Key Takeaways
Himax Technologies, Inc. (Nasdaq: HIMX) projected a strong sequential revenue increase of 10% to 13% for the second quarter of 2026, signaling a rebound in its core automotive business and continued expansion into high-growth areas like artificial intelligence and augmented reality. The company’s gross margin is also expected to improve to around 32%.
“We expect upward momentum through the remainder of 2026, supported by a meaningful number of new automotive projects scheduled to enter mass production in the second half,” said Jordan Wu, President and Chief Executive Officer of Himax. “Himax continues to expand beyond its traditional display IC business, focusing on key growth areas including smart glasses, ultralow power AI and CPO.”
For the first quarter ended March 31, Himax reported net revenues of $199.0 million and a gross margin of 30.4%, both at the high end of its guidance. Profit per diluted ADS was 4.6 cents, exceeding the guidance range of 2.0 to 4.0 cents. The second-quarter guidance anticipates profit per diluted ADS to be between 8.6 cents and 10.3 cents.
The positive outlook suggests Himax’s strategic diversification into non-driver ICs is beginning to pay off, positioning the company to capture higher-margin opportunities in the AI and automotive sectors. This pivot is critical as the company navigates cost pressures from the broader AI-driven memory chip shortage while leveraging its significant investment in Co-Packaged Optics (CPO) partner FOCI, which is crucial for next-generation AI data centers.
After a seasonal decline in the first quarter, Himax’s automotive driver IC sales are set for a double-digit quarter-over-quarter increase in Q2. The growth is driven by broad-based inventory replenishment and the ramp-up of new TDDI and DDIC projects. Himax continues to dominate the automotive display market, holding a 40% share in DDIC and over half in TDDI. The company is also seeing strong momentum in its local dimming Tcon solutions, with hundreds of secured design-wins.
Himax is making significant inroads into emerging markets with its WiseEye ultralow power AI sensing and LCoS microdisplays. The company announced a design win with a leading brand for its WiseEye solution in smart glasses, with mass production expected later this year. Its new Front-lit LCoS microdisplay technology, which enhances image quality for AR glasses, is also gaining traction with multiple waveguide partners.
In the AI data center space, Himax’s strategic partnership with FOCI on CPO technology is progressing. The Gen 1 solution is ready for small quantity shipments in the second half of 2026, while the Gen 2 solution, targeting high-volume AI applications, is nearing customer validation. Himax’s equity stake in FOCI has grown to $156 million, underscoring its long-term commitment to this high-potential market, with meaningful revenue contributions expected to start in 2027.
This article is for informational purposes only and does not constitute investment advice.
