HIMAX TECHNOLOGIES, INC. Dear Shareholders,
In 2023, Himax faced a host of challenges, primarily stemming from lingering subdued global demand coupled with cautious procurement practices among end brands and stringent controls by panel makers resulting in a revenue decline and gross margin contraction. In the face of this adversity, we made difficult but necessary strategic decisions to position the company for future success. One such key decision was to terminate certain high-cost foundry capacity agreements in second quarter of 2023. By sacrificing short- term gross margin through a one-time significant expense, we enhanced our cost competitiveness, added flexibility through supplier diversification and liberated new wafer starts from minimum fulfillment constraints, positioning us to capitalize on a potential turnaround in demand. Additionally, we implemented aggressive inventory destocking measures, which yielded encouraging results, successfully reducing inventory to near-historical average levels by the end of the year. The remaining stocks are comprised of IC products with a solid customer design-in base and long expected lifetimes.
Turning to some of our key 2023 highlights.
First, in the automotive sector, our primary revenue contributor, we continue to dominate the market with the most comprehensive product lineup for display semiconductor technologies, ranging from traditional DDIC and TDDI, to cutting-edge LTDI and local dimming Tcon for LCD panel, and extending into AMOLED display solutions. We are particularly optimistic about the growth trajectory in this market driven by the increasing trend toward sophisticated displays in vehicles, encompassing greater quantities, sizes and functionalities. Our 2023 automotive TDDI sales surged by over 50% year over year, showcasing the resilience of this market segment where we command a dominant position. Looking ahead, we expect strong growth in our automotive TDDI and local dimming Tcon, backed by hundreds of secured design- wins slated for mass production within the next two years. This will reinforce our leading market position amidst growing competition. Our automotive business is set to contribute to over 40% of our total sales in 2024, further bolstering our revenues and gross margin.
Next in the AI domain, Himax remains steadfast in its commitment to advancing our WiseEye product line in the realm of end-point applications, where we have achieved industry-leading ultralow power consumption and AI inference performance. Our award winning WiseEye2 AI processor, progressively advancing its market-leading predecessor WiseEye1, is pioneering a new standard in endpoint AI benchmarks, earning recognition for its outstanding AI inference capability, industry-leading ultralow power and advanced security features. WiseEye2 offers enhanced content-aware AI features such as face mesh, facial landmark, hand gesture, and human pose and skeleton, expanding the intuitive, user-friendly scope of interactive applications in real-life, all achieved with minimal power consumption. Additionally, we continue to expand our plug-and-play WiseEye Module offering and collaborate with ecosystem partners to broaden WiseEye's market reach. The modules unveil a spectrum of easy-to-adopt AI solutions that incorporate advanced no-code/low-code AI models to meet diverse needs and facilitate seamless system integration. This lowers the entry barrier and cost for customers' AI development, enabling them to promptly seize opportunities in the burgeoning field of end point AI.
Lastly on AMOLED, another key exciting area for us, where we are actively cultivating strategic partnerships with leading panel manufacturers in Korea and China across various applications, including automotive, tablets, notebooks, and smartphones. Himax's AMOLED portfolio, which comprises DDIC and Tcon, now extends to on-cell touch controllers, enabling a comprehensive solution offering. Notably,
1
in notebook segment, we unveiled industry-leadingon-cell AMOLED touch controllers, aiming to further bolster our presence as customers increasingly adopt touch features and AMOLED displays for product upgrade and differentiation. In the automotive segment, our newly launched AMOLED touch controller IC boasts an industry-leading touch signal-to-noise ratio, delivering superior performance even in challenging conditions such as glove-wearing and wet finger operations, all without compromising display quality. We expect to expand our presence in the OLED field with projects slated for mass production starting in the second half of 2024.
Looking ahead, we are well-positioned to sustain secular growth trends leveraging the strength of key strategic pillars in place including our automotive leadership, enhanced operational flexibility, and a commitment to high-value areas such as Tcon, OLED and AI, alongside optical solutions for metaverse/AR/VR applications. Importantly, these product lines enjoy higher gross margins than our corporate average with some already securing a leading position in their respective markets. Our vision, as we demonstrated at CES 2024, is to remain at the forefront of innovation by expanding beyond our core driver business and investing in cutting-edge technologies. With a growing global client base, including automotive, WiseEye, and optics product lines, such as LCoS and WLO, we have strengthened our presence in markets worldwide while diversifying regional exposure and adding stability to our operations. This positions us well for long-term revenue growth and profitability, ultimately leading to sustainable cash flow generation for our shareholders.
Thank you for your interest and support for Himax. We are grateful for our shareholders, customers, partners, and employees, and look forward with confidence to having a great year in 2024.
Sincerely,
Jordan Wu
President and CEO
Himax Technologies, Inc.
2
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report ________________
For the transition period from ________________ to ________________
Commission file number: 000-51847
HIMAX TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant's name into English)
CAYMAN ISLANDS
(Jurisdiction of incorporation or organization)
NO. 26, ZILIAN ROAD
XINSHI DISTRICT, TAINAN CITY 744092
TAIWAN, REPUBLIC OF CHINA
(Address of principal executive offices)
Jessica Pan
Chief Financial Officer
Telephone: +886-6-505-0880
E-mail: jessica_pan@himax.com.tw
Facsimile: +886-6-507-0038
No. 15, Zilian Road
Xinshi District, Tainan City 744092
Taiwan, Republic of China
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol | Name of each exchange on which |
registered | ||
Ordinary Shares, par value $0.3 per | HIMX | The NASDAQ Global Select |
ordinary share | Market Inc.* | |
3 |
- Not for trading, but only in connection with the listing on the NASDAQ Global Select Market, Inc. of American Depositary Shares representing such Ordinary Shares.
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report. 349,448,102 Ordinary Shares.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934. | Yes | No |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. | Yes | No |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files). | Yes | No |
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer," "accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Accelerated filer
Non-accelerated filer
Emerging growth company
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.
- The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to § 240.10D-1(b).
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP
International Financial Reporting Standards as issued | Other |
by the International Accounting Standards Board |
If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow. | Item 17 | Item 18 |
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
4
TABLE OF CONTENTS | |||
Page | |||
PART I | 10 | ||
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS | 10 | ||
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE | 10 | ||
ITEM 3. KEY INFORMATION | 10 | ||
3.A. [Reserved] | 10 | ||
3.B. Capitalization and Indebtedness | 10 | ||
3.C. Reason for the Offer and Use of Proceeds | 10 | ||
3.D. Risk Factors | 10 | ||
ITEM 4. INFORMATION ON THE COMPANY | 24 | ||
4.A. History and Development of the Company | 24 | ||
4.B. Business Overview | 25 | ||
4.C. Organizational Structure | 54 | ||
4.D. Property, Plants and Equipment | 56 | ||
ITEM 4A. UNRESOLVED STAFF COMMENTS | 56 | ||
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS | 56 | ||
5.A. Operating Results | 56 | ||
5.B. Liquidity and Capital Resources | 68 | ||
5.C. Research and Development | 69 | ||
5.D. Trend Information | 70 | ||
5.E. Critical Accounting Estimates | 73 | ||
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES | 73 | ||
6.A. Directors and Senior Management | 73 | ||
6.B. Compensation | 75 | ||
6.C. Board Practices | 76 | ||
6.D. Employees | 78 | ||
6.E. Share Ownership | 81 | ||
6.F. Disclosure of a registrant's action to recover erroneously awarded compensation | 81 | ||
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS | 81 | ||
7.A. Major Shareholders | 81 | ||
7.B. Related Party Transactions | 82 | ||
7.C. Interests of Experts and Counsel | 82 | ||
ITEM 8. FINANCIAL INFORMATION | 83 | ||
8.A. Consolidated Statements and Other Financial Information | 83 | ||
8.B. Significant Changes | 84 | ||
ITEM 9. THE OFFER AND LISTING | 84 | ||
9.A. Offer and Listing Details | 84 | ||
9.B. Plan of Distribution | 84 | ||
9.C. Markets | 84 | ||
9.D. Selling Shareholders | 84 | ||
9.E. Dilution | 84 | ||
9.F. Expenses of the Issue | 84 | ||
ITEM 10. ADDITIONAL INFORMATION | 84 | ||
10.A. Share Capital | 84 | ||
10.B. Memorandum and Articles of Association | 85 | ||
10.C. Material Contracts | 85 | ||
10.D. Exchange Controls | 85 | ||
10.E. Taxation | 86 | ||
10.F. Dividends and Paying Agents | 88 | ||
10.G. Statement by Experts | 88 | ||
10.H. Documents on Display | 88 | ||
5 |
10.I. Subsidiary Information | 88 |
10.J. Annual Report to Security Holders | 89 |
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 89 |
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES | 89 |
12.A. Debt Securities | 89 |
12.B. Warrants and Rights | 89 |
12.C. Other Securities | 89 |
12.D. American Depositary Shares | 89 |
PART II | 91 |
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES | 91 |
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF | |
PROCEEDS | 91 |
ITEM 15. CONTROLS AND PROCEDURES | 91 |
ITEM 16. [RESERVED] | 93 |
16.A. Audit Committee Financial Expert | 93 |
16.B. Code of Ethics | 93 |
16.C. Principal Accountant Fees and Services | 93 |
16.D. Exemptions from the Listing Standards for Audit Committees | 93 |
16.E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers | 94 |
16.F. Change in Registrant's Certifying Accountant | 94 |
16.G. Corporate Governance | 94 |
16.H. Mine Safety Disclosure | 94 |
16.I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 94 |
16.J. Insider Trading Policies | 94 |
16.K. Cybersecurity | 94 |
PART III | 95 |
ITEM 17. FINANCIAL STATEMENTS | 95 |
ITEM 18. FINANCIAL STATEMENTS | 95 |
ITEM 19. EXHIBITS | 96 |
6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 20-F contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), that involve significant risks and uncertainties. Although these forward-looking statements, which may include statements regarding our future results of operations, financial condition, or business prospects, are based on our own information and information from other sources we believe to be reliable, you should not place undue reliance on these forward-looking statements, which apply only as of the date of this annual report. The words "anticipate," "believe," "expect," "intend," "plan," "estimate" and similar expressions, as they relate to us, are intended to identify a number of these forward-looking statements. Our actual results of operations, financial condition or business prospects may differ materially from those expressed or implied in these forward-looking statements for a variety of reasons, including, among other things and not limited to, our anticipated growth strategies, our and our customers' future business developments, results of operations and financial condition, our ability to develop new products, the future growth and pricing trend of the display driver markets, the future growth of end-use applications that use flat panel displays, particularly TFT-LCD panels, development of alternative flat panel display technologies, market acceptance and competitiveness of the driver and non-driver products developed by us, our ability to protect intellectual property, changes in customer relations and preference, shortage in supply of key components, our ability to collect accounts receivable and manage inventory, changes in economic and financial market conditions, and other factors. For a discussion of these risks and other factors, please see "Item 3.D. Key Information-Risk Factors."
CERTAIN CONVENTIONS
Unless otherwise indicated, all translations from U.S. dollars to NT dollars in this annual report were made at a rate of $1.00 to NT$30.62, the exchange rates set forth in the H.10 weekly statistical release of the Federal Reserve System of the United States (the "Federal Reserve Board") on December 29, 2023. No representation is made that the NT dollar amounts referred to herein could have been or could be converted into U.S. dollars at any particular rate or at all. On March 29, 2024, the noon buying rate was $1.00 to NT$31.93.
Unless otherwise indicated, in this annual report,
"ADSs" refers to our American depositary shares, each of which represents two ordinary shares;
"ADRs" refers to the American depositary receipts that evidence our ADSs;
"AIoT" refers to Artificial Intelligence & Internet of Things;
"AMOLED" refers to active matrix organic light-emitting diode;
"AR" refers to the augmented reality;
"ASIC" refers to application specific integrated circuit;
"a-Si" refers to amorphous silicon;
"CMOS" refers to complementary metal oxide semiconductor;
"end-point AI" is the practice of running applications and storing data on devices located at the edge of a network. The aim is to reduce latency and network bandwidth by performing processing and storage functions locally on the device. This approach can improve the performance, reliability, and security of applications and data.
"head-mounted-display" refers to a display device, worn on the head or as part of a helmet, that has a small display optic in front of one or each;
"Himax Taiwan" refers to Himax Technologies Limited, our wholly owned subsidiary in Taiwan and our predecessor;
"IC" refers to integrated circuit;
7
"IFRS" refers to The International Financial Reporting Standards as issued by the International Accounting Standards Board;
"IGZO" refers to indium gallium zinc oxide;
"Innolux" refers to Innolux Corporation, its predecessor and consolidated subsidiaries, unless the context otherwise requires;
"large-sized panels" refers to panels that are typically above ten inches in diagonal measurement; All sizes of TV, monitor and notebook displays are identified as large.
"LCoS" refers to liquid crystal on silicon;
"LED" refers to light-emitting diode;
"LTPS" refers to low temperature poly silicon;
"MEMS" refers to micro-electro mechanical systems;
"OLED" refers to organic light-emitting diode;
"Panel Manufacturer" refers to panel manufacturers of either TFT-LCD or OLED panels, as well as those that produce both types collectively;
"PRC" or "China" for purposes of this annual report refers to the People's Republic of China, excluding the special administrative regions of Hong Kong and Macau;
"processed tape" refers to polyimide tape plated with copper foil that has a circuit formed within it, which is used in tape-automated bonding packaging;
"ROC" or "Taiwan" refers to the island of Taiwan and other areas under the effective control of the Republic of China;
"RSUs" refers to restricted share units;
"semiconductor manufacturing service providers" refers to third-party wafer fabrication foundries, gold bumping houses, and assembly and testing houses;
"shares" or "ordinary shares" refer to our ordinary shares, par value $0.3 per share;
"SLiM" refers to Structured Light Imaging Module, which is Himax homegrown structured light-based 3D sensing total solution;
"small and medium-sized panels" refers to panels that are typically around ten inches or less in diagonal measurement. All sizes of smartphone, automotive and tablet displays are identified as small and medium;
"Structured Light" refers to a 3D infrared structure light projector, which is composed of a laser light source, a collimated lens and a diffractive optics element (DOE);
"TDDI" refers to touch display driver integrated circuit for advanced in cell touch display;
"TFT-LCD" refers to thin film transistor liquid crystal display that may adopt a-Si, IGZO or LTPS technologies;
"ToF" refers to a time-of-flight (ToF) 3D camera works by illuminating the scene with a modulated light source, and observing the reflected light;
"Ultralow power WiseEye smart image sensing" refers to Company's WiseEyeTM AI image sensing solution which includes Himax's proprietary computer vision AI processor, ultralow power Always-On CMOS image sensor and CNN-based AI algorithms - all equipped with ultralow power design;
8
"VGA" refers to Video Graphics Array;
"VR" refers to the virtual reality;
"wafer level optics" or "WLO" are optical products manufactured using semiconductor process on wafers;
"we", "us", "our company", "our", "the Company" and "Himax" refers to Himax Technologies, Inc., its predecessor entities and subsidiaries;
"WiseEye AI Processor" refers to a Himax AI processor designed with power-efficient and multi-level power schemes for real-time motion detection, object detection and image processing, providing AI developers with possibilities of high performance and ultralow power. WiseEye1 is the first generation of WiseEye AI processor, where WiseEye2 is the second generation one.
All references to "New Taiwan dollars", "NT dollars" and "NT$" are to the legal currency of the ROC; and
All references to "dollars", "U.S. dollars" and "$" are to the legal currency of the United States.
On August 10, 2009, we effected: (i) a stock split in the form of a stock dividend of 5,999 ordinary shares for each ordinary share held by shareholders of record, followed by a consolidation of every 3,000 ordinary shares into one ordinary share; (ii) a change of the par value of our ordinary shares from $0.0001 each to $0.3 each; and (iii) a change in our ADS ratio from one ADS representing one ordinary share to one ADS representing two ordinary shares. See "Item 7.A. Major Shareholders and Related Party Transactions-Major Shareholders" for more information. Unless otherwise indicated, all shares, per share and share equity data in this annual report have been retroactively adjusted to reflect the effect of the stock split and the change in par value for all periods presented.
9
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Himax Technologies Inc. published this content on 20 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 May 2024 10:22:10 UTC.
