After reporting quarterly earnings results, Himax Technology (HIMX) soared above $8 a share only to give up all of those gains. The company reported weak results but investors chose instead to focus on Himax’s direction. Himax said it is investing in itself, at the cost of short-term results, to take advantage of the growth in 3D sensing and scanning solutions. Unnamed smartphone suppliers will take delivery of the technology in the quarters ahead.
Himax reported a revenue drop of 23.7 percent, to $155.2 million on earnings of $1.4 million, or $0.01 a share (non-GAAP). The fewer working days in China and Taiwan hurt results. Demand for large-sized driver IC fell, adding to the revenue decline. Despite the headwind it encountered, Himax is upbeat in its future.
TDDI products and 4K TV demand will grow later this year. WLO and CMOS sensor products need higher R&D spend. This investment is needed for developing 3D scanning solutions. Multiple top name customers will employ this technology. Risks are moderate that Himax will face some operational headwinds but the company is unlikely to stumble. The hard date for the component launch is strict. The availability of the component must be ready before the phone supplier launches the latest smartphone model.
Takeaway
HIMX is volatile but fundamentals are getting stronger. Consider speculating in this AR/VR component supplier.