Meanwhile, an emerging market trend shows more customers are opting for Himax’s TDDI or LTDI, coupled with Himax’s local dimming Tcon, as their standard development platforms for new automotive displays across various sizes and applications. This growing platform adoption of more of Himax’s automotive IC offerings not only reflects strong customer loyalty to Himax’s technologies and services but also signifies the increase in content value for Himax on a per-panel basis. Himax is widely recognized as the leader in the automotive display IC market, offering the industry's broadest range of products with leading market share in each of the product areas. The diverse range of offerings allows Himax to address different customer needs and adapt to changing market trends, thereby strengthening Himax’s market presence and boosting potential revenue. Himax’s newly introduced TED (Tcon Embedded Driver IC) solution, which combines TDDI with local dimming Tcon into a single chip, exemplifies its commitment to providing customers with more competitive, flexible and broader options. This solution is ideal for smaller panels that typically require only 1 to 2 ICs for cost consideration, while still offering advanced touch and local dimming features. Production is set to begin in early 2025 with several projects and engagements currently underway with major customers. Meanwhile, Himax is actively collaborating with automotive Tier 1 partners to develop more advanced, innovative and/or cost optimized solutions tailored to various market needs. This not only underscores Himax’s customers' confidence in its technology leadership but also reflects their commitment to engaging with Himax in future roadmap collaborations.
On smartphone IC sales, Himax anticipates Q4 to slightly decline sequentially with ongoing shipment to key customers. Q4 tablet IC sales are projected to decline low teens sequentially, as end customers are extending their replacement cycles due to challenging economic conditions.
On OLED business. In the automotive OLED market, Himax has formed strategic partnerships with leading panel manufacturers in Korea, China, and Japan. As OLED technology gains traction beyond premium car models, Himax is well-positioned as the preferred partner, thanks to Himax’s strong presence and proven track records in the LCD automotive display sector. Leveraging Himax’s first-mover advantage, Himax looks to capitalize on the growing adoption of OLED in automotive displays by offering a comprehensive range of OLED solutions, including DDIC, Tcon, and on-cell touch controller. Himax believes this positions the Company as the primary beneficiary of the growing adoption of OLED display in automotive. For instance, Himax’s advanced OLED on-cell touch controllers are setting new industry standards with an impressive touch signal-to-noise ratio of over 45 dB, ensuring reliable performance under challenging conditions such as glove-wearing or wet-finger operations. Himax’s OLED on-cell touch controller for automotive applications entered production last quarter and adoption is expanding across the board. With additional projects starting mass production next year, Himax expects this segment’s contribution to its revenues to increase starting in 2025.
Beyond the automotive sector, Himax has made notable advances in the tablet and notebook sectors with top OLED panel manufacturers in Korea and China. Himax’s comprehensive OLED product offerings, encompassing DDIC, Tcon, and touch controllers, have led to several new projects that are on track to enter mass production during Q4 and as the Company moves into 2025. Regarding smartphone OLED, Himax expects mass production to commence next year. Currently, Himax is making good progress in collaborations with customers in Korea and China on several verification and partnership projects. Additionally, Himax is building strong, long-term partnerships with leading OLED players to enhance Himax’s market position.
Non-Driver Product Categories
Q4 non-driver IC revenues are expected to increase mid-teens sequentially.
Timing Controller (Tcon)
Himax anticipates Q4 Tcon sales to increase mid-teens sequentially, driven by automotive and a one-time ASIC Tcon product shipment to a leading projector customer. Automotive Tcon business is expected to achieve high-teens growth sequentially, driven by the shipment of secured design wins. For the full year, Himax’s automotive Tcon business is projected to grow over 80% compared to last year, contributing to nearly 4% of Himax’s total sales. Moving forward, Himax is confident in the strong growth trajectory in the automotive Tcon business, backed by Himax’s dominant local dimming Tcon market position with over one hundred design-win projects, of which only a small portion are currently in mass production and new design-ins continuing to expand. Many panel houses, Tier 1s, and OEMs worldwide have now expanded the adoption of Himax’s leading-edge local dimming Tcon solutions from premium to mainstream car models. Himax is well positioned for decent growth in automotive Tcon over the next few years.
Despite subdued end-market demand, Himax is actively developing next-generation OLED Tcon ICs for tablets, notebooks, and automotive applications. This proactive approach not only broadens and diversifies Himax’s product offerings, but also helps the Company navigate through industry shifts towards wider adoption of OLED displays across applications. Some of Himax’s newly developed Tcon ICs for OLED tablets and notebooks are already showing promising results. For automotive OLED Tcon, an area rich with exciting growth potential, Himax began production in 2021 and anticipates new product launches with advanced feature enhancements in 2025.
WiseEye™ Ultralow Power AI Sensing
Himax’s WiseEye™ Ultralow Power AI Sensing is a cutting-edge endpoint AI integration featuring industry-leading ultralow power AI processor, always-on CMOS image sensor, and advanced CNN-based AI algorithm. In the fast-changing AI landscape, WiseEye AI technology stands out for its expertise in on-device tinyML microcontroller solutions, characterized by remarkably low power consumption, operating at just single-digit milliwatts, making it possible to add AI functionalities to battery-powered endpoint devices. Himax’s WiseEye technology is unlocking new opportunities across various applications, particularly in endpoint devices for everyday life. A prime example is the smart door lock. Stemming from Himax’s collaboration with DESMAN, a leading vendor in China's high-end smart door lock market, Himax is expanding use cases with other world-leading door lock makers across continents by integrating innovative AI features such as parcel recognition, smart anti-pinch protection, and palm vein biometric access. This approach targets diverse home security markets that value WiseEye’s ultralow power consumption and on-device AI capabilities, which are crucial for battery-powered endpoint AI devices.
On WiseEye module business update. Himax continues to offer a diverse range of plug-and-play modules, collaborating with ecosystem partners and third-party system integrators to develop pretrained no-code and low-code AI solutions with the goal of lowering barriers and timelines for developers entering the AI space. Progress is being made across various domains, including smart parking, access control, palm vein authentication, smart offices, smart homes, and more.
Among these, Himax PalmVein solution, which is part of Himax’s WiseEye AI module business, has garnered significant attention and positive feedback from customers since its launch early this year. It has already been adopted by a U.S. customer for smart access control systems and is on track to begin mass production by the end of the year. Extensive engineering activities of WiseEye PalmVein are ongoing with world-leading players across various industries, including smart door locks, access control, notebooks, and automotive, among others. The WiseEye PalmVein solution integrates the Himax WiseEye2 AI processor, an AoS CMOS sensor, and a proven palm vein authentication algorithm. It features an ultralow power, compact module capable of authenticating an individual’s identity in under 100 milliseconds while consuming only a few milliwatts of power, ideal for battery-charged, on-device AI endpoint applications. Palm vein authentication utilizes unique internal vein patterns that are difficult to replicate or spoof. In addition to exceptional low power consumption, WiseEye PalmVein provides robust security and reliability with industry-leading low rates of false acceptance and rejection, making it nearly impossible to bypass or misidentify. Equally important, WiseEye PalmVein processes identification locally, eliminating privacy risk associated with cloud access required for solutions that perform authentication remotely. Himax anticipates increasing sales contribution from WiseEye PalmVein across a diverse array of applications starting next year and are excited about the strong customer interest and opportunity for rapid growth in WiseEye module business.
Wafer Level Optics (WLO)
In June of this year, Himax joined forces with FOCI, a global leader in silicon photonics connectors, to announce the launch of an industry-leading optical communication solution designed for the most advanced multi-chip modules. Himax and FOCI are currently progressing through the small-scale production phase of first-generation solution designed for the LPO architecture. In addition, Himax, in collaboration with FOCI, along with leading global AI IC design companies and foundry partner, has commenced development for next-generation technologies, with the objective of incorporating these advancements into more sophisticated CPO architectures.
Leveraging Himax’s years of WLO engineering expertise, Himax has meticulously designed and developed nano-scale precision optical systems for LPO/CPO. In the LPO/CPO optical solution, Himax’s precision-engineered optical design and manufacturing technologies ensure that the optical signals in each fiber couple precisely with the silicon photonic integrated circuit (PIC) in the LPO/CPO optical components. This achieves high precision, low loss, and high-speed transmission to meet the demands of silicon photonic transmission in high-speed computing.
