Himax Technologies (NASDAQ:HIMX) reported second-quarter 2026 results that exceeded its prior guidance, as stronger-than-expected automotive integrated-circuit sales lifted revenue, gross margin and profit.
Revenue for the quarter totaled $227.4 million, up 14.2% sequentially and 5.9% from a year earlier. The company had forecast a sequential revenue increase of 10% to 13%. Gross margin rose to 33.1%, from 30.4% in the first quarter and 31.2% a year earlier, aided by a more favorable product mix and greater sales of higher-margin automotive IC products.
Automotive Products Remain Largest Revenue Source
Small- and medium-sized display driver IC revenue increased 19.6% sequentially to $162.3 million, representing 71.4% of quarterly sales. Himax said automotive display-driver revenue, including traditional display driver ICs and touch-and-display driver integration products, increased by double digits as customers replenished inventories after seasonally lower first-quarter shipments and as new programs ramped for a major panel customer.
Automotive products, including display drivers, timing controllers and OLED IC sales, represented well over half of total revenue during the quarter. Chief Executive Officer Jordan Wu said the company sees continued long-term expansion in automotive displays as vehicles add more screens, larger panels and more sophisticated configurations.
“The industry’s ongoing pursuit of richer human-machine interfaces, immersive infotainment, and enhanced in-cabin user experiences is driving adoption of a broader range of our display technologies,” Wu said.
Non-driver revenue rose 17.7% sequentially to $45.9 million, supported by automotive timing-controller shipments. Timing-controller products accounted for more than 10% of total sales, with automotive applications contributing more than half of that business, according to the company.
Large display-driver IC revenue, meanwhile, declined 21% sequentially to $19.2 million. Himax attributed the decline to panel makers pulling forward inventory purchases for high-end television ICs in previous quarters. Monitor and notebook IC sales increased during the quarter on higher legacy-product shipments to key customers.
Third-Quarter Outlook Calls for Further Revenue Growth
For the third quarter, Himax expects revenue to increase 7% to 11% sequentially and gross margin to be about 34%, depending on product mix. The company projected profit attributable to shareholders of $0.08 to $0.10 per fully diluted ADS.
The forecast includes an estimated $11.8 million third-quarter expense related to the company’s annual employee bonus program. Himax expects the total 2026 bonus to be about $13 million, subject to board approval, with $11.7 million expected to vest and be expensed immediately.
Management expects large display-driver IC sales to decline by a single-digit percentage sequentially in the third quarter, while small- and medium-sized display-driver IC revenue is projected to rise by a high-single-digit percentage. Automotive driver IC sales are expected to increase by a “solid double-digit” percentage, aided by broader demand and mass production of several large-display LTDI projects.
Non-driver revenue is expected to increase by a low-teens percentage, with timing-controller sales forecast to rise by a double-digit percentage. Smartphone IC sales are also expected to increase on shipments for a leading smartphone brand’s mainstream models and inventory building for upcoming premium models. Tablet IC sales are expected to decline because capacity constraints are limiting additional shipments.
Supply Constraints and Pricing Actions
Wu said demand tied to artificial intelligence is straining capacity at foundries, packaging facilities and testing providers serving mature semiconductor process nodes. The conditions have increased manufacturing and procurement costs, extended lead times and complicated efforts to secure adequate capacity across product lines.
Himax is using supply-chain relationships in Taiwan while expanding its presence in China, Singapore, Korea, Japan and Malaysia, he said. The company has also worked with customers on pricing adjustments to share increased costs. Some adjustments took effect in the second quarter, while further changes could be implemented as market conditions warrant.
Himax ended the quarter with $298.7 million in cash, cash equivalents and other financial assets, up from $287.6 million in the preceding quarter. Operating cash flow was $17.5 million, though the company said it had deferred approximately $11 million in Taiwan income-tax payments for one year under a new government policy. Excluding the deferral, operating cash flow would have been approximately $6.5 million.
The company expects cash balances to decline in the third quarter following a $44 million annual dividend payment made July 10 and a potential distribution of the immediately vested portion of the employee bonus award.
CPO, Smart Glasses and Other Growth Initiatives
Wu said Himax and strategic partner FOCI began engineering production ramps in the third quarter for co-packaged optics products supporting 1.6T, 3.2T and 6.4T transmission bandwidths. The company’s priority for the second half is achieving customer qualification milestones, improving manufacturing yields and establishing stable mass-production capabilities.
Himax expects CPO shipments to grow sequentially, but said official mass-production timing remains dependent on customer deployment schedules. Wu said the business is expected to make a more meaningful contribution beginning in 2027, although he declined to quantify expected revenue.
The company also highlighted WiseEye, its ultralow-power AI sensing technology, as a growth opportunity in smart glasses, security and biometric applications. Wu said a leading global brand has launched smart glasses using WiseEye technology, and several additional projects could enter mass production in coming quarters. Himax’s WiseGuard security module has been adopted by a U.S. surveillance customer, with mass production scheduled to begin toward the end of 2026.
Separately, Himax announced July 1 a proposed divestiture of an investment in an equity-method investee. Based on information from that company, Himax expects to recognize a pretax gain of approximately $23 million to $24 million if the transaction closes. Closing is expected in the fourth quarter, subject to customary conditions and regulatory approval.
About Himax Technologies (NASDAQ:HIMX)
Himax Technologies, Inc (NASDAQ: HIMX) is a fabless semiconductor company specializing in display imaging technologies. The company designs and develops a comprehensive portfolio of display driver integrated circuits (DDICs), timing controllers, and other high-speed interface chips that enable high-resolution panels for a wide array of electronic devices. Himax’s solutions are tailored to support both LCD and OLED displays, ensuring compatibility with television sets, desktop monitors, laptops, tablets, smartphones and wearable devices.
In addition to core display driver products, Himax offers wafer-level optics and liquid crystal on silicon (LCOS) microdisplay solutions for applications in augmented reality (AR) and virtual reality (VR) headsets.
