Himax Technologies (NASDAQ: HIMX) saw its shares soar more than 30% in U.S. trading on Thursday, following the company's announcement of a second-quarter recovery outlook, a new cash dividend, and strategic advances in artificial intelligence-powered smart glasses and automotive chips. The Taiwan-based display-chip designer reported first-quarter revenue of $199.0 million, down 2% sequentially but at the top end of its guidance range. Gross margin came in at 30.4%, while net income reached $8.0 million, or 4.6 cents per diluted American depositary share, exceeding the company's forecast of 2.0 to 4.0 cents.
Strong Q2 Forecast and Dividend Boost
For the second quarter, Himax projects revenue growth of 10% to 13% over the first quarter, with gross margin near 32%. The company expects earnings per diluted ADS to land between 8.6 and 10.3 cents. The improved margin outlook reflects a shift toward higher-margin non-driver products in the sales mix. Additionally, Himax declared a cash dividend of 25.2 cents per ADS for fiscal 2025, payable on July 10, rewarding shareholders as the company navigates a cyclical recovery.
Automotive and AI Glasses Drive Investor Enthusiasm
Investor attention focused on Himax's automotive display business and its low-power WiseEye AI platform for smart glasses. The company expects second-quarter automotive driver IC revenue, including both traditional display drivers and TDDI (touch and display driver integration), to rise by double digits quarter-over-quarter. Himax is a leading supplier of automotive TDDI, according to Omdia, holding the top market share in the first half of 2023. In the smart glasses segment, Himax revealed that a top brand has selected its WiseEye AI for an upcoming smart glasses lineup, with mass production slated for later this year. WiseEye is designed for low-power vision and voice detection, extending battery life in wearable devices. The company also highlighted its LCoS microdisplay technology for augmented-reality glasses.
Data Center Optical Connectivity Progress
Himax reported progress on its co-packaged optics (CPO) initiative with partner FOCI, which aims to improve data speeds in AI servers by moving optical links closer to the chip. The first-generation product is set for limited shipments in the second half of the year, while the Gen 2 CPO for AI data centers is nearing customer validation. This positions Himax to benefit from the growing demand for AI infrastructure.
Segment Performance and Challenges
Segment results were mixed. Large display driver revenue jumped 11.7% quarter-over-quarter to $24.2 million, driven by TV chip restocking. Small and mid-size display driver revenue slipped 2.4% to $135.8 million, while non-driver sales fell 7.7% to $39.0 million. However, Himax noted strong demand for automotive Tcon chips, with hundreds of design-win projects underway. The company cautioned that surging AI demand is straining memory supply and mature chip foundry capacity, while rising gold prices are increasing costs. Additionally, there is still limited visibility on consumer electronics and auto demand in the second half of the year, and large display-driver shipments are expected to drop by a high-teens percentage in Q2 after customers accelerated TV inventory purchases earlier.
Market Context and Outlook
First-quarter revenue came in about 2.1% above analyst expectations of $195 million, according to StockStory, but sales fell 7.5% year over year. CEO Jordan Wu stated that the first quarter represented the bottom of the cycle, with customer inventory rebuilding driving the current quarter's recovery. He expects upward momentum to continue through 2026, fueled by new automotive programs, timing controllers, and WiseEye AI. Despite lingering cyclical exposure, investors are revaluing Himax shares as the company pivots toward higher-growth AI and automotive segments.