奇景光電 (HIMX) 2024 Q3 法說會逐字稿

Welcome, everyone, to the Himax third-quarter 2024 earnings call. My name is Eric Li, Chief IR/PR Officer at Himax. Joining me today are Jordan Wu, President and Chief Executive Officer; Jessica Pan, Chief Financial Officer. After the company's prepared 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 or hx_cir@imax.com.tw. Access the press release on financial portals or download a copy from Himax' website at www.himax.com.tw.

歡迎大家參加奇景光電 2024 年第三季財報電話會議。我是 Eric Li，奇景光電首席 IR/PR 長。今天與我一起出席的還有總裁兼執行長吳喬丹 (Jordan Wu)；潘傑西卡，財務長。在公司準備好意見後，我們在問答環節分配了提問時間。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 或 hx_cir@imax.com.tw。請造訪金融入口網站的新聞稿或從奇景光電網站 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 industrial 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 21, 2023, 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工業增長的聲明，均為前瞻性聲明，涉及許多風險和不確定性，可能會導致以下結果：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 2023 年 12 月 21 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 2023 financials, which were provided in the company's 20-F and filed with SEC on April 2, 2024, 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 audit 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 20-F 中提供並於 2024 年 4 月 2 日向 SEC 提交的 2023 年全年財務資訊外，本次電話會議中包含的財務資訊未經審計並根據 IFRS 會計進行合併和編制。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機構的外部審計，我們的年度合併財務報表須接受這些審查和審查，並且可能與經審計的合併財務資訊有重大差異。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。

On today's call, I will first review the Himax consolidated financial performance for the third quarter 2024, followed by our fourth-quarter outlook. Jordan will then give an update on the status of our business, after which we will take questions. (Event Instructions) We will review our financials on an IFRS basis.

在今天的電話會議上，我將首先回顧奇景光電 2024 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。 （活動說明）我們將根據 IFRS 審查我們的財務狀況。

We are delighted to announce that Q3 revenues and profits both surpassed guidance, while gross margin was in line with guidance issued on August 8, 2024, despite prevailing economic challenges. The better-than-expected financial results stem primarily from strong order momentum in automotive, tablet, and the Tcon product lines.

我們很高興地宣布，儘管面臨普遍的經濟挑戰，但第三季的收入和利潤均超過了指引，而毛利率與 2024 年 8 月 8 日發布的指引相符。優於預期的財務表現主要源自於汽車、平板電腦和 Tcon 產品線強勁的訂單動能。

Third-quarter revenues registered $222.4 million, a decrease of 7.2% sequentially, yet significantly exceeded our guidance range of a 12% to 17% decrease. Gross margin came in at 30%, in line with our guidance of around 30%, but down from 30% in the previous quarter and 31.4% in the same period last year. The sequential decline was the result of unfavorable product mix. Q3 profit per diluted ADS was $0.074, considerably above the guidance range of $0.015 to $0.045 due to better-than-expected revenues.

第三季營收為 2.224 億美元，比上一季下降 7.2%，但大幅超出了我們 12% 至 17% 下降的指導範圍。毛利率為 30%，與我們 30% 左右的指引一致，但低於上一季的 30% 和去年同期的 31.4%。連續下降是不利的產品組合的結果。由於營收優於預期，第三季每股攤薄美國存託憑證利潤為 0.074 美元，遠高於 0.015 美元至 0.045 美元的指引範圍。

Revenues from large display drivers came in at $30.7 million, reflecting a sequential decrease of 21.2%. The decrease was primarily attributed to weaker monitor and TV IC sales due to customers destocking amid challenging market conditions following substantial Q2 replenishment for shopping festival. In contrast, notebook IC sales increased notably, resulting from rush orders for legacy products from leading panel customers.

大型顯示驅動器的收入為 3,070 萬美元，環比下降 21.2%。下降的主要原因是顯示器和電視 IC 銷售疲軟，原因是第二季購物節期間大量補貨後，市場環境充滿挑戰，客戶減少庫存。相較之下，由於領先面板客戶對傳統產品的緊急訂單，筆記型電腦 IC 銷售額顯著成長。

Sales of large panel driver ICs accounted for 13.8% of total revenue for the quarter compared to 16.3% last quarter and 18.3% a year ago. Revenue from the small- and medium-sized display driver segment totaled $155.4 million, a decline of 2.2% sequentially, but significantly better than our guidance of a low teens declines, thanks to stronger-than-expected sales in the automotive and tablet market.

大面板驅動IC的銷售額佔本季總營收的13.8%，而上季為16.3%，去年同期為18.3%。中小型顯示器驅動器細分市場的收入總計 1.554 億美元，比上一季下降 2.2%，但由於汽車和平板電腦市場的銷售強於預期，明顯優於我們的低雙位數降幅指引。

In Q3, automotive driver sales, which include both traditional DDIC and TDDI, experienced a mid-single-digit decrease, yet largely outperformed our expectation of a high teens decline. This better-than-expected result was primarily fueled by rush orders from our Chinese panel customers shortly after our last earnings call on the backdrop of the Chinese government's renewed trading stimulus announcement made in mid-August as part of their efforts to further boost automobile consumption.

第三季度，包括傳統 DDIC 和 TDDI 在內的汽車驅動器銷售額經歷了中個位數下降，但很大程度上超出了我們對高兩位數下降的預期。這一好於預期的業績主要是由於我們上次財報電話會議後不久，中國面板客戶的緊急訂單推動的，背景是中國政府於 8 月中旬宣布了新的貿易刺激措施，以進一步促進汽車消費。 。

Our automotive business comprising drivers, Tcon, and OLED sales remained the largest revenue contributor in third quarter, representing nearly half of total sales. Meanwhile, Q3 tablet IC sales also exceeded guidance of a sequential decline with sales slightly up from last quarter, fueled by rush orders from leading end customers. Q3 smartphone IC sales increased a decent double digit sequentially, thanks to new product launches of leading phone makers.

我們的汽車業務（包括驅動器、Tcon 和 OLED 銷售）仍然是第三季最大的收入貢獻者，佔總銷售額的近一半。同時，在領先終端客戶的緊急訂單推動下，第三季平板電腦 IC 銷售額也超出了季減的指引，銷售額較上季略有上升。由於領先手機製造商推出新產品，第三季智慧型手機 IC 銷售額較上季成長了兩位數。

The small- and medium-sized driver IC segment accounted for 69.9% of total sales for the quarter compared to 66.3% in previous quarter and 67.6% a year ago. Third quarter non-driver sales reached $36.3 million, a decline of 13.1% from the previous quarter. The decrease was primarily driven by a double-digit sequential decline in Tcon sales, particularly for monitor application as customers pull forward their inventory purchases in prior quarters, anticipating strong sales during the shopping festivals.

中小型驅動IC領域佔本季總銷售額的69.9%，而上一季為66.3%，去年同期為67.6%。第三季非司機銷售額達3,630萬美元，季減13.1%。這一下降主要是由於 Tcon 銷售額出現兩位數的環比下降，特別是顯示器應用領域，因為客戶預計購物節期間的強勁銷售，因此提前了前幾季的庫存採購。

However, automotive Tcon sales saw an impressive sequential increase of over 30% as our solutions, especially the market-leading local dimming Tcon continue to be rapidly adopted by major panel manufacturers, Tier 1 suppliers, and automotive manufacturers worldwide. In the third quarter, our Tcon business accounted for over 9% of total sales with notable contribution from automotive Tcon, representing almost half of Tcon sales, supported by steady growth with well over 100 secured design win projects.

然而，隨著我們的解決方案，特別是市場領先的局部調光Tcon 繼續被全球主要面板製造商、一級供應商和汽車製造商迅速採用，汽車Tcon 銷售額環比增長了30% 以上，令人印象深刻。第三季度，我們的 Tcon 業務佔總銷售額的 9% 以上，其中汽車 Tcon 的貢獻顯著，幾乎佔 Tcon 銷售額的一半，這得益於 100 多個安全設計中標項目的穩定增長。

Non-driver products accounted for 16.3% of total revenues as compared to 17.4% in the previous quarter and 14.1% a year ago. Third quarter operating expenses were $60.8 million, an increase of 28.4% from the previous quarter and a decline of 4.7% from a year ago. The sequential increase stemmed primarily from expense for annual bonus compensation, which we award employees at the end of September each year, typically resulting in higher Q3 employee compensation expense compared to other quarters of the year.

非驅動產品佔總營收的 16.3%，而上一季為 17.4%，一年前為 14.1%。第三季營運費用為6,080萬美元，較上季成長28.4%，年減4.7%。環比成長主要源自於年度獎金補償費用，我們在每年 9 月底獎勵員工，通常導致第三季員工補償費用高於一年中其他季度。

The year-over-year decrease was mainly due to a decline in employee bonus compensation as the amortized portion of prior year's bonuses for last year was higher than that for this year. As a reminder, we grant annual bonuses to employees at the end of September each year, including RSU and cash awards based on the expected profit of the full year.

年比減少的主要原因是去年獎金攤銷部分高於本年，導致員工獎金下降。提醒一下，我們在每年9月底向員工發放年度獎金，包括基於全年預期利潤的RSU和現金獎勵。

Our annual bonus compensation grant for 2024 was $12.5 million, in line with guidance, out of which $11.2 million was immediately adopted and expensed in the third quarter. In comparison, the annual bonuses for 2023 and 2022 were $10.4 million and $39.6 million, respectively, of which $9.7 million and $18.5 million were vested and expensed immediately. To further elaborate, our Q3 bonus expense includes two portions. First, as I just mentioned, $11.2 million was the allocation for the immediately vested and recognized portion of the current year's bonus grant. Second, $2.7 million was expense for the amortized tranches of prior year's bonuses compared to $2.8 million last quarter and $6.2 million a year ago.

我們 2024 年的年度獎金補償金額為 1,250 萬美元，符合指導方針，其中 1,120 萬美元立即在第三季支出。相較之下，2023年和2022年的年度獎金分別為1,040萬美元和3,960萬美元，其中970萬美元和1,850萬美元立即歸屬和支出。進一步詳細說明，我們的第三季獎金支出包括兩部分。首先，正如我剛才提到的，1120萬美元是分配給本年度獎金授予的立即歸屬和認可部分。其次，270 萬美元是上一年獎金攤銷部分的費用，而上季為 280 萬美元，一年前為 620 萬美元。

Amid ongoing macroeconomic challenges, we are strictly enforcing budget and expense controls with full year 2024 OpEx projected to decline mid-single digits compared to last year. Third quarter operating income was $5.9 million or 2.6% of sales compared to 12.2% last quarter and 4.6% of sales for the same period last year. The sequential decrease aside from lower sales and a contraction in gross margin primarily reflected the difference in annual employee bonus compensation, as mentioned earlier, totaling $11.2 million or 5.1% of sales that immediately led and expanded portion of this year's new grant. The year-over-year decrease in operating margin was mainly driven by a decline in sales and lower gross margins.

在持續的宏觀經濟挑戰中，我們嚴格執行預算和費用控制，預計 2024 年全年營運支出將比去年下降中個位數。第三季營業收入為 590 萬美元，佔銷售額的 2.6%，而上季為 12.2%，去年同期為銷售額的 4.6%。除了銷售額下降和毛利率收縮外，環比下降主要反映了年度員工獎金薪酬的差異，如前所述，總額為1,120 萬美元，佔銷售額的5.1%，這立即導致並擴大了今年新撥款的部分。營業利益率較去年同期下降主要是由於銷售額下降和毛利率下降所致。

Third quarter after-tax profit was $13 million or $0.074 per diluted ADS compared to $29.6 million or $0.169 per diluted ADS last quarter and $11.2 million or $0.064 in the same period last year. In calculating the Q3 after-tax profit, we made a favorable income tax adjustment to rectify our estimated tax expenses for preceding quarters this year, hence, the sequential increase in after-tax profit.

第三季稅後利潤為1,300 萬美元，或稀釋後每股美國存託憑證0.074 美元，而上季為2,960 萬美元，或稀釋後每股美國存託憑證0.169 美元，去年同期為1,120 萬美元，或稀釋後每股美國存託憑證0.064 美元。在計算第三季稅後利潤時，我們對今年前幾季的預計稅費進行了有利的所得稅調整，因此稅後利潤比去年同期增加。

Turning to the balance sheet, we had $206.5 million of cash, cash equivalents, and other financial assets at the end of September 2024 compared to $253.8 million a quarter ago and $155.4 million at the same time last year. The sequential decrease in cash balance was mainly the result of $50.7 million payment of annual dividends.

轉向資產負債表，截至 2024 年 9 月末，我們擁有 2.065 億美元的現金、現金等價物和其他金融資產，而上一季為 2.538 億美元，去年同期為 1.554 億美元。現金餘額環比減少主要是因為支付了 5,070 萬美元的年度股息。

Operating cash outflow for the third quarter was approximately $3.1 million compared to an inflow of $26.9 million in Q2. The outflow was primarily due to $30.1 million paid to employees for their bonuses, which included $10.8 million for immediately vested portion of the year's award and $19.3 million for vested awards granted over the past three years. Operating cash flow, excluding employee bonus, was a $27 million inflow during the quarter.

第三季營運現金流出約為 310 萬美元，而第二季流入為 2,690 萬美元。資金外流主要是由於支付給員工的獎金為 3,010 萬美元，其中包括當年獎勵的立即歸屬部分 1,080 萬美元和過去三年授予的既得獎勵 1,930 萬美元。本季營運現金流（不包括員工獎金）流入 2,700 萬美元。

We had $36 million of long-term unsecured loans as of the end of third quarter, of which $6 million was the current portion. Our quarter end inventory as of September 30, 2024, was $192.5 million, lower than $203.7 million last quarter and $259.6 million in the same period last year, indicating a well-managed and balanced inventory level from quarter to quarter. Accounts receivable at the end of September 2024 was $224.6 million, down from $242.4 million last quarter and $248.5 million a year ago.

截至第三季末，我們擁有 3,600 萬美元的長期無擔保貸款，其中 600 萬美元為流動部分。截至 2024 年 9 月 30 日，我們的季末庫存為 1.925 億美元，低於上季的 2.037 億美元和去年同期的 2.596 億美元，顯示季度與季度的庫存水準管理良好且平衡。截至 2024 年 9 月末，應收帳款為 2.246 億美元，低於上季的 2.424 億美元和一年前的 2.485 億美元。

DSO was 92 days at the quarter end as compared to 99 days last quarter and 95 days a year ago. Third quarter capital expenditures were $2.6 million versus $4.6 million last quarter and $2.6 million a year ago. The third quarter CapEx was mainly for R&D-related equipment for our IC design business. As of September 30, 2024, Himax had $175 million ADS outstanding, little changed from last quarter. On a fully diluted basis, the total number of ADS outstanding for the third quarter was $175 million.

季度末的 DSO 為 92 天，而上季為 99 天，去年同期為 95 天。第三季資本支出為 260 萬美元，上季為 460 萬美元，一年前為 260 萬美元。第三季資本支出主要用於我們的 IC 設計業務的研發相關設備。截至 2024 年 9 月 30 日，奇景的未償美國存託股份為 1.75 億美元，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 1.75 億美元。

Now turning to our fourth quarter 2024 guidance, we expect fourth quarter revenues to be flat to slightly down sequentially. Gross margin is expected to be flat to slightly up sequentially, depending on product mix. The fourth quarter profit attributable to shareholders is estimated to be in the range of $0.093 to $0.11 per fully diluted ADS.

現在轉向我們的 2024 年第四季指引，我們預計第四季營收將與上一季持平或略有下降。毛利率預計將持平或略有上升，具體取決於產品組合。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 0.093 美元至 0.11 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. Looking ahead to Q4, the macroenvironment remains challenging. Panel customers are reducing production to stabilize panel prices in response to the current market conditions. At the same time, end brands are also taking a cautious approach to panel procurement and maintaining low inventory levels. Taken together, these factors have suppressed IC demand, leading to our conservative outlook for the fourth quarter.

謝謝你，埃里克。展望第四季度，宏觀環境依然充滿挑戰。為了應對當前的市場狀況，面板客戶正在減少產量以穩定面板價格。同時，終端品牌也對面板採購採取謹慎態度，並維持低庫存水準。綜合來看，這些因素抑制了 IC 需求，導致我們對第四季的前景持保守態度。

Against this backdrop, we continue to strictly manage expenses and implement various cost optimization measures, including enhancing manufacturing and operational efficiency as well as leveraging a diverse range of vendors in foundries and backend suppliers. Looking ahead, while the global economy still looks uncertain, we are confident in the business outlook of several key areas, namely automotive, AI, WLO, and OLED and expect these product lines to drive significant growth of our business.

在此背景下，我們繼續嚴格管理費用並實施各種成本優化措施，包括提高製造和營運效率以及利用代工廠和後端供應商的多元化供應商。展望未來，雖然全球經濟仍存在不確定性，但我們對汽車、人工智慧、WLO和OLED等幾個關鍵領域的業務前景充滿信心，並預計這些產品線將帶動我們業務的大幅成長。

First, let me elaborate on the automotive sector, our primary revenue contributor. We remain optimistic in our long-term outlook as the automotive display market continues to expand through innovation and technological advancements. Our confidence also stems from our comprehensive offering and leading position in the market, particularly in the areas of LCD TDDI, OLED, and Tcon, all of which are relatively new and cutting-edge technologies for automotive display.

首先，讓我詳細介紹一下我們的主要收入來源汽車產業。隨著汽車顯示市場透過創新和技術進步不斷擴大，我們對長期前景保持樂觀。我們的信心也源自於我們全面的產品和市場領先地位，特別是在 LCD TDDI、OLED 和 Tcon 領域，所有這些都是相對較新的尖端汽車顯示技術。

These technologies are expected to see continued adoption, providing us with sustainable long-term growth opportunities. It is worth noting that there have been significant fluctuations in automotive market demand in recent quarters, particularly from the Chinese market, which accounts for over 30% of global vehicle sales. Government policies, subsidies, and aggressive discount campaigns by car manufacturers have made supply and demand less predictable, creating new challenges for automotive IC suppliers.

這些技術預計將繼續被採用，為我們提供可持續的長期成長機會。值得注意的是，近幾季汽車市場需求波動較大，尤其是佔全球汽車銷售量30%以上的中國市場。政府政策、補貼以及汽車製造商積極的折扣活動使得供需變得更加難以預測，這給汽車 IC 供應商帶來了新的挑戰。

Automotive ICs unlike consumer electronics products feature rigorous safety and reliability standards, resulting in longer production lead time, which poses greater challenges in handling customers' rush orders. However, thanks to our dominant market share and substantial shipment volume in the automotive sector, we are well equipped to navigate these market fluctuations. In fact, our ability to respond to the last-minute demands for automotive ICs was instrumental in our better-than-expected third quarter financial results with final revenues exceeding the midpoint of our guidance by as much as 7%.

與消費性電子產品不同，汽車IC具有嚴格的安全性和可靠性標準，導致生產週期較長，這對處理客戶的緊急訂單提出了更大的挑戰。然而，由於我們在汽車領域佔據主導地位的市場份額和大量的出貨量，我們有能力應對這些市場波動。事實上，我們對汽車 IC 最後一刻需求的反應能力對於我們第三季財務表現優於預期發揮了重要作用，最終收入超出了我們指導的中點多達 7%。

The higher revenues were driven primarily by rush orders that arose after our last earnings call held in the middle of the third quarter. Indeed, being able to quickly respond to changing customer needs has become a crucial competitive advantage in the automotive IC sector for us. In terms of our WLO business, we are confident in our collaboration with FOCI on the LPO/CPO business, where I'm pleased to share that we are making decent progress in the initial small-scale production of the first-generation solution.

收入增加主要是由我們在第三季中期舉行的上次財報電話會議後出現的緊急訂單所推動的。事實上，能夠快速回應不斷變化的客戶需求已成為我們在汽車 IC 領域的關鍵競爭優勢。就我們的WLO業務而言，我們對與FOCI在LPO/CPO業務上的合作充滿信心，我很高興地告訴大家，我們在第一代解決方案的初步小規模生產方面正在取得不錯的進展。

Demand for high-speed optical communication technology is surging, driven by advancements in high-performance computing and artificial intelligence. Moreover, Himax and FOCI, along with world-leading AI semiconductor companies and foundry partners have begun new technology development for future generation products. We believe this will create new revenue streams for Himax and make a significant contribution to our total revenue and profit in the coming years.

在高效能運算和人工智慧的進步推動下，對高速光通訊技術的需求正在激增。此外，奇景光電和FOCI以及世界領先的人工智慧半導體公司和代工合作夥伴已經開始針對下一代產品的新技術開發。我們相信這將為奇景創造新的收入來源，並對我們未來幾年的總收入和利潤做出重大貢獻。

With that, I will now begin with an update on the large panel driver IC business. In Q4, we anticipate a double-digit sequential sales decrease for large display driver ICs due to soft holiday shopping demand expectations, ongoing customer destocking since Q2, and intensified China local competition. As I just mentioned, panel manufacturers are strategically reducing production to safeguard panel prices, while end brands are enforcing strict procurement control in response to soft demand and maintaining low inventory levels.

接下來，我將先介紹大面板驅動IC業務的最新情況。由於假日購物需求預期疲軟、第二季以來客戶持續去庫存以及中國本土競爭加劇，我們預計第四季度大型顯示驅動器 IC 的銷售額將出現兩位數的環比下降。正如我剛才提到的，面板製造商正在策略性地減產以維護面板價格，而終端品牌則在嚴格採購控制以應對需求疲軟並維持低庫存水平。

Looking ahead in the notebook sector, the emergence of AI PC is prompting display upgrades towards OLED displays and displays were equipped with touch features. Through strategic collaborations with leading panel makers in Korea and China, Himax is well positioned to capitalize on this trend, offering a comprehensive range of notebook IC products, including DDIC, Tcon, and touch controller for OLED displays and TDDI and Tcon for LCD display. First, on TDDI for LCD, we are pioneering in-cell touch TDDI for notebook LCD display.

展望筆記型電腦領域，AI PC的出現正促使顯示器向OLED顯示器升級，顯示器配備觸控功能。透過與韓國和中國領先面板製造商的策略合作，奇景光電已做好充分利用這一趨勢的準備，提供全系列筆記型電腦IC產品，包括用於OLED顯示器的DDIC、Tcon和觸控控制器以及用於LCD顯示器的TDDI和Tcon。首先，在液晶顯示器的TDDI方面，我們率先推出了筆記本液晶顯示器的內嵌式觸控TDDI。

Our state-of-the-art in-cell touch TDDI solution features a proprietary architecture where the touch controller is embedded inside the TDDI chip with the display portion of the TDDI, taking advantage of the conventional display driver configuration to convey Tcon data to drive the panel. This allows customers to maintain the existing Tcon adoption, substantially reducing their product development efforts and enhancing production flexibility.

我們最先進的內嵌式觸控 TDDI 解決方案採用專有架構，其中觸控控制器與 TDDI 的顯示部分一起嵌入到 TDDI 晶片內部，利用傳統的顯示器驅動器配置來傳送 Tcon 資料以驅動面板。這使得客戶能夠維持現有的 Tcon 採用，從而大大減少產品開發工作並提高生產彈性。

Additionally, the TDDI features high integration multichip cascade and increased channel output, enabling higher resolution of up to 4K and larger screen of up to 16 inches, with complex PCD and narrow base designs, making it suitable for both mainstream and high-end LCD laptops. In the third quarter, our newly introduced in-cell touch DDI successfully entered mass production for a prominent brand first AI PC. Several projects are also in progress with other brands for the upcoming notebook models.

此外，TDDI具有高整合度的多晶片級聯和增加的通道輸出，可實現高達4K的更高解析度和高達16英寸的更大螢幕，並具有複雜的PCD和窄底座設計，使其適用於主流和高階液晶筆記型電腦。第三季度，我們新推出的In-cell Touch DDI成功量產某知名品牌首款AI PC。也與其他品牌針對即將推出的筆記型電腦型號進行了幾個項目。

The second area of focus is OLED, which is seeing increasing adoption in premium laptops. In addition to our OLED DDIC and Tcon solutions, we are also pioneering one touch control technology on notebook OLED display. Multiple projects with top panel and laptop makers are underway.

第二個重點領域是 OLED，它在高階筆記型電腦的採用越來越多。除了我們的 OLED DDIC 和 Tcon 解決方案之外，我們還在筆記本 OLED 顯示器上開創了一種觸控技術。與頂板和筆記型電腦製造商的多個項目正在進行中。

Finally, we are developing the next-generation EDP 1.5 display interface for Tcon applicable to both LCD and OLED panels, supporting high frame rates, low-power panel replay, adaptive sync, and high resolution. We aim to launch our EDP 1.5 Tcon in the second quarter of 2025. We are confident that with these new initiatives, Himax will be the frontrunner of next-gen AI PCs and premium notebooks. With several projects slated for mass production starting in 2025, we believe our LCD and OLED notebook solutions will act as a growth catalyst for our notebook IC business for the coming years.

最後，我們正在開發適用於 LCD 和 OLED 面板的 Tcon 下一代 EDP 1.5 顯示接口，支援高幀速率、低功耗面板重播、自適應同步和高解析度。我們的目標是在 2025 年第二季推出 EDP 1.5 Tcon。隨著多個項目計劃於 2025 年開始量產，我們相信我們的 LCD 和 OLED 筆記本解決方案將成為我們未來幾年筆記本 IC 業務的成長催化劑。

Turning to the small- and medium-sized display driver IC business, we anticipate fourth quarter revenue to be flat sequentially. Automotive IC revenue in Q4 is expected to resume growth and increase single digit sequentially, mainly supported by ongoing China market promotional events and the Chinese government's renewed trading stimulus policies, as earlier mentioned. Notably, our automotive driver IC sales for the full year 2024 are projected to grow high teens year over year, significantly outperforming global automotive growth, primarily driven by continued expansion of TDDI adoption among all major end customers worldwide.

至於中小尺寸顯示驅動IC業務，我們預期第四季營收將較上季持平。如前所述，預計第四季度汽車IC收入將恢復成長並環比成長個位數，這主要得益於持續的中國市場促銷活動和中國政府新的貿易刺激政策。值得注意的是，我們 2024 年全年的汽車驅動器 IC 銷售額預計將同比增長兩位數，顯著超過全球汽車增長，這主要是由於全球所有主要最終客戶對 TDDI 採用率持續擴大的推動。

In the automotive TDDI sector, we continue to strengthen our market dominance with cumulative shipments already exceeding 70 million units, far surpassing those of our competitors. With nearly 500 design-in projects secured and only about 30% currently in mass production, we continue to see substantial growth potential ahead. Remarkably, our Q4 automotive TDDI sales are set to surpass DDIC sales for the first time, highlighting the widespread adoption of our solutions worldwide, along with growing demand for more intuitive, interactive, and cost competitive touch panel features enabled by TDDI solutions.

在汽車TDDI領域，我們持續鞏固市場主導地位，累計出貨量已超過7,000萬台，遠遠超越競爭對手。我們已獲得近 500 個設計項目，但目前只有約 30% 投入量產，因此我們繼續看到未來巨大的成長潛力。值得注意的是，我們第四季的汽車TDDI 銷售額將首次超過DDIC 銷售額，這凸顯了我們的解決方案在全球範圍內的廣泛採用，以及對TDDI 解決方案支援的更直觀、互動性和成本競爭力的觸控螢幕功能的需求不斷增長。

While our full year 2024 traditional automotive DDIC sales are expected to decline as they are partially replaced by TDDI, our shipment quality for DDIC is set to see a modest increase. This is indicative of the product's long-life cycle as many of our customers' legacy models will not be retired for years. And many displays such as cluster display, HUD or rear and side view mirrors do not require touch feature.

雖然我們的 2024 年全年傳統汽車 DDIC 銷售額預計會下降，因為它們被 TDDI 部分取代，但我們的 DDIC 出貨品質預計將略有成長。這表明該產品的生命週期很長，因為我們許多客戶的舊型號在幾年內都不會退役。許多顯示器（例如儀表顯示器、HUD 或後視鏡和側視鏡）不需要觸控功能。

We remain the leader of the automotive DDIC market with approximately 40% global market share. Meanwhile, the emerging market trend shows more customers are opting for TDDI or LTDI, coupled with our local dimming Tcon as their standard development platform for new automotive displays across various sizes and applications. This growing platform adoption of more of our automotive IC offerings not only reflects strong customer loyalty to our technologies and services, but also signifies the increase in content value for Himax on a per panel basis.

我們仍然是汽車 DDIC 市場的領導者，擁有約 40% 的全球市場份額。同時，新興市場趨勢表明，越來越多的客戶選擇 TDDI 或 LTDI，並結合我們的本地調光 Tcon 作為各種尺寸和應用的新型汽車顯示器的標準開發平台。我們的汽車 IC 產品越來越多地被平台採用，不僅反映了客戶對我們的技術和服務的強烈忠誠度，而且還意味著奇景每個面板的內容價值不斷增加。

Himax is widely recognized as a leader in the automotive display IC market, offering the industry's broadest range of products with leading market share in each of the product areas. The diverse range of offerings allows us to address different customer needs and adapt to changing market trends, thereby strengthening our market presence and boosting potential revenue.

奇景光電被廣泛認為是汽車顯示 IC 市場的領導者，提供業界最廣泛的產品，在每個產品領域擁有領先的市場份額。多樣化的產品使我們能夠滿足不同的客戶需求並適應不斷變化的市場趨勢，從而增強我們的市場影響力並增加潛在收入。

Our newly introduced TED or Tcon-embedded driver IC solution, which combines TDDI with total dimming Tcon into a single chip exemplifies our commitment to providing customers with more competitive, flexible, and broader options. This solution is ideal for smaller panels that typically require only one to two ICs for cost consideration while still offering advanced touch and lower dimming features. Production is set to begin in early 2025 with several projects and engagements currently underway with major customers.

我們新推出的 TED 或 Tcon 嵌入式驅動器 IC 解決方案將 TDDI 與總調光 Tcon 結合到單一晶片中，這體現了我們致力於為客戶提供更具競爭力、更靈活和更廣泛的選擇的承諾。該解決方案非常適合較小的面板，出於成本考慮，通常只需要一到兩個 IC，同時仍提供先進的觸控和較低的調光功能。生產定於 2025 年初開始，目前正在與主要客戶進行多個專案和合作。

Meanwhile, we are actively collaborating with automotive Tier 1 partners to develop more advanced, innovative and/or cost-optimized solutions tailored to various market needs. This not only underscores our customers' confidence in our technology leadership, but also reflects their commitment to engaging with us in future road map collaborations.

同時，我們積極與汽車一級合作夥伴合作，開發針對各種市場需求的更先進、創新和/或成本優化的解決方案。這不僅突顯了客戶對我們技術領先地位的信心，也反映了他們對與我們進行未來路線圖合作的承諾。

Moving to smartphone IC sales, we anticipate Q4 to slightly decline sequentially with ongoing shipments to key customers. Q4 tablet IC sales are projected to decline low teens sequentially as customers are extending their replacement cycles due to challenging economic conditions.

至於智慧型手機 IC 銷售，我們預計第四季將因向主要客戶的持續出貨而略有下降。由於經濟形勢嚴峻，客戶延長了更換週期，預計第四季度平板電腦 IC 銷售額將持續下降。

Next, for an update on our OLED business. In the automotive OLED market, we have formed strategic partnerships with leading panel manufacturers in Korea, China, and Japan. As OLED technology gains traction beyond premium car models, Himax is well positioned as the preferred partner, thanks to our strong presence and proven track records in the LCD automotive display sector.

接下來，我們將介紹 OLED 業務的最新情況。在汽車OLED市場，我們與韓國、中國和日本的領先面板製造商建立了戰略合作夥伴關係。隨著 OLED 技術在高階汽車領域的應用越來越廣泛，奇景光電憑藉在 LCD 汽車顯示領域的強大影響力和良好的業績記錄，成為首選合作夥伴。

Leveraging our first-mover advantage, we look to capitalize on the growing adoption of OLED in automotive displays by offering a comprehensive range of OLED solutions, including DDIC, Tcon, and on-cell touch controller. We believe this positions us as the primary beneficiary of the growing adoption of OLED display in automotive.

憑藉我們的先發優勢，我們希望透過提供全面的 OLED 解決方案（包括 DDIC、Tcon 和 On-cell 觸控控制器）來利用 OLED 在汽車顯示器中日益普及的趨勢。我們相信，這使我們成為汽車中越來越多採用 OLED 顯示器的主要受益者。

For instance, our advanced OLED touch controllers are setting new industry standards with an impressive to signal to loss ratio of over 45 dB, ensuring reliable performance under challenging conditions such as glove wearing and wet finger operations. Our OLED touch controller for automotive applications entered production last quarter and adoption is expanded across the board. With additional projects starting mass production next year, we expect this segment's contribution to our revenue to increase starting in 2025.

例如，我們先進的 OLED 觸控控制器正在製定新的行業標準，其信損比超過 45 dB，令人印象深刻，確保在戴手套和濕手指操作等挑戰性條件下具有可靠的性能。我們用於汽車應用的 OLED 觸控控制器於上季投入生產，並全面擴大採用範圍。隨著更多項目明年開始大規模生產，我們預計該部門對我們收入的貢獻從 2025 年開始將會增加。

Beyond the automotive sector, we have made notable advances in the tablet and notebook sectors with top OLED panel manufacturers in Korea and China. Our comprehensive OLED product offerings encompassing DDIC, Tcon, and touch controllers have led to several new projects that are on track to enter mass production during Q4 and as we move into 2025.

除了汽車領域之外，我們還與韓國和中國的頂級 OLED 面板製造商合作，在平板電腦和筆記型電腦領域取得了顯著進展。我們全面的 OLED 產品系列（包括 DDIC、Tcon 和觸控控制器）催生了多個新項目，這些項目預計在第四季度和進入 2025 年進入量產。

Regarding smartphone OLED, we expect mass production to commence next year. Currently, we are making good progress in collaborations with customers in Korea and China on several verification and partnership projects. Additionally, we are building strong long-term partnerships with the OLED players to enhance our market position.

至於智慧型手機OLED，我們預計明年開始量產。目前，我們與韓國和中國客戶在多個驗證和合作項目上的合作正在取得良好進展。此外，我們正在與 OLED 廠商建立牢固的長期合作夥伴關係，以增強我們的市場地位。

I would like to now turn to our driver IC business update, where we expect the fourth quarter revenue to increase mid-teens sequentially. First, for an update on our Tcon business. We anticipate Q4 Tcon sales to increase mid-teens sequentially, driven by automotive and a onetime ASIC Tcon product shipment to a leading projector customer.

我現在想談談我們的驅動器 IC 業務更新，我們預計第四季度的營收將連續成長 15%左右。首先，了解我們 Tcon 業務的最新情況。我們預計第四季度 Tcon 銷售額將連續成長 15%左右，這主要是受到汽車和向領先投影機客戶發貨的一次性 ASIC Tcon 產品的推動。

Automotive Tcon business is expected to achieve high teens growth sequentially, driven by the shipment of secure design wins. For the full year, our automotive Tcon business is projected to grow over 80% compared to last year, contributing to nearly 4% of our total sales. Moving forward, we are confident in the strong growth trajectory in the automotive Tcon business, backed by our dominant local dimming Tcon market position with over 100 design win projects, of which only a small portion are currently in mass production and new design-ins continue to expand.

在安全設計成果出貨量的推動下，汽車 Tcon 業務預計將連續實現兩位數的高速成長。全年來看，我們的汽車Tcon業務預計將比去年成長80%以上，占我們總銷售額的近4%。展望未來，我們對汽車Tcon 業務的強勁成長軌跡充滿信心，這得益於我們在本地調光Tcon 市場的主導地位，擁有超過100 個設計獲勝項目，其中只有一小部分目前處於量產狀態，新的設計仍在持續擴大。

Many panel houses, Tier 1s, and OEMs worldwide have now expanded the adoption of our leading-edge local dimming Tcon solutions from premium to car models. We are well positioned for decent growth in automotive Tcon over the next few years. Despite subdued end market demand, we are actively developing next-generation OLED Tcon ICs for tablet, notebooks, and automotive applications.

全球許多面板製造商、一級供應商和原始設備製造商 (OEM) 現在已將我們領先的局部調光 Tcon 解決方案的採用範圍擴大到從高端車型到轎車車型。我們已做好充分準備，在未來幾年汽車 Tcon 領域實現可觀成長。儘管終端市場需求低迷，我們仍在積極開發用於平板電腦、筆記型電腦和汽車應用的下一代 OLED Tcon IC。

This proactive approach not only broadens and diversifies our product offerings, but also helps us navigate through industry shifts towards wider adoption of OLED displays across applications. Some of our newly development Tcon ICs for OLED tablets and notebooks are already showing promising results. For automotive OLED Tcon, an area which with exciting growth potential, we began production in 2021 and anticipate new product launches with advanced feature enhancements in 2025.

這種積極主動的方法不僅擴大了我們的產品範圍並使其多樣化，而且還幫助我們引導行業轉變，朝著更廣泛地採用 OLED 顯示器的方向發展。我們新開發的一些用於 OLED 平板電腦和筆記型電腦的 Tcon IC 已經顯示出可喜的結果。對於汽車 OLED Tcon 這一具有令人興奮的成長潛力的領域，我們於 2021 年開始生產，並預計在 2025 年推出具有先進功能增強的新產品。

Switching gears to WiseEye ultra-low power AI sensing solution, the cutting-edge endpoint AI integration featuring industry-leading ultralow power AI processor, always-on CMOS image sensor, and advanced CNN-based AI algorithm. In the fast-changing AI landscape, WiseEye AI technology stands out for its expertise in on-device tiny ML microcontroller solutions, characterized by remarkably low power consumption, operating at just single-digit milliwatts, making it possible to add AI functionalities to battery-powered endpoint devices.

轉向 WiseEye 超低功耗 AI 感測解決方案，尖端端點 AI 整合採用業界領先的超低功耗 AI 處理器、始終在線的 CMOS 影像感測器和先進的基於 CNN 的 AI 演算法。在快速變化的AI 領域，WiseEye AI 技術因其在設備上微型ML 微控制器解決方案方面的專業知識而脫穎而出，其特點是功耗極低，運行時僅為個位數毫瓦，使得向電池添加AI 功能成為可能。

Our WiseEye technology is unlocking new opportunities across various applications, particularly in endpoint devices for everyday life. A prime example is a smart door lock stemming from our collaboration with DESMAN, a leading vendor in China's high-end smart door lock market. We are expanding use cases with other world-leading door lock makers across continents by integrating innovative AI features such as puzzle recognition, smart anti-pinch protection, and palm vein biometric access. This approach targets diverse home security markets that value WiseEye power consumption and on-device AI capabilities, which are crucial for battery-powered endpoint AI devices.

我們的 WiseEye 技術正在為各種應用釋放新的機遇，特別是在日常生活的端點設備中。一個典型的例子是我們與中國高端智慧門鎖市場領先供應商德斯曼合作推出的智慧門鎖。我們正在透過整合拼圖識別、智慧防夾保護和手掌靜脈生物識別存取等創新人工智慧功能，與各大洲其他世界領先的門鎖製造商擴大使用案例。這種方法針對重視 WiseEye 功耗和設備上 AI 功能的多樣化家庭安全市場，這對於電池供電的端點 AI 設備至關重要。

Next, for an update on our WiseEye module business. We continue to offer a diverse range of plug-and-play modules collaborating with ecosystem partners and third-party system integrators to develop retrained no-code and low-code AI solutions with the goal of lowering barriers and timelines for developers entering the AI space. Progress is being made across various domains, including smart parking, access control, PalmVein authentication, smart offices, smart homes, and more.

接下來介紹我們的 WiseEye 模組業務的最新情況。我們繼續與生態系統合作夥伴和第三方系統整合商合作，提供各種即插即用模組，開發經過再培訓的無程式碼和低程式碼人工智慧解決方案，旨在降低開發人員進入人工智慧領域的障礙和時間表。各個領域都取得了進展，包括智慧停車、門禁控制、PalmVein 身份驗證、智慧辦公室、智慧家庭等。

Among this, Himax's PalmVein solution, which is part of our WiseEye AI module business has garnered significant attention and positive feedback from customers since its launch early this year. It has already been adopted by US customer for smart access control systems and is on track to begin mass production by the end of the year. Extensive engineering activities of WiseEye PalmVein are ongoing with sales across various industries, including smart door locks, access control, notebooks and automotive, among others.

其中，奇景的PalmVein解決方案是我們WiseEye AI模組業務的一部分，自今年年初推出以來，獲得了客戶的廣泛關注和正面回饋。該產品已被美國客戶應用於智慧門禁系統，並預計今年底開始量產。 WiseEye PalmVein 正在進行廣泛的工程活動，銷售遍及各個行業，包括智慧門鎖、門禁控制、筆記型電腦和汽車等。

The WiseEye PalmVein solution integrates the Himax WiseEye2 AI processor and AOS CMOS image sensor and a proven PalmVein authentication algorithm, efficient and ultralow power compact module capable of authenticating an individual's identity in under 100 milliseconds, while consuming only a few milliwatts of power, ideal for battery charged on-device AI endpoint applications. PalmVein authentication utilizes unique internal vein patterns that are difficult to replicate.

WiseEye PalmVein 解決方案整合了Himax WiseEye2 AI 處理器和AOS CMOS 影像感測器以及經過驗證的PalmVein 身份驗證演算法，高效、超低功耗的緊湊型模組，能夠在100 毫秒內驗證個人身份，同時僅消耗幾毫瓦的功率，非常適合電池充電的裝置上 AI 端點應用程式。 PalmVein 身份驗證利用難以複製的獨特內部靜脈圖案。

In addition to exceptional low power consumption, WiseEye PalmVein provides robust security and reliability with industry-leading low rates of force acceptance and rejection, making it nearly impossible to bypass or misidentify. Equally important, WiseEye PalmVein processes identification locally, eliminating privacy risk associated with cloud access required for solutions that perform authentication remotely. We anticipate increasing sales contribution from WiseEye PalmVein across a diverse array of applications starting next year and are excited about the strong customer interest and opportunity for rapid growth in our WiseEye module business.

除了超低功耗之外，WiseEye PalmVein 還提供強大的安全性和可靠性，以及業界領先的低受力率和拒絕率，幾乎不可能被繞過或誤識別。同樣重要的是，WiseEye PalmVein 在本地處理身份識別，消除了與遠端執行身份驗證解決方案所需的雲端存取相關的隱私風險。我們預計從明年開始，WiseEye PalmVein 對各種應用的銷售貢獻將不斷增加，並對客戶的強烈興趣和我們 WiseEye 模組業務快速增長的機會感到興奮。

Now switching to a quick update on WLO, in June of this year, Himax joined forces with FOCI, a global leader in silicon photonics connectors to announce the launch of an industry-leading optical communication solution designed for the most advanced multichip modules. Himax and FOCI are currently progressing through the small-scale production phase of our first-generation solution designed for the LPO architecture.

現在轉向 WLO 的快速更新，今年 6 月，奇景光電與全球矽光子連接器領導者 FOCI 聯手，宣布推出專為最先進的多晶片模組設計的業界領先的光通訊解決方案。 Himax 和 FOCI 目前正處於針對 LPO 架構設計的第一代解決方案的小規模生產階段。

In addition, Himax in collaboration with FOCI, along with leading global AI IT design companies and foundry partner has commenced development for next-generation technologies with the objective of incorporating these advancements into more sophisticated CPU architectures. Leveraging our years of WLO engineering expertise, Himax has meticulously designed and developed net scale precision optical systems for LPO/CPO.

此外，奇景光電與 FOCI 以及全球領先的 AI IT 設計公司和代工合作夥伴合作，已開始開發下一代技術，目標是將這些進步融入更複雜的 CPU 架構中。憑藉我們多年的 WLO 工程專業知識，Himax 精心設計和開發了用於 LPO/CPO 的淨尺寸精密光學系統。

In the LPO/CPO optical solution, our precision engineered optical design and manufacturing technologies ensure that the optical signals in each fiber couple precisely with the silicon photonic integrated circuit or PIC in the LPO/CPO optical components. This achieves high precision, low loss, and high-speed transmission to meet the demands of silicon photonic transmission in high-speed computing.

在LPO/CPO光學解決方案中，我們精密工程光學設計和製造技術確保每根光纖中的光訊號與LPO/CPO光學組件中的矽光子積體電路或PIC精確耦合。從而實現高精度、低損耗、高速傳輸，滿足高速運算中矽光子傳輸的需求。

In addition to the progress made in the LPO/CPO, we have seen an increase in engineering collaborations with global technology leaders who are leveraging our WLO expertise for AR/VR and a range of other applications, underscoring the widespread recognition of our technology. We believe that WLO will make a significant contribution to our overall revenue and profit in the coming years.

除了在LPO/CPO 方面取得的進展之外，我們還看到與全球技術領導者的工程合作有所增加，他們正在利用我們在AR/VR 和一系列其他應用方面的WLO 專業知識，這突顯了我們的技術得到了廣泛認可。我們相信，WLO 將為我們未來幾年的整體收入和利潤做出重大貢獻。

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

我的本季報告到此結束。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) Donnie Teng, Nomura.

（操作員指示）Donnie Teng，野村證券。

Thank you, Jordan and Eric, for taking my question. My first question is regarding to your automotive business. So based on your guidance, automotive driver IC sales in fourth quarter will be growing like single digit sequentially. But when we look at some of peers' announcements like, for example, like Novatek, like Radian, they all mentioned about the automotive driver IC sales in fourth quarter may decline a little bit sequentially.

謝謝喬丹和艾瑞克提出我的問題。我的第一個問題是關於你們的汽車業務。因此，根據您的指導，第四季的汽車驅動器 IC 銷售額將連續成長個位數。但當我們看一些同業的公告時，例如像Novatek、像Radian，他們都提到第四季的汽車驅動IC銷售可能會比上季下降一點。

And also, I remember that back in past few months, it seems like the automotive business was pretty volatile, customers adding orders and cut orders within a couple of months. So what makes this kind of volatility that big? And how confident we are to outperforming our peers in terms of our automotive business into fourth

而且，我記得在過去的幾個月裡，汽車業務似乎相當不穩定，客戶在幾個月內增加訂單並減少訂單。那麼是什麼讓這種波動如此之大呢？我們有多大信心在汽車業務方面超越同行進入第四

Thank you for the question. I mean, as you know, we are always very confident. And actually, we are always on somehow conservative side when we provide our guidance. So when we say Q4 automotive overall business is projected to grow, I mean, we certainly win business. And similar to the last quarter, we are seeing a lot of rush orders, which fortunately, we are able to fulfill because of the reasons I mentioned earlier in my prepared remarks.

謝謝你的提問。我的意思是，如你所知，我們總是非常有信心。事實上，當我們提供指導時，我們總是處於某種保守的立場。因此，當我們說第四季度汽車整體業務預計將成長時，我的意思是，我們肯定會贏得業務。與上季類似，我們看到了許多緊急訂單，幸運的是，由於我之前在準備好的發言中提到的原因，我們能夠履行這些訂單。

And I think the customers appreciate that the fact that Himax has the leading market position and also is fulfilling our responsibility by fulfilling such rush orders for being the leading market share player. And I think that the main reason for the Q4 is really a continuation of the last-minute Q3 rush orders. China is renewing its stimulus plan, and that is rushing the carmakers and to a great extent, consumers to make their purchase before the incentive plan expires. And I think that is what we are seeing. Having said that though, so again, we are very confident about our projection for Q4.

我認為客戶欣賞奇景擁有領先的市場地位，並且透過履行這種緊急訂單來履行我們作為市場份額領導者的責任。我認為第四季度的主要原因實際上是第三季最後一刻緊急訂單的延續。中國正在更新其刺激計劃，這促使汽車製造商以及很大程度上消費者在刺激計劃到期之前購買汽車。我認為這就是我們所看到的。儘管如此，我們還是對第四季的預測非常有信心。

We are, however, less confident on the prospect of Q1. So perhaps a more important question is what is our prospect for 2025. I know you didn't ask that question, but I think it's probably a good opportunity for me to elaborate a little bit on our prospect here. So again, we are very confident about our continued market share leadership and close engagement with our customers across the global automotive supply chain. However, we don't have good visibility to be quite honest for our automotive business for 2025.

然而，我們對第一季的前景不太有信心。所以也許一個更重要的問題是我們對 2025 年的前景是什麼。因此，我們對我們持續的市場份額領先地位以及與全球汽車供應鏈客戶的密切合作充滿信心。然而，老實說，我們對 2025 年的汽車業務並沒有很好的預見性。

And this is mainly because of the uncertainty related to the macroenvironment, both politically and economically. I think I don't need to elaborate further on that. We all know what I'm talking about the uncertainty. Nevertheless, regardless of the macroenvironment, we are quite comfortable about further growing our automotive TDDI business next year, which surpassing DDIC is already our largest source of revenue right now, as you know. Our confidence stems from our large number of design win projects, which are yet to enter mass production and the penetration of in TDDI for automotive which is still projected to somehow growth further, although certainly not at the same kind of high growth rate that we enjoyed over the last few years.

這主要是因為政治和經濟宏觀環境的不確定性。我想我不需要進一步詳細說明這一點。我們都知道我在談論不確定性。儘管如此，無論宏觀環境如何，我們對明年汽車TDDI業務的進一步成長感到非常滿意，正如你所知，它已經超過DDIC，成為我們目前最大的收入來源。我們的信心源於我們大量的設計獲勝項目，這些項目尚未進入批量生產，以及 TDDI 在汽車領域的滲透，預計仍會以某種方式進一步增長，儘管肯定不會達到我們所享受的高增長率在過去的幾年裡。

Our confidence level is even higher for growing our local dimming Tcon as well as LTDI business in 2025 for very similar reasons, i.e., a large number of design win projects already in hand and dominant market position. We are actually now projecting for the Tcon to grow a rather decent double digit next year. And for LTDI, starting from a relatively low base to grow triple digit actually next year. Again, we are fairly confident about this prospect. However, I can't say the same for traditional DDIC for next year.

我們對於在 2025 年發展本地調光 Tcon 和 LTDI 業務的信心更高，原因非常相似，即已有大量設計贏得項目並佔據市場主導地位。實際上，我們現在預計 Tcon 明年將實現相當不錯的兩位數成長。對於LTDI來說，從相對較低的基數開始，明年實際上將成長三位數。再次，我們對這一前景充滿信心。然而，我不能對明年的傳統 DDIC 說同樣的話。

As you know, the overall DDIC volume of the market is projected to decline somehow. It is being partially replaced by TDDI. But it still has solid demand for applications that do not require touch features. So the business next year for our automotive DDIC will depend largely on the overall automotive shipment. We don't really expect our market share to decline, but we can't really with our 40% market share, which is already quite high, we can't really project our market share to grow much further either.

如您所知，DDIC 市場的整體銷售量預計會下降。它正在被 TDDI 部分取代。但它對不需要觸控功能的應用程式仍然有強勁的需求。所以明年我們汽車DDIC的業務將很大程度取決於整個汽車出貨量。我們並不真正預期我們的市佔率會下降，但我們也不能真正預測我們的市佔率會進一步成長，因為我們的市佔率已經達到了 40%，這已經相當高了。

If I try to complete the story, let me also look further ahead into 2026 and '27. We are likely to see our OLED business taking off for automotive. We are already collaborating very closely with leading customers in Korea, China and Japan on the new generation projects that are already in design stage with Tier 1s and ODMs, involving all of our DDIC Tcon and on-cell touch solutions for OLED with our touch solution already in early stage of mass production, as we just mentioned. So while the automotive OLED will be the story of 2026 and beyond, we believe it will represent a major growth engine for Himax when it happens because what we are seeing right now, what we are experiencing right now is very, very busy design activities with not just panel makers and also Tier 1s and OEMs for their high-end models. So I hope that addresses your question.

如果我試著完成這個故事，讓我也進一步展望 2026 年和 27 年。我們很可能會看到我們的 OLED 業務在汽車領域起飛。我們已經與韓國、中國和日本的領先客戶就新一代專案進行密切合作，這些專案已與一級供應商和ODM 一起進入設計階段，其中涉及我們所有的DDIC Tcon 和用於OLED 的On -cell 觸控解決方案以及我們的觸控解決方案正如我們剛才提到的，已經處於大量生產的早期階段。因此，雖然汽車OLED 將成為2026 年及以後的故事，但我們相信，當它發生時，它將成為奇景的主要成長引擎，因為我們現在所看到的、我們現在正在經歷的是非常非常繁忙的設計活動，不僅是面板製造商，還有高端型號的一級供應商和原始設備製造商。所以我希望這能解決你的問題。

Yes, another follow-up on this is like, as I mentioned, some of the peers mentioned about fourth quarter may sequentially decline a little bit. So other than the overall customer situation seems like getting better towards the end of this year. Is there any specific company reason to drive our automotive sales to be outperforming our peers?

是的，正如我所提到的，另一個後續行動是，一些提到第四季度的同業可能會連續下降一點。因此，除了整體客戶狀況似乎在今年年底有所改善之外。是否有任何特定的公司原因可以推動我們的汽車銷售超越同行？

I certainly don't know what is happening with our peers, but we are seeing this rush orders actually coming from not just one or two single customers. It's actually a widespread from almost across the board, various panel makers and covering both DDIC and TDDI Tcon actually. And I recall very vividly with automotive Tcon, which has actually very, very long production lead time. And we are scrambling to meet customer demand, which luckily, we are able to achieve. However, in the meantime, we are complaining to the customer that this should not happen anymore because partially by luck, we are able to make the delivery for Tcon.

我當然不知道我們的同行發生了什麼，但我們看到這種緊急訂單實際上不僅僅來自一兩個客戶。實際上，它幾乎遍及各個面板製造商，涵蓋 DDIC 和 TDDI Tcon。我對汽車 Tcon 的記憶非常清晰，它的生產週期實際上非常非常長。我們正在努力滿足客戶的需求，幸運的是，我們能夠實現這一目標。然而，與此同時，我們向客戶抱怨這種情況不應該再發生了，因為部分幸運的是，我們能夠為 Tcon 交貨。

And with this long production lead time, if it happens next time, we can't really guarantee it. But anyway, what I'm trying to say is the rush orders actually came from not just Chinese, also other countries, panel makers, Tier 1s and automotive.

而且生產週期這麼長，如果下次再發生這種情況，我們真的無法保證。但無論如何，我想說的是，緊急訂單實際上不僅來自中國，還來自其他國家、面板製造商、一級供應商和汽車製造商。

Understood. And my second question is regarding to the CPO progress. Wondering if you -- okay, firstly, it looks like non-driver IC sales growth in fourth quarter primarily driven by Tcon. So is CPO playing any role there in fourth quarter yet? Or how should we look at the update progress there for CPO?

明白了。我的第二個問題是關於 CPO 的進展。想知道您是否——好吧，首先，第四季度非驅動器 IC 銷售成長看起來主要是由 Tcon 推動的。那麼，CPO 在第四季度是否發揮了作用？或者說我們應該如何查看CPO那裡的更新進度呢？

The answer is no, not in Q4. In Q4, we do see some small amount of revenue from this starting from Q4. These are very early, very small quantity shipments for customers' engineering, verification and trial production purposes. So WLO for CPO doesn't really contribute to our non-driver growth for Q4.

答案是否定的，不是在第四季。在第四季度，我們確實從第四季度開始看到了一些少量的收入。這些是非常早期、非常少量的發貨，用於客戶的工程、驗證和試生產目的。因此，CPO 的 WLO 並沒有真正對我們第四季的非驅動因素成長做出貢獻。

I see. Do you have any update on the future progress? I mean, when exactly we will see more meaningful progress or sales contribution from CPO? Is there any update on the schedule and the industry dynamics as well.

我懂了。能否介紹一下未來的進展？我的意思是，我們到底什麼時候才能看到 CPO 取得更有意義的進展或銷售貢獻？日程安排和行業動態是否有任何更新？

Good question. Let me probably elaborate a little bit on -- in our prepared remarks, right, we talked about working on next-generation technologies and products. And so, you may wonder exactly what those are and its time line. And therefore, your question about contribution potentially for next year or the year after. So the short answer is we are trying to squeeze more and more optical fiber lines into a very, very limited space.

好問題。讓我大概詳細說明一下——在我們準備好的發言中，我們談到了下一代技術和產品的工作。因此，您可能想知道它們到底是什麼及其時間表。因此，你關於明年或後年可能捐款的問題。所以簡單來說，我們正在努力將越來越多的光纖線路擠進非常非常有限的空間。

And that is a very tremendous engineering challenge. Now, as we all know, one of the main purposes of using LPO/CPO technology is to substantially raise the data transmission rate or what we call bandwidth of the advanced multichip module, which, as you know, is essentially the bundling of multiple chiplets into a single module through so-called advanced packaging. The module after such, call it, co-bundling can therefore process a very large amount of data. But to make the module useful, the module also needs to have sufficient bandwidth to transmit that data with the outside in both ways. And we all know optical fiber is being used to replace the traditional metal wire for such high-bandwidth data transmission.

這是一個非常巨大的工程挑戰。現在，眾所周知，使用LPO/CPO技術的主要目的之一是大幅提高資料傳輸速率或我們所說的高級多晶片模組的頻寬，眾所周知，這本質上是多個chiplet的捆綁通過所謂的高級封裝將其整合到單一模組中。這樣之後的模組，稱之為聯合捆綁，因此可以處理非常大量的資料。但為了使模組有用，模組還需要有足夠的頻寬來與外部雙向傳輸資料。我們都知道光纖正在取代傳統的金屬線來進行高頻寬資料傳輸。

However, the bandwidth of each optical fiber line is still fixed, it's still limited. And therefore, to up the overall bandwidth of the whole multichip module. The simple idea is to have multiple optical fiber lines working in parallel. And that is exactly what we're working on when we talk about technology road map. We are trying to squeeze more and more optical fiber lines into a very limited space.

然而，每條光纖線路的頻寬仍然是固定的，仍然是有限的。因此，提高了整個多晶片模組的整體頻寬。簡單的想法是讓多條光纖線路並行工作。這正是我們在談論技術路線圖時所做的工作。我們正試圖將越來越多的光纖線路擠進非常有限的空間。

We are targeting some phenomenal increases over the next few years to cope with the projected increase of data amount that need to be transmitted by the advanced multichip modules. So to achieve that, among other things, we need to push the boundary of optical design and manufacturing, for example, for better waveform integrity after transmission. And another example will be for more precise coupling of the optical fiber with the photonic IC that our device connected to. So in terms of time line, I can't really speak on my behalf of my customers. So all I can say is that we are being requested to accelerate the time line from something already quite challenging for the migration from first-generation LPO to more advanced CPO as well as for the readiness of our next-generation products, enabling a fast-increasing number of optical fiber lines.

我們的目標是在未來幾年內出現一些顯著的成長，以應對高級多晶片模組需要傳輸的資料量的預期成長。因此，為了實現這一目標，我們需要突破光學設計和製造的界限，例如，在傳輸後獲得更好的波形完整性。另一個例子是光纖與我們的設備所連接的光子 IC 的更精確耦合。因此，就時間安排而言，我無法真正代表我的客戶發言。因此，我只能說，我們被要求加快從第一代 LPO 到更先進的 CPO 的遷移以及下一代產品的準備工作，這已經相當具有挑戰性，從而實現快速-光纖線路數量不斷增加。

And we also mentioned as part of our Q&A last quarter as well, some people wonder about whether we have the capacity to meet such demand when it really happens. And certainly, we have run the math internally several times, and we are certainly very excited about the prospect because if we look at our partners or customers' projected capacity expansion as well as their projected growth of such high-end 2.5D modules or STUs. Even if we are to fully utilize our existing capacity, we can only meet a small fraction of their projected demand. Now to be honest, we still don't have their long-term forecast, long-term projection for their demand for covering next few years yet. But we feel we are very prepared because all the generation of products I just mentioned, whether this generation or future generation of our products will be manufactured in our existing WLO with existing capacity, which was built for the purpose of some earlier projects that we work on several years back for consumer electronics products.

我們在上個季度的問答中也提到，有些人想知道當這種需求真正發生時我們是否有能力滿足這種需求。當然，我們已經在內部進行了多次數學計算，我們對這一前景當然感到非常興奮，因為如果我們看看我們的合作夥伴或客戶的預計產能擴張以及他們對此類高端2.5D 模組或STU 的預計增長。即使我們充分利用現有產能，也只能滿足他們預期需求的一小部分。現在說實話，我們還沒有他們的長期預測，對他們未來幾年需求的長期預測。但我們覺得我們已經做好了充分的準備，因為我剛才提到的所有一代產品，無論是這一代還是下一代我們的產品都將在我們現有的WLO 中以現有產能進行製造，這是為我們工作的一些早期項目而建造的幾年前消費電子產品。

Now without specifics, we believe the same existing capacity will generate substantially more revenue and profit for us as the products for LPO/CPO demand much more sophisticated optical design manufacturing compared to those used for our earlier products, which, as I mentioned, is for consumer electronics. So I hope that addresses all your questions regarding this WLO business.

現在沒有具體細節，我們相信相同的現有產能將為我們帶來更多的收入和利潤，因為與我們早期產品所使用的產品相比，LPO/CPO 產品需要更複雜的光學設計製造，正如我所提到的，這是為了消費電子產品。因此，我希望這能解決您有關 WLO 業務的所有問題。

(Operator Instructions) There are no further questions at this moment.

（操作員說明） 目前沒有其他問題。

Thank you, operator. 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.

謝謝你，接線生。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。

Thank you, Jordan. Ladies and gentlemen, this concludes third quarter 2024 Earnings Conference. You may now disconnect. Thank you, and goodbye.

謝謝你，喬丹。女士們、先生們，2024 年第三季財報會議到此結束。您現在可以斷開連線。謝謝你，再見。