Himax Technologies (HIMX, Financial) posted results that were in line with its previously released guidance, driven mainly by a strong rebound at its Korean end customers. Himax is seeing growth opportunities for its 4K TV and non-drive products. Management is expecting strong sales in the second half of 2014. Himax is counting on some positive growth drivers, which it thinks will be a long-term growth driver for it.
Himax's strategies
Himax is now focused on proactively adding new supply partners to secure more capacity. With this strategic move Himax will be able to position itself with more diversified and stable supply chain as it enters new fiscal 2015. It is seeing some positive signs from its large panel driver IC business which is seeing robust sales. It is expecting driver IC sales to be the strongest area in this segment and with the penetration of 4K TV since 2014, Himax is confident of better contribution to the top line in the coming days by this segment.
The relationship of Himax with Lenovo for total solution of timing controllers and driver IC seems to be a wise move by the company. With this, Himax will have a competitive advantage among its peers and it will also strengthen its long term growth trends. Moreover, Himax is worried about the declining Chinese market due to government policies that substantially reduced subsidy from cell phone operator. However, the company is pleased to see some positive signs from the Chinese market and it is expecting it to regain momentum in 2015.
Headwinds and beyond
There are some other points which might be challenging for the company in future. The declining tablet demand due to slowing Chinese exports is putting pressure on company’s margins and it is expecting this to be soft in the coming days as well. Further, Himax is also flat demands for driver ICs used in automotive displays.
However, besides this Himax is counting on the non-driver business segment and it thinks it to be potential long term growth prospect for Himax in future. This will also help the company to hold a competitive position over its peers in the market. The analysts are forecasting a solid 35% growth in the non-driver products. This is momentum will continue in 2015 as well giving Himax bright opportunities for a better financial performance.
Moving on, Himax’s 8 megapixel CMOS image sensor continues to be a key growth driver for it even in 2015. As this 8 megapixel has become a mainstream for high end smartphones, Himax is ramping up its sales to satisfy the growing demands. This will contribute well to Himax in the days to come. With this robust momentum, Himax is expecting the CMOS image sensor business to grow more than double in 2014 which will lead Himax to hold a leading position in the space.
Conclusion
Himax is working on adding value to its product portfolio. It is working closely with many customers in its in-cell touch panel development. With these potential efforts, Himax is expecting the market to see major launches of this new technology in the coming quarters. In addition, the company is also seeing good growth in demands for LCOS and WLO products. To meet these growing demands, Himax is working on new plans to expand its production capacity. It is also ramping up its R&D investment with a view to unveil new business opportunities.
