Tiffany Yip

Tiffany Yip asked about Himax's first-quarter gross margin guidance, inquiring whether the flat to slight decline was due to product mix or increasing material and foundry costs, and also sought details on Co-Packaged Optics (CPO) revenue expectations for 2026 and 2027.

Answer

President and CEO Jordan Wu clarified that the Q1 gross margin guidance reflects a product mix shift with slightly less automotive shipments. He acknowledged ongoing discussions with foundry vendors regarding rising prices and with customers about potential price increases, noting these factors are more likely to impact Q2 and beyond. Regarding CPO, Mr. Wu stated that 2026 revenue would be limited to sample shipments as the focus is on validating Gen 1 and Gen 2 products. He projected meaningful top and bottom-line contributions from the Gen 2 product (targeting >6.4T bandwidth for AI data centers) starting in 2027, potentially even before official mass production, with early-stage mass production potentially generating hundreds of millions in annual sales for Himax.

Tiffany Yip inquired about the factors influencing Himax Technologies' first-quarter gross margin guidance, specifically asking if product mix, increasing material costs, or foundry costs were contributing to the flat to slightly down outlook. She also asked for more detailed guidance on Himax's Co-Packaged Optics (CPO) revenue expectations for 2026 and 2027, noting investor excitement about the company's progress in this area.

Answer

Jordan Wu, President and CEO, clarified that the Q1 gross margin guidance was primarily due to product mix changes, with slightly less automotive shipments. He acknowledged increasing material costs and foundry capacity tightening, stating these discussions are ongoing but would likely impact Q2 and beyond. Regarding CPO, Mr. Wu explained that 2026's main goal is product validation, limiting revenue to sample shipments. For 2027, he highlighted the finalization of the Gen 2 product (targeting >6.4 T bandwidth for AI data centers) in collaboration with FOCI, projecting meaningful top and bottom-line contributions from pre-MP shipments, with early mass production potentially generating hundreds of millions in annual sales.