奇景光電 (HIMX) 2022 Q3 法說會逐字稿

Hello, ladies and gentlemen. Welcome to the Himax Technologies, Inc. Third Quarter 2022 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. Mark Schwalenberg from MZ Group.

你好，女士們，先生們。歡迎參加 Himax Technologies, Inc. 2022 年第三季度收益電話會議。 （操作員說明）作為提醒，此電話會議正在錄音中。我現在想將會議轉交給您的主持人，來自 MZ Group 的 Mark Schwalenberg 先生。

Welcome, everyone, to the IMAX Third Quarter 2022 Earnings Call. Joining us from the company are Mr. Jordan Wu, President and Chief Executive Officer; Ms. Jessica Pan, Chief Financial Officer; and Mr. Eric Li, Chief IR/ PR Officer. After the company's prepared remarks comments, we have allocated time for questions in a Q&A session. If you have not yet received a copy of today's results release, please e-mail himx@mzgroup.us, access the press release on financial portals or download a copy from Himax's website at www.imax.com.tw.

歡迎大家參加 IMAX 2022 年第三季度財報電話會議。加入我們公司的是總裁兼首席執行官Jordan Wu先生；傑西卡潘女士，首席財務官；以及首席投資者關係/公關官 Eric Li 先生。在公司準備好評論意見後，我們安排了問答環節的提問時間。如果您還沒有收到今天發布的結果副本，請發送電子郵件至 himx@mzgroup.us，訪問金融門戶網站上的新聞稿或從 Himax 的網站 www.imax.com.tw 下載副本。

Unless otherwise specified, we will discuss our financials based on non-IFRS measures. You can find the related reconciliation to IFRS on our website.

除非另有說明，否則我們將根據非 IFRS 措施討論我們的財務狀況。您可以在我們的網站上找到與 IFRS 的相關對賬。

Before we begin the formal remarks, I'd like to remind everyone that some of the statements in this conference call, including statements regarding expected future financial results and industry growth are forward-looking statements that involve a number of risks and uncertainties that could cause actual results or events to differ materially from those described in this conference call. A list of risk factors can be found in the company's SEC filings, Form 20-F for the year ended December 31, 2021, in the section entitled Risk Factors as may be amended. Except for the company's full year of 2021 financials, which were provided in the company's 20-F and filed with the SEC on March 23, 2022. The financial information included in this conference call is unaudited and consolidated and prepared in accordance with IFRS accounting. Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and external audits by an independent auditor, to which we subject our annual consolidated financial statements and may vary materially from the audited consolidated financial information for the same period. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

在我們開始正式發言之前，我想提醒大家，本次電話會議中的一些陳述，包括關於預期未來財務業績和行業增長的陳述是前瞻性陳述，涉及可能導致的許多風險和不確定性實際結果或事件與本次電話會議中描述的結果或事件存在重大差異。風險因素清單可在公司提交給 SEC 的文件中找到，即截至 2021 年 12 月 31 日止年度的 20-F 表格，標題為可能修訂的風險因素部分。除了公司的 2021 年全年財務數據，這些財務數據在公司的 20-F 中提供並於 2022 年 3 月 23 日向美國證券交易委員會提交。本次電話會議中包含的財務信息未經審計，並根據國際財務報告準則會計準則編制。此類財務信息由內部生成，並未接受相同的審查和審查，包括獨立審計師的內部審計程序和外部審計，我們對年度合併財務報表進行審查和審查，並且可能與經審計的合併財務信息存在重大差異同一時期。公司不承擔因新信息、未來事件或其他原因而公開更新或修改任何前瞻性陳述的義務。

I will now turn the call over to Mr. Eric Li. Eric, the floor is yours.

我現在將把電話轉給 Eric Li 先生。埃里克，地板是你的。

Thank you, Mark, and thank you, everyone, for joining us. My name is Eric Li, Chief IR/PR Officer Himax. On today's call, I will first review the Himax consolidated financial performance for the third quarter 2022, followed by our fourth quarter 2022 outlook. Jordan will then give an update on the status of our business, after which we will take questions.

謝謝你，馬克，也謝謝大家加入我們。我是 Eric Li，首席 IR/PR 官 Himax。在今天的電話會議上，我將首先回顧 Himax 2022 年第三季度的綜合財務業績，然後是我們對 2022 年第四季度的展望。喬丹隨後將提供我們業務狀況的最新信息，之後我們將回答問題。

Our third quarter revenues and EPS beat the guidance while gross margin was at the midrange of the guidance issued on August 11, 2022, despite macro headwinds continuing to challenge our business. Third quarter net revenue of $213.6 million decreased 31.7% sequentially but extended our guidance of a decrease of around 35% to 39% sequentially. Increased sales momentum in our small- and medium-sized display driver segment contributed to the better-than-expected sales results. Gross margin came in at 36.3%, a decrease from 43.6% last quarter but at the mid-range of the guidance range of 35.5% to 37. 5%.

儘管宏觀逆風繼續挑戰我們的業務，但我們第三季度的收入和每股收益超過了指引，而毛利率處於 2022 年 8 月 11 日發布的指引的中端。第三季度淨收入為 2.136 億美元，環比下降 31.7%，但將我們的預期環比下降約 35% 擴大至 39%。我們的中小型顯示驅動器細分市場的銷售勢頭增強，促成了好於預期的銷售業績。毛利率為 36.3%，低於上一季度的 43.6%，但處於指導範圍 35.5% 至 37. 5% 的中間範圍。

Non-IFRS profit per diluted ADS was $0.17 beating our guidance of $0. 16 to $0.156. IFRS profit per diluted ADS was $0.48, exceeding our guidance of $0.02 to 4 -- I'm sorry, $0.02 to $0.042. Revenue from large display drivers was $41.3 million in Q3 and a decrease of 39.8% sequentially and below what we typically see on a seasonal basis. Customers across the board from brands to panel houses continued to impose stringent inventory control measures on the backdrop of slowing end market pressures and the destocking pressure. As guided, all 3 large display driver sectors covering TV, monitor and notebook were down double digit sequentially. Large panel driver IC sales accounted for 19.3% of total revenue for this quarter compared to 22% last quarter and 27.9% a year ago.

每攤薄後 ADS 的非 IFRS 利潤為 0.17 美元，超過了我們 0 美元的指導。 16 至 0.156 美元。 IFRS 每攤薄 ADS 的利潤為 0.48 美元，超出了我們 0.02 美元至 4 美元的指導——對不起，0.02 美元至 0.042 美元。第三季度大型顯示驅動器的收入為 4130 萬美元，環比下降 39.8%，低於我們通常看到的季節性水平。在終端市場壓力放緩和去庫存壓力的背景下，從品牌到面板廠的全線客戶繼續實施嚴格的庫存控制措施。根據指引，包括電視、顯示器和筆記本電腦在內的 3 大顯示驅動板塊均連續下跌兩位數。大型面板驅動 IC 銷售額佔本季度總收入的 19.3%，上一季度為 22%，去年同期為 27.9%。

Moving on to our small and medium-sized display driver segment. Revenue was $141.4 million a decrease of 29.9% sequentially, primarily a result of the prelonged inventory reduction effort of our smartphone and tablet customers. Smartphone and tablet driver IC sales contributions were approximately equal in the third quarter. Despite the challenging macro environment, we continue to gain traction with our leading driver solution being adopted by more customers for their next-generation products. As an illustration our proprietary tablet TDDI solution once again was adopted by Xiaomi for their latest premium tablet and 2-in-1 laptop where our TDDI, of course, larger size, high frame rate displays and high-precision active silo features as well as the most touch channels in the market to offer superior touch sensitivity.

繼續我們的中小型顯示驅動程序部分。收入為 1.414 億美元，環比下降 29.9%，主要是由於我們的智能手機和平板電腦客戶長期努力減少庫存。第三季度智能手機和平板電腦驅動IC的銷售貢獻大致相等。儘管宏觀環境充滿挑戰，但我們領先的驅動器解決方案被更多客戶採用用於他們的下一代產品，因此我們繼續獲得牽引力。舉例來說，我們專有的平板電腦 TDDI 解決方案再次被小米用於他們最新的高端平板電腦和二合一筆記本電腦，其中我們的 TDDI，當然，更大的尺寸、高幀率顯示和高精度的主動筒倉功能以及市場上最多的觸控通道，可提供卓越的觸控靈敏度。

Meanwhile, for AMOLED business, our global leading customer had more AMOLED premium tablet models commence mass production this quarter, where we provide the total solution covering DDIC and Tcon as their sole source supplier. In the third quarter, our AMOLED sales including DDIC and Tcon were up more than 45% sequentially and accounted for more than 8% of total sales. Q3 automotive business was once again the largest revenue contributor, representing over 35% of total sales. However, Q3 automotive sales declined double digits sequentially as guided as customers continued with strict inventory control measures to destock from the accumulation during China city lockdown in the previous quarter, yet on a year-over-year basis, automotive IC sales increased more than 80% for the 9 months ended September 30, 2022, and a result of our comprehensive product covering and increasing design wins for our automotive TDDI.

同時，在AMOLED業務方面，我們的全球領先客戶本季度有更多AMOLED高端平板機型開始量產，我們作為其唯一來源供應商提供涵蓋DDIC和Tcon的整體解決方案。第三季度，我們包括DDIC和Tcon在內的AMOLED銷售額環比增長超過45%，佔總銷售額的8%以上。第三季度汽車業務再次成為最大的收入貢獻者，佔總銷售額的 35% 以上。然而，由於客戶繼續採取嚴格的庫存控制措施以從上一季度中國城市封鎖期間的積累中去庫存，導致第三季度汽車銷量環比下降兩位數，但汽車IC銷量同比增長超過80截至 2022 年 9 月 30 日止 9 個月的百分比，這是我們全面的產品覆蓋和增加我們汽車 TDDI 的設計勝利的結果。

For our ePaper business, another product in our small and medium-sized driver lineup. Sales declined double-digit quarter-over-quarter due to customers downsizing their annual business plan amid a weak consumer electronics market. Small and medium-sized driver IC segment accounted for 66. 2% of total sales for the quarter compared to 64.5% in the previous quarter and 59.9% a year ago. Third quarter nondriver revenue was $30. 9 million down 26.9% from a quarter ago. As expected, our Tcon business was down double digits sequentially pressured by lower shipment for TV, monitor and notebook market, yet Tcon shipment for automotive enjoyed decent growth, and we anticipated its business momentum to accelerate in the coming quarters. Tcon business represented more than 7% of our total sales in the third quarter.

對於我們的 ePaper 業務，我們的中小型驅動器陣容中的另一個產品。由於消費電子市場疲軟，客戶縮減年度業務計劃，銷售額環比下降兩位數。本季度中小型驅動IC部分佔總銷售額的66. 2%，而上一季度為64.5%，一年前為59.9%。第三季度非司機收入為 30 美元。 900 萬比一季度前下降 26.9%。正如預期的那樣，由於電視、顯示器和筆記本市場的出貨量下降，我們的 Tcon 業務連續下降了兩位數，但汽車的 Tcon 出貨量增長良好，我們預計其業務勢頭將在未來幾個季度加速。 Tcon 業務占我們第三季度總銷售額的 7% 以上。

Non-driver products in Q3 accounted for 14.5% of total revenue as compared to 13.5% in the previous quarter and 12.2% a year ago. Non-IFRS gross margin for the third quarter was 36.3%, a decrease from 43.6% of last quarter. As we previously reported, the incurred charges from agreements we entered with foundries and back-end suppliers for securing capacity where the predominant factors not adversely impacted our margin profile in the third quarter. Price erosion because of inventory destocking also contributed to the margin contraction. IFRS gross margin was 36% for the quarter. Our non-IFRS operating expenses for the third quarter were first $6.7 million, slightly up by 3.8% from the previous quarter and 5% from a year ago. The sequential increase was caused mainly by increased salary expenses while year-over-year expenses increased because of higher inventory -- I'm sorry, higher salary and R&D expenses.

第三季度非驅動產品佔總收入的 14.5%，而上一季度為 13.5%，一年前為 12.2%。第三季度非國際財務報告準則毛利率為 36.3%，低於上一季度的 43.6%。正如我們之前報導的那樣，我們與代工廠和後端供應商簽訂的協議產生的費用是為了確保產能，而主要因素並未對我們第三季度的利潤率狀況產生不利影響。庫存去庫存導致的價格侵蝕也導致利潤率收縮。本季度 IFRS 毛利率為 36%。我們第三季度的非國際財務報告準則運營費用為 670 萬美元，比上一季度小幅增長 3.8%，比去年同期增長 5%。環比增長主要是由於工資費用增加，而同比費用增加是因為庫存增加——對不起，工資和研發費用增加。

IFRS operating expenses were $72.9 million for the third quarter, up 38. 5% from the preceding quarter and 6. 4% from a year ago. The higher IFRS figures were mainly due to the trend of annual bonus compensation, which we award employees at the end of September each year. The 2022 annual bonus compensation, including RSU and cash awards was in line with guidance we mentioned on our last earnings call that totaled $39.6 million, out of which $18. 5 million or $0.085 per diluted ADS was immediately vested and recognized in the third quarter of 2022. The remainder will be equally vested in 3 tranches at the first, second, third anniversary of the grand date. The remaining compensation expenses will be recognized on a straight-line basis over the vesting period of each tranche.

IFRS 第三季度運營費用為 7290 萬美元，比上一季度增長 38. 5%，比去年同期增長 6. 4%。較高的國際財務報告準則數字主要是由於年度獎金薪酬的趨勢，我們在每年九月底獎勵員工。包括 RSU 和現金獎勵在內的 2022 年年度獎金薪酬符合我們在上次財報電話會議上提到的總計 3960 萬美元的指導，其中 18 美元。 500 萬美元或每股攤薄後的美國存託憑證 0.085 美元在 2022 年第三季度立即歸屬和確認。其餘部分將在盛大日期的第一、二、三週年時分三批平均歸屬。剩餘補償費用將在各批次的等待期內以直線法確認。

Third quarter non-IFRS operating income was $30.9 million or 14.5% of sales versus 29.3% of sales in the last quarter and 41.2% of sales from a year ago. Non-IFRS after tax was $29. 8 million or $0. 17 per diluted ADS decreased from $76.8 million or $0.439 per diluted ADS last quarter. Turning to the balance sheet. We had $227.9 million of cash cash equivalents and other financial assets as of September 30, 2022, compared to $250.8 million at the same time last year. and $461.6 million a quarter ago. Our cash balance at the end of the third quarter substantially declined following the annual cash dividend payout of $217.9 million in July. We had $48 million of long-term unsecured loans at the end of Q3, of which $6 million was the current portion.

第三季度非國際財務報告準則營業收入為 3090 萬美元，佔銷售額的 14.5%，而上一季度佔銷售額的 29.3%，佔去年同期銷售額的 41.2%。非國際財務報告準則稅後為 29 美元。 800萬或0美元。每攤薄 ADS 17 美元從上一季度的 7680 萬美元或每攤薄 ADS 0.439 美元減少。轉向資產負債表。截至 2022 年 9 月 30 日，我們擁有 2.279 億美元的現金等價物和其他金融資產，而去年同期為 2.508 億美元。和一個季度前的 4.616 億美元。在 7 月份支付 2.179 億美元的年度現金股息之後，我們在第三季度末的現金餘額大幅下降。截至第三季度末，我們有 4800 萬美元的長期無抵押貸款，其中 600 萬美元是流動部分。

Our quarter end inventory as of September 30, 2022, was $410.1 million, up from $337.3 million last quarter and up from 160 points a year ago. The advented inventory level reflects the abrupt drop in the demand triggered by the strict customer inventory control due to sluggish end customer demand and murky visibility. The excess customer inventory, particularly in consumer electronics, has adversely affected our sales, resulting in high inventory level as our production always begins months in advance. Accounts receivable at the end of September 2022 was $253. 3 million, down from $371 million last quarter and from $400.9 million a year ago. DSO was 74 days at the quarter end, as compared to 100 days a year ago and 93 days from last quarter.

截至 2022 年 9 月 30 日，我們的季度末庫存為 4.101 億美元，高於上一季度的 3.373 億美元，高於一年前的 160 點。出現的庫存水平反映了由於最終客戶需求低迷和能見度模糊導致嚴格的客戶庫存控制引發的需求突然下降。過剩的客戶庫存，尤其是消費電子產品，對我們的銷售產生了不利影響，導致庫存水平很高，因為我們的生產總是提前幾個月開始。 2022 年 9 月末的應收賬款為 253 美元。 300 萬美元，低於上一季度的 3.71 億美元和一年前的 4.009 億美元。季度末 DSO 為 74 天，而去年同期為 100 天，上一季度為 93 天。

Third quarter capital expenditures were $3.4 million versus $2.5 million last quarter and $2.1 million a year ago. The third quarter CapEx was mainly for R&D-related equipment for our IC design business. As for September 30, 2022, Himax had $174.4 million ADS outstanding, little changed from last quarter. On a fully diluted basis, total number of ADS outstanding for the third quarter was $174.7 million.

第三季度資本支出為 340 萬美元，上一季度為 250 萬美元，一年前為 210 萬美元。第三季度資本支出主要用於我們 IC 設計業務的研發相關設備。截至 2022 年 9 月 30 日，Himax 的 ADS 餘額為 1.744 億美元，與上一季度相比變化不大。在完全攤薄的基礎上，第三季度未償還的 ADS 總數為 1.747 億美元。

Now turning to our fourth quarter 2022 guidance. We expect fourth quarter revenue to increase 4% to 8% sequentially. Non-IFRS gross margin is expected to be around 31.5% to 33.5%, depending on the final product mix. Non-IFRS profit attributable to shareholders is expected to be in the range of $0.21 to $0.24 per fully diluted ADS. The fourth quarter IFRS profit attributable to shareholders is estimated to be in the range of $0.178 to $0.208 per fully diluted ADS attributable to gains from disposal of long-term assets and certain financial arrangements.

現在轉向我們 2022 年第四季度的指導。我們預計第四季度收入將環比增長 4% 至 8%。非國際財務報告準則毛利率預計約為 31.5% 至 33.5%，具體取決於最終產品組合。股東應佔非國際財務報告準則的利潤預計在每股完全攤薄後的 ADS 0.21 美元至 0.24 美元之間。由於處置長期資產和某些財務安排的收益，第四季度歸屬於股東的 IFRS 利潤估計在每股完全攤薄後的美國存託憑證 0.178 美元至 0.208 美元之間。

I will now turn the call over to Jordan to discuss our Q4 outlook. Jordan, the floor is yours.

我現在將電話轉給喬丹討論我們的第四季度展望。喬丹，地板是你的。

Thank you, Eric. The near-term economic outlook appears like in the face of elevated inflation and rapidly rising interest rates, which are hurting the market along with the ongoing fall out from China city lockdowns and a geopolitical conflict. For the display application market and brands are downsizing their panel procurements which consequently triggers panelmakers to further lower fab utilization. Against this backdrop, our business visibility remains limited especially in case consumer-centric products. As we continue to trend through this inventory offloading cycle, we are cautiously managing our new wafer starts trying to strike a balance between inventory level and foundry contract fulfillment.

謝謝你，埃里克。近期的經濟前景似乎是在通脹上升和利率迅速上升的情況下出現的，這些因素以及中國城市封鎖和地緣政治衝突的持續影響正在損害市場。對於顯示應用市場，品牌正在縮減面板採購規模，從而促使面板製造商進一步降低晶圓廠利用率。在這種背景下，我們的業務知名度仍然有限，尤其是在以消費者為中心的產品方面。隨著我們繼續通過這個庫存卸載週期，我們正在謹慎管理我們的新晶圓，開始試圖在庫存水平和代工合同履行之間取得平衡。

The silver lining among the clouds is the automotive segment where visibility is relatively better. This allows us to continue to maintain new orders to our foundry partners and back-end suppliers. Continuous orders in such segments, coupled with our successful negotiation with suppliers, we reduced the incurred charges in Q4 from contracts to secure capacity as compared to the third quarter. Charging by our current business pipeline and production plan, we believe our inventory level has reached the peak at the end of the third quarter.

雲中的一線希望是能見度相對較好的汽車領域。這使我們能夠繼續維持對我們的代工合作夥伴和後端供應商的新訂單。這些細分市場的持續訂單，加上我們與供應商的成功談判，與第三季度相比，我們減少了第四季度因合同產生的費用以確保產能。根據我們目前的業務管道和生產計劃，我們認為我們的庫存水平已在第三季度末達到峰值。

Looking into Q4, our gross margin is still under pressure due to price erosion from high inventory offloading while the cost of goods sold remained high as the inventory was sourced when foundry and back-end prices were still at high levels. Despite the soft demand we remain upbeat about our top line growth from several revenue streams that we consider our high visibility groups, notably automotive, AMOLED, timing controller and WiseEye AI image sensing. In the automotive business, we expect TDDI sales momentum to pick up starting Q4 and from the trial in the third quarter.

展望第四季度，由於高庫存卸載造成的價格侵蝕，我們的毛利率仍面臨壓力，而銷售成本仍然很高，因為庫存是在代工和後端價格仍處於高位時採購的。儘管需求疲軟，但我們仍然對我們認為高知名度的幾個收入來源的收入增長持樂觀態度，特別是汽車、AMOLED、時序控制器和 WiseEye AI 圖像傳感。在汽車業務方面，我們預計 TDDI 銷售勢頭將從第四季度開始和第三季度的試驗開始回升。

For automotive DDIC, however, customers are still in the process of offloading their inventories accumulated is. intended for the second quarter production, which was severely disrupted by the widespread China City of tons. We believe our 2022 full year automotive business growth will reach around 50%, despite the challenging environment and expect growth momentum, especially for TDDI to expand into 2023 for another stellar year of strong growth. Separately, our WiseEye AI image sensing and AMOLED business are poised to deliver an impactful contribution next year. We expect WiseEye's sales to grow nicely, backed by strong business pipeline from a wide variety of new AI application adoptions. Among our AMOLED deployments, our AMOLED for smartphone will commence as a new sales stream next year on top of the current AMOLED for tablet and automotive sales.

然而，對於汽車 DDIC，客戶仍處於卸載其累積庫存的過程中。計劃用於第二季度的生產，受到廣泛的中國噸市的嚴重干擾。儘管環境充滿挑戰，我們相信我們 2022 年全年汽車業務增長將達到 50% 左右，並預計增長勢頭，特別是 TDDI 將擴展到 2023 年，實現又一個強勁增長的輝煌一年。另外，我們的 WiseEye AI 圖像傳感和 AMOLED 業務有望在明年做出有影響力的貢獻。我們預計 WiseEye 的銷售額將在各種新 AI 應用程序採用的強大業務管道的支持下實現良好增長。在我們的 AMOLED 部署中，我們用於智能手機的 AMOLED 將於明年開始作為新的銷售流，在目前用於平板電腦和汽車銷售的 AMOLED 之上。

The benefits from the increasing contribution from these higher visibility segments is twofold. First, our overall corporate visibility improves as their weighting increases. Second, the gross margin for this segment is above our corporate average, lending support to a more sustainable, higher margin profile for us. We expect this groups combined to account for more than 50% of total sales in Q4 and believe their contribution weighting will continue to increase for years to come.

這些更高可見度細分市場的貢獻增加帶來的好處是雙重的。首先，隨著權重的增加，我們的整體企業知名度提高。其次，該部門的毛利率高於我們的公司平均水平，為我們提供了更可持續、更高利潤率的支持。我們預計這些群體在第四季度的總銷售額將佔總銷售額的 50% 以上，並相信他們的貢獻權重將在未來幾年繼續增加。

With that, I will begin with an update on the large panel display IC business. Our fourth quarter large display driver IC business is projected to be flat sequentially of low base after 3 consecutive quarters of decline. Yet on a year-over-year basis, this is still a double-digit decline as we brace for a disappointing year-end holiday season. On a positive note, we do see TV panel prices showing signs of stabilization as customers have started to replenish inventory, particularly in mainstream models, leading to positive momentum in our TV driver sales which are set to increase single digits sequentially in Q4. Conversely, the downward trend in our IT segment lingers on with further declines expected in both notebook and monitor sales in the fourth quarter on the backdrop of customers' continuous tight inventory control measures and a sluggish economy.

有了這個，我將首先介紹大面板顯示IC業務的最新情況。在連續三個季度下滑後，我們的第四季度大型顯示驅動器 IC 業務預計將與低基數持平。然而，與去年同期相比，這仍然是兩位數的下降，因為我們準備迎接令人失望的年終假期。積極的一面是，隨著客戶開始補充庫存，尤其是主流機型，我們確實看到電視面板價格顯示出企穩跡象，這導致我們的電視驅動器銷售勢頭良好，預計第四季度將環比增長個位數。相反，在客戶持續嚴格的庫存控制措施和經濟不景氣的背景下，預計第四季度筆記本電腦和顯示器的銷售將進一步下滑，我們的 IT 部門的下滑趨勢持續存在。

Turning to the small and medium-sized display driver IC business. In the fourth quarter, revenue is expected to increase by single digits sequentially. Our Q4 automotive driver IC sales are anticipated to be flat sequentially, following double-digit decline in Q3 as customers look to restock inventory. Sales for automotive TDDI are poised to grow by double-digit whole loans for traditional driver IC are set to decrease single-digit from last quarter. The business visibility for automotive segment into next year remains much better than those of consumer-centric products. Smartphone driver IC revenue is set to be slightly down sequentially, a result of lengthy inventory of loading cycle amid soft demand and limited visibility across those channels. Tablet driver IC revenue, however, is projected to increase double digits sequentially, driven by a replenished momentum from leading customers.

轉向中小型顯示驅動IC業務。第四季度，預計收入將環比增長個位數。由於客戶希望補充庫存，繼第三季度出現兩位數下滑之後，我們的第四季度汽車驅動 IC 銷售額預計將環比持平。汽車 TDDI 的銷售額有望增長兩位數，傳統驅動 IC 的整體貸款將比上一季度下降個位數。到明年，汽車領域的業務能見度仍然比以消費者為中心的產品要好得多。由於需求疲軟和這些渠道的可見性有限，加載週期過長，智能手機驅動 IC 收入將環比略有下降。然而，由於主要客戶的補充動力，平板電腦驅動器 IC 收入預計將連續兩位數增長。

Now for a more detailed update on the Automotive segment an area which has more resilient demand and is less vulnerable to the macro headwinds. As we have previously discussed, automotive driver sales are now our largest revenue contributor and set to represent over 35% of our total sales in Q4. The demand trends for automotive interiors continue to favor more stylish and diverse designs, made possible with increasing quantity and size of panels equipped with advanced display technologies. As a leader in automotive display IC market, we not only offer the most comprehensive automotive product portfolio in the industry, ranging from traditional DDIC to new technologies such as TDDI, local dimming Tcon, LPD and AMOLED. We are also the preferred partner that panel customers like to work with especially those looking to focus more on growing their automotive business in order to compensate for the soft consumer electronic businesses.

現在，關於汽車領域的更詳細更新，該領域的需求更具彈性，不易受宏觀逆風的影響。正如我們之前所討論的，汽車司機銷售現在是我們最大的收入貢獻者，並將占我們第四季度總銷售額的 35% 以上。隨著配備先進顯示技術的面板數量和尺寸的增加，汽車內飾的需求趨勢繼續偏向更時尚和多樣化的設計。作為汽車顯示IC市場的領導者，我們不僅提供業內最全面的汽車產品組合，從傳統的DDIC到TDDI、局部調光Tcon、LPD和AMOLED等新技術。我們也是面板客戶喜歡與之合作的首選合作夥伴，尤其是那些希望更加專注於發展汽車業務以彌補軟消費電子業務的客戶。

As the pioneer of mass production for automotive TDDI and backed by rapid expansion of automotive TDDI adoption, we expect our automotive TDDI sales will be one of the primary driving forces for our long-term business growth for years to come. The automotive TDDI technology is essential for large-sized interactive, stylish and curved automotive displays. To date, we have acquired more than 200 automotive TDDI project awards with only a small portion currently in mass production, implying an enormous growth opportunity ahead. Our TDDI design win coverage continues to quickly expand with panelmakers, Tier 1s and auto brands. Meanwhile, the Chinese government continues to support the LED industry with stimulus programs which may accelerate the adoption of premium automotive displays that adopt TDDI.

作為汽車 TDDI 量產的先行者，並在汽車 TDDI 應用迅速擴大的支持下，我們預計我們的汽車 TDDI 銷售將成為我們未來幾年長期業務增長的主要驅動力之一。汽車 TDDI 技術對於大型交互式、時尚和曲面汽車顯示器至關重要。迄今為止，我們已獲得 200 多個汽車 TDDI 項目獎項，目前只有一小部分在量產，這意味著未來的巨大增長機會。我們的 TDDI 設計贏得覆蓋面繼續迅速擴大到面板製造商、一級供應商和汽車品牌。與此同時，中國政府繼續通過刺激計劃支持 LED 行業，這可能會加速採用 TDDI 的高端汽車顯示器的採用。

Moreover, we are well positioned with suppliers in support of our automotive segment growth leveraging our diverse foundry resources for optimal operational efficiency and benefit. Furthermore, we are the first in the industry to launch the cutting-edge LTI or large touch and display driver integration. Automotive display solutions, especially designed for the next-generation extra large-sized automotive displays which are typically larger than 30 inches. The LTDI adopts cascade topology technique, allowing up to 30 chips seamlessly connected in support of extra large-sized display and high-precision touch sensitivity, creating a high-entry barrier for potential competitors. This was featured at CES 2022 early this year by 1 of our key customers, who showcased a 30-inch in-cell part display powered by Himax's LTDI solution. more design collaborations are underway and will debut in 2023 in some of the most automotive vehicles.

此外，我們在供應商方面處於有利地位，可以利用我們多樣化的代工資源來支持我們的汽車部門增長，以實現最佳運營效率和效益。此外，我們在業界率先推出尖端的 LTI 或大尺寸觸控與顯示驅動整合。汽車顯示器解決方案，專為通常大於 30 英寸的下一代超大尺寸汽車顯示器而設計。 LTDI採用級聯拓撲技術，最多可無縫連接30個芯片，支持超大尺寸顯示和高精度觸控，為潛在競爭者創造了高門檻。我們的一位主要客戶在今年年初的 CES 2022 上展示了這一點，他們展示了由 Himax 的 LTDI 解決方案提供支持的 30 英寸單元內部件顯示器。更多的設計合作正在進行中，並將於 2023 年在一些汽車中首次亮相。

Next, on smartphone and tablet businesses. For smartphone, much of our shipments to key customers for their next-generation new designs have been delayed amidst a deteriorating demand. For the tablet, shipments are on the rise for premium models that adopt high-end tablet TDDI and advanced AMOLED solution, of which we offer both DDIC and TCO to certain leading branch. Q4 sales for those premium tablet solutions are expected to increase more than 100% sequentially, and we believe momentum will accelerate into next year. supported by demand for advanced specifications and higher-end displays.

接下來是智能手機和平板電腦業務。對於智能手機，由於需求惡化，我們向主要客戶的下一代新設計的大部分發貨都被推遲了。平板電腦方面，採用高端平板TDDI和先進AMOLED解決方案的高端機型出貨量正在上升，其中我們為某些領先分支提供DDIC和TCO。這些優質平板電腦解決方案的第四季度銷售額預計將環比增長 100% 以上，我們相信這一勢頭將加速到明年。受到對高級規格和更高端顯示器的需求的支持。

Turning to the e-paper driver business. Our e-paper business is expected to increase double-digit quarter-over-quarter stemming from increasing shipments of a large size display to a leading customer as their sole supplier. We expect long-term demand for both e-paper and e-signage to endure. E-reader is fueled by a growing e-learning market along with increasing reading material over the Internet. E-signage market is also on an upswing as the product is being more widely used in smart warehousing, smart retail and many other fields to replace traditional signage. We continue to collaborate with all leading customers for certain ASIC and Tcon projects with increased R&D efforts spent on their next-generation products towards larger size, high resolution and colored e-paper displays.

轉向電子紙驅動業務。我們的電子紙業務預計將實現兩位數的季度環比增長，原因是作為唯一供應商的大尺寸顯示器的出貨量增加。我們預計對電子紙和電子標牌的長期需求將持續下去。不斷增長的電子學習市場以及越來越多的互聯網閱讀材料推動了電子閱讀器的發展。電子標牌市場也呈上升趨勢，產品正更廣泛地應用於智能倉儲、智能零售等眾多領域，以取代傳統標牌。對於某些 ASIC 和 Tcon 項目，我們將繼續與所有領先客戶合作，加大研發力度，在他們的下一代產品上投入更大尺寸、高分辨率和彩色電子紙顯示器。

Next, for an update on OLED we continue to gear up for OLED driver IC development jointly with major Korean and Chinese panel makers in various applications. Q4 AMOLED sales are set to increase by double digits sequentially and represent over 9% of total sales. Our AMOLED business, including Tcon and driver, is slated for strong growth in the next few years. For AMOLED tablet product, we provide both AMOLED driver and are the sole source supplier for 1 global leading brand. For automotive OLED play, we continue to win project awards for our flexible AMOLED driver and TCAM with both conventional carmakers and LED vendors.

接下來，對於 OLED 的更新，我們將繼續與韓國和中國主要面板製造商在各種應用中共同開發 OLED 驅動 IC。第四季度 AMOLED 銷售額將連續兩位數增長，佔總銷售額的 9% 以上。我們的 AMOLED 業務，包括 Tcon 和驅動程序，預計在未來幾年內實現強勁增長。對於 AMOLED 平板產品，我們提供 AMOLED 驅動器，並且是 1 個全球領先品牌的唯一來源供應商。在汽車 OLED 領域，我們的柔性 AMOLED 驅動器和 TCAM 繼續贏得傳統汽車製造商和 LED 供應商的項目獎項。

Finally, we are making good progress with leading panel houses for the development of MA display drivers for smartphone, TV and novel applications. We expect to start shipping smartphone OLED drivers around middle of 2023. As a reminder, for smartphone AMOLED display driver, we already have secured meaningful capacity and continue to look to expand it moving forward.

最後，我們正在與領先的面板廠商合作開髮用於智能手機、電視和新型應用的 MA 顯示驅動器。我們預計將在 2023 年中期左右開始出貨智能手機 OLED 驅動器。提醒一下，對於智能手機 AMOLED 顯示驅動器，我們已經獲得了有意義的產能，並繼續尋求擴大產能。

Now let me share some of the progress we made on the nondriver IC businesses. Starting with an update on timing controller. We anticipate Q4 in sales to increase by high teens sequentially, bolstered by higher shipments of automotive products for both LCD and AMOLED displays. For the MO display market, we successfully commenced production of Motors for tablets and automotive. We also made good progress strategically with leading panelmakers on -- and notebook Tcon, which features advanced EDP providing higher resolution, higher refresh rate as well as improved image quality to the notebook.

現在讓我分享一下我們在非驅動IC業務方面取得的一些進展。從時序控制器的更新開始。我們預計第四季度的銷售額將連續增長十幾倍，這得益於 LCD 和 AMOLED 顯示器的汽車產品出貨量增加。在 MO 顯示器市場，我們成功開始生產用於平板電腦和汽車的電機。我們還與領先的面板製造商在戰略上取得了良好進展——以及筆記本電腦 Tcon，它具有先進的 EDP，可為筆記本電腦提供更高分辨率、更高刷新率以及改進的圖像質量。

Next, on LCD display for automotive. Our position remains unchallenged in automotive Tcon for local dimming technology, which not only enhances display contrast for better viewing and driver safeguard under various ambient light conditions, but also provides effective power saving critical for EVs and larger-size displays. With years of strenuous work on this high-entry barrier technology, we have won numerous awards from various OEMs, Tier 1s and car makers premium new car models, some of which have already commenced mass production. We anticipate Q4 automotive Tcon sales to increase more than 80% year-over-year and represent around 2% of total sales in the fourth quarter with additional projects slated for meaningful volume shipments starting in 2023. Additionally, we are undertaking new design developments supporting even larger-panel sizes and high resolution with more NAND customers. We expect to gain traction with more shipments to key customers in upcoming quarters and are optimistic about the long-term potential for our Tcon business with secured capacity from our foundry partners in pursuit of long-term sustainable growth.

接下來，關於車載液晶顯示器。我們在局部調光技術的汽車 Tcon 領域的地位仍然沒有受到挑戰，該技術不僅可以增強顯示對比度，從而在各種環境光條件下更好地觀看和保護駕駛員，還可以為電動汽車和大尺寸顯示器提供有效的節能。多年來，我們在這項高門檻技術上的艱苦努力，贏得了來自各種原始設備製造商、一級供應商和汽車製造商的優質新車的眾多獎項，其中一些已經開始量產。我們預計第四季度汽車 Tcon 銷售額將同比增長 80% 以上，佔第四季度總銷售額的 2% 左右，其他項目計劃從 2023 年開始大量出貨。此外，我們正在進行新的設計開發，以支持更大的面板尺寸和更高分辨率的 NAND 客戶。我們預計在未來幾個季度向主要客戶提供更多的出貨量，並且對我們的 Tcon 業務的長期潛力持樂觀態度，因為我們的代工合作夥伴確保了產能，以追求長期的可持續增長。

Now switching gears to the WiseEye AI total solution, which incorporates Himax propriety ultralow power AI processor or on CMOS image sensor and CNN-based AI algorithm. Our WiseEye business for notebook, we continue to support a range of Dale's new models where Himax remains the key supplier for leading edge, we talo power AI processor and always on CMOS image sensor. In order to capture the vast opportunity presented in the emerging notebook AI application market, we have extended deployment of in-house development of new algorithms to advance our AI capabilities for partnering with big notebook CPU players aiming to expand our partnerships with leading global laptop names to propel their business forward. In addition to fishers, such as human presence, local way and onlooker detections. We are also working on a variety of enriched new AI features and use cases to broaden possible applications with end customers for next-generation smart notebooks. Aside from notebook our highly integrated WiseEye solution, featuring ultra low-power tiny and mirovision AI in a tiny form factor is a perfect fit for many resource constraints and battery-powered endpoint applications.

現在轉向 WiseEye AI 整體解決方案，它結合了 Himax 專有的超低功耗 AI 處理器或基於 CMOS 圖像傳感器和基於 CNN 的 AI 算法。我們的 WiseEye 筆記本電腦業務，我們繼續支持 Dale 的一系列新型號，其中 Himax 仍然是領先的主要供應商，我們提供強大的 AI 處理器和始終使用 CMOS 圖像傳感器。為了抓住新興筆記本電腦人工智能應用市場的巨大機遇，我們擴展了新算法的內部開發部署，以提升我們與大型筆記本電腦 CPU 廠商合作的人工智能能力，旨在擴大與全球領先筆記本電腦品牌的合作夥伴關係推動他們的業務向前發展。除了漁民之外，諸如人類存在、本地方式和旁觀者的檢測。我們還致力於開發各種豐富的新 AI 功能和用例，以擴大與最終客戶的下一代智能筆記本的可能應用。除了筆記本電腦外，我們高度集成的 WiseEye 解決方案以超低功耗和 mirovision AI 為特色，外形小巧，非常適合許多資源限制和電池供電的端點應用。

The new line area, which is now ardently explored by AI communities. Our success, for example, worth highlighting 1 successful example was highlighting is the strong adoption with meaningful shipment of our AI solution in automatic meter reading. Our power-efficient AI can help existing conventional water meters operate with a battery pack for over 5 years for real-time order consumption, readout and detection of economies such as water leakage, attracted by the simplicity of installation and superb low-power performance dozens of water authorities, utility companies, meter OEM, ODMs and/or IoT network providers across the globe have commenced joint development projects with us. Moreover, we have additional WiseEye AI customer engagements in areas such as video conference, lead device, share by party medical, capsule endoscope, automotive, smart office battery can and surveillance, just to name a few.

人工智能社區正在熱切探索的新線區。我們的成功，例如，值得強調 1 個成功的例子是我們的人工智能解決方案在自動抄表方面的大力採用和有意義的出貨。我們的高能效 AI 可以幫助現有的傳統水錶使用電池組運行超過 5 年，以實現實時訂單消耗、讀出和檢測漏水等經濟性，其安裝簡單性和卓越的低功耗性能吸引了數十個全球的水務部門、公用事業公司、儀表 OEM、ODM 和/或物聯網網絡提供商已開始與我們開展聯合開發項目。此外，我們在視頻會議、領導設備、黨派醫療、膠囊內窺鏡、汽車、智能辦公電池罐和監控等領域有更多的 WiseEye AI 客戶參與，僅舉幾例。

These decent volume shipment is anticipated within the next few quarters. As we focus on scaling adoption in this relatively untapped market, we continue to build alliances with numerous AI partners and communities to make our AI solution more accessible. To that end, during the upcoming CES 2023. Several of our proprietary ultra-low power wise AI solutions will be showcased jointly with our ecosystem partners and customers in various applications. including smart home, smart agriculture and surveillance, just to name a few. As on display will be applications embedded with our entirely Sensi module, a solution that offers numerous pre-trained machine learning models with a plug-and-play design that makes it possible to drastically reduce the significant financial barrier for AI or systems developers in deploying computer vision and machine learning AI capabilities to the endpoint devices. We welcome all interested parties to stop buying to learn more about our AI product line and see them in action.

這些體面的出貨量預計將在未來幾個季度內實現。隨著我們專注於在這個相對未開發的市場中擴大採用率，我們將繼續與眾多 AI 合作夥伴和社區建立聯盟，以使我們的 AI 解決方案更易於使用。為此，在即將到來的 2023 年國際消費電子展期間。我們將與我們的生態系統合作夥伴和客戶在各種應用中聯合展示我們專有的超低功耗智能人工智能解決方案。包括智能家居、智能農業和監控，僅舉幾例。展出的將是嵌入了我們完整 Sensi 模塊的應用程序，該解決方案提供了許多具有即插即用設計的預訓練機器學習模型，可以大大減少 AI 或系統開發人員在部署時面臨的重大財務障礙端點設備的計算機視覺和機器學習 AI 功能。我們歡迎所有感興趣的人停止購買，以了解更多關於我們的 AI 產品線並看到它們的實際應用。

Finally, we recently announced the divestiture of our fully owned subsidiary, emza Visua Sense. As we mentioned in our press release, the transaction will not affect the existing business with sale -- the divestiture does not change our Astral power wires AI image sensing business model, where we will continue to develop our own algorithms and work with third-party algorithm partners. Furthermore, we are more committed than ever to strengthen our WiseEye product road map and retaining our leadership position in ultra low power AI processor and image sensor for endpoint AI applications. As a demonstration of this commitment, at CES 2023, we will also debut our next-generation AI processor code named WE-2. The art processor features arm-based Cortex CPU and ESOP resets of sensor control interfaces, industrial-grade security and cryptography engines a multilayer power management architecture to offer superb tiny AML computing performance, optimal energy efficiency and best-in-class security and privacy assurance.

最後，我們最近宣布剝離我們的全資子公司 emza Visua Sense。正如我們在新聞稿中提到的那樣，該交易不會影響現有的銷售業務——剝離不會改變我們的 Astral 電源線 AI 圖像傳感業務模式，我們將繼續開發自己的算法並與第三方合作算法夥伴。此外，我們比以往任何時候都更加致力於加強我們的 WiseEye 產品路線圖，並保持我們在用於端點 AI 應用的超低功耗 AI 處理器和圖像傳感器方面的領先地位。作為這一承諾的體現，在 CES 2023 上，我們還將推出代號為 WE-2 的下一代 AI 處理器。 Art 處理器具有基於 ARM 的 Cortex CPU 和傳感器控制接口的 ESOP 重置、工業級安全和加密引擎、多層電源管理架構，可提供卓越的微型 AML 計算性能、最佳能效以及一流的安全和隱私保證.

The WE-I process offers 40% peak power savings and 30-fold inference speed, implying over 50x power efficiency on a per influence basis compared to the first generation WOI, which is already leading the industry among AI processes aiming for similar target markets. Several leading tops names CPU players have shown strong interest in order to process to support diverse AI patients of their next-generation smart notebooks we are very excited about the potential for BE2 and believe we are well positioned to capture the vast endpoint AI opportunities presented ahead. Lastly, I would like to give an update on our optical-related product lines, including WLO, Arcos and 3D sensing. Himax is 1 of the few companies in the technology industry with optical design capabilities and years of proven track record of mass production. We continue to work on strengthening our optical-related technology suite, while collaborating with some of the world's largest technology companies that are deeply committed to investing in its development. We are well positioned to play an enabling the role this exciting new industry as it evolves. Now to quickly review some of our recent progress. First, on our leading edge from the cost micro display efficient lightweight, small form factor and full color with unique characteristics of high illumination and low power consumption. One notable highlights in Q3 is a design win with a partner for new AR glasses without from those micro displays, which assists hearing-impaired people throughout the to tax translation that is projected onto the AR glasses on a realtime basis. Small volume shipments commenced during Q3. In addition, we also started shipment of from liters micro display in Q3 for customers assisted reality type NII chemotic device that sits below a presence line of sight to assist workers to access real-time or fee information.

WE-I 流程提供 40% 的峰值功率節省和 30 倍的推理速度，這意味著與第一代 WOI 相比，在每個影響基礎上的功率效率提高了 50 倍以上，第一代 WOI 已經在針對類似目標市場的 AI 流程中處於行業領先地位。幾位領先的頂級 CPU 玩家已表現出強烈的興趣，以便處理支持其下一代智能筆記本電腦的各種 AI 患者，我們對 BE2 的潛力感到非常興奮，並相信我們有能力抓住未來呈現的大量端點 AI 機會.最後，我想介紹一下我們與光學相關的產品線，包括 WLO、Arcos 和 3D 傳感。 Himax 是科技行業為數不多的具有光學設計能力和多年量產記錄的公司之一。我們將繼續致力於加強我們的光學相關技術套件，同時與一些全球最大的技術公司合作，這些公司致力於投資其發展。隨著這個令人興奮的新行業的發展，我們處於有利地位，可以發揮推動作用。現在來快速回顧一下我們最近的一些進展。首先，在我們的成本優勢上，微顯示高效輕巧、體積小、色彩全，具有高照度和低功耗的獨特特性。第三季度的一個顯著亮點是與合作夥伴在沒有那些微型顯示器的情況下獲得了新的 AR 眼鏡的設計勝利，這有助於聽力受損的人在實時投影到 AR 眼鏡上的稅收轉換過程中獲得幫助。第三季度開始小批量出貨。此外，我們還在第三季度開始為客戶提供輔助現實型 NII 化學設備的升微顯示器出貨，該設備位於存在視線下方，以幫助工人訪問實時或費用信息。

Moving on to an update on human interface sensign. We are seeing increasing adoption of our optical components and our 3D sensing technologies that enables new ways people interact with ARV applications. On 3D just share control, our WLO technology is deployed to empower 3D perception sensing for precise controller-free gesture recognition in VR devices. The collaboration is ongoing with a lead India player with promising progress with volume production expected during 2023. On 3D scanning for object reconstruction. Our 3D sensing technology, which incorporates both our 3D projector and 3D decoder is being deployed by a leading customer 3D scanning device for the purpose of generating real-time digital twins. [EBITDA] and 3D environment around this that ultimately help users transit and connect seamlessly between physical and digital worlds.

繼續更新人機界面感知。我們看到越來越多地採用我們的光學組件和 3D 傳感技術，這些技術使人們能夠以新的方式與 ARV 應用程序交互。在 3D 共享控制方面，我們部署了 WLO 技術以支持 3D 感知傳感，從而在 VR 設備中實現精確的無控制器手勢識別。與印度領先企業的合作正在進行中，有望在 2023 年實現量產。用於對象重建的 3D 掃描。我們的 3D 傳感技術結合了我們的 3D 投影儀和 3D 解碼器，正在由領先的客戶 3D 掃描設備部署，以生成實時數字雙胞胎。 [EBITDA] 和圍繞此的 3D 環境最終幫助用戶在物理世界和數字世界之間無縫過渡和連接。

While still early in the life cycle for the optical and metaverse related products, the ongoing commitment by the world's technology leaders alongside expanding interest in its potential suggests that this next-generation technology is poised for significant growth in the years to come. We are excited that Himax is at the forefront of optical innovation for this nascent industry and believe it has potential to be a long-term growth driver for our business. For non-driver IC business, we expect revenue to increase high teens sequentially in the fourth quarter. That concludes my report for this quarter. Thank you for your interest in Himax. We appreciate you joining today's call, and we are now ready to take questions.

雖然光學和虛擬世界相關產品仍處於生命週期的早期階段，但世界技術領導者的持續承諾以及對其潛力的興趣不斷擴大表明，這項下一代技術有望在未來幾年實現顯著增長。我們很高興 Himax 處於這個新興行業光學創新的前沿，並相信它有潛力成為我們業務的長期增長動力。對於非驅動IC業務，我們預計第四季度收入將環比增長十幾倍。我本季度的報告到此結束。感謝您對 Himax 的關注。感謝您加入今天的電話會議，我們現在準備回答問題。

(Operator Instructions) Our first question comes from the line of Donnie Teng with Nomura.

（操作員說明）我們的第一個問題來自 Donnie Teng 和 Nomura 的台詞。

Can you hear me?

你能聽到我嗎？

Yes, very well.

是的，很好。

My first question is regarding to gross margin. I think you have mentioned like foundries are lowering the price as well. And I think we have seen some of them lowering the price quite aggressively. But at the same time, I think our customers are still asking us to lower the price as well. So I think it's pretty dynamic. But wondering if you could kindly comment on like when do you think the gross margin would be the lowest point into next year? And how should we expect the reasonable gross margin next year after the foundry low price and also we lower our price to our customers.

我的第一個問題是關於毛利率的。我想你已經提到鑄造廠也在降低價格。我認為我們已經看到他們中的一些人非常積極地降低了價格。但與此同時，我認為我們的客戶仍然要求我們降低價格。所以我認為這是非常動態的。但是想知道您是否可以評論一下，您認為毛利率何時會成為明年的最低點？在代工低價之後我們應該如何期望明年的合理毛利率以及我們向客戶降低價格。

Thank you, Donnie. It's an interesting question. It's dynamic and it's so evolving. You are right to say that the foundry is kind of lowering their price. Although they -- I mean, in doing so, they do expect volume from customers any change. Now the thing is we are burdened we as an industry and Himax included we are burdened with steely high inventory, meaning our our capability to give significant orders to foundry right now is quite limited. So I think

謝謝你，唐尼。這是一個有趣的問題。它是動態的，它是如此的發展。你說得對，代工廠正在降低他們的價格。儘管他們——我的意思是，這樣做時，他們確實希望客戶的數量有任何變化。現在的問題是，作為一個行業，我們承受著沉重的負擔，包括 Himax 在內，我們都承受著鋼鐵般的高庫存，這意味著我們現在向鑄造廠提供大量訂單的能力非常有限。所以我認為

so actually, I think on a negative note, you are likely to see across the industry, gross margin continue to be under pressure because we are just offloading our inventory, which was sourced previously at a higher cost. And it doesn't matter really how foundry is lowering their price right now. So that is the major issue. However, for the products where the industry enjoys better visibility. Certainly, we continue to place new orders to foundries. However, the foundries also are aware of this. So on those areas, typically, how we see is that they are priced down will then become less aggressive because they now actually you do have to continue to place order because you don't have much inventory burden and the market remains visible and relatively strong. So I think -- and for Himax specifically, for next year, I mean, we will say, first off, it's too early to comment on the whole year's gross margin because the macro uncertainty you name it, you know what I'm talking about. It still calling the market, right? So I think it's still too early to comment. However, I think we are still quite confident on what we called the strong visibility group. In my prepared remarks, and we also mentioned the same in last quarter. There are basically 4 major things in the next few years, which will call High visibility group, namely automotive business in general and timing controller business and OLED business.

所以實際上，我認為不利的是，你可能會看到整個行業的毛利率繼續承壓，因為我們只是在卸載我們以前以更高成本採購的庫存。鑄造廠現在如何降低價格並不重要。所以這是主要問題。但是，對於行業知名度較高的產品。當然，我們繼續向代工廠下新訂單。然而，代工廠也意識到了這一點。因此，在這些領域，通常情況下，我們看到它們的定價會變得不那麼激進，因為它們現在實際上你必須繼續下訂單，因為你沒有太多的庫存負擔，市場仍然可見且相對強勁.所以我認為 - 特別是對於 Himax，對於明年，我的意思是，首先，現在評論全年的毛利率還為時過早，因為宏觀不確定性，你知道我在說什麼關於。它仍然在呼喚市場，對吧？所以我認為現在發表評論還為時過早。但是，我認為我們仍然對我們所說的強可見性組充滿信心。在我準備好的評論中，我們在上個季度也提到了同樣的內容。未來幾年基本上有4個主要的事情，稱為High Visibility Group，即通用汽車業務和時序控制器業務和OLED業務。

And lastly, our WiseEye powerAI business. And these 4 segments together account for -- it's going to account for about 50% or 50% of our total sales. So they are pretty significant. And they all they are all projected to enjoy better growth next year than our corporate average. They all are projected to enjoy better gross margin as well as than our corporate average. And so I think that is our positive note. So mixing the negative policy together, what is going to be the outcome for next year. I think it's indeed too early to tell. However, I do believe after this inventory destocking cycle is complete, which hopefully will be within 2 to 3 quarters from now. After this destocking cycle is complete, I think we will emerge a better company gross margin wise supported by this so-called high-visibility group of products. So that will be my kind of long answer to you, Donnie.

最後，我們的 WiseEye powerAI 業務。這 4 個部分加在一起佔 - 它將占我們總銷售額的 50% 或 50% 左右。所以它們非常重要。他們都預計明年將享受比我們公司平均水平更好的增長。預計它們都將享有更好的毛利率以及我們的公司平均水平。所以我認為這是我們積極的一面。因此，將負面政策混合在一起，明年的結果將是什麼。我認為現在下結論確實為時過早。但是，我確實相信在這個去庫存週期完成之後，希望會在從現在起的 2 到 3 個季度內。在這個去庫存週期完成後，我認為我們將在這個所謂的高知名度產品組的支持下出現更好的公司毛利率。所以這將是我對你的長篇回答，唐尼。

Very helpful. And maybe a housekeeping question is like in the past 2 years, I think most of the semi and tech companies have hired lots of talents and employees and mostly facing quickly deteriorating outlook in the past few quarters. And I'm wondering do you have any expectation on managing the OpEx into 2023. Is there any way you can control OpEx or you would just -- we should model like the similar OpEx this year?

非常有幫助。也許一個管家問題就像在過去的兩年裡，我認為大多數半導體和科技公司都僱傭了很多人才和員工，並且在過去幾個季度中大多面臨著迅速惡化的前景。我想知道您對管理到 2023 年的 OpEx 是否有任何期望。有什麼方法可以控制 OpEx，或者您只是——我們應該像今年類似的 OpEx 那樣建模？

I think that will be a fair assumption for your modeling purpose, I think that is right now, the plan, which is not to increase our non-IFRS OpEx. And so the non-IFRS OpEx will not depend largely on our profitability. As you know, our CU goes in line with our profitability. Now how do we do that? I think, again, back to my so-called high visibility group. For those product lines, we do need to continue to invest. However, we are likely to regroup our organization so that those people working on other product areas many of them will be channeled through to the product areas. That is 1 thing. That is 1 major thing. That is the way to control our headcount, knowing that actually the business visibility is poor. And so on select areas, I think we will continue to invest and expand, but we just have to do that more smartly. And again, 1 of the approaches is to rechannel some of the people from other areas into those focus areas. And we are still in the process of finalizing our BP for next year and it's very dynamic, a lot of uncertainties. But I think also considering inflation, which is creating pressure for wage increase across the industry. And on the top of the fact that Taiwan is still high talent engineers are still quite hard demand. So we have to remain competitive for such tenants. So again, I think the bottom line is given the high -- low visibility for the business. Our target is to keep a flat OpEx expense next year compared to this year while still continuing to invest in those especially for those high visibility group of product lines.

我認為這對於您的建模目的來說是一個公平的假設，我認為這就是現在的計劃，而不是增加我們的非 IFRS 運營支出。因此，非 IFRS 運營支出將不會在很大程度上取決於我們的盈利能力。如您所知，我們的 CU 符合我們的盈利能力。現在我們該怎麼做呢？我想，再次回到我所謂的高知名度小組。對於這些產品線，我們確實需要繼續投資。但是，我們可能會重新組合我們的組織，以便那些在其他產品領域工作的人將被引導到產品領域。那是一件事。這是一件大事。這是控制我們員工人數的方法，因為我們知道實際上業務可見性很差。等等選擇領域，我認為我們將繼續投資和擴大，但我們只需要更聰明地做到這一點。同樣，其中一種方法是將一些人從其他領域重新引導到這些重點領域。而且我們仍在為明年確定我們的 BP 的過程中，這是非常動態的，有很多不確定性。但我認為還要考慮通貨膨脹，這給整個行業的工資增長帶來了壓力。而且在台灣仍然是高人才的事實之上，工程師的需求仍然相當艱鉅。因此，我們必須對此類租戶保持競爭力。再說一次，我認為底線是對業務的高 - 低知名度。我們的目標是在明年與今年相比保持平穩的運營支出，同時繼續投資那些特別是那些高知名度的產品線組。

(Operator Instructions)

（操作員說明）

We have a question from the line of Tiffany with Morgan Stanley.

我們有一個來自蒂芙尼與摩根士丹利的問題。

Can you hear me?

你能聽到我嗎？

Yes, Claude clear.

是的，克勞德很清楚。

Okay. And my first question will be about your future foundry adoption plan. Could you kindly let us know whether you will leverage more Chinese foundries in the future? And I have a follow-up for this -- thank you.

好的。我的第一個問題是關於你未來的代工廠採用計劃。您能否讓我們知道您將來是否會利用更多的中國代工廠？我對此進行了跟進——謝謝。

We have been using Chinese foundries, although our vast majority of our foundry supplies still come from Taiwan. And also a bit from Korea as well. China is a new source of supplier, and we do intend to collaborate with Chinese foundries. -- now understanding the U.S.-China tension at the moment, right? So I think on the 1 hand, I mean, our Chinese customers do -- we certainly love to see our using more Chinese foundries. On the other hand, I mean even our Chinese customers, the other international customers, they do need to target non-China customers. And for some of those -- for many of those non-China customers, they are, I mean, seeing the uncertainty, again, this current tension, the prevailing tension between China and U.S. they are worried. So they need to hedge against Chinese foundries. So I think -- the good news is that for guys like us, China is such a big foundry base. It doesn't matter how you strategize your foundry position. You -- I'm talking about my customers or even end customers, you can't really get away with utilizing or depending counting on Taiwan as a sell foundry place. So I think that leaves us with a pretty good position. So I think looking forward, we are going to continue to -- CadonTaiwan is our primary source of foundry supply while continuing to expand our China and Korean funding basis.

我們一直在使用中國代工廠，儘管我們絕大多數的代工供應仍然來自台灣。還有一點來自韓國。中國是一個新的供應商來源，我們確實打算與中國代工廠合作。 ——現在了解目前的美中緊張局勢，對嗎？所以我認為，一方面，我的意思是，我們的中國客戶這樣做——我們當然希望看到我們使用更多的中國代工廠。另一方面，我的意思是即使是我們的中國客戶，其他國際客戶，他們也確實需要針對非中國客戶。對於其中一些人——對於許多非中國客戶來說，我的意思是，他們再次看到了不確定性，他們擔心當前的緊張局勢，中美之間普遍存在的緊張局勢。所以他們需要對沖中國代工廠。所以我認為——好消息是，對於像我們這樣的人來說，中國是一個如此大的鑄造基地。您如何制定代工位置的戰略並不重要。你——我說的是我的客戶，甚至是最終客戶，你無法真正擺脫利用或依賴台灣作為代工廠的地位。所以我認為這給我們留下了一個很好的位置。所以我認為展望未來，我們將繼續——CadonTaiwan 是我們的主要代工供應來源，同時繼續擴大我們在中國和韓國的資金基礎。

Okay. Very clear. if possible? Could you kind of let us know like your ideal proportion between Chinese Taiwanese and Korean foundries.

好的。非常清楚。如果可能的話？您能否讓我們知道您在中國台灣和韓國代工廠之間的理想比例。

I don't have the data right in front of me right now. But we do -- we there are product considerations. They are just areas where we find Korean foundries are quite suitable in certain areas, they do capacity we do have -- they do have a track record, they give the technology and that is suitable for us, likewise, for China. But in China, we are now doing actually, across the board, quite a diversified line of product areas, covering smartphone tablet to a lesser extent TV and monitor. Our source of supply for automotive is still primarily Taiwan almost exclusive in Taiwan. And for example, our sensor is Taiwan plus Korea. So it's -- I don't exactly quantify them by potentials of our sourcing because I look at them more on product and technology perspective. And if you like, I mean, our IR can follow up with you for a more spec number breakdown.

我現在沒有數據在我面前。但我們這樣做——我們有產品方面的考慮。他們只是我們發現韓國代工廠在某些領域非常適合的領域，他們有我們確實擁有的能力——他們確實有過往記錄，他們提供了適合我們的技術，同樣也適合中國。但在中國，我們現在實際上在做的產品線非常多元化，包括智能手機平板電腦和電視和顯示器。我們的汽車供應來源仍然主要是台灣，幾乎是台灣獨有的。例如，我們的傳感器是台灣加韓國。所以它 - 我沒有通過我們採購的潛力來準確量化它們，因為我更多地從產品和技術的角度看待它們。如果您願意，我的意思是，我們的 IR 可以與您聯繫以獲取更多規格編號細分。

Okay. My second question is about your thoughts on the accounting -- Chinese competitors. Could you kindly let us know whether you see any impact on your business from these like new Chinese competitors? And could you also share your plans in encountering more peer competition from them.

好的。我的第二個問題是關於您對會計的看法——中國競爭對手。您能否告訴我們您是否看到這些新的中國競爭對手對您的業務有任何影響？您能否也分享您在遇到更多來自他們的同行競爭方面的計劃。

Yes. Thank you, Tiffany. It's a fair question. I think China has always wanted to localize. It's directive from the government for years. So it's nothing new to us. So throughout the years, they have -- we have been dealing with Chinese competition all the time. And certainly, the is being intensified over the last few years because, again, Chinese government is giving another push. So regardless, we are still doing our best to support China customers. both in terms of technology and service and capacity and whatnot. And we are actually viewed by many of them by vast majority of them as their strategic partners as well. I think it's -- the fact that China wants to localize more doesn't mean they were -- they are going to start using foreign suppliers. -- suppliers. So our strategy is to upgrade our technology and our offering and and try to for possible dominant in certain applications. For example, automotive, where our position remains quite dominant and Chinese competition is still having a having a hard time trying to get in because the qualification process, the technology requirements and the willingness for adoption from Tier 1 and end user customers. are all higher.

是的。謝謝你，蒂芙尼。這是一個公平的問題。我認為中國一直想要本土化。這是政府多年來的指令。所以這對我們來說並不新鮮。所以這些年來，他們一直 - 我們一直在處理中國的競爭。當然，在過去的幾年裡，這種情況正在加劇，因為中國政府再次給予了推動。因此，無論如何，我們仍在盡最大努力支持中國客戶。無論是在技術、服務、能力等方面。實際上，他們中的大多數人也將我們視為他們的戰略合作夥伴。我認為這是——中國想要更多本地化的事實並不意味著他們是——他們將開始使用外國供應商。 ——供應商。所以我們的戰略是升級我們的技術和我們的產品，並嘗試在某些應用程序中佔據主導地位。例如，在汽車領域，我們的地位仍然佔據主導地位，而中國的競爭仍然難以進入，因為資格流程、技術要求以及一級和最終用戶客戶的採用意願。都更高。

The barriers are much higher, even for Chinese Tier 1s because many Chinese Tier 1s, they still have to deal with international end customers even for dealing with the whole end customers much of the these customers still want better quality and better technology support. So that is 1 thing in automotive. We are -- we are working very hard to safeguard our position. And in the meantime, excluding Chinese competition. We are seeing Chinese competition most severe from 2 segments, TV and smartphone. Both segments share on the common characteristic, which is both have -- in both local Chinese end brands to master a major market share globally. So it's a push from the end customer that panelmakers get to have a easier position in terms of introducing Chinese IC vendors to the end customers' products. Whereas if you look at notebook and monitor in comparison, where Chinese end customers presence is less compared to the 2 sectors I mentioned earlier. You see less Chinese competition. I'm not saying this will last forever. So I'm saying automotive will be the most difficult, not just for Himax across the board. It's just also a sector where Himax enjoys the best position and followed by notebook and monitor where the end customers you have still pretty much international dominance. And lastly, TV and smartphone, where Chinese end customers do together command a pretty sizable market share.

壁壘要高得多，即使是中國的 Tier 1，因為很多中國的 Tier 1，他們仍然需要與國際終端客戶打交道，即使要與整個終端客戶打交道，這些客戶中的大部分仍然需要更好的質量和更好的技術支持。所以這是汽車中的一件事。我們是——我們正在努力維護我們的立場。同時，不包括中國的競爭。我們從電視和智能手機這兩個領域看到中國的競爭最為激烈。這兩個細分市場有一個共同的特點，那就是都擁有——在中國本土終端品牌中都掌握了全球主要市場份額。因此，終端客戶推動面板製造商在將中國 IC 供應商介紹給終端客戶產品方面處於更容易的位置。而如果你比較一下筆記本電腦和顯示器，與我之前提到的兩個行業相比，中國終端客戶的存在較少。你看到中國的競爭減少了。我不是說這會永遠持續下去。所以我說汽車將是最困難的，而不僅僅是整個 Himax。這也是奇景科技佔據最佳位置的一個領域，其次是筆記本和顯示器，在這些領域的終端客戶你仍然擁有相當大的國際主導地位。最後，電視和智能手機，中國終端客戶共同佔據了相當可觀的市場份額。

So that is 1 thing. And the other thing is we are diversified into new businesses, such as our optics, such as our WiseEye who really local competition is not really an issue as such. We are dealing with international customers. We are competing in international markets. So this China factor is relatively small in those areas. I hope that addresses your question.

所以這是一件事。另一件事是我們多元化進入新業務，例如我們的光學，例如我們的 WiseEye，真正的本地競爭並不是真正的問題。我們正在與國際客戶打交道。我們在國際市場上競爭。所以這個中國因素在那些領域相對較小。我希望這能解決你的問題。

(Operator Instructions) We are showing no further questions in queue at this time. I'd like to turn the call back to Jordan Wu for closing remarks.

（操作員說明）我們目前在隊列中沒有顯示更多問題。我想把電話轉回給 Jordan Wu 做閉幕詞。

As a final note, Eric Li, our Chief IRP Officer, will maintain investor marketing activities and continue to attend investor conferences. We will announce the details as they come about. Thank you, and have a nice day SP1 This concludes today's conference call. Thank you for participating. You may now disconnect.

最後一點，我們的首席 IRP 官 Eric Li 將維持投資者營銷活動並繼續參加投資者會議。我們將在它們出現時公佈細節。謝謝，祝您有美好的一天 SP1 今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。