45.

$5 million in long term unsecured long with $6 million representing.

Representing the current portion.

Our year end inventories were $217 $3 million.

Lower than $259.

$6 million last quarter and the 379.

<unk> 9 million.

At the end of last year.

Our inventory level has declined steadily over the last five quarters and reached a healthy level by end of 2023.

Accounts receivables at the end of December 2023 was $203 $35 $8 million a decline from $248 five meeting last quarter and the downfall in $261, one meeting a year ago.

DSO was 91 days at quarter end as compared to 95 days last quarter and 79 days a year ago.

Fourth quarter capital expenditures were 15 point.

$1 million versus $2 6 million last quarter, and the $2 $3 million a year ago.

Fourth quarter, Capex was mainly allocated to inhouse testers for our IC design business.

In addition to other R&D related equipment.

Total capital expenditures for 2023 was 23 4 million.

As compared to 11 $8 million in 2022.

As of December 31, 2023, <unk> has $174 seven meaning ABS outstanding unchanged from last quarter.

Fully diluted basis basis, the total number of avs outstanding for the fourth quarter was 175.

Meaning.

Yes.

Now turning to our first quarter 2020 full guidance.

The first quarter profit attributable to shareholders is estimated to be in the range of two to five.

Per fully diluted ads.

I will now turn the call over to Jordan to discuss our Q1 outlook Joe the floor is yours.

Okay.

Okay.

Yes.

Traditionally business operations in the first quarter decelerate due to the lunar new year holidays.

This year.

Debated conditions due to sluggish demand, causing panel makers to strategically lower factory utilization.

He made an attempt to support panel pricing and profitability.

In tandem.

Oems and end customers are maintaining their cautious approach with heightened procurements scrutiny.

Even with inventories now.

More manageable levels.

This shift has resulted.

Short term focused.

A more frequent last minute orders ultimately constraining visibility, particularly in consumer electronics products.

To fortify the resilience of our operations, we are actively implementing strategies to optimize costs.

Suffice suppliers you can pull.

Fundraise and backend sources to enhance supply for this ability.

Cost effectiveness.

The recent partnership with next trip.

The automotive market illustrated our supplier services.

Okay. So the strategy.

<unk>.

It also highlighted our strategic approach to better align with customers switching will supply apollo's each particularly.

In the surge in demand in China.

Motive industry.

In addition, our recent presence.

He has provided a comprehensive outlook.

Our strategic focus for the upcoming years, covering automotives OSI AI and optical technologies.

In Automotives are primary European contributor.

We remain as optimistic as ever given our extensive <unk>.

<unk> product portfolio across a broad spectrum of technologies.

Mainstream LCD technology to the emerging OLED technology.

Notably within the automotive LCD displays.

We have secured hundreds of design wins in cdti, local dimming T Con and kantar.

To see ongoing expansion.

The majority of these are slated for mass production.

Next two years.

Corey our continued market dominance moving towards.

Yes.

Furthermore, our expansion into automotive OLED displays covering of the ICT and touch controller.

Bolsters, our market share leadership by offering customers an integrated bundle solution.

As a reminder, automotive driver pieces represented 36% of our polo sales in the full year 2000 for the street.

And we anticipated.

Spent well over 40% the local those sales in 2024.

Okay.

Thanks.

In the AI adult men.

We are relentlessly dedicated to our Wifi product line Gorilla, we have already achieved industry, leading ultra low power consumption.

Insurance performance.

Although shipment wise side is also.

No further supported through strategic collaborations with ecosystem partners and system integration companies covering approach range of AI applications.

Concurrently we are actively expanding our easy to adopt Wi Fi module offering for the endpoint AI market to cater to diverse needs and Kevin.

Utilize only extensive opportunities endpoint AI.

Looking further out on the horizon.

The realisation OBO costs must spend several years, the ultra illumina as color sequential friendly they'll close Michael display.

Build it.

Yes, Mark.

It means your technology breakthrough that we believe will pave the way for the realization of true <unk> goggles.

In summary.

By accelerating growth in our automotive segment.

Spending and expansion beyond our core travel business, we are well positioned for sustainable long term revenue growth and profitability.

Furthermore.

Automotive quite side and the <unk> product wise.

Our strong global client base.

Significantly extends our reach and strengthens.

Our presence in markets worldwide wireless diversified regional exposure slipping.

Stability to our operations.

Okay.

We start.

I will now begin with an update on the large panel driver IC business.

In Q1, 2024, we anticipate a sequential decline of single digits in lost display driver IC revenue primarily the.

As I've mentioned.

Panel makers.

The regulatory lowering factory utilizations striving to safeguard panel prices by constraining panel supply of missed the prevailing sluggish market.

We expect Q1 sales for TV monitor Ics to decline quarter over quarter.

However, Q1 notebook sales are poised for a decent increase bolstered by customer we started following several several quarters of muted demand.

In the local market as customers strive to differentiate and add value to their products.

Certainly both trends unfolding.

Marked by increasing the adoption of <unk> features.

The displays in premium notebooks and upcoming AIG.

As user interaction.

As we enriched our user experience.

AMOLED display.

Hello base, we showed enhancements in areas, such as gaming and that dependent.

Is crucial to emphasize our heightened focus the growing significance of both technologies.

Notably during CES this year.

<unk> industry, leading <unk>.

Automotive touch controller.

In sale TVD for premium OLED, and LCD notebooks, respectively.

Our loan sale ammo that touch controller.

It.

Is designed to address this demand for accurate cost response.

And it has handwriting.

Capability.

In the merchant midsize OLED displays for notebooks the feature.

Thinner.

Lighter brighter and.

Wider color comment.

Spirits.

What distinguishes our touch controller is a comprehensive set of features which include support will do is OLED panel.

Types in reach it flexible and hybrid.

Okay.

The capability to handle responsive Costco operations of up to <unk>.

Kimberly the ability we serious industry center.

<unk> protocols.

By expanding our OLED portfolio to equal the touch controller IC alone, we see existing DD IC and T com.

We provide a comprehensive variable that local solution.

Meanwhile, our recently launched <unk> notebooks offers precise touch sensitivity.

Vibrant modest bingo operation.

Acute active status functionalities.

Alone we support for large size high resolution low power consumption is the bezel designs.

By leveraging this extensive product portfolios.

We are well positioned to capitalize on this market shift through collaborations with key Korean and Chinese panel makers.

Sure.

Mass production is scheduled to commence in the second half of this year for next generation <unk> modules.

Sure.

Yes.

Furthermore.

The incorporation of high value added features increases the contract value.

And per panel <unk>, presenting the new opportunity for higher rates.

Looking ahead to 2025.

We anticipate the diesel replacement cycle plan.

With leading solutions for high end market launched lately.

Hi mixes presence in the local market will be further lifted.

Sure.

Turning to the small and medium sized display driver IC business.

Quarter revenue is expected to decline high teens sequentially.

On the big drop.

Of traditional losses.

Demand for consumer electronics remains sluggish.

Smartphone and tablet sales are predicted to decline single digits and double digit respectively in Q1.

Automotive revenue is also expected to decline mid teens.

Sequentially.

Following robust order request older replenishment.

In previous quarters.

Okay.

In contrast, Q1 automotive Tds sales us the opposed for sequential growth.

Defining recent reports of slower electronic equal demand in China.

The slipped and ongoing expansion of TVD adoption as evidenced.

By hour.

400 secured design win projects.

This is us significantly ahead of our peers.

We said approximately 70% of awarded projects currently must deduction.

And the continuous influx of new pipeline and design wins across the board. Our leadership position is reinforced looking ahead into 2024 and beyond.

Remarkably automotive PDI sales.

Anticipated to account for.

Almost half of total automotive drove our sales in Q1.

Meanwhile, the prominence trend.

Immersion.

Small customers.

For our TVD or LTI.

Coupled with our local dimming E com.

They are standard development platform for crops in new automotive displays of various sizes.

This movement has thrown the interest of leading panel makers.

It's incumbent ventures across the spectrum.

Cooler around these dependencies.

Supreme bundle solution to accelerate that new panel development and elevate the product value.

Moving on to our industry, leading OTT.

<unk> pro to be.

Pioneering the introduction of the OTT to the automotive display market.

Once the 10, we spend as the first company in the hole.

In the world to initiate must production <unk>, starting with <unk> and Evs in the third quarter of 2023.

For displays larger than so the inches deep.

Corporation LTI signifies increased content value for high mix on a pro panel basis.

Whereas such.

Loss is place usually necessitate six or more LTE chips.

At least one local dimming.

T com.

This opens a new revenue stream for us.

Fortifies our market leadership moving forward.

During CES this year premise presented the most comprehensive product lineup for display semiconductor technologies ranging from traditional <unk>.

So cutting edge LTV at local dimming T con for LCD panel.

Extending into AMOLED display solutions.

Our molded portfolio.

Used to be comprised of.

<unk> no expense to own sale touch controller.

It's important to point out that the automotive.

Industry uphold.

Finjan standards of quality and reliability.

So past seasonal loss of consumer electronics.

Cloud is clearly in the acknowledgment of this heightened requirements.

Our recently unveiled more of the touch controller IC.

Meticulously engineered.

And industry, leading plus signal to noise ratio exceeding 45 BP.

Making it the ideal solution to meet their needs.

Flexible OLED panels.

OLED requires volatile multi reputation.

Yields will provide improved sensitivity to challenging user conditions, such as co op.

And the wisdom cooperations.

Guaranteed.

<unk> performance with display quality free from.

Theories bypass displayed the actions.

Furthermore, our touch controllers support model.

Steve touch.

Is compatible with multiple OLED panel types.

<unk> has the capability to Cascade multiple chips in support of larger than 20 each displays.

Please proceed awards from leading AMOLED panel manufacturers.

In the upcoming quarters.

We continue to strive forward.

We continue to strive towards providing the most extensive array of automotive display solutions in the market.

This commitment evolves.

Foster a robust partnerships with panel.

Makers.

And suppliers incumbent ventures across the globe.

Shoring comprehensive solutions like cater to a wide spectrum of customer preferences.

For your requirements.

In terms of both smartphone and tablet product lines, we continue to see lackluster demand in the market.

On a positive note.

Inventory has substantially.

Pallets to a satisfactory level.

We saw Destocking process nearly complete we placed waiver stars for select products study in Q2 last year.

Currently we are diligently working on improving our cost structure through supplier diversification and strategic alliances, thereby positioning ourselves for an anticipated resurgence in demand.

Let's for an update on <unk> business as I mentioned earlier, we are exiting the venture into a mold that market by forging strategic partnerships.

And Amit fixtures in Korea and China.

Spending a diverse range of applications, including automotive tablet notebook and smartphones.

As I just covered we have made great progress in automotive typically at notebook markets, where we offer a comprehensive solutions covering DVD ICT covenant touch controller.

Bus production for most of these solutions is expected to commence the second half of 2024.

In the smartphone AMOLED display driver segment. However, the prevailing slowdown is smartphone market demand has slipped two adjustments to our initial timeline.

Nevertheless, collaborations with customers in Korea, and China going with certification and process ship project is underway.

I would like to now turn to our non driver IC business update.

First for an update on our telecom business.

Okay.

We expect <unk> sales to increase by single digit sequentially.

Driven by increasing shipments for automotive displays.

OLED displays for Kyprolis.

Despite subdued end market demand, we are actively developing next generation <unk> IC for OLED tablets notebooks and automotive applications.

The initiatives.

Ams to broaden and diversify our product offerings, while also positioning ourselves to capitalize on our market research.

Since two hour cutting edge local dimming technology high mix.

Sure.

Over 100 design wins projects and they all failed.

At CES 2024.

<unk>, our latest level TV T Con quiz features as well as image enhancement.

White color spectrum.

Ensuring exceptional visual quality, let's suppose resolutions of up to 12 paid by one.

And exceptional dynamic contrast enhancement payloads to real time display content.

All while adhering to power efficiency and stringent automotive safety sensors.

The rapid increase in.

Customer adoption reflects the growing traction and trust in our solutions.

We expect a decent grills.

Correct.

<unk> for the whole of immunity comes over the next few years.

Yes.

Switching gears to the wayside smart image sensing Colo solution.

But in edge standpoint.

Equation, featuring high mix as ultra low power AI processor.

Always on Cmos image sensor.

CRM based AI algorithms.

During CES this year, we highlighted our range of application demonstrations, which have slipped to the.

Ken adoption across various <unk>.

<unk> <unk>.

Featuring our industry, leading ultra low power.

<unk> potent AI capabilities.

We achieved noteworthy progress with customers, particularly in implementing oils side in smart door locks.

The collaboration with the trend of small talk Rita.

Persimmon.

Mark's a groundbreaking feature advancement in the door lock industry.

So ultra low power Wi Fi AI with remarkably low power consumption of just won many awards.

<unk> enables the world's first.

Smart, though look feature.

I interrupted so visits with 24 seven realtime sedentary voluntary.

At the same time significantly extending battery life.

Yeah.

We also showcased.

Option of White side.

In catcher endoscope.

So heidi.

Encouraging advancement.

In the medical area.

I always say AI solution empowers tiny peel sized kept Shaw endoscopes, which are easy to swallow facilitated smooth medical examination processes.

The device consumes minimal power to sustain continuous image capture and transmission for up to 12 hours.

This creates.

The simply flight med.

Medical process pushed compared when compared to conventional procedures quicker often involves the use of invasive endoscopic tubes.

Speaker Change: We're excited about the potential for this transformation.

Relevant for the healthcare industry.

<unk> to commence production with a customer in 2035.

Turning to an update on one side to.

Our new generation of AI processor.

We are honored to report that <unk> was awarded the 2023.

Product award by Double E Awards Asia.

For the elevated hi, Miss this one.

Speaker Change: Prominence in the industry.

<unk> is pioneering a new center in endpoint AI benchmarks.

The recognition for its outstanding AI inference, the PDP indoor.

Speaker Change: Industry, leading ultra low power efficiency.

Ed Advanced security features.

And the ramp of context aware AI voice.

<unk> facilitates high precision detection with features such as face mesh facial.

Facial and clock.

And just sure and <unk>.

Human pose a skeleton cushy expense the utilities user friendly scope of it.

<unk> applications, you realize oh achieved with minimal Cocos post consumption.

Peripheral interfaces.

Effectively lowering.

The system cost for.

Speaker Change: Application appliances.

By eliminating the need for costly power hungry discrete MCU otherwise required to process series sensor data.

Additionally, wisely to both.

The title of sensor fusion capabilities.

Encompassing.

Image re deal Oh deal vibration and thermal inputs.

Okay.

Speaker Change: This enables sophisticated integral.

Speaker Change: Highly accurate detection, we slow latency, especially suitable in the anomaly detection with timely.

All means.

Making it an ideal solution for a range of industrial applications, notably in automated.

Mens factories.

The loan size, our ongoing collaboration with end customers.

Second progress is speed rate in partnerships with major CPU and AP SLC players in preparation for their next generation smart notebooks, the itc's surveillance applications as a host of other pinpoint AI applications.

We will provide more details as they come about.

Concurrently to meet various application requirements and context.

An extended market reach.

We are in collaborations with numerous ecosystem partners and system integration companies offering.

Hence of development tools and rigorous AI models to streamline customer development efforts reduce costs for the AI product introduction.

The launch of a product launch of a production ready <unk> modules.

Simplifies this business model.

This.

Modules incorporate high mix is.

Speaker Change: Low power Cmos image sensor <unk>, one OSI to AI processor.

The pilot.

Are those from either in house or third party partners.

Meticulously designed with plentiful factors highly integrated and plug and play characteristics.

The modules feature user programmable preload. These AI models to facilitate seamless system integration lowering the entry barrier and costs for development.

Speaker Change: This initiative is particularly well suited for early stage market engagement applications.

Furthermore.

We continue to collaborate with ecosystem partners to unveil a spectrum of plug and play modules like incorporate us no code.

Speaker Change: Slash low code AI solutions.

Speaker Change: By leveraging their strengths in specific domains.

Assistant channels.

This collaborative efforts to ensure we can meet diverse development needs for both software and hardware.

Notably <unk> is probably two thirds done before.

Partnership we seat still deal.

One is battery powered endpoint AI vision processing module.

<unk> vision AI module <unk>.

Difficult to the underscores our dedication to making.

I think biology easily accessible.

After years of dedicated effort to enhance all aspects of our PDT industrial.

Low power AI processor and image sensing for endpoint AI applications, we believe WSI.

WSI business will emerge.

Multiyear such.

Growth driver for hydraulics.

Okay.

Lastly, I would like to provide an update on the optical product lines.

Speaker Change: Hi mix is a distinguish industry leader with a diverse range of optical optical electronics products.

So a full building emergent may numbers applications.

We strive to innovate.

Well series technologies in this arena, including liver liver optics <unk>.

Speaker Change: We still own silica among.

Among others.

Pushing the envelope in a variety of fields.

Our technological expertise and extensive manufacturing experience.

Evident in our growth.

Client <unk> for <unk>.

Slash VR goggles and ongoing engineering projects.

This review some recent progress we have made.

First although advancement in <unk>.

Technology <unk>.

<unk>, both a decade long expertise and proven track record for shipments for Ya goggles.

With global leading names.

Our latest breakthrough color sequential from vehicles, Michael display offers unparalleled industry, leading brightness of up to 180 southern needs.

Speaker Change: Providing usher luminance performance in vibrant RGB displays.

Also features superior optical power efficiency.

Speaker Change: <unk> form factor.

Nacho lightweight design.

Make it the best.

<unk> choice for the next generation of <unk> devices.

Currently we are actively involved in full of engineering activities.

Speaker Change: <unk> with key tech players.

Despite significant opportunities in the coming years.

Speaker Change: Next let's discuss discuss the research production.

Nano imprinting optical film technology in automotive lighting by high matches subsidiary.

<unk> in collaboration with our industry.

Speaker Change: The global leader in automotive lighting in victory.

The sales to our technology was implemented we didnt leading edge.

Escalate tight automotive lighting.

By leveraging our nano <unk> print optical film.

Meeting the OLED light is reflected or restricted.

Towards the illumination direction.

Speaker Change: The automotive flaps.

Ensuring uniformity minimizing fixtures sites.

Billing precise control of light.

Speaker Change: <unk> two convention, though.

Direct lead type autonomous automobiles.

This results in enhanced efficiency reduce the OED usage and the ability to create versus higher price items.

Because of the low cost.

This groundbreaking development and look not only expensive we feel possibilities for multiplied.

But also interior light decoration design is worse.

Reality illumination applications.

We will provide more updates as they come about.

We believe our optical and auto auto electronics technologies.

Poised.

Speaker Change: To play an important enabling role in developing next generation applications.

We are committed to advancing this technology suite collaborate to the.

Expanding application possibilities, we see industry leaders, who are devoted to advancing the next generation rollovers related products.

For non driver IC business, we expect revenue to decline single digits sequentially.

The first quarter.

That concludes my report for this quarter. Thank you flew in towards the Timex, we appreciate youre joining todays call.

Now.

Maybe to take questions.

As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced.

To withdraw your question. Please press star one again please.

Please standby, while we compile the Q&A roster.

Once again, if you have a question at this time. Please press star one one on your telephone.

I'm showing no questions at this time I would now like to turn it back to Jordan <unk> for closing remarks.

As a final note.

Our Chief <unk> Officer will maintain Mr marketing activities and continue to attain risk coverage.

Now the details as they come about thank you and have a nice day.

This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

Okay.

Speaker Change: [music].

Okay.

[music].