How Himax addresses competition in the FAU/WLO market and its key advantages.

Jordan Wu highlighted Himax's unique wafer-level optics (WLO) approach compared to competitors' traditional molding glass technology, believing it offers advantages. He emphasized focusing on successful validation and mass production ramp-up rather than competition, as the market is large enough for multiple players. “we are probably the only one providing optics using wafer-level optics or wafer-based solution, where the so-called competition actually use traditional molding glass type of technology. So I think that's a key difference.”

What are the biggest bottlenecks for CPO mass production and how long it would take to resolve them.

Jordan Wu stated that the CPO ecosystem is complicated and he cannot comment on overall bottlenecks. Himax's focus is to ensure they are not the bottleneck themselves, both technologically and in terms of capacity. He noted that engineering runs by the end of the year will validate not only Himax's solution but also the entire ecosystem, including major GPU/CPU makers and OSAT houses. “the ecosystem admittedly is actually quite complicated. And our focus for now is to, again, make sure we are not going to be the bottleneck, right? So we don't want to be the bottleneck ourselves technology-wise, that's step one.”

How smart glasses revenue (WiseEye) is expected to trend in 2027 and if mass production is expected.

Jordan Wu clarified that WiseEye will be a mass production story for smart glasses in 2027, while LCoS microdisplays are still in the design-win phase. He mentioned a major customer recently launched a WiseEye-powered product, and there's strong design momentum with hyperscalers for new projects, some expected to enter mass production in coming quarters. However, it's too early to quantify the revenue impact. “WiseEye, however, will very much a story for next year for smart glasses. We mentioned there's a major customer which just launched its product a while back with our WiseEye serving the function of always on visual understanding of the surroundings.”

HIMX

Himax Technologies (HIMX) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Information Technology· Aug 6, 2026

Source: earnings call transcript

Executive summary

Himax Technologies Q2 FY26 — Strong Automotive IC Sales Drive Revenue and Margin Beat

Himax delivered a strong Q2 FY26, surpassing guidance on revenue, gross margin, and profit, primarily fueled by robust automotive IC sales and a favorable product mix. The company is navigating industry-wide supply chain constraints and rising costs by leveraging its global supply chain and implementing pricing adjustments. Strategic investments in smart glasses and CPO are progressing, with CPO poised for meaningful financial contributions starting in 2027.

Highlights

Q2 revenues of $227.4 million exceeded guidance, increasing 14.2% sequentially and 5.9% YoY, primarily driven by better-than-expected automotive IC sales.
Gross margin reached 33.1%, surpassing guidance of around 32%, due to a favorable product mix with higher-margin automotive ICs.
Profit per diluted ADS was $0.114, significantly exceeding guidance of $0.086 to $0.103, up from $0.046 sequentially.
Automotive business remained the largest revenue contributor, representing well over 50% of total revenues, with double-digit sequential growth in Q2.
Strong design-in momentum for WiseEye technology in smart glasses, with a leading global brand launching a product powered by WiseEye.

Concerns

Rapid rise in AI demand is creating capacity constraints, higher manufacturing/procurement costs, and extended lead times on mature process nodes for non-AI applications.
Large display driver revenue declined 21.0% sequentially to $19.2 million due to panel makers pulling forward inventory in prior quarters.
Q3 tablet IC sales are expected to decrease sequentially as capacity constraints limit additional shipments.

Guidance & targets

Category	Target	Timeline	Confidence
Revenue growth	increase 7% to 11% sequentially high materiality	Q3 · FY26	High
Gross margin	around 34% high materiality	Q3 · FY26	High
Profit per diluted ADS	$0.08 to $0.10 high materiality	Q3 · FY26	High
Full-year 2026 automotive driver IC sales growth	grow by double digits from last year medium materiality	FY26	High
CPO volume shipment	significantly higher than in 2026 high materiality	2027	Medium
Overall business outlook (excluding CPO)	robust sales growth for next year with continuously improved gross margin high materiality	2027	High
Non-driver areas revenue contribution	approaching 30% from around 20% at present medium materiality	2027	High
Automotive Tcon growth	another year of very strong growth medium materiality	2027	High
WiseEye product line growth	well positioned to contribute to growth momentum medium materiality	2027	High
Mainstream automotive business growth	continue to grow as well on top of a year of double-digit growth this year medium materiality	2027	High
Large display driver IC sales	decline by single digit from last quarter medium materiality	Q3 · FY26	High
Monitor IC sales	decline quarter-over-quarter low materiality	Q3 · FY26	High
TV IC sales	poised for sequential increases low materiality	Q3 · FY26	High
Small- and medium-sized display IC business sales	increase by high single digits from last quarter medium materiality	Q3 · FY26	High
Automotive driver IC sales (TDDI and traditional DDIC)	increase by a solid double-digit quarter-over-quarter medium materiality	Q3 · FY26	High
Smartphone IC sales	increase quarter-over-quarter low materiality	Q3 · FY26	High
Tablet IC sales	decrease sequentially low materiality	Q3 · FY26	High
Non-driver IC business revenue	increase by low teens sequentially medium materiality	Q3 · FY26	High
Tcon sales	increase by double teens quarter-over-quarter medium materiality	Q3 · FY26	High
Automotive Tcon business growth	deliver decent double-digit growth in Q3 medium materiality	Q3 · FY26	High
WiseGuard mass production	scheduled to begin towards the end of this year low materiality	Q4 · FY26	High
Smart glasses projects (WiseEye-powered) mass production	expected to enter mass production in the coming quarters medium materiality	Coming quarters	Medium
OLED adoption in automotive	major ramping expected starting from probably second half next year and certainly well into 2028 medium materiality	H2 2027 and into 2028	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Large Display Driver IC Decline attributable to panel makers pulling forward their inventory purchases for high-end TV ICs in prior quarters. Monitor and notebook IC sales increased quarter-over-quarter due to higher legacy product shipments. Share of total revenues: 8.4% (Q2 FY26)Share of total revenues: 12.2% (Q1 FY26)Share of total revenues: 11.6% (Q2 FY25)	$19.2 million	—	-21.0%	—
Small- and Medium-Sized Display Driver IC Driven by broad-based customer replenishment of TDDI and DDIC following seasonally lower shipments in Q1, ramp-up of new TDDI and DDIC projects, and early pull-in demand for tablet ICs. Automotive business (DDIC, TDDI, Tcon, OLED IC) remained the largest revenue contributor, representing well over 50% of total revenues. Share of total revenues: 71.4% (Q2 FY26)Share of total revenues: 68.2% (Q1 FY26)Share of total revenues: 67.3% (Q2 FY25)Automotive driver sales (DDIC, TDDI): double-digit increase QoQTablet IC sales: increased sequentiallySmartphone IC sales: decreased sequentially	$162.3 million	—	19.6%	—
Non-driver sales Attributable to robust automotive Tcon shipment supported by replenishment across the board customer base. Expected strong growth momentum to continue into next year for automotive Tcon. Share of total revenues: 20.2% (Q2 FY26)Share of total revenues: 19.6% (Q1 FY26)Share of total revenues: 21.1% (Q2 FY25)Tcon business share of total sales: >10%Automotive Tcon share of Tcon business: >50%	$45.9 million	—	17.7%	—

Product announcements

Product	Type	Timeline
T2000 Tcon	milestone	—
WiseEye biometric power man modules	milestone	—
WiseGuard	launch	mass production scheduled to begin towards the end of this year

Deals & partnerships

one of our equity method investees Proposed divestiture of investment

Transaction is subject to customary closing conditions and regulatory approval.

FOCI Strategic partnership for Co-Packaged Optics (CPO)

Deepening customer engagement and working towards mass production readiness for CPO products.

multiple waveguide partners Collaboration to deliver integrated AR display solutions

Working with partners across Asia, Europe, and North America.

Risks & headwinds

Supply Chain Constraints near term

unprecedented strength on memory chip supply

Mitigation:Leveraging established supply chain in Taiwan and strengthening presence across China, Singapore, Korea, Japan, and Malaysia; working with customers on pricing adjustments.

Higher Costs & Extended Lead Times near term

higher manufacturing and procurement costs, extended lead times

Mitigation:Implementing pricing adjustments, some took effect in Q2, additional adjustments possible; securing sufficient capacity.

Industry-wide Supply Tightness next year

all major foundries indicating further price hikes next year

Mitigation:Continuing to manage the situation like this year; proactive inventory building.

Shorter Product Life Cycles in Automotive ongoing

product life cycles are becoming shorter

Mitigation:Driving broader adoption of platform standardization, favoring suppliers with comprehensive and validated technology portfolios and proven track records like Himax.

CPO Mass Production Uncertainty 2027

outlook will be too uncertain, to quantify

Mitigation:Focusing on getting products validated this year, ramping volume successfully with good yield, and meeting customer demands; not speculating on exact timing due to ecosystem complexity.

What to watch in Q3 FY26

CPO Mass Production & Ramping

2027

Current Gen 1 & Gen 2 engineering production ramps in Q3 FY26.

Target Official mass production kickoff and ramping curve.

Why it matters

CPO is a "once-in-a-lifetime opportunity" with potential for meaningful financial contribution, especially to the bottom line, starting 2027.

The extent of CPO's contribution to our overall financial next year will depend on when the end customer kick off mass production and obviously, the ramping curve.

Find out whether HIMX delivers this. Inve re-checks your case every morning.

Q&A highlights

How to quantify "meaningful" CPO revenue for 2027 and provide an overall business outlook for 2027.

Jordan Wu stated that Himax does not provide guidance beyond one quarter but is well-positioned for robust sales growth and continuously improved gross margin in 2027, excluding CPO. He clarified that non-driver areas (automotive Tcon, WiseEye) will likely outgrow driver ICs, approaching 30% of revenue. For CPO, he expects very significant growth in 2027 from a low base, making a meaningful contribution to financials, especially the bottom line, with volume growth quarter-over-quarter starting Q3 2026.

“for sure, CPO will see very significant growth next year, but we'll be comparing with the low base this year, right? But the growth will be very significant. The extent of CPO's contribution to our overall financial next year will depend on when the end customer kick off mass production and obviously, the ramping curve.”

asked by Donnie Teng · answered by Jordan Wu

2 min read 5 chapters

Detailed narrative

Supply Chain & Cost Environment

The rapid rise in AI demand is creating significant challenges for non-AI applications, leading to capacity constraints at mature process nodes for foundry, packaging, and testing. This has resulted in higher manufacturing and procurement costs, extended lead times, and difficulty securing sufficient capacity across many product lines.

Himax is leveraging its global supply chain and implementing pricing adjustments to mitigate these impacts, with some adjustments taking effect in Q2 and more expected.

Automotive Display IC Leadership

Himax is well-positioned in the automotive market, which is experiencing secular growth driven by more displays per vehicle (now averaging over 3), larger/higher-resolution displays, and diverse cabin configurations. The company's comprehensive portfolio, including LTDI solutions for ultra-large displays, advanced Tcon solutions for head-up displays, OLED drivers, and Knob-on-Display solutions, increases dollar content per vehicle.

The industry shift towards platform standardization further benefits Himax, with its solutions being adopted as standard platforms across multiple car brands.

Smart Glasses & AI Sensing

Himax is optimistic about smart glasses, offering both ultra-low power AI sensing (WiseEye) and microdisplay technologies (Front-lit LCoS). WiseEye enables always-on outward and inward sensing for AI use cases like contextual awareness and real-time visual assistance. A leading global brand recently launched a WiseEye-powered smart glasses product, and Himax is seeing strong design-in momentum with hyperscalers and platform providers, with some projects moving to mass production in 2027.

CPO Development & Outlook

Himax, in partnership with FOCI, is making progress in Co-Packaged Optics (CPO), with Gen 1 (1.6T and 3.2T) and Gen 2 (6.4T) products beginning engineering production ramps in Q3 FY26. While official mass production timing depends on customer deployment, significant volume shipments are expected to begin in 2027, contributing meaningfully to financials.

The company is also co-developing next-generation optical solutions with customers, targeting 12.8T bandwidth for HPC and AI data center applications.

Non-Driver IC Growth

The non-driver segment, including Tcon and WiseEye products, is expected to outgrow driver ICs, approaching 30% of total revenue in 2027. Automotive Tcon is a key driver, with hundreds of design wins and strong growth momentum, including new projects entering mass production.

WiseEye is expanding into new applications like smart glasses, biometric authentication (PalmVein), and security (WiseGuard), with mass production for some WiseGuard applications scheduled for late 2026.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.