Himax expects revenue drop in 2Q22

Jay Liu, Taipei; Jessie Shen, DIGITIMES Asia 0


Display driver IC (DDI) specialist Himax Technologies expects to post a 16-20% sequential decline in second-quarter revenue, with gross margin ranging from 43% to 45%.

"A host of geopolitical, macroeconomic and pandemic related factors are creating challenges and impairing Himax' near-term outlook," said the company's management. "The war in Ukraine, rising inflation and rolling lockdowns throughout China have significantly impacted the supply chain and consumer electronics demand, leading to a particularly abnormal business environment."

Nevertheless, Himax expects second-quarter sales to be "the low point of this year." For full-year 2022, the company expects revenue to be on par with the 2021 level.

Himax reported revenue grew 33.6% on year to US$412.8 million in the first quarter of 2022, with gross margin climbing to 47% from 40.2% a year earlier. Non-IFRS net profits came to US$121.9 million, rising a robust 81.5% from the same period in 2021.

Himax enjoyed robust automotive DDI sales during the first quarter, with the product segment becoming the company's single largest revenue contributor. Automotive DDIs represented over 25% of Himax' total sales in the first quarter.

Himax' overall small- to medium-size DDI revenue, consisting of automotive DDI sales, accounted for 62.6% of the company's total sales in the first quarter of 2022, while sales of its large-size DDIs accounted for 26.8% of the total revenue.

Himax expects its small- and medium-size DDI sales to fall about 15% sequentially in the second quarter, with automotive DDI sales likely to stay flat on quarter. Automotive DDI sales will still represent an over 100% hike compared to the second quarter of 2021.

Falling demand for smartphones and tablets will be dragging down Himax' small- and medium-size DDI sales in the second quarter, said the chipmaker, adding that customers will be engaged in inventory correction over the near term.

Meanwhile, sales of Himax' large-size DDI sales will post a double-digit decline sequentially in the second quarter, due mainly to sluggish demand for TVs and Chromebooks, the company indicated. Demand for high-end displays and premium monitor models will still be able to boost its monitor DDI sales in the second quarter, which will see an over 60% surge compared to the same period in 2021.

Himax expects a sequential decline in second-quarter gross margin, due to rising manufacturing costs. Stabilizing foundry and backend will help ease its cost pressure in the second half of this year, said the fabless firm.