Himax Shares Sink 28% After Auto Chip Orders Vanish Post-Holiday, Q4 Revenue Seen Down as Much as 26%
By Google News Motors ·
Himax Technologies (HIMX) lost more than a quarter of its market value Thursday after the display driver chip designer told investors that automotive orders collapsed almost overnight, forcing a fourth-quarter revenue forecast far below what the business had been delivering.
The company's American depositary shares fell nearly 28% to $7.55 in afternoon trading in New York, a slide sharpened by a broader selloff that hit AI-linked semiconductor names especially hard. The drop followed Wednesday's third-quarter earnings release and Thursday's conference call, during which President and Chief Executive Jordan Wu described a demand reversal that caught management off guard.
Himax guided fourth-quarter revenue to fall 22% to 26% sequentially from $246.8 million, with profit of 4.5 to 6.5 cents per diluted ADS. That is down from 10.7 cents in the September quarter, which itself beat the company's own 8-to-10-cent forecast on lower-than-expected operating expenses. Gross margin is expected to be flat to slightly higher.
The forecast excludes an anticipated after-tax gain of roughly $19 million to $20 million from the sale of a stake in an equity-method investment, a transaction announced in July that is expected to close this quarter. On a pre-tax basis the gain is projected at $23 million to $24 million.
The trouble centers on automotive display driver chips, which now account for close to half of Himax's revenue. Wu said the year opened softly, then panel makers ramped purchases hard in the second and third quarters to meet surging orders from Chinese automakers expanding abroad.
Automotive driver sales jumped by solid double digits sequentially in the third quarter, the second consecutive quarter of strong growth, as some panel makers pulled orders forward.
Then came the holiday. "Right after China's National Day holidays in early October," Wu said, the company saw a "sudden and sizable decline in demand among the customers that had purchased aggressively in prior quarters." Panel makers with heavy exposure to Chinese automakers and vehicle programs slashed their fourth-quarter projections within weeks.
Wu attributed part of the pullback to Chinese automakers' "earlier, overly aggressive export expectations, along with their growing concerns over inventory levels across distribution channels." He cited industry data showing domestic sales of locally made vehicles in China fell 22.4% year over year in the first nine months of 2026 while exports of those vehicles climbed 65.8%.
Mounting pressure from trading partners, including the European Union, to tighten barriers on Chinese vehicle imports, and Beijing's October reduction of export tax rebates for new energy vehicles, added to the uncertainty and limited near-term order visibility, he said.
By contrast, panel makers serving customers outside China have held their forecasts steady, and some have raised fourth-quarter orders slightly.
Note: Third-quarter operating expenses rose 21.9% sequentially to $61.8 million, largely because of $11.9 million in annual employee bonus expense booked in September.
Wu framed the shortfall as a temporary inventory correction rather than a loss of position. Automotive chip sales rose about 16% year over year in the first nine months, and management still expects roughly 10% growth for the full year even as global vehicle production is projected to decline. Automotive timing-controller revenue, a separate product line, is on track to grow more than…
Originally published by Google News Motors
