Q4 2024 Himax Technologies Inc Earnings Call
Speaker Change: At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference call is being recorded.
Speaker Change: And now I would like to turn the conference over to Mr. Eric Lee, Chief IR and PR Officer at Hymex. Mr. Lee, please begin.
Thank you.
Speaker Change: Welcome everyone to the HIMAC fourth quarter in the full year 2024 amnesty call. My name is Eric Li, chief IRT officer at HIMAC.
Speaker Change: Joining me today are Jordan Wu, President and Chief Executives Officer, Jessica Kang, Chief Financial Officer. After the company prepared comments.
Speaker Change: We have allocated time for questions in a Q&A session. If you have not yet received a copy of today's resource release, please email hlimx at ncgroup.us.
Speaker Change: Before we begin the formal remarks, I'd like to remind everyone that some of the statements in this conference call, including statements regarding expected future finance results and industrial growth, are forward-looking statements.
Speaker Change: 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.
Speaker Change: A list of risk factors can be found in the company's SEC filing form 20-F for the years ended December 31, 2023 in the session entitled Risk Factors as may be amended.
Speaker Change: which were provided in the company's 20th and filed with SEC on April 2nd, 2024. The financial information included in this conference call is unauthorized.
and consolidated and prepared in accordance with IFRS of accounting.
Much financial information is generated internally.
Speaker Change: and has not been subjected to the same review as the scrutiny, including internal auditing procedures and external audit.
Speaker Change: by an independent auditor, or to which we subject our annual consolidated financial statement and may vary materially from the audited consolidated financial information for the same period.
Speaker Change: On today's call, I will first review the IMAX Complicated Financial Performance of the fourth quarter and full year 2024, followed by our first quarter 2025 outlook.
Speaker Change: Jordan will then give an update on the status of our business, after which we will take questions.
Speaker Change: You can submit your questions online, through the webcast, or by phone. We will review our financials on an IFRS basis.
Speaker Change: We are delighted to announce that the Q4 Revenue's gross margin as well as profit all surpassed the guidance issued on November 7, 2024, despite prevailing economic challenges.
Speaker Change: The better-than-expected financial results were primarily driven by stronger order momentum across product lines, along with cost improvements and better product mix.
Fourth quarter revenues, legend, $237.2 million
Speaker Change: The increase of 6.7% sequentially significantly exceeding our guidance range of a slight decrease to flat.
and up 4.2% year-over-year.
Speaker Change: Growth Margin reached 30.5% exceeding our guidance flat to slightly up from 30% in the previous quarter and up from 30.3% in same period last year.
Speaker Change: The sequential increase was driven by a favorable product mix and cost improvement.
Speaker Change: Q4 profit per diluted ADS was $0.14, considerably above the guidance range of $0.093-$0.11 thanks to better-than-expected revenues and improved costs.
Heightened price competition from China peers
Speaker Change: Revenue from small and medium-sized display drivers segment totaled $166.8 million, an increase of 7.4% sequentially, exceeding our guidance of flat quarter-over-quarter.
Thanks to stronger-than-expected sales in the automotive and technical markets.
Speaker Change: Q4, automotive driver sales, including both traditional DDIC and TDDI, experienced mid-teens increase.
Speaker Change: significantly outperforming our expectation of a single-digit increase with both the DDIC and the TDDI showing stronger than expected sales
Speaker Change: Trading stimulus initiatives announced in mid-August 2024 to boost automobile consumption
Speaker Change: underscoring the global adoption of our TDDI solutions which are increasingly essential in modern vehicles.
Speaker Change: and reflect the growing demand for bold, intuitive, interactive, and cost-effective touch panel features powered by TDDI technology.
Powerful to motivate business
Speaker Change: Comprising drivers, QICOM and OLAY IC cells accounted for around 50% of total Q4 revenues.
Speaker Change: Meanwhile, Q4 Kepler-IC cells exceeded the guidance of a low-Tin-Chi, with the cells up slightly sequentially.
Speaker Change: Q4 smartphone IC cells declined slightly in line with our guidance
Speaker Change: The small and medium-sized striver IT segment accounted for 17.3% of total sales for the quarter, compared to 69.9% in the previous quarter and 71.6% a year ago.
Speaker Change: The growth was primarily driven by a one-time T-Comp product shipment to a leading projector customer in T-Comp for monitor application.
In Q4, automotive T-con cells continued to grow sequentially.
Speaker Change: Due to the widespread adoption of our market-leading local DMT comp with over 200 secure design wing projects across major panel makers, Tier 1 suppliers, and automotive manufacturers worldwide.
Speaker Change: First quarter operating expenses were $49.2 million, a decrease of 19.1%.
The sequential secretes
Speaker Change: stemmed primarily from a reduction in annual employee bonuses partially offset by an increase in R&D expenses.
Speaker Change: As part of our standard company practice, we grant annual balances, including cash and ICUs, to employees at the end of September each year.
Speaker Change: This results in higher RFIS operating expenses in Q3 compared to other quarters of the year.
Speaker Change: The year-over-year decrease was mainly due to a decline in employee bonus compensation because the annual tithe proportion, or pi years as bonuses, for 2023 was higher than that for 2024.
Speaker Change: Affecting the Higher Annual Bonus Compensation Grant for 2024 compared to 2023
Hemet ongoing macroeconomic challenges
Speaker Change: We are strictly enforcing budget and expense control, with full year 2024 operating expenses declining 5.6% compared to last year.
Speaker Change: Fourth quarter operating income was $23.1 million, or 9.7% of sales compared to 2.6% of sales last quarter and 7.3% of sales for the same period last year.
Speaker Change: The sequential increase was primarily the result of higher sales, improved growth margin, and lower operating expense.
Speaker Change: The year-over-year increase was primarily the result of higher sales, higher gross margin and lower employee bonus compensation due to the amortized proportion of high-year bonuses.
Speaker Change: Fourth quarter asset tax profit was $24.6 million, or $0.14 per diluted ADF.
Speaker Change: reflecting a meaningful increase from $13 million or $0.074 per diluted ADR last quarter and up from $23.6 million or $0.135 in the same period of the year.
Speaker Change: Now, let's quickly review the financial performance for the full year 2024.
Speaker Change: persistent global demand weakness coupled with uncertainty about market trends led to conservative purchasing decisions in the inventory management by our panel customers
Speaker Change: Even based on certainty, we implemented strict expense controls, resulting in a 5.6% reduction in operating expenses for the year.
However, our optimism in the automotive business remains unwavering.
Speaker Change: with automotive I.C. sales increasing by nearly 20% year-over-year in 2024, far outpacing the overall automotive market growth.
Speaker Change: Among our automotive product lines, automotive TTDI and T-con cells boast relatively new technologies.
Speaker Change: surged by more than 70% driven by accelerated adoption across the board.
Speaker Change: for continued success as the automotive sector embraces more advanced technology resulting from the mega-trend of increasing size, quantity and sophistication of displays inside vehicles.
Revenue for large-panel display drivers totaled $125.9 million in 2024.
Speaker Change: marking a decrease of 28.3 percent year-over-year and representing 13.9 percent of total sales as compared to 18.6 percent in 2023.
Small Intermediate-sized Subtribers
totaled $625.4 million
Speaker Change: reflecting a slight decrease of 0.6% year-over-year and accounting for 69% of our total revenues as compared to 66.5% in 2023.
to 14.9% a year ago.
Speaker Change: Gross margin in 2024 was 13.5%, up from 27.9% in 2023. The margin expansion was driven by a strategic focus on cost improvement and operational efficiency optimization.
also contributed to margin increase.
Speaker Change: Primarily due to lower employee bonus compensation, the annualized proportion of bonuses in 2023 was higher than that in 2024.
Speaker Change: 2024 operating income was $68.2 million or 7.5% of sales, an increase from $43.2
million dollars or 4.6 of them in 2023
Our Net Profit
For 2024, $179.8 million, or 0.46 per diluted ADF
Speaker Change: Slightly, significantly off from 50.6 million dollars or 0.29 per diluted ADM in 2023.
Speaker Change: Turning to the balance sheet, we have $224.6 million of cash, cash equivalents, and other financial assets as of December 31, 2024.
Speaker Change: This compared to $206.4 million at the same time last year and $206.5 million a quarter ago.
Speaker Change: We achieved a strong positive operating cash flow of $35.4 million for the fourth quarter compared to a cash outflow of $3.1 million in Q3.
We made a total of 13.1 million
Speaker Change: dollars annual cash bonus to employees resulting in the low operating cash flow of the quarter
of December 31, 2024. We have 34...
$0.5 billion dollars in long-term unsecured loans
with six million dollars representing the current portion.
$217.3 million at the end of last year
Speaker Change: Our inventory level has steadily declined over the past couple of quarters and is now at a healthy level.
Speaker Change: The cost receivables at the end of December 2024 was $236.8 million.
Speaker Change: Little changed from $224.6 million last quarter and $235.8 million a year ago.
Speaker Change: DSO was 96 days at the quarter end, but compared to 92 days the last quarter, and 91 days a year ago.
Speaker Change: First quarter capital expenditure was $3.2 million versus $2.6 million last quarter and $15.1 million a year ago.
Speaker Change: Fourth Quarter CapEx was mainly for R&D related equipment for our IC design business.
Speaker Change: Total capital expenditures for 2024 were $13.1 million compared to $23.4 million in 2023.
Speaker Change: The decrease was primarily due to reduced spending on in-house testers.
for our IT design business in 2004.
Speaker Change: As of December 31, 2024, IMEX had 174.9, meaning ADS outstanding. Little changed from last quarter.
Speaker Change: The total number of ADS outstanding from the first quarter was 175.1 million.
Now, turning to our first quarter, 2025 guidance.
Speaker Change: Reflecting the Low Season Demand Due to Lunar New Year Holidays
Speaker Change: The revenue guidance implies a year-over-year performance ranging from flat to a 4.6% increase.
Speaker Change: Growth margin is expected to be around 30.5% depending on product mix. This compares to 29.3% of same period last year.
Speaker Change: The first quarter profit attributable to shareholders is estimated to be in the range of $0.09 to $0.11 per fully diluted ADF.
Fifty-four percent.
Speaker Change: We have noted that some peers' customers placed orders early due to tolerance factors, especially in the consumer electronics sector.
resulting in Q1 revenue forecast exceeding normal seasonal demand.
Speaker Change: In contrast, no similar trend has been observed in the automotive semiconductor market.
Speaker Change: I will now turn the call over to Jordan to discuss our Q1 2025 Outlook. Jordan, the floor is yours.
Thank you, Eric.
Speaker Change: For his strong performance, he's certainly commendable. He also highlights the challenges we faced, such as limited multi-visibility and conservative customer demand. For our many customers, we relied on cross-orders to address their actual demands.
Speaker Change: On the other hand, rush orders are indicative of the tri-unitary position of our kind of customers in general.
Speaker Change: In the past eight quarters, we have consistently demonstrated our ability to handle most of such cross-orders, underscoring our agility.
Protectability, strong capability in inventory management, and sweet market responsiveness.
Speaker Change: His performance highlights high-maxes of automotive leadership in technological innovations, product development, and market share.
Speaker Change: Looking ahead, we expect our automotive TDI and QICOM technologies to maintain gross momentum, further strengthen our market competitiveness.
Speaker Change: Beyond LCD technology, Himex is advancing development in the automotive OLED sector, with numerous projects currently underway in partnership with the Intel matrix.
Speaker Change: We anticipate that automotive OEIC will serve as one of the key growth drivers for Himex in the coming years.
further solidify our leadership in the automotive display market.
Speaker Change: Meanwhile, Hi-Res is actively expanding its technology development beyond display ICs.
to the end in the one-sided acceptance.
collaborating with world-leading customers to develop new innovations.
Speaker Change: We anticipate a strong growth trajectory in our WiFi business in 2025 and beyond.
Speaker Change: HEMES' proprietary weather-level optics, or WLOP, or Copenius Optics, or CPO, has recently garnered significant attention in the technical markets.
Speaker Change: The collaboration spanning several years unites Himex's W.O. technology with 4C's CTL solutions for cutting-edge AI.
Muddy Chute, Marshalls, RNCF
Speaker Change: Since the announcement, we have provided updates on the latest progress in each quarterly earnings call.
Speaker Change: Highlight is that WL technology plays a critical role in CPL by providing essential optical coupling capacity.
Speaker Change: CPO significantly enhances bandwidth and accelerates data transmission, while reducing signal loss, latency, and power consumption. Additionally, it can help drastically decrease the size and cost of MCM.
Speaker Change: YCTO is still in engineering validation and trial production stage this year. With confidence, most production timelines are disclosed.
and the recent air market disruption from deep-sea.
The prospect of CTO remains unchanged.
Speaker Change: The wide-spread option of CPL for data transmission to be conducted via optics instead of MegaWire is on track in high-performance AI applications.
Speaker Change: This is evident by the significant increase in customers' recent trial production volume forecast, indicating an accelerated timeline for CTO technology towards mass production.
Speaker Change: Furthermore, Hymex and Falsi in close collaboration with BBA customers and partners.
Speaker Change: are actively developing future generations of CPU technologies to meet the explosive high-speed optical data transmission demand in HPC and AI.
Speaker Change: We believe that CPU technology, beyond core applications, will see further adoption in sectors such as automotive and robots in the future.
thereby helping drive Chrono CPU adoption in AI applications.
Speaker Change: At CES this year, HIMAX showcased a wide range of innovative achievements, including automotive display technology, Wi-Fi AI, and advanced optical technologies, or AR-VR.
Speaker Change: Notably, a clear trend emerged at this year's CES as industry demonstrated strong enthusiasm for AR glasses.
Speaker Change: fueled by more companies entering the space and integrating generative AI to accelerate the development of lightweight, compact, and all-day AI classes.
Hey y'all fellas, it's Rutherford.
Speaker Change: For AR glasses, HIMAX offers three optical technologies, namely Air-Cross Micro-Display, WL-Wi-Fi, and Ultra-Low-Power Wi-Fi AI.
Speaker Change: Our latest patented front linear cosmical display delivers arterial brightness with industry-leading 400k nits, exceptional optical power efficiency.
Speaker Change: making it one of the most viable solutions in the CSU air classes market.
Speaker Change: In the Web Guide, in collaboration with Deeding TechLabs, highlights leverages proprietary WL expertise.
Speaker Change: Build of advanced nano imprint technology to offer industry-leading optical solutions that optimize light transmission and display efficiency.
in the field of AI sensing for air glasses.
Speaker Change: These solutions not only improve the intuitive operation of smart cabins
Speaker Change: but also enhance driving safety and provide an exceptional user experience.
Speaker Change: A prime example is the advanced display HMI solution developed in collaboration with AUL, which meets the demands for large-size, high-resolution and 3-in-4 automotive displays.
Thank you.
Speaker Change: At CES, Time has also partnered with several AI ecosystem partners to showcase its ultra-low-power Wi-Fi modules over a range of innovative, production-ready AIoT applications.
Speaker Change: These applications include Convair authentication, A-B cryo-detection, people flow management, and human-centered detection.
Speaker Change: The modules are designed for easy integration, making it highly suitable for various AIoT applications.
With that, I will now begin with an update.
Speaker Change: In Q1, we anticipate a single-digit sequential sales increase for last displayed Tri-YCs.
Speaker Change: driven by demand spurred by the Chinese government subsidies for household appliances and by the demand in the Scottish household sector.
Speaker Change: Notebook and monitor sales are expected to increase in Q1. In contrast,
Speaker Change: TVIC sales are set to decline if customers pull forward their inventory purchases in the prior quarter, coupled with the seasonal slowdown in Q1.
Speaker Change: HiMesh is well positioned to capitalize on this trend, offering a comprehensive range of ICs for both LCD and OLED notebooks, including DDIC, T-Con, Touch Controllers, and TDDI.
Speaker Change: The standout innovation is our pioneering in-sale touch TV BI for LCD displays.
which improves the ease of system integration.
Speaker Change: This is a design integration by embedding the touch controller within the TV and cheek while maintaining the conventional display driver setup for T-Con data transmission.
Thanks for watching!
Speaker Change: This design simplifies the integration for customers, reducing engineering complexity and speeding up product development.
Speaker Change: This solution also supports high-resolution displays up to 4K and larger screens up to 16 inches, aligning with the growing demand for advanced visual, toning and immersive laptops.
SCREEN!
Speaker Change: With mass production already underway for any inoperative AITC, more projects are lined up.
Speaker Change: for all the notebooks in addition to all the DDIT and TCAP solutions.
Speaker Change: We are also developing on-sale touch controller technology with multiple projects underway with top panel makers and notebook vendors.
Speaker Change: Last but not least, progress has been made on the next generation EDP 1.5 display interface for T-Con, for both LCD and OLED panels.
This interface will support hyper-arrays, low power consumption, adaptive sync
and time resolution, key features essential for next-generation AI PCs.
Speaker Change: By delivering innovative cutting-edge technologies, Hyman is well-positioned to lead in the rapidly evolving landscape for ARTC and premium notebooks.
significantly outpacing global automotive growth
Speaker Change: largely driven by the continued adoption of TDDM technology among major customers across all continents.
Speaker Change: However, we anticipate Q1 automotivating to decline low teens sequentially, following two quarters of 30 men.
Speaker Change: Despite this, human automotive sales are still projected to increase by mid-teens on a year-on-year basis.
Speaker Change: in the automotive TDI sector with cumulative shipments significantly surpassing those of our competitors.
Nice.
We continue to bring forth our multi-leadership.
Speaker Change: We clearly find the design project secured in a continuous influx of new pipelines and design wins across the board, of which only 30% already in mass production.
Speaker Change: We expect to sustain this different growth in the years ahead.
Speaker Change: Foreign traditional automotive VDIP sales for 2024 declined due to their gradual partial replacement by TDI
Speaker Change: Our DDIC shipment volume still saw a modest increase in the last year.
This demonstrates
Speaker Change: The steady demand for mature DSE products, such as those used in cluster displays, HVBs, and rear and side view mirrors
Thank you. Thank you.
Speaker Change: Furthermore, the long-term trust and loyalty from our DE IT customers, some of whom have relied on our solutions for over a decade.
is indicative of our strong customer retention.
Speaker Change: We continue to lead the automotive DDIC market, maintaining a global market share of approximately 40%.
Speaker Change: Hi-Rez continues to lead in automotive display ID innovation by pioneering solutions that deliver superior performance, point efficiency, and enhance user experiences.
Speaker Change: As part of this ongoing innovation, our latest TVD, or T-Con Invasive Drive-By-Seed solution, which combines TVDI with local beaming T-Con into a single chip,
Speaker Change: Another new technology worth highlighting is our Automotive TDI with Advanced User-Aware Touch Control, which differentiates between driver and passenger touches.
In addition, we offer a unique lab-on-in-cell display solution.
that combines a physical knot of a GTI.
This design seamlessly merges in-sale touch technology with tactile controls
Speaker Change: offering drivers a safer, more intuitive interaction that reduces distractions and enhances the overall driver experience.
hang
Speaker Change: Moving to smartphone and tablet IT sales, we expect a sequential decline in both product lines, as is typical during the long season Q1-Q2, the New Year.
Speaker Change: Next for an update on our OLED business. In the automotive OLED market, we have established strategic partnerships with e-ink panel makers in Korea, China and Japan.
Speaker Change: Capitalizing on our first-mover advantage, we aim to drive the growing adoption of OLED in automotive displays by offering a comprehensive range of solutions, including EDIC, TICON, and on-scale touch controllers.
ROAR
Speaker Change: We believe this positions us as a primary beneficiary of the anticipated shift towards older displays.
Speaker Change: for high-end vehicles in a couple of years, enabling us to capture new growth opportunities and further strengthen our market leadership.
Speaker Change: Beyond the automotive sector, we have also made strides in the tablet and notebook markets.
partnering with leading all the telemeters in Korea and China.
Speaker Change: Our comprehensive audit product portfolio, covering EDIC, TCAP and touch controllers, has driven several new projects that are on track to begin mass production this year.
Speaker Change: In response to the pandemic, we are making solid progress in our collaborations with customers in Korea and China, and we anticipate mass production to start later this year.
Speaker Change: First quarter small and medium-sized respiratory diseases is expected to decline low-tension sequentially.
Speaker Change: I would like to now turn to our non-drug IT business update, where we stick to the first core directive to decrease high sales sequentially.
First, I want to update all our T-Con districts.
Speaker Change: We anticipate Q1 T-Con sales to decrease mid-term sequentially, primarily due to the long recurrence of a one-time ASIC T-Con shipment to a leading projector customer last year.
Speaker Change: as well as a moderation in automotive T-car shipments, following several quarters of strong growth.
Speaker Change: That being said, CARMAX maintains an unchallenged position in the automotive economy, evidenced by growing validation and widespread adoption in both premium and maturing car models worldwide.
Speaker Change: We are confident in the continued growth of our automotive vehicle business.
Speaker Change: supported by our strong market presence in lower limit tea cup with strong pipelines of over 200 design projects set to gradually enter production in the coming years
Speaker Change: Head-up display, or HUP, is another field gaining traction with the automotive displays, driving increased adoption of low-volume T-hub technology and emerging as a particularly promising application.
Speaker Change: He effectively eliminates the so-called postcard effect, often seen in action films.
Speaker Change: caused by backlight leakage typical of traditional conventional TFT LCD panels
ensuring a clear and precise image on the windshield.
Speaker Change: Additionally, the T-con features advanced transparency detection to prevent the display from obstructing the driver's view, thereby ensuring driver safety.
Speaker Change: Several SUD projects are already in progress, and we are excited about the potential opportunities ahead.
Speaker Change: We are well positioned for continuous growth in automotive tech over the next few years.
Switching gears to the Windsor Ultralocal AI-Thinning Solution
for coming to this important end-presentation.
Features of a 3D game
after low poly and processor.
Always wrong, she must be misinterpreted.
and C.M.L. Bates.
We Salute You
Speaker Change: Wi-Fi AI delivers a significant competitive edge in the rapidly growing AI market through its ultra-low power consumption and context-aware on-device AI inferencing.
Speaker Change: that seamlessly integrates vision and other sensing capabilities into endpoint applications, particularly battery-powered devices.
Speaker Change: This not only enhances intuitiveness in the interaction, but also makes AI more practical and accessible.
Speaker Change: Additionally, Wi-Fi AI offloads packs from the main processor, effectively extending battery lifespan and improving overall data processing efficiency.
Heading on, the French says, which there are no books.
Speaker Change: HiMAX WISA-AI is continuing to expand its market presence with additional use cases expected across other leading notebook brands, some of which are set for production later this year.
Whiteside: Whiteside also continues to achieve significant market success across various sectors.
For Smarter Lock, we collaborated, we specimen.
Whiteside: a leading high-end brand in China, to introduce the world's first smart door lock with 24x7 century monitoring and real-time event recording.
on this treatment.
Whiteside: We are expanding globally by collaborating with other development makers worldwide.
to integrate innovative AI features, including
Powerful recognition
Whiteside: anti-pig protection and palm vein biometric access for the extended applications possibilities
Whiteside: Several of these value-added solutions are set to enter production this year.
Whiteside: HCS 2025 highlights joint forces with ecosystem partners to unveil a suite of innovative production-ready IoT applications.
Powered by our tiny four-digit quad-gigabyte Wi-Fi modules
Whiteside: Timex offers a series of modules, each incorporating an absolute power Wi-Fi AI processor, an ALS image sensor, and advanced algorithms.
These modules feature low-code slash low-code AI platform capabilities.
Whiteside: Simplifying AI integration and supporting diverse use cases, such as human presence detection, gender and age recognition, gesture recognition.
Thank you very much.
Whiteside: Board of Command, Thermal Incentive, Post Estimation, and People for Law Management.
by streamlining development and reducing development costs.
Wi-Fi modules, OpenNIC units for automation
Whiteside: Enhance our interactivity and elevate user experiences across a variety of industries.
Whiteside: The broad range of innovative, ultra-low-power Wi-Fi modules are also under development in collaboration with ecosystem partners, such as Crime Baby Detection, Dynamic Cheshire Recognition, and Human Searching, among others.
Whiteside: One standout in our Wi-Fi module portfolio is the HIMX Wi-Fi Permanent Solution.
Whiteside: which has quickly gained traction since its introduction just a year ago.
Whiteside: We have secured multiple design wins with smart production already underway by a U.S. customer for smart access applications, and the Taiwan-based DOLOC vendor for its leading smart DOLOC brands.
Whiteside: to make a growing customer demand for Perseverance across various environments.
The Upgraded Wi-Fi Convention Suite Now Features
by a model of identification.
combining both PowerEdge and face recognitions.
Whiteside: The dual authentication solution enhances security by offering two layers of biometric verification.
The rise of Victoria Agents
Whiteside: marks a significant shift in human-machine interaction, enabling devices to perceive, process, and respond to their surroundings in real time.
Whiteside: A key emerging trend is the integration of cloud-based cross-language models.
which enables this agent advanced reasoning and language understanding.
Whiteside: HiMesh Wi-Fi AI is at the forefront of this revolution delivering overload sensor fusion, ultra-low power on-device processing
Why I've Seen You Sleep
Whiteside: A good demonstration of this innovation was showcased at CES 2025, where Hymex and Seed Steel introduced the SenseTec watcher.
Whiteside: If you truly are agents, call or buy a Wi-Fi AID.
Whiteside: equipped with vision and audio center vision along with a speaker. This battery-powered IoT device combines on-device AI with cloud-based LLM to interpret
Whiteside: Incomplete commands recognize objects, respond to events, and facilitate real-time interaction.
Whiteside: Separately, we are excited about our collaboration with a leading AR player to integrate WI-SAI AI into the next generation of AR glasses.
Whiteside: As I mentioned earlier, at CES, there was a renewed enthusiasm on AI glasses, with AI becoming an integral component to enhance intuitive and seamless human-device interaction.
Whiteside: WIFA-EA addresses two critical challenges in the air classes, namely real-time responsiveness and pilot visits.
Whiteside: For example, Wi-Fi supports always-on outward sensing, enabling AR glasses to detect and analyze the surrounding environment with real-time contents of AR.
Whiteside: This capability powers instant response, real-time object recognition, navigation assistance, sensation and environmental mapping.
糟糕不利
Whiteside: One that AI is exceptional at low power consumption, measured in single digits, meaning watts. Also, maybe perfectly suited for air glasses, for air, for all day wear.
is another example.
Whiteside: We collaborate with Gan Jin from Eyeball Tracking Technology, which powered by Wiseline, precisely detects subtle eyeball movements.
Case Detection, Pupil Size, and Blinking
Whiteside: Neoprime, providing critical data for the enhancement of user interaction in AR glasses.
Whiteside: In June 2034, HIFACS, in partnership with 4C, the world leader in silicon photonics connected.
unveiled an industry-leading co-packaged optics CTL technology.
Whiteside: This innovation integrates silicon photon exchange in optical connectors within MCM, replacing traditional metal wire transmission with high-speed optical communication.
the technology significantly advances backwards
Whiteside: Boost data transmission rates, reduces signal loss and latency, lowers power consumption and significantly minimizes the size and cost of MCM.
Whiteside: In working closely with 4C, we are making significant strides through a solid partnership with billionaires and accountable companies and foundations.
with small-scale production of the first-generation CTL solution already underway.
Whiteside: combined with the anticipated sample volume increases in the coming quarters is a strong indication that CTL technology is being accelerated towards mass production.
In addition, in close collaboration with E&A customers slash partners.
Whiteside: We are speeding up the development of CPU technology for the next few generations.
Whiteside: We are more optimistic than ever about the outlook for our aerial business.
Whiteside: which is poised to generate significant growth opportunities and become a major revenue and profit contributor in the years ahead.
Whiteside: Alongside the CPO progress, we are witnessing a rise in engineering collaborations.
Whiteside: with global technology leaders who are utilizing our W.O. expertise to make advanced waveguides for aircrafts highlighting the growing recognition of our W.O. capabilities.
Whiteside: setting a new benchmark for brightness with extremely low power consumption of nearly 300 MW.
Whiteside: At CES 2025, we showcased the AR Glasses PLC for Proof of Concept.
featuring the Michael Display with the Sir Polly Worth Guts.
achieving over 1,000 nits of brightness to the eye.
Whiteside: This demonstration highlighted its suitability for outdoor high ambient light conditions.
with a light weight of just 0.98 grams
and the ultra-compact form factor of less than 0.5 cc
Whiteside: Following the recent release of our 400k-inch ultra-luminous front-of-the-air cosmical display, we are actively engaged in significant projects through strategic collaborations with industry leaders.
Whiteside: I met this proletariat group of over a decade in the Occult Technology.
Whiteside: coupled with a history of successful production achievements highlights our readiness to meet the demands of large-scale production of airglasses. That concludes my report for this quarter. Thank you for your interest in Timex. We appreciate your joining today's call.
and are now ready to take questions.
Speaker Change: Yes, thank you. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad and you will enter the queue.
After you are announced, please ask your question.
Speaker Change: If you find that your question has been answered before it is your turn to speak, please press star 2 to cancel the question.
Speaker Change: In addition to submitting questions through your phone, you can also submit questions through the webcast, where the chat box is available on the right-hand side of the screen. Thank you.
Speaker Change: Now, please press star key and number one on your keypad to ask a question.
Speaker Change: And you may also submit your questions through the webcast system. Thank you.
Speaker Change: Now we'll have our first question, Donny Tan, Nomura. Go ahead please.
Donny Tan: Thank you Jordan and Eric for taking my question. My first question is regarding to CPO, you know, because
Speaker Change: Maybe in the past few months some investors were asking about whether
Speaker Change: the CPO, our CPO is firstly adopted by scale up or scale up
Speaker Change: so wondering if you could kindly elaborate more there and also you mentioned about there has been already some small-scale production
Speaker Change: and could you give us some updates on when should we see more sensible mass production scale?
in the coming years.
Speaker Change: and also could you update a little bit on the competition landscape there is like how how well our position right now compare with multiple peers this is my first question thank you
Thank you, Tony.
Speaker Change: I'll try to, it's not an easy question, I'll try to...
You know, I've traded the...
I shall perhaps draw a slightly
Speaker Change: different angle but I think you know I mean understandably you guys are
Speaker Change: The one issue you guys are really interested in now is that, you know, effectively how much contribution this will be for Himex in the future.
Speaker Change: in the foreseeable future, even in the long term? I assume that is basically the essence of your question.
Speaker Change: As I just mentioned, this year, 2025, will be a year for engineering validation with only sample shipments for us.
Speaker Change: So while the sample shipment will accelerate quarter by quarter, the revenue contribution will be rather limited if you compare that with the total revenues.
Speaker Change: The fourth quarter, which presumably will be the peak of this year, the revenue is said to be in millions of dollars.
Speaker Change: based on current forecast. But again, it's still quite small compared to our total size and things can still change as it is still early.
Speaker Change: But we don't know how, and certainly we won't comment on exactly when.
Speaker Change: It's probably still more than a year from now, there are still many unknowns, like how many customers, how many projects, or their revenue curve, etc. And therefore,
Speaker Change: While 2026 is likely to be the first year of mass production, it is still early and it is still...
Speaker Change: to give a very good indication for the year at this point.
Now, if we look further ahead, then...
Speaker Change: like ignore the exact timing and wrapping curve etc for the type B right and let's just try to kind of paint a picture for an, I will call it annualized potential revenue for Himex, annualized potential revenue for Himex
uh
Speaker Change: And the reason why I say polychlorine is a stage of mass production is because I believe the...
Speaker Change: The ultimate demand for CPO is probably above and beyond anything we can imagine at this point.
So, by quote-unquote early stage, I'm thinking...
Speaker Change: probably the first couple of years when the industry is perhaps still testing the water which may be only premium models equipped with CPL
Bye. Bye. Bye.
Speaker Change: In making the assessment, we have considered meeting AI customers' total advanced GPU shipment outlook.
Speaker Change: for which you guys have provided a lot, right? And the leading funder is Total Coal Waste Capacity Plan, which is very much a public information.
Speaker Change: And we have assumed a very low percentage of CPU attach rate for both.
Speaker Change: Right, so when I say early stage, you know, early stage of mass production is what I mean, right? The attention rate for both is still very, very low percentage wise.
Speaker Change: So, with such conservative assumptions, I can say that our annualized CPO revenue could still reach hundreds of millions of dollars.
Oh
Speaker Change: So, to me, this is not really a question of whether or even when it will happen, because it will definitely happen in our view, but rather how fast the CPU technology will penetrate.
Speaker Change: So, while we believe with all its obvious benefits like raising transmission bandwidth and lowering power consumption at relatively, you know, very low cost.
Oh
Speaker Change: The CTO technology has the potential of ramping quickly, we believe, because of all its benefits, right? It has the potential of ramping quickly. However, at the end of the day, that is still a decision to be made by all end customers.
Speaker Change: So all we can do is to get ourselves well prepared to meet any customer demand or rapid time and that's exactly what we will do.
I don't know if that answers your question.
Yeah, thank you Jordan for sharing this valuable information.
Speaker Change: Yes, but just maybe I'm wondering maybe if we talk about maybe 2026, do you think that CPU is mainly used for the unracked switches or it can be directly used for the connection between GPUs and GPUs?
Speaker Change: Again, we are so upstream, you know, we are probably not the best person to answer such questions. However, as far as we are told, it will be firstly adopted in switches.
Speaker Change: and that is going to account for the bulk of the volume in early stage, that's what we are told, although again you are probably
I'll ask you the right person.
Speaker Change: Because at the end of the day, what we provide is those critical components and how our customers are going to use it for whatever application. It's really their call and they don't necessarily need to share such information with us.
Speaker Change: However, we also know, as I mentioned in my previous remarks, in addition to classification, we believe eventually this world also has great potential for things like automotives and robots.
ahhh
Speaker Change: You know, CPU technology is low-cost compared to most applications. But if you're talking about, like, a notebook or a smartphone, it is still...
because of the
Speaker Change: Those are also good areas to use CPO. However, I want to emphasize in our assessment, we are only counting cloud applications. We are only assuming a very low attach rate for the cloud applications only.
Speaker Change: and that can easily result in hundreds of millions of annual sales for us.
Thank you, Tom.
My second question is related to...
Speaker Change: The core driver IC business, so for automotive driver IC, the new steps will be sequentially declining into the first quarter as you just guided. I'm wondering if it is just like the previous quarters that customers have some, you know, normal
in the LSE.
Speaker Change: Right, so basically two questions. The first question is about Q1 outlook, the sales. I think the sequential decline really just reflects the seasonal
Thank you.
Speaker Change: Not necessarily a bad first quarter for us. I mean, again, in our preparatory part, we...
Speaker Change: We mentioned that we noticed, you know, some of our peers
I've kissed for a variety of reasons.
Speaker Change: located in September 2010, Founder of Goldman Sachs Goldman Sachs International valued asset portfolio.
for their pull-in orders for Q1. So I think...
Speaker Change: The sequential decline is just a fair reflection of the Chinese New Year localities.
And also I said...
Speaker Change: Quite specifically, our preparatory maps, we believe, across the automotive display, I see ecosystem, the inventory level is quite big, quite healthy. So that is definitely good news for us as we, you know,
Look forward to the whole year's outlook.
And he also mentioned cross-marches.
Speaker Change: and specifically, we are seeing DTIC remains quite strong, although TDPI, we are seeing some decline. Again, I mean...
It's just one single-coded phenomenon. I'm not sure I should...
Speaker Change: Speculate on the reasons or comment on, you know, why the...
Speaker Change: The change of direction, you know, in both polar areas, just one single border, three lamina.
Thank you.
Thank you.
Speaker Change: If you would like to ask a question, please press star key and number 1 on your keypad. Or you may submit your questions through the webcast system. Thank you.
There are a few questions from online Q&A box
Speaker Change: They are all related to automotive, so if I may, I will quickly repeat their questions.
Speaker Change: Question 1, automotive revenue mix between Chinese and non-Chinese cars. No obvious difference there. I mean, given our market share.
We, we have to do.
Speaker Change: Although Chinese customers tend to be more aggressive in terms of
bringing our new technology to mass production.
Which is uh, which is uh
Speaker Change: a clear trend we are observing. Other than that, in terms of market share, we don't see a significant difference between Chinese and non-Chinese.
Speaker Change: Top three of the world's customers and their respective revenue percentage contributions. Our direct customers, our paying customers, our panel makers.
Speaker Change: We also get some businesses from, to a much lesser extent, from tier 1s. And we don't really get revenues from OEMs and customers.
Speaker Change: Right, so, in this regard, if you ask me the top three automotive customers, they are obvious customers, which are LCD makers, which are the biggest companies.
Speaker Change: is probably not too difficult to catch. They are major panel makers with the biggest capacity.
Oh
Percentage of the remaining 70% of authorities via design wins.
Speaker Change: Lofa has not yet entered FPE. Is that expected to FPE in 2025? Not necessarily.
Typically we are, we have a
doing the task.
and when TA1s get their inquiries for
Speaker Change: from OEMs, you know, and they make a decision which panel to use and which IC to use.
and they...
Speaker Change: that goes through the evaluation stage, and they finalize it, and they make the final call.
and that's way
the official design process.
Speaker Change: gets kicked off and that's how we define design-win, right? So when we are getting inquiries and we don't call that or even approval concept, you know, we call it design-win but they are not defined as our number of projects design-win. So project, number of projects design-win is actually quite strict.
and so from design win
meaning Project Kick-Off to mass production.
Speaker Change: It varies quite a lot, depending on how, whether it's a very mature technology or it's a very new technology. Although it depends on the type of customers. And I would say, indeed, Chinese customers tend to be quicker.
with shorter design cycles compared to others.
Speaker Change: So the time can vary from as far as, very exceptional, but we've seen as far as nine months to two and a half years or sometimes even longer.
Speaker Change: right so this pipeline and then so you mentioned they probably spread across
Speaker Change: almost even across this period between one year to two plus years.
Speaker Change: So 2025 will only be a portion of it. Some will still wait until later.
Speaker Change: Question, are you working with one or multiple CPU customers to utilize your WL solution?
BAH!
Speaker Change: I mean, we have made an announcement with 4C, so 4C is our clear customer-slash-partner.
While we've been approached by others, I...
Speaker Change: I think this is a bit sensitive question to answer. I think, certainly, I would just say that Forsyth is our very strong, solid and close partner. And there are requests and demands.
Speaker Change: R&D or ramping or otherwise you know is of the highest utmost priority to us
Speaker Change: for the time being, for any foreseeable future, in fact. So I think I'll just say that without...
direct answer to your question.
Speaker Change: And I think the two of us together, we should be able to, you know, take up...
Speaker Change: You know, I mean we are to be honest we are seeing little competition, so the
The issue for us is to work together and...
Speaker Change: and resolve all issues for customers in terms of mass production.
Speaker Change: and making sure we have a smooth delivery and quality and what not, right? Rather than thinking about diversity for our customer or supplier base, that is definitely not a priority for us.
for the foreseeable future.
Speaker Change: Okay, thank you. Then there are no questions at the moment. Thank you.
Speaker Change: Thank you. As a final note, Eric Li, our chief IRP officer, will maintain VISTA marketing activities and continue to attend VISTA conferences. We will announce the details as they come about. Thank you and have a nice day.
Speaker Change: Thank you, Jordan. And ladies and gentlemen, this concludes fourth quarter and full year 2024 earnings conference call. You may now disconnect. We thank you and goodbye.