Though the virtual reality and augmented reality markets are getting less hype these days, their importance in technology is indisputable. For now, though, 3D sensing will come first as the next growth engine and Himax Technologies (NASDAQ: HIMX) will reaccelerate its sales when that happens.
Himax, which is a WLO and LCoS supplier, reported earnings of break-even ($0.00 per share) on revenue of $151.7 million. Revenue fell sharply from last year but the drop is expected. The company’s main business is declining, which is way management accelerated its investment in growth markets. This is hurting short-term results but puts the company in a healthier position.
Demand for 3D sensing, NIR imaging and WLO technologies is accelerating. Smartphone suppliers, particularly those in the Asian region, are set to refresh the devices. This will include some form of 3D scanning. In the AR/VR space, LCoS demand will continue to moderate. Sales of Oculus are light and Alphabet’s (NASDAQ: GOOGL) Google Glass Version 2 will only target a small market in the commercial space.
Takeaway
Himax has characteristics similar to that of AMD stock. The growth is back-loaded towards later this year. This inherently adds uncertainty for stockholders. Management is confident it will meet its growth targets. If it does, HIMX investors will be rewarded.
