奇景光電 (HIMX) 2023 Q3 法說會逐字稿

Hello, ladies and gentlemen, and welcome to Himax Technologies, Inc. Third Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this call is being recorded.

女士們、先生們，大家好，歡迎參加奇景光電 2023 年第三季財報電話會議。 （操作員說明）謹此提醒，此通話正在錄音。

I would now like to hand the conference over to your host, Mr. Mark Schwalenberg from MZ Group. Sir, you may begin.

現在我想將會議交給東道主、來自 MZ 集團的 Mark Schwalenberg 先生。先生，您可以開始了。

Thank you. Welcome, everyone, to the Himax Third Quarter 2023 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 comments, we have allocated time for questions in a question-and-answer 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.himax.com.tw.

謝謝。歡迎大家參加奇景光電 2023 年第三季財報電話會議。加入我們公司的還有總裁兼執行長吳喬丹先生；潘潔女士，財務長；以及首席 IR/PR 長 Eric Li 先生。在公司準備好意見後，我們在問答環節安排了提問時間。如果您尚未收到今天的業績發布副本，請發送電子郵件至 hisx@mzgroup.us、訪問金融入口網站上的新聞稿或從奇景網站 www.himax.com.tw 下載副本。

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 events or results 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, 2022, in the section entitled Risk Factors as may be amended.

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聲明，包括有關預期未來財務業績和行業增長的聲明，都是前瞻性聲明，涉及許多風險和不確定性，這些風險和不確定性可能會影響您的投資決策。導致實際事件或結果與本次電話會議中所述的情況有重大差異。風險因素清單可在公司提交給 SEC 的文件（截至 2022 年 12 月 31 日的年度 20-F 表格）標題為「可能會修訂的風險因素」的部分中找到。

Except for the company's full year of 2022 financials, which were provided in the company's 20-F and filed with the SEC on April 6, 2023. 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.

除本公司2022 年全年財務數據外，該財務數據在公司20-F 中提供並於2023 年4 月6 日向SEC 備案。本次電話會議中包含的財務資訊未經審計和合併，並根據IFRS 會計編制。此類財務資訊是內部產生的，並未經過相同的審查和審查，包括內部審計程序和獨立審計師的外部審計，我們的年度合併財務報表必須遵守這些審查和審查，並且可能與經審計的合併財務資訊有重大差異。同一時期。本公司不承擔公開更新或修改任何前瞻性陳述的義務，無論是由於新資訊、未來事件或其他原因。

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

我現在想把電話轉給Eric Li先生。艾瑞克，地板是你的。

Thank you, Mark, and thank you, everyone, for joining us. My name is Eric Li, Chief IR/PR Officer at Himax. On today's call, I will first review the Himax consolidated financial performance for the third quarter 2023, followed by our fourth quarter outlook. Jordan will then give an update on the status of our business, after which we will take questions. We will review our financials on an IFRS basis.

謝謝你，馬克，也謝謝大家加入我們。我是 Eric Li，奇景光電首席 IR/PR 長。在今天的電話會議上，我將首先回顧奇景光電 2023 年第三季的綜合財務業績，然後是我們對第四季的展望。然後喬丹將介紹我們業務的最新狀況，然後我們將回答問題。我們將根據國際財務報告準則審查我們的財務狀況。

We are pleased to report that Himax third quarter revenues and profit, both exceeded our guidance while gross margin came in at the upper end of the guidance range issued on August 10, 2023. The better-than-expected results are attributable to the resilience of our core business in the face of macroeconomic challenges. Third quarter revenues registered $238.5 million, an increase of 1.5% sequentially and up 11.6% on a year-over-year basis, exceeding the guidance range of a 7% decline to flat sequentially. This can be credited to positive order momentum across all business segments.

我們很高興地報告，奇景第三季度收入和利潤均超出了我們的指導，而毛利率則處於 2023 年 8 月 10 日發布的指導範圍的上限。好於預期的業績歸因於面對宏觀經濟挑戰，我們的核心業務。第三季營收為 2.385 億美元，季增 1.5%，年增 11.6%，超出了環比下降 7% 至持平的指導範圍。這可以歸功於所有業務部門的積極訂單勢頭。

Gross margin came in at 31.4%, a substantial increase from 21.7% of last quarter and at the upper end of our guidance range of 30.5% to 32%. The Q3 gross margin improvement reflected the absence of the onetime expense incurred in the second quarter related to the strategic termination of certain high-cost foundry capacity agreements, in addition to a favorable product mix, primarily driven by the remarkable performance of our automotive product line, which maintains a higher margin profile than corporate average. Q3 profit per diluted ADS was $0.064, exceeding the guidance range of $0.015 to $0.06.

毛利率為 31.4%，較上季的 21.7% 大幅成長，處於我們指導範圍 30.5% 至 32% 的上限。第三季毛利率的改善反映了第二季與策略性終止某些高成本代工產能協議相關的一次性費用的消失，以及有利的產品組合（主要由我們的汽車產品線的出色表現推動） ，其利潤率維持高於企業平均。第三季稀釋後每股美國存託憑證利潤為 0.064 美元，超出了 0.015 美元至 0.06 美元的指導範圍。

Revenue from large display drivers came in at $43.7 million, a decrease of 3.7% sequentially but up 5.9% year-over-year. TV IC sales declined as expected, as customers already replenished their inventory in previous quarters and suspended further pull-ins. Monitor and notebook IC sales were up single digit and a nice double-digit respectively in the third quarter, predominantly driven by rush order from key customers. Large panel driver IC sales accounted for 18.3% of total revenues for this quarter compared to 19.3% last quarter and a year ago.

大型顯示器驅動器的收入為 4,370 萬美元，環比下降 3.7%，但年增 5.9%。電視IC銷售如預期下降，因為客戶已經在前幾個季度補充了庫存並暫停了進一步的拉貨。第三季顯示器和筆記型電腦 IC 銷售額分別成長個位數和兩位數，主要受到主要客戶緊急訂單的推動。大尺寸面板驅動IC銷售額佔本季總營收的18.3%，而上季及去年同期為19.3%。

Moving on to our small and media-sized display driver segment. Revenue was $161.1 million, an increase of 7.2% sequentially and up 13.9% compared to same period last year, surpassing the guidance range due to better-than-expected sales performance, particularly in automotive sector and TDDI products. Q3 automotive driver sales saw a decent double-digit sequential increase, thanks to a strong uptick in both TDDI and traditional DDIC as clients worldwide resume order replenishment. Smartphone and tablet driver sales, on the other hand, decreased double-digit and mid-teens sequentially, reflecting continued soft market demand.

繼續我們的小型和中型顯示驅動器部分。營收為1.611億美元，比上一季成長7.2%，比去年同期成長13.9%，由於銷售業績好於預期，特別是在汽車領域和TDDI產品方面，收入超出了指導範圍。隨著全球客戶恢復補貨，TDDI 和傳統 DDIC 均出現強勁成長，第三季汽車驅動器銷售額出現了兩位數的季增。另一方面，智慧型手機和平板電腦的銷售量較上季下降了兩位數和中位數，反映出市場需求持續疲軟。

In the third quarter, the automotive business remained our largest revenue contributor, accounting for nearly 45% of total sales. One notable highlight during the quarter was our commencement of the world's first mass production of LTDI. This further demonstrates our leadership position in the lucrative automotive display battlefield. Jordan will elaborate in a few minutes. Small and medium-sized driver IC segment accounted for 67.6% of total sales for this quarter compared to 63.9% in previous quarter and 66.2% a year ago.

第三季度，汽車業務仍然是我們最大的收入貢獻者，佔總銷售額的近45%。本季的一個顯著亮點是我們開始在全球首次大規模生產 LTDI。這進一步證明了我們在利潤豐厚的汽車顯示領域的領導地位。喬丹將在幾分鐘內詳細說明。中小型驅動IC領域佔本季總銷售額的67.6%，而上一季為63.9%，去年同期為66.2%。

Third quarter nondriver sales also exceeded guidance with revenue of $33.7 million, down 14.4% from a quarter ago, but up 9% compared to same period last year. The better-than-expected performance was a result of higher shipment of WLO and CMOS image sensor. Tcon business represented over 8% of our total sales in the third quarter, yet experienced a low teens sequential decline, hampered by decreased demand for both large display panels and AMOLED displays for tablet.

第三季非駕駛銷售額也超出了預期，營收為 3,370 萬美元，較上一季下降 14.4%，但較去年同期成長 9%。業績優於預期是由於 WLO 和 CMOS 影像感測器的出貨量增加。 Tcon 業務佔第三季總銷售額的 8% 以上，但由於大型顯示器和平板電腦 AMOLED 顯示器的需求下降，環比下降幅度較低。

On a positive note, we continue to solidify our leadership in automotive Tcon market with local dimming technology adoption, rising rapidly by leading panel makers, Tier 1s and car makers across the board. With numerous project awards already in hand, we expect a strong growth trajectory for automotive Tcon in the next few years. Non-driver products accounted for 14.1% of total revenues as compared to 16.8% in the previous quarter and 14.5% a year ago.

從積極的方面來看，我們透過採用局部調光技術，繼續鞏固我們在汽車 Tcon 市場的領導地位，並在領先的面板製造商、一級供應商和汽車製造商的推動下迅速崛起。憑藉著已經獲得的眾多項目獎項，我們預計汽車 Tcon 在未來幾年將出現強勁的成長軌跡。非驅動產品佔總營收的 14.1%，而上一季為 16.8%，一年前為 14.5%。

Third quarter operating expenses were $63.7 million, an increase of 19.8% from the previous quarter, but down 12.5% from a year ago. As a reminder, we grant annual bonuses to employees at the end of September each year, including RSU and cash awards. Our 2023 annual bonus compensation of $10.4 million was in line with guidance, out of which $9.7 million or $0.044 per diluted ADS was immediately vested and expensed in the third quarter. In comparison, bonuses for 2022 and 2021 were $39.6 million and $74.7 million, respectively, of which $18.5 million and $24.8 million were vested and expensed immediately. The changes in Q3 operating expenses were mainly associated with the way we expensed the employee annual bonus grants based on IFRS accounting.

第三季營運費用為6,370萬美元，較上季成長19.8%，但年減12.5%。提醒一下，我們在每年 9 月底向員工發放年度獎金，包括 RSU 和現金獎勵。我們的 2023 年年度獎金為 1040 萬美元，符合指導方針，其中 970 萬美元或稀釋後的美國存託股份 0.044 美元立即歸屬並在第三季度支出。相較之下，2022 年和 2021 年的獎金分別為 3,960 萬美元和 7,470 萬美元，其中 1,850 萬美元和 2,480 萬美元立即歸屬和支出。第三季營運費用的變化主要與我們根據國際財務報告準則會計處理員工年度獎金補助的費用方式有關。

To clarify, the Q3 bonus expense includes 2 portions. First, as mentioned above, $9.7 million for the immediately vested and recognized portion of the current year bonus grant that is based on the expected profit for the full year. Second, $6.2 million for the amortized tranches of the prior year bonuses. As a reference, the amortized expense of the prior year employee bonuses for full year 2023 would be as high as $21.8 million due to substantially high profits in 2021 and 2022, leading to a significantly increased bonus carryover amortization expense. This has caused volatility in our IFRS figures for 2023. While for the annual bonus grant, Himax has always followed a consistent compensation policy and rules for employees. Amidst prevailing macroeconomic headwinds, we are currently exercising strict budget and expense control with full year 2023 OpEx post to decline compared to last year.

澄清一下，第三季的獎金費用包括兩個部分。首先，如上所述，970萬美元用於本年度獎金授予的立即歸屬和確認部分，該部分基於全年預期利潤。其次，620 萬美元用於上一年獎金的攤提部分。作為參考，由於2021年和2022年利潤大幅提高，2023年全年的上年員工獎金攤銷費用將高達2,180萬美元，導致獎金結轉攤銷費用大幅增加。這導致我們2023年的國際財務報告準則數據出現波動。而在年度獎金發放方面，奇景始終遵循一致的員工薪酬政策和規則。在當前宏觀經濟不利的情況下，我們目前正在實行嚴格的預算和費用控制，2023 年全年營運支出較去年下降。

Third quarter operating income was $11.1 million or 4.6% of sales compared to 1.8% of sales for the same period last year and minus 0.9% last quarter. The sequential increase was primarily a result of increased sales and gross margin, partially offset by higher operating expenses in the third quarter. The year-over-year increase was primarily a result of lower operating expenses brought by lower annual bonus compensation, partially offset by lower gross margin compared to same period last year. Third quarter after-tax profit was $11.2 million or $0.064 per diluted ADS compared to $0.9 million or $0.005 per diluted ADS last quarter and $8.3 million or $0.048 in the same period last year.

第三季營業收入為 1,110 萬美元，佔銷售額的 4.6%，去年同期為 1.8%，上季為負 0.9%。環比成長主要是由於銷售額和毛利率的增加，但部分被第三季營運費用的增加所抵消。年比成長主要是由於年度獎金薪酬下降帶來的營運費用下降，但部分被毛利率較去年同期下降所抵銷。第三季稅後利潤為1,120 萬美元，即每稀釋後美國存託憑證0.064 美元，而上季為90 萬美元，即每稀釋後美國存託憑證0.005 美元，去年同期為830 萬美元，即每稀釋後美國存託憑證0.048 美元。

Turning to the balance sheet. We had $155.4 million of cash, cash equivalents and other financial assets as of September 30, 2023, compared to $227.9 million at the same time last year and $219.5 million a quarter ago. Third quarter cash flows were impacted by -- primarily by 2 cash payouts, $83.7 million for annual dividend and $29.5 million for employee bonus. The employee bonus is comprised of $9.3 million for the immediately vested portion of this year's award and $20.2 million for vested awards granted over the last 3 years. Despite the substantial payout in Q3, we delivered strong positive operating cash flow of $16 million, again, due to the ongoing destocking process across major product lines with inventory experiencing a meaningful reduction compared to the past quarters. We had $42 million of long-term unsecured loans as of the end of the third quarter, of which $6 million was the current portion.

轉向資產負債表。截至 2023 年 9 月 30 日，我們擁有 1.554 億美元的現金、現金等價物和其他金融資產，而去年同期為 2.279 億美元，上季為 2.195 億美元。第三季現金流量主要受到兩項現金支出的影響，即年度股利 8,370 萬美元和員工獎金 2,950 萬美元。員工獎金包括今年獎勵的立即歸屬部分 930 萬美元和過去 3 年授予的既得獎勵 2020 萬美元。儘管第三季支出豐厚，但由於主要產品線持續去庫存，庫存與過去幾季相比大幅減少，我們再次實現了 1,600 萬美元的強勁正營運現金流。截至第三季末，我們擁有 4,200 萬美元的長期無擔保貸款，其中 600 萬美元為流動部分。

Our quarter end inventory as of September 30, 2023, were $259.6 million, markedly lower than $297.3 million last quarter. Accounts receivable at the end of September 2023 was $248.5 million, up from $239 million last quarter and down from $253.3 million a year ago. DSO was 95 days at the quarter end as compared to 90 days last quarter and 74 days a year ago. Third quarter capital expenditures were $2.6 million versus $2.9 million last quarter and $3.4 million a year ago. The third quarter CapEx was mainly for our IC design business. As of September 30, 2023, Himax had 174.7 million ADS outstanding, little changed from last quarter. On a fully diluted basis, total number of ADS outstanding for the third quarter was 174.8 million.

截至 2023 年 9 月 30 日，我們的季末庫存為 2.596 億美元，明顯低於上季的 2.973 億美元。截至 2023 年 9 月末，應收帳款為 2.485 億美元，高於上季的 2.39 億美元，低於一年前的 2.533 億美元。季度末的 DSO 為 95 天，而上季為 90 天，去年同期為 74 天。第三季資本支出為 260 萬美元，上季為 290 萬美元，一年前為 340 萬美元。第三季資本支出主要用於我們的IC設計業務。截至2023年9月30日，奇景已發行美國存託股1.747億股，與上季相比變化不大。在完全攤薄的基礎上，第三季流通在外的美國存託股份總數為1.748億股。

Now turning to our fourth quarter 223 guidance. We expect fourth quarter revenues to decline 5% to 11% sequentially. Gross margin is expected to be around 30%, depending on the final product mix. The fourth quarter profit attributable to shareholders is estimated to be in the range of $0.09 to $0.13 per fully diluted ADS.

現在轉向我們的第四季 223 指引。我們預計第四季營收將環比下降 5% 至 11%。毛利率預計在 30% 左右，具體取決於最終產品組合。第四季股東應占利潤預計為每股完全攤薄後的美國存託股份 0.09 至 0.13 美元。

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

我現在將把電話轉給喬丹，討論我們第四季的前景。喬丹，地板是你的。

Thank you, Eric. We expect our fourth quarter sales growth to be relatively subdued compared to typical seasonal trends, primarily due to sluggish end market demand as well as cautious inventory management and rigorous procurement scrutiny by our customers. Additionally, ongoing macro headwinds are limiting our visibility as panel customers remain tentative about demand prospects, leading to shortened forecasts and more frequent last-minute orders. Having said that, our longer-term outlook for the automotive business, our largest revenue contributor, remains positive as we maintain a dominant position in the sector.

謝謝你，埃里克。我們預計，與典型的季節性趨勢相比，第四季度的銷售成長將相對疲軟，這主要是由於終端市場需求低迷以及客戶謹慎的庫存管理和嚴格的採購審查。此外，持續的宏觀逆風限制了我們的能見度，因為面板客戶對需求前景仍持試探態度，導致預測縮短和最後一刻訂單更加頻繁。話雖如此，我們對汽車業務（我們最大的收入貢獻者）的長期前景仍然樂觀，因為我們保持在該行業的主導地位。

The majority of our design wins in TDDI and local dimming Tcon, both relatively new technologies for automotive sector, are slated to commence mass production during the next 2 years, thereby further fortifying our market share leadership amidst growing competition. When coupled with the mega trend of increasing quantity, size and sophistication of displays inside vehicles, Himax is poised to enjoy sustainable growth in the automotive market for years to come, regardless of auto industry headwinds or macroeconomic challenges.

我們在TDDI 和局部調光Tcon 方面贏得的大部分設計，這兩種汽車行業相對較新的技術，預計將在未來兩年內開始大規模生產，從而在日益激烈的競爭中進一步鞏固我們的市場份額領先地位。再加上車內顯示器數量、尺寸和複雜程度不斷增加的大趨勢，無論汽車行業面臨逆風或宏觀經濟挑戰如何，奇景光電都將在未來幾年在汽車市場實現可持續增長。

Amidst the prevailing challenging economic conditions, we continue to implement a range of measures to reduce costs, including improving manufacturing and operational efficiencies and leveraging diverse partners in foundries and back-end sources. The recently announced partnership alliance with Nexchip in automotive is an illustration of Himax's foundry supply diversification strategy. The collaboration expands Himax's foundry supply while optimizing cost structure for the thriving automotive market, especially in China. In terms of inventory, the destocking process is progressing nicely with Q3 seeing a meaningful reduction. Currently, we are nearing historical average levels after several quarters of aggressive inventory depletion.

在當前充滿挑戰的經濟狀況下，我們繼續實施一系列措施來降低成本，包括提高製造和營運效率以及利用代工廠和後端來源的多元化合作夥伴。最近宣布與 Nexchip 在汽車領域的合作關係是奇景光電代工供應多元化策略的例證。此次合作擴大了奇景的代工供應，同時優化了蓬勃發展的汽車市場（尤其是中國）的成本結構。庫存方面，去庫存進展順利，第三季庫存明顯減少。經過幾季的庫存大幅消耗後，目前我們已接近歷史平均值。

Thanks to accelerating growth in our automotive business, improved cost structure, normalized inventory levels, favorable product mix and our emphasis on higher margin, higher value-added areas, like Tcon, OLED and AI, we are well positioned to deliver sustainable long-term revenue growth and profitability.

由於我們的汽車業務加速成長、成本結構改善、庫存水準正常化、有利的產品組合以及我們對高利潤、高附加價值領域（如Tcon、OLED 和AI）的重視，我們有能力實現可持續的長期發展收入成長和獲利能力。

With that, I will now begin with an update on the large panel driver IC business. For our fourth quarter -- our fourth quarter 2023 large display driver IC revenue is projected to decline by double digits sequentially, reflecting the absence of festival season shopping this year and intensified China local competition. In the TV IC business, leading end brands continue to implement stringent production control measures amidst soft demand and are maintaining low inventory levels. Consequently, we expect a double-digit quarter-over-quarter decline in Q4 TV IC sales. Notebook and monitor IC are also facing a challenging business environment, where we expect sales for both product lines to decrease by double digit sequentially.

接下來，我將先介紹大面板驅動IC業務的最新情況。對於我們的第四季度，我們的 2023 年第四季度大型顯示驅動器 IC 收入預計將環比下降兩位數，反映出今年節日購物季的缺失以及中國本土競爭的加劇。在電視IC業務中，領先終端品牌在需求疲軟的情況下繼續實施嚴格的生產控制措施，並維持較低的庫存水準。因此，我們預計第四季度電視 IC 銷售額將出現兩位數的環比下降。筆記型電腦和顯示器IC也面臨著充滿挑戰的商業環境，我們預期這兩個產品線的銷售額將連續兩位數下降。

Turning to the small and medium-sized display driver IC business. Fourth quarter revenue is expected to decline single digit on the backdrop of a muted festival season where demand for consumer electronics remains sluggish. Smartphone sales are projected to decline double digit, while tablet sales are expected to increase single digit sequentially in Q4. Automotive revenue is expected to be flat or slightly down sequentially following a surge in orders resuming for both traditional DDIC and TDDI during the previous quarter. Q4 automotive TDDI sales are poised to continue to increase by low teens sequentially, fueled by strong customer orders across the board and supportive governmental policies, especially in China and U.S., aimed at incentivizing new vehicle purchases.

轉向中小尺寸顯示驅動IC業務。在消費性電子產品需求依然低迷的節日淡季背景下，第四季營收預計將下降個位數。智慧型手機銷量預計將下降兩位數，而平板電腦銷量預計第四季將環比增長個位數。由於上一季傳統 DDIC 和 TDDI 訂單恢復激增，汽車行業收入預計將持平或略有下降。在全面強勁的客戶訂單和旨在刺激新車購買的政府支持性政策（特別是在中國和美國）的推動下，第四季度汽車 TDDI 銷售量預計將繼續以十位數以下的速度增長。

Secured design win projects for automotive TDDI continue to expand across the board and now total nearly 400, significantly ahead of our peers. Remarkably, automotive TDDI sales are expected to account for almost 40% of total automotive driver sales in Q4. As Eric mentioned earlier, automotive driver sales are now our largest revenue contributor. And if combined with automotive Tcon, is set to represent almost half of our total sales in Q4.

汽車 TDDI 的安全設計得標項目繼續全面擴展，目前總數接近 400 個，明顯領先我們的同行。值得注意的是，第四季汽車 TDDI 銷售額預計將佔汽車驅動器總銷售額的近 40%。正如艾瑞克之前提到的，汽車驅動器銷售現在是我們最大的收入來源。如果與汽車 Tcon 結合起來，將占我們第四季總銷售額的近一半。

Moving on to our industry-leading LTDI. As we recently announced, Himax is the first in the world to commence mass production of LTDI for certain customers' NEVs starting in Q3 this year. We expect LTDI adoption to further proliferate as it gains traction in car models featuring large-size displays as carmakers look to distinguish their vehicle products. Additionally, we are seeing an increasing number of customers choosing to adopt our integrated LTDI and local dimming Tcon solution as the standard platform for the ultra large automotive display development. These newly designed automotive displays are typically larger than 30 inches, deliver a sharp detailed visual experience and incorporate high-density touch functionality, which typically necessitates the utilization of 6 or more LTDI chips, together with at least one local dimming Tcon, representing much higher content value for us on a per panel basis. This not only ramps up a new revenue stream but also reinforces our leadership position in the automotive display market as we move into 2024.

轉向我們行業領先的 LTDI。正如我們最近宣布的那樣，奇景光電是全球第一家從今年第三季開始為某些客戶的新能源汽車大規模生產 LTDI 的公司。我們預計 LTDI 的採用將進一步激增，因為隨著汽車製造商希望使自己的車輛產品脫穎而出，LTDI 在配備大尺寸顯示器的車型中越來越受歡迎。此外，我們看到越來越多的客戶選擇採用我們的整合 LTDI 和局部調光 Tcon 解決方案作為超大型汽車顯示器開發的標準平台。這些新設計的汽車顯示器通常大於 30 英寸，可提供清晰細膩的視覺體驗並包含高密度觸摸功能，這通常需要使用 6 個或更多 LTDI 晶片，以及至少一個局部調光 Tcon，代表更高以每個面板為基礎對我們來說內容價值。這不僅增加了新的收入來源，而且在進入 2024 年時也鞏固了我們在汽車顯示器市場的領導地位。

Himax stands at the forefront of the automotive display IC market with a diverse product portfolio covering a full range of specifications and technologies, including DDIC, TDDI, local dimming Tcon, LTDI and AMOLED. These holistic offerings cater to a wide range of customer preferences and needs, fostering strong customer loyalty and collaborations with global panel makers, Tier 1s and carmakers. We expect our automotive segment to continue to be a key growth driver for us. In terms of our smartphone and tablet product lines, we continue to see lackluster demand in the market. On a positive note, our inventory has substantially rebalanced to a satisfactory level after consecutive quarters of inventory depletion. With the destocking process nearly complete, we placed wafter starts for select products starting in Q2 this year and continue to work on improving our cost structure with the aim of improving our efficiency for when demand returns.

奇景光電站在汽車顯示IC市場的前沿，擁有涵蓋全系列規格和技術的多元化產品組合，包括DDIC、TDDI、局部調光Tcon、LTDI和AMOLED。這些整體產品可滿足廣泛的客戶偏好和需求，培養強大的客戶忠誠度以及與全球面板製造商、一級供應商和汽車製造商的合作。我們預計汽車業務將繼續成為我們的主要成長動力。就我們的智慧型手機和平板電腦產品線而言，我們仍然看到市場需求低迷。從積極的方面來看，在連續幾季庫存耗儘後，我們的庫存已大幅重新平衡至令人滿意的水平。隨著去庫存流程接近完成，我們從今年第二季開始對部分產品開始投放訂單，並繼續努力改善我們的成本結構，以期在需求恢復時提高我們的效率。

Next, for an update on our AMOLED business. By partnering with leading panel manufacturers in Korea and China, we are accelerating our AMOLED driver IC advancements, covering various applications from automotive and tablet to smartphones, notebooks and TVs. In the automotive AMOLED sector, our design wins are steadily increasing from both traditional car manufacturers and NEV vendors worldwide. For smartphone AMOLED display driver, sluggish demand in the smartphone market has resulted in a slight delay from our original targeted timeline. Nevertheless, we continue collaborations with customers from Korea and China where ongoing verification and partnership projects are in progress.

接下來是我們AMOLED業務的最新動態。透過與韓國和中國領先的面板製造商合作，我們正在加速 AMOLED 驅動器 IC 的進步，涵蓋從汽車和平板電腦到智慧型手機、筆記型電腦和電視的各種應用。在汽車 AMOLED 領域，我們從全球傳統汽車製造商和新能源汽車供應商獲得的設計勝利正在穩步增加。對於智慧型手機AMOLED顯示驅動器，智慧型手機市場需求低迷導致我們原定目標時間表略有延遲。儘管如此，我們仍繼續與韓國和中國的客戶合作，正在進行的驗證和合作項目正在進行中。

I would now like to turn to our non-driver IC business where we continue to make steady progress. First, for an update on our Tcon business. We anticipate Q4 Tcon sales to decrease double digit sequentially, hampered by reduced shipment for large-sized displays and OLED displays for tablet as customer inventory offloading continues due to subdued end market demand. Despite the soft market sentiment, we are actively developing the next generation Tcon IC for OLED tablet, notebook and automotive, aiming to diversify our offerings and strategically position ourselves for a resurgence in demand.

我現在想談談我們的非驅動IC業務，我們在該業務上繼續取得穩步進展。首先，了解我們 Tcon 業務的最新情況。我們預計第四季度 Tcon 銷售額將環比下降兩位數，這是由於終端市場需求疲軟導致客戶庫存持續卸載，導致大尺寸顯示器和平板電腦 OLED 顯示器出貨量減少。儘管市場情緒疲軟，我們仍在積極開發 OLED 平板電腦、筆記型電腦和汽車的下一代 Tcon IC，旨在使我們的產品多樣化，並為需求復甦做好戰略定位。

Moving on to our automotive Tcon business for LCD panels. Our position remains unchallenged in local dimming Tcon, evidenced by growing validation and widespread deployment globally in both premium and mainstream new car models. We plan to roll out a series of Tcon for automotive to expand our product offerings catering to different needs of global customers.

繼續我們的汽車液晶面板 Tcon 業務。我們在局部調光 Tcon 領域的地位仍然沒有受到挑戰，這可以從全球高端和主流新車車型的持續驗證和廣泛部署中得到證明。我們計劃推出一系列汽車Tcon，以擴大我們的產品範圍，滿足全球客戶的不同需求。

Local dimming technology has found increasing application in automotive display, initially for high-end car models and gradually into mainstream vehicles. One emerging use case is in heads-up display or HUD. Thanks to our Tcon's unique ability to deliver a high contrast ratio for selected content, along with low heat dissipation and minimal power consumption.

局部調光技術在汽車顯示領域的應用越來越廣泛，最初用於高階車型，並逐漸進入主流車輛。平視顯示器 (HUD) 是一種新興的用例。由於我們的 Tcon 獨特的能力，可為所選內容提供高對比度，同時具有低散熱和最低功耗。

Our local dimming Tcon can effectively eliminate the frequently occurring so-called a postcard effect in HUD application, caused by backlight leakage in TFT LCD panels that shows a square-shaped display images on the windshield. Our automotive Tcon business is poised to experience explosive growth with strong momentum expected into 2024 and years to come, serving as one of our major growth engines.

我們的局部調光 Tcon 可以有效消除 HUD 應用中經常出現的所謂明信片效應，這種效應是由 TFT LCD 面板背光洩漏引起的，在擋風玻璃上顯示方形顯示圖像。我們的汽車 Tcon 業務預計將在 2024 年及未來幾年實現爆炸性成長，勢頭強勁，成為我們的主要成長引擎之一。

Switching gears to the WiseEye Smart Image Sensing total solution, which incorporates Himax's proprietary ultralow power AI processor, always-on CMOS image sensor, and CNN-based AI algorithm. For notebook, we continue to support the mass production of Dell's notebook. Given the growing prevalence of the human presence detection feature in notebooks, our engagement with global notebook names for their next generation products are progressing nicely.

轉向 WiseEye 智慧型影像感測整體解決方案，該解決方案融合了 Himax 專有的超低功耗 AI 處理器、始終在線的 CMOS 影像感測器和基於 CNN 的 AI 演算法。對於筆記本，我們繼續支持戴爾筆記本的量產。鑑於筆記型電腦中人體存在檢測功能的日益普及，我們與全球筆記型電腦品牌的下一代產品合作進展順利。

Our WiseEye solution is also in broad adoption across a range of endpoint AI applications, including video conference device, automotive, access control, shared bike parking, door lock and smart agriculture, among others. Notably, WiseEye adoption is also going smoothly in door lock application where we join forces with leading door lock players in China with mass production expected to commence starting the end of this year.

我們的 WiseEye 解決方案也在一系列端點人工智慧應用中廣泛採用，包括視訊會議設備、汽車、門禁、共享單車停車、門鎖和智慧農業等。值得注意的是，WiseEye在門鎖應用方面的採用也進展順利，我們與中國領先的門鎖製造商聯手，預計今年底開始量產。

Moreover, the latest smart door lock design surpasses the existing human presence detection feature and takes a step forward to support an additional camera set, enabling dual-camera functionality. The secondary camera can be oriented downward for ground-level status monitoring for events such as parcel delivery or placed indoors to enhance security detection. More innovative features are also under development together with key customers in the field targeting their next generation smart door lock. We anticipate that WiseEye adoption in surveillance will significantly increase starting in 2024.

此外，最新的智慧門鎖設計超越了現有的人體存在檢測功能，並向前邁進了一步，支援額外的攝影機組，從而實現雙攝影機功能。輔助攝影機可以朝下，用於包裹遞送等事件的地面狀態監控，也可以放置在室內以增強安全檢測。我們也與該領域的主要客戶一起開發更多創新功能，瞄準下一代智慧門鎖。我們預計從 2024 年開始，WiseEye 在監控領域的採用將顯著增加。

Next, for an update on our WE2 AI processor. Compared to WE1, its predecessor, the WE2 processor offers further advancements in inference speed and ultralow power. In context aware AI, WE2 enables detailed, real-time computer vision object analysis, such as facial landmark, hand landmark, and human pose and skeleton, among others, at extremely low power consumption.

接下來是我們 WE2 AI 處理器的更新。與其前身 WE1 相比，WE2 處理器在推理速度和超低功耗方面取得了進一步的進展。在上下文感知人工智慧中，WE2能夠以極低的功耗實現詳細的即時電腦視覺物件分析，例如臉部標誌、手部標誌以及人體姿勢和骨骼等。

This enables sophisticated human expression detection for smart notebook and broader AI applications. Alongside our ongoing collaboration with end customers, we have also made significant progress in partnerships with major CPU and AP SOC players, in preparation for their target markets in next generation smart notebooks, surveillance and a host of other endpoint AI applications. We will provide more details as they come about.

這使得智慧型筆記型電腦和更廣泛的人工智慧應用能夠進行複雜的人類表情檢測。除了與最終客戶的持續合作外，我們還在與主要 CPU 和 AP SOC 廠商的合作方面取得了重大進展，為他們的下一代智慧筆記本、監控和許多其他端點人工智慧應用的目標市場做好準備。我們將在發佈時提供更多詳細資訊。

In addition to the WiseEye total solution, we are also focused on expanding our Intelli-Sensing Module business by targeting users that may be less familiar with AI or wish to incorporate AI capabilities into their applications without significant development effort. This particularly applies to small volume or early-stage market engagement applications. The module offerings incorporating WiseEye technology, provide clients with a series of highly integrated, plug-and-play module boards which are extremely compact in size, user-programmable and loaded with our pre-trained AI models for straightforward system integration.

除了WiseEye整體解決方案之外，我們還專注於擴展我們的智慧感測模組業務，目標用戶可能不太熟悉人工智慧或希望將人工智慧功能融入他們的應用程式中而不需要大量的開發工作。這尤其適用於小批量或早期市場參與應用程式。該模組產品採用 WiseEye 技術，為客戶提供一系列高度整合的即插即用模組板，這些模組板尺寸極其緊湊，用戶可編程，並加載了我們預先訓練的 AI 模型，可實現簡單的系統整合。

This can effectively shorten customers' time-to-market and reduce development costs. To broaden market reach, a series of Intelli-Sensing Modules will be rolled out to cover more diverse markets that cater to various AI needs. The Intelli-Sensing Module solution will also be made available through online resellers like DigiKey and other SI partners.

這可以有效縮短客戶的上市時間並降低開發成本。為擴大市場範圍，將推出一系列智慧感測模組，涵蓋更多元化的市場，滿足各種人工智慧需求。智慧感測模組解決方案也將透過 DigiKey 和其他 SI 合作夥伴等線上經銷商提供。

Throughout recent quarters, our Intelli-Sensing Module has received excellent feedback with adoptions for various applications. One particularly successful adoption is in parking systems which has been deployed by several vendors in different regions of Asia. Our module offers precise real-time motion and occupancy detection to streamline the billing procedure for vehicles.

在最近幾個季度中，我們的智慧感測模組收到了良好的回饋，並被各種應用採用。其中一個特別成功的應用是停車系統，該系統已被亞洲不同地區的多家供應商部署。我們的模組提供精確的即時運動和佔用偵測，以簡化車輛的計費程序。

Additionally, our module operates efficiently with ultralow power, making it a viable choice for battery-powered parking systems, thereby greatly simplifying the installation process and reducing maintenance costs. Moreover, our AI's functionality can include vehicle type recognition, which enhances the effective utilization of parking spaces.

此外，我們的模組以超低功耗高效運行，使其成為電池供電停車系統的可行選擇，從而大大簡化安裝過程並降低維護成本。此外，我們的人工智慧功能還包括車輛類型識別，從而提高停車位的有效利用。

Beyond the parking solution, there is a growing interest in applications for our Intelli-Sensing Module in areas such as retail shelf management and human flow monitoring, among others. We are excited about the upcoming growth prospects for this product.

除了停車解決方案之外，人們對我們的智慧感測模組在零售貨架管理和人流監控等領域的應用越來越感興趣。我們對該產品即將到來的成長前景感到興奮。

Our leading position in ultralow power AI processing and image sensing for endpoint AI applications demonstrates our commitment and conviction to the ongoing development and growth of WiseEye AI business. By leveraging broad ecosystem partners and customers, we aim to maximize market reach and explore more potential endpoint AI applications. While adoption is at an early stage, we believe our WiseEye AI business will serve as a multi-year structural growth driver for Himax.

我們在端點人工智慧應用的超低功耗人工智慧處理和影像感測方面的領先地位表明了我們對 WiseEye 人工智慧業務持續發展和成長的承諾和信念。透過利用廣泛的生態系統合作夥伴和客戶，我們的目標是最大限度地擴大市場覆蓋範圍並探索更多潛在的端點人工智慧應用。雖然採用尚處於早期階段，但我們相信我們的 WiseEye AI 業務將成為奇景光電的多年結構性成長動力。

Lastly, for an update on our optical related product lines. With over a decade of optical and optoelectronics know-how and capabilities under our belt, Himax has been offering various technologies, including WLO, 3D Sensing, and LCoS, driving continuous advancements in diverse fields related to emerging metaverse applications.

最後，更新我們的光學相關產品線。憑藉著十多年的光學和光電專業知識和能力，奇景光電一直提供各種技術，包括 WLO、3D 感測和 LCoS，推動與新興元宇宙應用相關的各個領域的不斷進步。

Additionally, we have other innovative solutions under development to further expand our technological portfolio. The recent introduction of Liqxtal Graph display technology, unveiled by Himax's subsidiary Liqxtal Technology, is one illustration of Himax's capability to provide more diverse offerings to the industry. This liquid crystal based optical product provides one-of-a-kind technology that defies imagination through the display of personalized and colored content on the exterior lens of glasses for external viewers to enjoy, while also providing wearers with unobstructed visibility. We expect Liqxtal Graph display technology to create a broad array of application possibilities for wearable devices in the future.

此外，我們也正在開發其他創新解決方案，以進一步擴大我們的技術組合。奇景光電子公司Liqxtal Technology最近推出的Liqxtal Graph顯示技術，是奇景光電有能力為業界提供更多樣化產品的一個例證。這種基於液晶的光學產品提供了一種獨一無二的技術，透過在眼鏡外部鏡片上顯示個性化的彩色內容供外部觀看者欣賞，同時也為佩戴者提供暢通無阻的視野，這種技術超越了想像。我們期望 Liqxtal Graph 顯示技術能夠為未來的穿戴式裝置創造廣泛的應用可能性。

Next on our progress on LCoS. Following the unveiling of our cutting-edge Color Sequential Front-Lit LCoS micro display at the Display Week in May, several tech giants in the industry have shifted their focus away from micro-LED to our Front-Lit LCoS for their AR goggles. This shift is demonstrative of our exceptional achievements in both performance and functionality, marked by breakthroughs not only in the luminance performance in full RGB color, but also in terms of superior optical efficiency, tiny form factor and ultra-lightweight design. These factors are critical and represent technological advancements that can readily meet rigorous requirements to support next generation see-through goggles.

接下來介紹我們在 LCoS 的進展。繼我們在 5 月的顯示週上推出尖端的彩色順序前照式 LCoS 微型顯示器之後，業內的幾家科技巨頭已將注意力從 microLED 轉移到我們用於 AR 護目鏡的前照式 LCoS。這項轉變證明了我們在性能和功能方面取得的卓越成就，不僅在全 RGB 顏色的亮度性能方面取得了突破，而且在卓越的光學效率、微小的外形尺寸和超輕設計方面也取得了突破。這些因素至關重要，代表技術進步，可以輕鬆滿足支援下一代透視護目鏡的嚴格要求。

Next an update on WLO. As previously mentioned, we initiated volume production of our WLO technology to a leading North American customer in the second quarter. The WLO solution is integrated into the customer's new generation VR goggles to enable 3D gesture control. A decent shipment was made in the third quarter in preparation for the upcoming seasonal shopping sales. For non-driver IC business, we expect revenue to decline mid-teens sequentially in the fourth quarter.

接下來是 WLO 的更新。如前所述，我們在第二季開始向北美領先客戶大量生產 WLO 技術。 WLO 解決方案整合到客戶的新一代 VR 護目鏡中，以實現 3D 手勢控制。第三季出貨量不錯，為即將到來的季節性購物銷售做準備。對於非驅動IC業務，我們預期第四季營收將季減15%左右。

That concludes my report for this quarter. Thank you for your interest in Himax. We appreciate you joining today's call and are now ready to take questions.

我本季的報告到此結束。感謝您對奇景光電的關注。我們感謝您參加今天的電話會議，現在準備好回答問題。

(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野村證券的鄧尼特的台詞。

Hi, Jordan and Eric, can you hear me?

嗨，喬丹和艾瑞克，你們聽得到我說話嗎？

Yes, loud and clear.

是的，響亮而清晰。

My first question is regarding to your guidance. If I look at your guidance across different product lines or by applications, I feel it's a little bit opposite to the current market condition. For example, smartphone and PC looks like to be recovery, while automotive. If you look at the IDM companies recent guidance, it seems like the auto demand in non-China market has been weakening. But your guidance shows that PC, notebook and monitor has been slowing down into the fourth quarter as well as smartphone, while automotive looks like still quite resilient. So could you kindly explain why there is differences between the current market dynamics versus your guidance?

我的第一個問題是關於您的指導。如果我看一下你們對不同產品線或應用程式的指導，我覺得這與當前的市場狀況有點相反。例如，智慧型手機和個人電腦看起來正在復蘇，而汽車則是。如果你看看IDM公司最近的指導，中國以外市場的汽車需求似乎一直在減弱。但您的指引顯示，進入第四季度，個人電腦、筆記型電腦和顯示器以及智慧型手機的成長放緩，而汽車產業看起來仍然相當有彈性。那麼您能否解釋為什麼當前的市場動態與您的指導之間存在差異？

Thank you, Donnie. To be honest, I don't -- I'm not sure I have a very good explanation to that. I agree with your view that our guidance seems to indicate towards a different direction, right? As you said, overall, the consensus seems to be pessimistic, while smartphone and PC seems to be in early stage of rebounding.

謝謝你，唐尼。說實話，我不知道——我不確定對此有一個很好的解釋。我同意你的觀點，我們的指導似乎表明了不同的方向，對吧？正如您所說，總體而言，共識似乎是悲觀的，而智慧型手機和個人電腦似乎正處於反彈的早期階段。

I think the explanation I can offer perhaps is that for automotive display market, we really dominate the market. And as you recall, the Q1 for this year, there was a sudden drop in demand for automotive display ICs when China started to implement this rather stringent COVID control mandate, right, which causes a lot of factories to get shut down and so on.

我想我能提供的解釋或許是，對於車載顯示市場，我們確實佔據了市場主導地位。大家還記得嗎，今年第一季度，當中國開始實施這個相當嚴格的新冠管控指​​令時，汽車顯示IC的需求突然下降了，對吧，導致很多工廠停工等等。

And in Q2, there was a widespread industry -wide EV price competition, which kind of led to a lot of customers suspending their orders to us. So in Q3, we saw a very, very strong rebound. And that rebound is not entirely a reflection of market sentiment as such, rather, I think it is for our customers to restock from where they probably were behind in the first and second quarter.

在第二季度，全行業範圍內普遍存在電動車價格競爭，這導致許多客戶暫停了向我們的訂單。因此，在第三季度，我們看到了非常非常強勁的反彈。這種反彈並不完全反映了市場情緒本身，相反，我認為這是為了讓我們的客戶從第一季和第二季可能落後的地方補充庫存。

And I think the momentum continues into this quarter for us, although certainly the rebound will not be as strong. So we are guiding for automotive business for this quarter to be flat to slightly down. So I think that reflects our leading market position, where we have a very comprehensive and thorough market coverage and customer coverage. So, when customers need to restock for their production, I think we are probably their first point of call. While in comparison for smartphone and PC, our position was not, certainly not as strong, quite the opposite. Actually, I would highlight for monitor, for example, where our market share was relatively strong.

我認為我們的勢頭將持續到本季度，儘管反彈肯定不會那麼強勁。因此，我們預計本季汽車業務將持平或略有下降。所以我認為這反映了我們領先的市場地位，我們擁有非常全面和徹底的市場覆蓋範圍和客戶覆蓋範圍。因此，當客戶需要為其生產補充庫存時，我認為我們可能是他們的第一選擇。與智慧型手機和個人電腦相比，我們的地位不是，當然不是那麼強大​​，恰恰相反。事實上，我會​​強調顯示器，例如，我們的市佔率相對較強。

We're also seeing in Q4 demand to be run strong, which -- I mean, if you think about it, it shouldn't be a big departure from the demand for PC monitor against PC. One would not expect major departure, but from our perspective, our forecast book or order book, we do see different picture. I think this, again, can be explained by our different position in these different markets.

我們也看到第四季的需求強勁，我的意思是，如果你仔細想想，這與 PC 顯示器相對於 PC 的需求應該不會有太大的背離。人們不會期望出現重大偏離，但從我們的預測書或訂單書的角度來看，我們確實看到了不同的情況。我認為這可以透過我們在這些不同市場中的不同地位來解釋。

Understood. Sorry, Jordan. So, you mean the monitor momentum from your side is better than notebook?

明白了。對不起，喬丹。那麼，你的意思是你這邊的顯示器動力比筆記本好？

Yes, slightly, yes.

是的，稍微，是的。

Understood. And my second question is regarding to the ASP trend across the different product lines. Are you seeing ASP stabilizing or by different products, there could be still some different kinds of ASP erosion trends in the coming months.

明白了。我的第二個問題是關於不同產品線的平均售價趨勢。您是否看到 ASP 趨於穩定，或透過不同的產品，未來幾個月仍可能出現一些不同類型的 ASP 侵蝕趨勢。

And another thing is that you previously announced that you have more cooperation with Nexchip. And I feel recently that driver IC companies are more aggressively shifting their foundry capacity away from the foundries with higher price to the lower price. So if that will be helpful to your gross margin improvement going forward, if the ASP is not further declined that much, while the foundry cost can be further reduced?

還有一點就是你們之前宣布和Nexchip有更多的合作。我感覺最近驅動IC公司正在更積極地將其代工產能從價格較高的代工廠轉移到價格較低的代工廠。那麼，如果ASP不再進一步下降那麼多，而代工成本可以進一步降低的話，這是否有助於你們未來毛利率的提高？

First on ASP trend. Compared to the last few quarters certainly, ASP is definitely stabilizing across the board because the overall industry inventory position is now healthier than before. And certainly, our customers, i.e. panel makers, are either just starting to make money or some of them are still under the water in their P&L, right? And certainly, we are aware the macroeconomic condition has not been looking very positive. So, I think price pressure because of lack of demand and also because of our customers are not being very profitable I think price pressure will persist.

首先介紹 ASP 趨勢。當然，與過去幾季相比，平均售價肯定全面穩定，因為整體產業庫存狀況現在比以前更健康。當然，我們的客戶，即面板製造商，要么剛開始賺錢，要么其中一些人的損益表仍處於困境，對嗎？當然，我們知道宏觀經濟狀況看起來不太樂觀。因此，我認為價格壓力是由於需求不足以及我們的客戶利潤不高而造成的，我認為價格壓力將持續存在。

Although, I don't see similar kind of price pressure that we experienced in the last few quarters. And I think that comments kind of applies across different sectors. I can't really tell one sector from another a very different picture. And certainly, that picture may vary as time as we move along into next year, but we'll report in due course. But for now, we don't see a very different picture across different sectors.

儘管如此，我沒有看到我們在過去幾季經歷過的類似價格壓力。我認為這種評論適用於不同的領域。我無法真正區分一個部門和另一個部門的截然不同的情況。當然，隨著我們進入明年，情況可能會有所不同，但我們會在適當的時候報告。但就目前而言，我們沒有看到不同行業的情況有很大不同。

You mentioned foundry, China Foundry. In fact, also back end and our collaboration with Nexchip. I mean, certainly, we have a joint press announcement for our strategic alliance, and that is focused on automotive display. And with Nexchip, actually, we have kick-started collaboration on both DDIC and TDDI with mass production for both expected to be around Q4 next year.

你提到了鑄造廠，中國鑄造廠。事實上，還有後端以及我們與 Nexchip 的合作。我的意思是，當然，我們有一個關於我們策略聯盟的聯合新聞公告，重點是汽車顯示。實際上，我們已經與 Nexchip 啟動了 DDIC 和 TDDI 方面的合作，預計將於明年第四季左右實現量產。

And I think price aside, which certainly is always welcome. Price aside, I think having a strong partner in China also helps us in dealing with Chinese customers and covering Chinese markets, where in automotive, especially EV as we're all aware is very, very important. And I think they are -- our Chinese customers will certainly favor -- welcome this move that we made with Nexchip.

我認為拋開價格不談，這當然是受歡迎的。撇開價格不談，我認為在中國擁有強大的合作夥伴也有助於我們與中國客戶打交道並涵蓋中國市場，眾所周知，在汽車領域，尤其是電動車領域，這非常非常重要。我認為他們——我們的中國客戶肯定會喜歡——歡迎我們與 Nexchip 合作的這項舉措。

So, yes, so both in foundry and probably a bit more so for back end, where possible, we will look to diversify our customer base -- our supplier base and expand into -- expand further into China. And longer term, surely, that I think will help us with our cost and hopefully alleviates pressure for price.

所以，是的，所以無論是在代工方面，還是在後端方面，在可能的情況下，我們都將尋求多元化我們的客戶群——我們的供應商基礎，並擴展到——進一步擴展到中國。當然，從長遠來看，我認為這將有助於我們降低成本，並有望減輕價格壓力。

Understood. Maybe just one last follow-up from me. If look at your fourth quarter guidance, your EPS is between $0.09 to $0.13. But surprisingly, I feel that the upper range of $0.13 looks like to be higher than my previous expectation if considering your sales is going to decline like 8% quarter-on-quarter in the mid-range. So, do you have lower tax rate in fourth quarter or you have lower OpEx in the 4Q?

明白了。也許只是我的最後一次跟進。如果你看一下你的第四季指導，你的每股盈餘在 0.09 美元到 0.13 美元之間。但令人驚訝的是，如果考慮到您的銷售額將在中段季度環比下降 8%，我覺得 0.13 美元的上限似乎高於我之前的預期。那麼，第四季的稅率是否較低，或者第四季的營運支出是否較低？

Yes, indeed. I mean, thank you to be -- for this question, and I appreciate you've been very diligent in looking at our financials and building your model. Yes, there will be some tax benefits that we were enjoying because of a certain tax plan that we made earlier in Q4. I wouldn't elaborate on details right now over here, but yes, tax is one of the reasons.

確實是的。我的意思是，謝謝你提出這個問題，我很感謝你非常勤奮地研究我們的財務狀況並建立你的模型。是的，由於我們在第四季度早些時候制定的某些稅收計劃，我們將享受一些稅收優惠。我現在不會在這裡詳細說明細節，但是，稅收是原因之一。

And basically, we also run our financial projection models, right? So, the EPS range certainly is directly the outcome from those models based on our revenue and gross margin guidance, among other things. And yes, you pick up this fine detail, and indeed, there will be some tax benefits that we expect to enjoy in Q4. Again, that is due to earlier tax planning that we did.

基本上，我們也運行我們的財務預測模型，對吧？因此，每股盈餘範圍當然是基於我們的收入和毛利率指引等的這些模型的直接結果。是的，你注意到了這個細節，事實上，我們預計在第四季將享受一些稅收優惠。同樣，這是由於我們之前所做的稅務規劃。

Thank you. At this time, I would now like to turn the call back over to Jordan Wu for closing remarks.

謝謝。現在，我想將電話轉回吳喬丹，讓其致閉幕詞。

As a final note, Eric Li, our Chief IR/PR 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.

最後一點，我們的首席投資者關係/公關長 Eric Li 將維持投資者行銷活動並繼續參加投資者會議。我們將在細節出現時公佈。謝謝你，祝你有美好的一天。

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。