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| Furthermore, our expansion into automotive OLED displays covering all of DDIC, Tcon, and touch controller bolsters our market share leadership by offering customers an integrated bundle solution |
| Our latest breakthrough Color Sequential Front-Lit LCoS Microdisplay offers unparalleled industry leading brightness of up to 180,000 nits, providing ultra luminance performance in vibrant RGB displays |
| Concurrently, we are diligently working on improving our cost structure through supplier diversification and strategic alliances, thereby positioning ourselves for an anticipated resurgence in demand |
| This opens a new revenue stream for us and fortifies our market leadership moving forward |
| This was underpinned by outperforming sales, particularly in TDDI products for automotive and tablet market |
| However, Q4 automotive TDDI sales still increased high-teens sequentially, bucking the industry downturn, thanks to our solid pipeline of the design win projects |
| Taken together, this not only solidifies our leadership in next-generation automotive display, but also reflects the robust market demand for advanced display technology |
| For tablet Q4 sales grew high-teens sequentially exceeding our guidance, driven by successful new product launches by our customers during the quarter |
| Fourth quarter non-driver sales also exceeded guidance with revenue of $31 million, but declined 8.2% from a quarter ago |
| The better-than-expected performance is attributable to resurgence in orders from our Tcon product line |
| With approximately 30% of awarded projects currently in mass production and a continuous influx of new pipeline and design wins across the board, our leadership position is reinforced looking ahead into 2024 and beyond |
| The rapid increase in customer adoption reflects the growing traction and trust in our solutions |
| It also features superior optical power efficiency, a compact form factor, and ultra lightweight design, which make it the best choice for the next generation of see-through AR devices |
| By leveraging these extensive product portfolios, we are well positioned to capitalize on this market shift through collaborations with key Korean and Chinese panel makers where mass production is scheduled to commence in the second half of this year for next generation premium notebook models |
| Yet our optimism in the automotive business remain steadfast as automotive TDDI sales witnessed a remarkable surge of over 50%, reflecting the resilience and potential of our largest business segment |
| Looking further out on the horizon while the realization of LCoS may span several years, the ultra-illuminance color sequential front-lit LCoS microdisplay that we unveiled at the CES marked a major technology breakthrough that we believe will pave the way for the realization of true see-through AR goggles |
| The remaining stock featured promising customer design-ins and long product lifecycles that lay the groundwork for a more stable outlook in 2024 |
| This was primarily attributable to better-than-expected order momentum in major product categories, as well as cost improvements |
| 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 |
| First, on our advancement in LCoS, a technology where Himax boasts a decade long expertise and proven track record for shipments for AR goggles with global leading names |
| We are honored to report that WiseEye2 was awarded the 2023 Best AI Product Award by EE Awards Asia, further elevating Himax's WiseEye AI prominence in industry |
| Our technological expertise and extensive manufacturing experience are evident in our growing clientele for AR/VR goggles and ongoing engineering projects |
| WiseEye2 is pioneering a new standard in endpoint AI benchmarks, earning recognition for its outstanding AI inference capability, industry leading ultra-low power efficiency, and advanced security features |
| In automotive, our primary revenue contributor, we remain as optimistic as ever, given our extensive, unparalleled product portfolio across a broad spectrum of technologies, from mainstream LCD technology to the emerging OLED technology |
| We are delighted to announce that Q4 2023 revenues and profits both surpassed the guidance, while gross margin was in line with the guidance issued on November 9, 2023 |
| After years of dedicated efforts to enhance our AI capabilities in ultralow power AI processing and image sensing for endpoint AI applications, we believe that our WiseEye AI business will emerge as a multi-year structure growth driver for Himex |
| However, Q1 notebook IC sales are poised for decent increase, bolstered by customer restocking following several quarters of muted demand |
| Furthermore, our automotive WiseEye and LCoS product lines have attracted a strong global client base, which significantly extends our reach and strengthens our presence in markets worldwide, while diversifying regional exposure and adding stability to our operations |
| The swift and ongoing expansion of TDDI adoption, as evidenced by our over 400 secure design-win projects, positions us significantly ahead of our peers |
| In summary, driven by accelerating growth in our automotive segment and expansion beyond our core driver business, we are well positioned for sustainable long-term revenue growth and profitability |
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| In terms of our smartphone and tablet product lines, we continue to see lackluster demand in the market |
| Monitors and notebook IC sales both declined double digit quarter-over-quarter caused by slowdown in order momentum as customers put forward their inventory purchases during prior quarter |
| As a reminder, in Q2, we strategically terminated high cost foundry capacity agreements, leading to a depressed Q2 gross margin of just 21.7% |
| In Q1 2024, we anticipate a sequential decline of single-digits in large display driver IC revenue, primarily attributed to weaker-than-expected sell-through during the slow season |
| In tandem, OEMs and end customers are maintaining their cautious approach with heightened procurement scrutiny, even with inventories now at more manageable levels, this shift has resulted in short-term forecast and more frequent last-minute orders, ultimately constraining our visibility, particularly in consumer electronics products |
| Our TV IC sales declined mid-teens sequentially due to ongoing strict production and inventory control measures of leading customers |
| The year-over-year decrease was primarily a result of lower sales and the gross margin, compared to the same period last year |
| Inventory management also presented unique challenges for us throughout this sluggish demand environment this year |
| Turning to the small and medium sized display driver IC business, first quarter revenue is expected to decline high teens sequentially on the backdrop of traditional low seasonality where demand for consumer electronics remains sluggish |
| We expect first-quarter revenues to decline 9% to 16% sequentially |
| Persistent subdued global demand coupled with the looming recession concerns presented significant challenges to our operations throughout 2023 |
| We expect Q1 sales for TV and monitor ICs to decline quarter-over-quarter |
| This market dynamics adversely affected both demand and procurement process of panel customers, particularly in the realm of customers in electronics |
| Conversely, smartphone driver sales declined as expected amidst a subdued festival season characterized by sluggish demand |
| The decline was predominantly driven by prevailing weak macroeconomic conditions amidst the traditional peak seasonality in the fourth quarter |
| Gross margin in 2023 was 27.9%, decreasing from 40.5% in 2022 |
| Automotive revenue is also expected to decline mid-teens sequentially following robust order replenishment in previous quarters |
| For non-driver IC business, we expect revenue to decline single-digits sequentially in the first quarter |
| Q4 automotive driver sales, combining both traditional DDIC and TDDI experienced a slight decline following robust order restocking in both during the third quarter |
| Revenues totaled $945.4 million, reflecting 21.3% decline, compared to 2022 |
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