Himax is “more and more optimistic” about 4K penetration,...

Himax is “more and more optimistic” about 4K penetration, said CEO Jordan Wu on an earnings call Thursday. Market penetration of large-panel driver ICs for 4K TVs is getting closer to 10 percent for 2014, Wu said, saying some TV customers are talking about “10 percent or more.” Revenue from large-panel display drivers at Himax in Q1 dropped 19 percent to $48.6 million from the year-ago quarter, but they were up sequentially from $46.8 million in Q4 2013 on shipments from new and existing customers and “the increasing penetration of 4K TVs,” Himax said. In the second half, 4K TV sales “are likely” to account for a higher percentage of sales than the first half, which would lift gross margin for large-panel driver ICs, Wu said. The company warned of upcoming “headwinds” in Q2 due to an “inventory correction” by one of the company’s “major Korean end-customers” that’s expected to cause a drop in Q2 smartphone IC sales. “We are waiting for the inventory position to be cleared” and for the customer to review its long-term strategy, Wu said, calling the customer “among the leaders” in the smartphone category. The excess inventory position is a “short-term setback” for Himax, Wu said. For small-panel driver ICs, Himax expects a higher percentage of sales to come from higher-end resolution products such as HD and Full HD in coming months, Wu said. Small and medium-sized panel driver sales and non-driver sales grew 21.5 percent and 44.5 percent year-over-year to 57 percent and 18 percent of total revenue in Q1, the company said. Earnings rose 12 percent to $15.7 million while margin remained relatively flat. For Q2, Himax forecasts revenue to be flat sequentially. The company said it disposed of its investment in a U.S. display company last month, which was wholly acquired by a third party. The initial $4 million investment, made in December, matured to a $12.24 million one-time gain, Himax said.