o
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2009
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from ________________ to ________________
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OR
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o
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of event requiring this shell company report ________________
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Title of each class
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Name of each exchange on which registered
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Ordinary Shares, par value $0.3 per ordinary share
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The Nasdaq Global Select Market Inc.*
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*
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Not for trading, but only in connection with the listing on the Nasdaq Global Select Market, Inc. of American Depositary Shares representing such Ordinary Shares
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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U.S. GAAP
x
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International Financial Reporting Standards as issued by the International Accounting Standards Board
o
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Other
o
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Page
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
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1
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CERTAIN CONVENTIONS
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1
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PART I
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3
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ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
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3
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ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
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3
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ITEM 3. KEY INFORMATION
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3
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3.A. Selected Financial Data
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3
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3.B. Capitalization and Indebtedness
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6
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3.C. Reason for the Offer and Use of Proceeds
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6
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3.D. Risk Factors
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6
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ITEM 4. INFORMATION ON THE COMPANY
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27
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4.A. History and Development of the Company
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27
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4.B. Business Overview
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29
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4.C. Organizational Structure
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49
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4.D. Property, Plants and Equipment
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51
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ITEM 4A. UNRESOLVED STAFF COMMENTS
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51
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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
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51
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5.A. Operating Results
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51
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5.B. Liquidity and Capital Resources
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66
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5.C. Research and Development
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67
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5.D. Trend Information
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67
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5.E. Off-Balance Sheet Arrangements
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68
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5.F. Tabular Disclosure of Contractual Obligations
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68
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ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
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69
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6.A. Directors and Senior Management
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69
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6.B. Compensation of Directors and Executive Officers
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71
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6.C. Board Practices
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72
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6.D. Employees
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74
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6.E. Share Ownership
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77
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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
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77
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7.A. Major Shareholders
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77
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7.B. Related Party Transactions
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78
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7.C. Interests of Experts and Counsel
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79
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ITEM 8. FINANCIAL INFORMATION
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80
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8.A. Consolidated Statements and Other Financial Information
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80
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8.B. Significant Changes
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81
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ITEM 9. THE OFFER AND LISTING
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81
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9.A. Offer and Listing Details
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81
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9.B. Plan of Distribution
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82
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9.C. Markets
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82
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9.D. Selling Shareholders
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82
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9.E. Dilution
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82
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9.F. Expenses of the Issue
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82
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ITEM 10. ADDITIONAL INFORMATION
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82
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10.A. Share Capital
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82
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10.B. Memorandum and Articles of Association
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83
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10.C. Material Contracts
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83
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10.D. Exchange Controls
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83
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10.E. Taxation
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84
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10.F. Dividends and Paying Agents
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86
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10.G. Statement by Experts
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86
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10.H. Documents on Display
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86
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10.I. Subsidiary Information
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86
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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
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86
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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
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87
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12.A. Debt Securities
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87
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12.B. Warrants and Rights
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87
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12.C. Other Securities
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87
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12.D. American Depositary Shares
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87
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PART II
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89
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ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
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89
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ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
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89
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ITEM 15. CONTROLS AND PROCEDURES
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89
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ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
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90
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ITEM 16B. CODE OF ETHICS
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91
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ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
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91
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ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
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91
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ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
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91
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ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
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92
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ITEM 16G. CORPORATE GOVERNANCE
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92
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PART III
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93
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ITEM 17. FINANCIAL STATEMENTS
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93
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ITEM 18. FINANCIAL STATEMENTS
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93
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ITEM 19. EXHIBITS
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94
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·
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the terms “we,” “us,” “our company,” “our,” and “Himax” refer to Himax Technologies, Inc., its predecessor entities and subsidiaries;
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·
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the term “Himax Taiwan” refers to Himax Technologies Limited, our wholly owned subsidiary in Taiwan and our predecessor;
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·
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“shares” or “ordinary shares” refers to our ordinary shares, par value $0.3 per share;
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·
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“RSUs” refers to restricted share units;
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·
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“ADSs” refers to our American depositary shares, each of which represents two ordinary shares;
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·
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“ADRs” refers to the American depositary receipts that evidence our ADSs;
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·
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“TDRs” refers to our proposed Taiwan depositary receipts to be listed on the Taiwan Stock Exchange upon the successful completion of our Taiwan listing plan;
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·
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“ROC” or “Taiwan” refers to the island of Taiwan and other areas under the effective control of the Republic of China;
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·
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“PRC” or “China” for purposes of this annual report refers to the People’s Republic of China, excluding Taiwan and the special administrative regions of Hong Kong and Macau;
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·
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“AMOLED” refers to active matrix organic light-emitting diode;
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·
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“CMOS” refers to complementary metal oxide semiconductor;
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·
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“IC” refers to integrated circuit;
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·
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“LCOS” refers to liquid crystal on silicon;
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·
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“LED” refers to light-emitting diode;
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·
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“LTPS” refers to low temperature poly silicon;
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·
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“OLED” refers to organic light-emitting diode;
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·
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“TFT-LCD” refers to amorphous silicon thin film transistor liquid crystal display, or “a-Si TFT-LCD;”
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·
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“processed tape” refers to polyimide tape plated with copper foil that has a circuit formed within it, which is used in tape-automated bonding packaging;
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·
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“semiconductor manufacturing service providers” refers to third-party wafer fabrication foundries, gold bumping houses and assembly and testing houses;
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·
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“large-sized panels” refers to panels that are typically above ten inches in diagonal measurement;
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·
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“small and medium-sized panels” refers to panels that are typically around ten inches or less in diagonal measurement;
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·
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all references to “New Taiwan dollars,” “NT dollars” and “NT$” are to the legal currency of the ROC; and
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·
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all references to “dollars,” “U.S. dollars” and “$” are to the legal currency of the United States.
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Year Ended December 31,
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||||||||||||||||||||
2005
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2006
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2007
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2008
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2009
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||||||||||||||||
(in thousands, except per share data)
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||||||||||||||||||||
Consolidated Statement of Income Data:
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||||||||||||||||||||
Revenues from third parties, net
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$ | 217,420 | $ | 329,886 | $ | 371,267 | $ | 312,336 | $ | 245,075 | ||||||||||
Revenues from related parties, net
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322,784 | 414,632 | 546,944 | 520,463 | 447,306 | |||||||||||||||
Costs and expenses
(1)
:
|
||||||||||||||||||||
Cost of revenues
|
419,380 | 601,565 | 716,163 | 628,693 | 550,556 | |||||||||||||||
Research and development
|
41,278 | 60,655 | 73,906 | 87,574 | 71,364 | |||||||||||||||
General and administrative
|
6,784 | 9,762 | 14,903 | 19,353 | 16,346 | |||||||||||||||
Bad debt expense
|
- | 187 | - | 25,305 | 218 | |||||||||||||||
Sales and marketing
|
4,762 | 6,783 | 9,334 | 11,692 | 10,360 | |||||||||||||||
Operating income
|
$ | 68,000 | $ | 65,566 | $ | 103,905 | $ | 60,182 | $ | 43,537 | ||||||||||
Net income
(2)
|
$ | 61,335 | $ | 74,953 | $ | 111,455 | $ | 72,724 | $ | 35,810 | ||||||||||
Net income attributable to Himax stockholders
|
$ | 61,558 | $ | 75,190 | $ | 112,596 | $ | 76,381 | $ | 39,650 |
Year Ended December 31,
|
||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||||||
|
||||||||||||||||||||
Earnings per ordinary share attributable to Himax stockholders
(2)
:
|
||||||||||||||||||||
Basic
|
$ | 0.17 | $ | 0.20 | $ | 0.29 | $ | 0.20 | $ | 0.11 | ||||||||||
Diluted
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$ | 0.17 | $ | 0.19 | $ | 0.29 | $ | 0.20 | $ | 0.11 | ||||||||||
Earnings per ADS attributable to Himax stockholders:
|
||||||||||||||||||||
Basic
|
$ | 0.35 | $ | 0.39 | $ | 0.57 | $ | 0.40 | $ | 0.21 | ||||||||||
Diluted
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$ | 0.34 | $ | 0.39 | $ | 0.57 | $ | 0.40 | $ | 0.21 | ||||||||||
Weighted-average number of ordinary shares used in earnings per share computation:
|
||||||||||||||||||||
Basic
|
352,210 | 384,950 | 393,725 | 383,229 | 369,652 | |||||||||||||||
Diluted
|
361,317 | 390,180 | 395,043 | 383,753 | 370,229 | |||||||||||||||
Cash dividends declared per ordinary share
(3)
|
$ | 0.038 | $ | 0.000 | $ | 0.100 | $ | 0.175 | $ | 0.150 | ||||||||||
Cash dividends declared per ADS
|
$ | 0.075 | $ | 0.000 | $ | 0.200 | $ | 0.350 | $ | 0.300 |
Note: (1)
|
The amount of share-based compensation included in applicable costs and expenses categories is summarized as follows:
|
Year Ended December 31,
|
||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Cost of revenues
|
$ | 188 | $ | 275 | $ | 422 | $ | 435 | $ | 264 | ||||||||||
Research and development
|
6,336 | 11,806 | 15,393 | 15,861 | 10,936 | |||||||||||||||
General and administrative
|
848 | 1,444 | 2,182 | 2,813 | 1,959 | |||||||||||||||
Sales and marketing
|
1,241 | 1,625 | 2,324 | 2,691 | 1,902 | |||||||||||||||
Total
|
$ | 8,613 | $ | 15,150 | $ | 20,321 | $ | 21,800 | $ | 15,061 |
(2)
|
Under the ROC Statute for Upgrading Industries, we are exempt from income taxes for income attributable to expanded production capacity or newly developed technologies. Based on the ROC statutory income tax rate of 25%, the effect of such tax exemption was an increase on net income and basic and diluted earnings per share attributable to our stockholders of $27.1 million, $0.07 and $0.07, respectively, for the year ended December 31, 2007, $25.2 million, $0.07 and $0.07, respectively, for the year ended December 31, 2008, and $9.4 million, $0.03 and $0.03, respectively, for the year ended December 31, 2009. A portion of these tax exemptions expired or will expire on March 31, 2009, December 31, 2010, December 31, 2012 and December 31, 2013.
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(3)
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The above cash dividends should not be considered representative of the dividends that would be paid in any future periods or our dividend policy. See “Item 8.A.8. Financial Information—Dividends and Dividend Policy” for more information on our dividends for the years from 2007 to 2010 and our dividend policy.
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As of December 31,
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||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Consolidated Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
(1)
|
$ | 7,086 | $ | 109,753 | $ | 94,780 | $ | 135,200 | $ | 110,924 | ||||||||||
Accounts receivable, net
|
80,259 | 112,767 | 88,682 | 51,029 | 64,496 | |||||||||||||||
Accounts receivable from related parties, net
|
69,587 | 116,850 | 194,902 | 104,477 | 138,172 | |||||||||||||||
Inventories
|
105,004 | 101,341 | 116,550 | 96,921 | 67,768 | |||||||||||||||
Total current assets
|
300,056 | 466,715 | 538,272 | 434,650 | 423,797 | |||||||||||||||
Total assets
|
327,239 | 518,794 | 652,762 | 565,548 | 550,448 |
As of December 31,
|
||||||||||||||||||||
2005
|
2006
|
2007
|
2008
|
2009
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Accounts payable
|
105,801 | 120,407 | 147,221 | 53,720 | 88,079 | |||||||||||||||
Total current liabilities
(2)
|
160,784 | 153,279 | 185,048 | 90,143 | 120,651 | |||||||||||||||
Total liabilities
|
160,784 | 153,471 | 190,364 | 95,542 | 126,376 | |||||||||||||||
Ordinary shares
|
109,253 | 116,160 | 115,188 | 114,072 | 107,404 | |||||||||||||||
Total equity
(1)
|
166,455 | 365,323 | 462,398 | 470,006 | 424,072 |
Note:
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(1)
|
Cash and cash equivalents as of December 31, 2006 increased significantly as compared to December 31, 2005. This increase was due primarily to net proceeds of $147.4 million received from our initial public offering in April 2006, which also caused the increase in total equity by the same amount.
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(2)
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Total current liabilities as of December 31, 2007 and 2008 were previously stated at $185,599 thousand and $91,630 thousand, respectively, and have been revised due to the reclassification of $551 thousand and $1,487 thousand, respectively, as non-current income taxes payable and other liabilities.
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Year Ended December 31,
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2005
|
2006
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2007
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2008
|
2009
|
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(in thousands)
|
||||||||||||||||||||
Consolidated Cash Flow Data:
|
||||||||||||||||||||
Net cash provided by operating activities
|
$ | 12,464 | $ | 29,696 | $ | 77,162 | $ | 136,500 | $ | 73,630 | ||||||||||
Net cash used in investing activities
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(25,363 | ) | (8,927 | ) | (25,019 | ) | (21,764 | ) | (7,255 | ) | ||||||||||
Net cash provided by (used in) financing activities
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14,404 | 81,886 | (67,241 | ) | (74,350 | ) | (91,065 | ) |
Noon Buying Rate
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||||||||||||||||
Average
(1)
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High
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Low
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Period-end
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|||||||||||||
(NT dollars per U.S. dollar)
|
||||||||||||||||
Period
|
||||||||||||||||
2005
|
32.16 | 33.77 | 30.65 | 32.80 | ||||||||||||
2006
|
32.49 | 33.31 | 31.28 | 32.59 | ||||||||||||
2007
|
32.82 | 33.41 | 32.26 | 32.43 | ||||||||||||
2008
|
31.51 | 33.55 | 29.99 | 32.76 | ||||||||||||
2009
|
32.96 | 35.21 | 31.95 | 31.95 | ||||||||||||
November
|
32.32 | 32.58 | 32.12 | 32.20 | ||||||||||||
December
|
32.25 | 32.38 | 31.95 | 31.95 | ||||||||||||
2010
|
||||||||||||||||
January
|
31.87 | 32.04 | 31.65 | 31.94 | ||||||||||||
February
|
32.06 | 32.14 | 31.98 | 32.12 | ||||||||||||
March
|
31.83 | 32.04 | 31.70 | 31.73 | ||||||||||||
April
|
31.48 | 31.74 | 31.30 | 31.31 | ||||||||||||
May (through May 28)
|
31.83 | 32.33 | 31.40 | 32.00 |
Source: Federal Reserve Bank of New York.
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Note:
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(1)
|
Annual averages are calculated by averaging month-end rates for the relevant year. Monthly averages are calculated by averaging daily rates for the relevant period.
|
|
·
|
lower-than-expected demand for end-use products that incorporate TFT-LCD panels;
|
|
·
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a surge in manufacturing capacity due to the ramping up of new fabrication facilities and/or improvements in production yields; and
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·
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manufacturers operating at high levels of capacity utilization in order to reduce fixed costs per panel.
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·
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consumer demand and the general economic conditions;
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·
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the cyclical nature of both the TFT-LCD industry, including fluctuations in average selling prices, and its downstream industries;
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·
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the speed at which TFT-LCD panel manufacturers expand production capacity;
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·
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brand companies’ continued need for original equipment manufacturing services provided by TFT-LCD panel manufacturers;
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·
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access to raw materials, components, equipment and utilities on a timely and economical basis;
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·
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technological changes;
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·
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the rescheduling and cancellation of large orders;
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·
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access to funding on satisfactory terms; and
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·
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fluctuations in the currencies of TFT-LCD panels exporting countries against the U.S. dollar.
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·
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hire, train, integrate, retain and manage additional qualified engineers, senior managers, sales and marketing personnel and information technology personnel;
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·
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implement additional, and improve existing, administrative and operations systems, procedures and controls;
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·
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expand our accounting and internal audit team, including hiring additional personnel with U.S. GAAP and internal control expertise;
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·
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continue to expand and upgrade our design and product development capabilities;
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·
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manage multiple relationships with semiconductor manufacturing service providers, customers, suppliers and certain other third parties; and
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|
·
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continue to develop and commercialize non-driver products, including, among others, timing controllers, TFT-LCD television and monitor chipsets, LCOS projector solutions, power ICs, CMOS image sensors and wafer level optics products
.
|
|
·
|
our ability to accurately forecast shipments, average selling prices, cost of revenues, operating expenses, non-operating income/loss, foreign currency exchange rates, and tax rates;
|
|
·
|
our ability to transfer any increase in unit costs to our customers;
|
|
·
|
our ability to accurately perform various tests, estimations and projections, including with respect to the write-down on slow or obsolete inventories, the impairment of long-lived assets, the collectibility of accounts receivable, and the realizability of deferred tax assets;
|
|
·
|
our ability to successfully design, develop and introduce in a timely manner new or enhanced products acceptable to our customers;
|
|
·
|
changes in the relative mix in the unit shipments of our products, which may have significantly different average selling prices and cost of revenues as a percentage of revenues;
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·
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changes in share-based compensation;
|
|
·
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the loss of one or more of our key customers;
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|
·
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decreases in the average selling prices of our products;
|
|
·
|
our accumulation and write-down of inventory;
|
|
·
|
the relative unpredictability in the volume and timing of customer orders;
|
|
·
|
shortages of other components used in the manufacture of TFT-LCD panels;
|
|
·
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the risk of cancellation or deferral of customer orders in anticipation of our new products or product enhancements, or due to a reduction in demand of our customers’ end product;
|
|
·
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changes in our payment terms with our customers and our suppliers;
|
|
·
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our ability to negotiate favorable prices with customers and suppliers;
|
|
·
|
our ability to hedge foreign exchange risks;
|
|
·
|
changes in the available capacity of semiconductor manufacturing service providers;
|
|
·
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the rate at which new markets emerge for new products under development;
|
|
·
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the evolution of industry standards and technologies;
|
|
·
|
product obsolescence and our ability to manage product transitions;
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|
·
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increase in cost of revenues due to inflation;
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|
·
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our involvement in litigation or other types of disputes;
|
|
·
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changes in general economic conditions, especially the impact of the global financial crisis on economic growth and consumer spending;
|
|
·
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changes in our tax exemptions and applicable income tax regulations; and
|
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·
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natural disasters, particularly earthquakes and typhoons, or outbreaks of disease affecting countries where we conduct our business or where our products are manufactured, assembled or tested.
|
|
·
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failure to secure necessary manufacturing capacity, or being able to obtain required capacity only at higher costs;
|
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·
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risks of our proprietary information leaking to our competitors through the foundries we use;
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|
·
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limited control over delivery schedules, quality assurance and control, manufacturing yields and production costs;
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·
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the unavailability of, or potential delays in obtaining access to, key process technologies; and
|
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·
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financial risks of certain of our foundry suppliers, including those that are owned by ailing dynamic random access memory, or DRAM, companies.
|
|
·
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potential capacity constraints faced by the limited number of high-voltage foundries and the lack of investment in new and existing high-voltage foundries;
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·
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difficulty in attaining consistently high manufacturing yields from high-voltage foundries;
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·
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delay and time required (approximately one year) to qualify and ramp up production at new high voltage foundries; and
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·
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price increases.
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·
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stop selling products or using technology or manufacturing processes that contain the allegedly infringing intellectual property;
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·
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pay damages to the party claiming infringement;
|
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·
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attempt to obtain a license for the relevant intellectual property, which may not be available on commercially reasonable terms or at all; and
|
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·
|
attempt to redesign those products that contain the allegedly infringing intellectual property with non-infringing intellectual property, which may not be possible.
|
|
·
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problems integrating the acquired operations, technologies or products into our existing business and products;
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·
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diversion of management’s time and attention from our core business;
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·
|
adverse effects on existing business relationships with customers;
|
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·
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the need for financial resources above our planned investment levels;
|
|
·
|
failures in realizing anticipated synergies;
|
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·
|
difficulties in retaining business relationships with suppliers and customers of the acquired company;
|
|
·
|
risks associated with entering markets in which we lack experience;
|
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·
|
potential loss of key employees of the acquired company;
|
|
·
|
potential write-offs of acquired assets;
|
|
·
|
potential expenses related to the depreciation of tangible assets and amortization of intangible assets; and
|
|
·
|
potential impairment charges related to the goodwill acquired.
|
|
·
|
actual or anticipated fluctuations in our quarterly operating results;
|
|
·
|
changes in financial estimates by securities research analysts;
|
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·
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fluctuations in the trading price of our TDRs upon listing on the Taiwan Stock Exchange;
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conditions in the TFT-LCD panel market;
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changes in the economic performance or market valuations of other display semiconductor companies;
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announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;
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the addition or departure of key personnel;
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fluctuations in exchange rates between the U.S. dollar and the NT dollar;
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litigation related to our intellectual property and shareholders’ lawsuit; and
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the release of lock-up or other transfer restrictions on our outstanding ADSs or sales of additional ADSs.
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directors who are interested in a transaction do not have a statutory duty to disclose such interest and there are no provisions under
the
Cayman Islands Companies Law which render such director liable to the company for any profit realized pursuant to s
uch transaction
. Our articles of association, however, contain provisions that require our directors to disclose their interest in a transaction
;
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dissenting shareholders do not have comparable appraisal rights if a scheme of arrangement is approved by the Grand Court of the Cayman Islands;
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shareholders may not be able to bring class action or derivative action suits before a Cayman Islands court
except in certain exceptional circumstances
; and
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unless otherwise provided under the memorandum and articles of association of the company, shareholders do not have the right to bring business before a meeting or call a meeting.
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Display Driver.
The display driver receives image data from the timing controller and delivers precise analog voltages or currents to create images on the display. The two main types of display drivers for a TFT-LCD panel are gate drivers and source drivers. Gate drivers turn on the transistor within each pixel cell on the horizontal line on the panel for data input at each row. Source drivers receive image data from the timing controller and generate voltage that is applied to the liquid crystal within each pixel cell on the vertical line on the panel for data input at each column. The combination determines the colors generated by each pixel. Typically multiple gate drivers and source drivers are installed separately on the panel. However, for certain small and medium-sized applications, gate drivers and source drivers are integrated into a single chip due to space and cost considerations. Large-sized panels typically have higher resolution and require more display drivers than small and medium-sized panels.
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Timing Controller.
The timing controller receives image data and converts the format for the source drivers’ input. The timing controller also generates controlling signals for gate and source drivers. Typically, the timing controller is a discrete semiconductor in large-sized TFT-LCD panels. For certain small and medium-sized applications, however, the timing controller may be integrated with display drivers.
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Scaler
. For certain displays, a scaler is installed to magnify or shrink image data in order for the image to fill the panel.
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Operational Amplifier.
An operational amplifier supplies the reference voltage to source drivers in order to make their output voltage uniform.
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Television Chipset
. Television flat panel displays require chipsets that typically contain all or some of the following components: an audio processor, analog interfaces, digital interfaces, a video processor, a channel receiver and a digital television decoder. See “—Products—TFT-LCD Television and Monitor
|
Semiconductor Solutions—TFT-LCD Television and Monitor Chipsets” for a description of these components. |
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LCOS microdisplay.
LCOS is a microprojection technology which can be applied in mobile projection devices.
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Power IC.
Power ICs include certain drivers, amplifiers, DC to DC converters and other semiconductors designed to enhance power management, such as voltage regulation, voltage boosting and battery management.
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CMOS Image Sensor.
The CMOS image sensor converts an optical image to an electric signal and is used mostly in camera-equipped applications.
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Wafer level optics products.
Wafer level optics are optical products manufactured using semiconductor process on glass wafers. This innovative approach enables wafer level optics to feature small-form factor and high temperature resistance, making the surface-mount technology, or SMT, reflow process possible.
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Others.
Flat panel displays also require multiple general purpose semiconductors such as memory, power converters and inverters.
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display drivers and timing controllers;
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TFT-LCD television and monitor semiconductor solutions;
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LCOS products;
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power ICs;
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CMOS image sensors; and
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wafer level optics products.
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Resolution and Number of Channels.
Resolution refers to the number of pixels per line multiplied by the number of lines, which determines the level of fine detail within an image displayed on a panel. For example, a color display screen with 1,024 x 768 pixels has 1,024 red columns, 1,024 green columns and 1,024 blue columns for a total of 3,072 columns and 768 rows. The red, green and blue columns are commonly referred to as “RGB.” Therefore, the display drivers need to drive 3,072 column outputs and 768 row outputs. The number of display drivers required for each panel depends on the resolution of the panel and the number of channels per display driver. For example, an XGA (1,024 x 768 pixels) panel requires eight 384 channel source drivers (1,024 x 3 = 384 x 8) and three 256 channel gate drivers (768 = 256 x 3), while a full HD (1,920 x 1,080 pixels) panel requires eight 720 channel source drivers and four 270 channel gate drivers. The number of display drivers required can be reduced by using drivers with a higher number of channels. For example, a full HD panel can have six 960 channel source drivers instead of eight 720 channel source drivers. Thus, using display drivers with a higher number of channels can reduce the number of display drivers required for each panel, although display drivers with a higher number of channels typically have higher unit costs.
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Color Depth.
Color depth is the number of colors that can be displayed on a screen, which is determined by the number of shades of a color, also known as grayscale, that can be shown by the panel. For example, a 6-bit source driver is capable of generating 2
6
x 2
6
x 2
6
= 2
18
, or 262K colors, and similarly, an 8-bit source driver is capable of generating 16 million colors. Typically, for TFT-LCD panels currently in commercial production, 262K, 16 million and 1 billion colors are supported by 6-bit, 8-bit and 10-bit source drivers, respectively.
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Operational Voltage.
A display driver operates with two voltages: the input voltage (which enables it to receive signals from the timing controller) and the output voltage (which, in the case of source drivers, is applied to liquid crystals and, in the case of gate drivers, is used to switch on the TFT device). Source drivers typically operate at input voltages from 4.5 to 1.5 volts and output voltages between 4.5 to 24 volts. Gate drivers typically operate at input voltages from 3.3 to 1.5 volts and output voltages from 10 to 50 volts. Lower input voltage saves power and lowers electromagnetic interference, or EMI. Output voltage may be higher or lower depending on the characteristics of the liquid crystal (or diode), in the case of source drivers, or TFT device, in the case of gate drivers.
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Gamma Curve.
The relationship between the light passing through a pixel and the voltage applied to it by the source driver is nonlinear and is referred to as the “gamma curve” of the source driver. Different panel designs and manufacturing processes require source drivers with different gamma curves. Display drivers need to adjust the gamma curve to fit the pixel design. Due to the materials and processes used in manufacturing, panels may contain certain imperfections which can be corrected by the gamma curve of the source driver, a process which is generally known as “gamma correction.” For certain types of liquid crystal, the gamma curves for RGB cells are significantly different and thus need to be independently corrected. Some advanced display drivers feature three independent gamma curves for RGB cells.
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Driver Interface.
Driver interface refers to the connection between the timing controller and display drivers. Display drivers increasingly require higher bandwidth interface technology to address the larger data volume necessary for video images. Panels used for higher data transmission applications such as televisions require more advanced interface technology. The principal types of interface technologies are transistor-to-transistor logic, or TTL, reduced swing differential signaling, or RSDS, and mini-low voltage differential signaling, or mini-LVDS. Among these, RSDS and mini-LVDS were developed as low power, low noise and low amplitude methods for high-speed data transmission using fewer copper wires and resulting in lower EMI.
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Package Type.
The assembly of display drivers typically uses TAB and COG package types. COF and TCP are two types of TAB packages, of which COF packages have become predominantly used in recent years. Customers typically determine the package type required according to their specific mechanical and electrical considerations. In general, display drivers for small-sized panels use COG package type whereas display drivers for large-sized panels primarily use TAB package types and, to a lesser extent, COG package types.
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Product
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Features
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TFT-LCD Source Drivers
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384 to 1,032 output channels
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6-bit (262K colors), 8-bit (16 million colors) or 10-bit (1 billion colors)
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one gamma-type driver
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three gamma-type drivers (RGB independent gamma curve to enhance color image)
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output driver voltage ranging from 4.5V to 24V and support half VDDA
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input logic voltage ranging from standard 3.3V to low power 1.5V
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low power consumption and low EMI
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Product
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Features
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support TCP, COF and COG package types
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support TTL, RSDS, mini-LVDS (up to 330MHz), dual edge transistor-to-transistor logic, or DETTL, turbo RSDS, cascade modulated driver interface, or CMDI, and customized interface technologies
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support dual gate and triple gate panel designs
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TFT-LCD Gate Drivers
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192 to 600 output channels
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output driving voltage ranging from 10 to 50V
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input logic voltage ranging from standard 3.3V to low power 1.5V
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low power consumption
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support TCP, COF and COG package types
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support dual gate and triple gate panel designs
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Timing Controllers
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product portfolio supports a wide range of resolutions, from VGA (640 x 480 pixels) to full HD (1,920 x 1,080 pixels and 1,920 x 1,200 pixels)
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support TTL, RSDS, mini-LVDS, DETTL, turbo RSDS, CMDI and customized output interface technologies
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input logic voltage ranging from standard 3.3V to low power 1.5V
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embedded overdrive function to improve response time
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support CABC to save power and color engine to enhance color and sharpness
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support TTL, LVDS and DisplayPort input interface technologies
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Product
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Features
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TFT-LCD Drivers
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highly integrated single chip embedded with the source driver, gate driver, power circuit, timing controller and memory
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suitable for a wide range of resolutions from QQVGA (128 x 160 pixels) to WVGA (480 x 864 pixels)
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support 262K colors to 16 million colors
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support RGB separated gamma adjustment
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support CABC
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support mobile display digital interface, or MDDI, and mobile industry processor interface, or MIPI
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input logic voltage ranging from standard 3.3V to low power 1.65V
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low power consumption and low EMI
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utilize die shrink technology to reduce die size and cost
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fewer external components to reduce costs
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slimmer die for compact module to fit smaller mobile handset designs
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application specific integrated circuits, or ASIC, can be designed to meet customized requirements (e.g., drivers without memory or drivers without gate driver embedded on the chip)
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LTPS Drivers
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highly integrated single chip embedded with the source driver, power circuit, timing controller and memory
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suitable for a wide range of resolutions from QQVGA (128 x 160 pixels) to WVGA (480 x 864 pixels)
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support 262K colors to 16 million colors
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support RGB separated gamma adjustment
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support CABC
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support compact display port, or CDP, MDDI, and MIPI
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input logic voltage ranging from standard 3.3V to low power 1.65V
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utilize die shrink technology to reduce die size and cost
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slimmer die for compact module
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ASIC can be designed to meet customized requirements
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(e.g., gateless or multi-bank output driver)
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Product
|
Features
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TFT-LCD Source Drivers
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240 to 1366 output channels
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products for analog and digital interfaces
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support 262K colors to 16.7 million colors
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input logic voltage ranging from standard 3.3V to low power 2.3V
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low power consumption and low EMI
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TFT-LCD Gate Drivers
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96 to 1200 output channels
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Product
|
Features
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input logic voltage ranging from standard 3.3V to low power 2.3V
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output driving voltage ranging from 10 to 40V
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TFT-LCD Integrated Drivers
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highly integrated single chip embedded with source driver, gate driver, timing controller and power circuit
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resolutions include WVGA (846 x 480 pixels), SVGA (800 x 600 pixels) and WSVGA (1,024 x 600 pixels)
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products for analog or digital interfaces
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low power consumption
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CABC function integrated for backlight power saving
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Timing Controllers
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products for analog or digital interfaces
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products for E-readers
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support various resolutions from 280 x 220 pixels to 1024 x 600 pixels
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Audio Processor/Amplifier.
Demodulates, processes and amplifies sound from television signals.
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Analog Interfaces.
Convert analog video signals into digital video signals. Video decoder and analog-to-digital converter, or ADC, are included.
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Digital Interfaces.
Receive digital signals via digital receivers. Digital visual interfaces, or DVI, and high-definition multimedia interfaces, or HDMI, are included.
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Channel Receiver.
Demodulates input signals so that the output becomes compressed bit stream data.
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DTV Decoder.
Converts video and audio signals from compressed bit stream data into regular video and audio signals.
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Video Processor.
Performs the scaling function that magnifies or shrinks the image data in order to fit the panel’s resolution; provides real-time processing for improved color and image quality; converts output video from an interlaced format to a progressive format in order to eliminate jaggedness; and supports on-screen display and real-time video format transformation.
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Product
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Features
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Analog TV Single-Chip Solutions
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ideal for LCD TV, multi-function monitor TV and LCOS applications
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integrated with high performance ADC, scaler and de-interlacer
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built-in HDMI and DVI receiver
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integrated with video decoder and 3D comb filter to support worldwide National Television System Committee, or NTSC, phase alternating line, or PAL, and sequential color with memory, or SECAM, standards
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integrated with vertical blanking interval slicer for closed caption, viewer-control chip and teletext functions
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built-in Himax 4th generation video engine which supports variable dynamic video enhancement features
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built-in analog audio demodulator, audio processor and surround integrated high speed microprocessor control unit, or MCU
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integrated with timing control for additional cost-down
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output resolutions range from 640 x 480 pixels up to 1,920 x 1,080 pixels
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Digital TV Integrated Solutions
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embedded digital demodulators: ATSC, DVB-T, DVB-C, and DVMB
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embedded analog demodulator: picture intermediate frequency for NTSC, PAL and SECAM
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embedded multi-format video stream decoder: MPEG2, MPEG4, AVS, Real Video and H.264 up to full HD
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embedded audio stream decoder: MPEG1 I/II/III and MPEG2 layer 2 I/II/III, Dolby audio coding 3, Dolby Digital Plus, advanced audio coding and Real Audio
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Product
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Features
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embedded audio processor: sound retrieval system
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embedded high performance RISC CPU
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embedded 3D video processor
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input resolution up to full HD (1,920 x 1,080 pixels)
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output resolution up to full HD (1,920 x 1,080 pixels)
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Product
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Features
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Monitor Scaler Integrated Solutions
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ideal for monitor applications
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integrated with high performance ADC, scaler and de-interlancer
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built-in HDMI and DVI receiver
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built-in audio digital-to-analog converter
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built-in high performance color engine
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integrated high speed MCU
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integrated with timing control for additional cost-down
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input/output resolutions range from 640 x 480 pixels up to 1,920 x 1,080 pixels
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Product
|
Features
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Power-Saving iCT Solutions
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built-in single/dual path 8/10-bit LVDS receiver
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support up to 1920x1080@75HZ resolution
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built-in single/dual path 6/8-bit RSDS transmitter for low power consumption and low EMI
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built-in single/dual 8/10-bit LVDS transmitter
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built-in single/dual 6/8-bit 3/6-pair mini-LVDS transmitter
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support polarity 1 or 1+2 line inversion mode and dual-gate/Z-inversion panel structure
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embedded aging generator for simplifying TFT-LCD panel dynamic burn-in test
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support low color shift, initial download from electrically-erasable programmable read-only memory, or EEPROM
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support serial bus programming from scaler to select up to 4 different initial download value settings (depend on the size of EEPROM)
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embedded 3D color engine, 10-bit gamma correction look-up table
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programmable sRGB matrix coefficients
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Product
|
Features
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embedded dynamic analog gamma control, dynamic exposure adaptation control, CABC and over drive
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support up to external 20+1-channel gamma buffer with 10-bit resolution control by 2-wire serial bus
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2D to 3D Conversion Solutions
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convert 2D video sequence to 3D video sequence for 3D display
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enable virtual 3D experience on 2D display based on human 3D perception characteristics
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use human perception based processing with better performance and fewer side effects
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support 2D bypass mode, 2D to 3D converter mode and 3D bypass mode
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support a wide range of display formatting and interface, including LVDS and TTL
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support anaglyph, pattern retarder or micro-retarder and CheckerBoard 2-view 3D display
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configurable stereoscopic density; support in-front-of-screen, behind-the-screen and on-the-screen configurations
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support resolutions up to full HD
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enable integration into existing TV, monitor, portable DVD, digital photo frame and other 3D display devices
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support top-and-bottom, frame packing, side-by-side (full) and side-by-side (half) 3D formats
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support dual LVDS, front/back quad LVDS, non-front/back quad LVDS and left/right parallel quad LVDS for output format
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support 8-bit/10-bit LVDS for both input and output formats
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LCOS Microdisplays
|
Size and Resolution
|
Applications
|
||
Color-Filter LCOS Microdisplays
|
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|
0.28” (320 x 240 pixels)
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|
toy projectors / embedded projectors
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0.38” (640 x 360 pixels)
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entry-level video projectors
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0.44” (640 x 480 pixels)
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versatile projectors
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0.59” (800 x 600 pixels)
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multimedia projectors
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Color-Sequential LCOS Microdisplays
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0.22” (640 x 360 pixels)
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toy projectors / embedded projectors
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0.28” (852 x 480 pixels)
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embedded projectors
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0.38” (640 x 480 pixels)
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versatile projectors
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LCOS Microdisplays
|
Size and Resolution
|
Applications
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||
·
|
0.37” (800 x 600 pixels)
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multimedia projectors
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0.37” (1366 x 768 pixels)
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multimedia projectors
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0.45” (1024 x 768 pixels)
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multimedia projectors
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Product
|
Features
|
|
Integrated Multi-Channel Power Solutions for Notebooks
|
·
|
2.5V to 5.5V input voltage range
|
·
|
16V, 2A power metal oxide semiconductor field-effect transistor, or MOSFET
|
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step-up PWM converter
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charge pump regulator
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LDO regulator
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voltage detector
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gate pulse modulator
|
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Integrated Multi-Channel Power Solutions for Monitors
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2.5V to 6V input voltage range
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20V, 4.2A power MOSFET
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step-up PWM converter
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charge pump regulator
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programmable common voltage
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level shifter
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Product
|
Features
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|
WLED Drivers for NB
|
·
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4.5V to 24V input voltage range
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·
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built-in 1.3MHz step-up PWM converter (max. boost voltage: 40V)
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8 constant current source channels
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capable of driving up to 11 LEDs in serial for each channel
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Product
|
Features
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|
WLED Drivers for LED TV
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·
|
8V to 40V input voltage range
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8-channel current sinks
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Up to 80mA per channel
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·
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65V sustainable voltage for LED pins
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Product
|
Features
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|
3.4MP UltraBrightTM Color Image Sensor
|
·
|
1/4” format color type
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·
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QXGA resolution at 15 frames per second, support for 720p HD and D1 resolution at 30 frames per second
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ClearVisionTM 80dB enhanced dynamic range mode compatible with standard color processing
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on-chip 4-channel lens correction, defect removal
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2.0MP UltraBrightTM Color Image Sensor
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1/5” format color type
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UXGA resolution at 18 frames per second, 720p HD resolution at 30 frames per second
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on-chip 4-channel lens correction, defect removal
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low noise, low power consumption
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1.3MP BrightSenseTM System on Chip
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1/6” format color type
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SXGA resolution at 20 frames per second, 720p HD resolution at 30 frames per second
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color processing pipeline with dynamic adjustments based on luminance and light color temperature
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low noise, low power consumption
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VGA UltraBrightTM System on Chip
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1/10” format color type
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VGA YUV output at 30 frames per second, QVGA at 60 frames per second
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color processing pipeline including lens correction, defect correction, color de-mosaic, color correction, gamma control, saturation/hue adjustment, edge enhancement
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·
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automatic low light and frame rate control
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·
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multiple video formats including YUV422, RGB565, and ITU656
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Product
|
Features
|
|
VGA 1 element wafer level lens
|
·
|
For 1/10” VGA CIS (2.2~2.25μm pixel pitch)
|
·
|
One-element and two-surface design for cost-competitive market
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Double-side manufacture process
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·
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Already in mass production
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VGA 2 elements wafer level lens
|
·
|
For 1/10” VGA CIS (2.2~2.25μm pixel pitch)
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·
|
Two-element and four-surface design for high-performance requirement
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·
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Double-side manufacture process
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·
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Lower profile
|
|
2M 2 elements wafer level lens
|
·
|
For 1/5” 2M CIS (1.75μm pixel pitch)
|
·
|
Two-element and four-surface design for cost-competitive market
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|
·
|
Double-side manufacture process
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|
2M 3 elements wafer level lens
|
·
|
For 1/5” 2M CIS (1.75μm pixel pitch)
|
·
|
Three-element and six-surface design for high-performance requirement
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·
|
Double-side manufacture process
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·
|
Inner-Lead Bonding
: The TCP and COF assembly process involves grinding the bumped wafers into their required thickness and cutting the wafers into individual dies, or chips. An inner lead bonder machine connects the chip to the printed circuit processed tape and the package is sealed with resin at high temperatures.
|
·
|
Final Testing
: The assembled display drivers are tested to ensure that they meet performance specifications. Testing takes place on specialized equipment using software customized for each product.
|
Wafer Fabrication
|
Gold Bumping
|
|
Globalfoundries Singapore Pte., Ltd. (formerly Chartered Semiconductor Manufacturing Ltd.)
|
Chipbond Technology Corporation
(1)
|
|
Lite-on Semiconductor Corp.
|
Chipmore International Trading Company Limited
|
|
Macronix International Co., Ltd.
|
Chipmore Technology Co., Ltd.
|
|
Maxchip Electronics Corp.
|
ChipMOS Technologies Inc.
|
|
Shanghai Hua Hong NEC Electronics Company, Ltd.
|
Siliconware Precision Industries Co., Ltd.
|
|
Silicon Manufacturing Partners Pte., Ltd.
|
||
Taiwan Semiconductor Manufacturing Company Limited
|
||
United Microelectronics Corporation
|
||
Vanguard International Semiconductor Corporation
|
Processed Tape for TAB Packaging
|
Assembly and Testing
|
|
Hitachi Cable Asia, Ltd. Taipei Branch
|
Ardentec Corporation
|
|
Mitsui Micro Circuits Taiwan Co., Ltd.
|
Chipbond Technology Corporation
(1)
|
|
Samsung Techwin Co., Ltd.
|
Chipmore International Trading Company Limited
|
|
Simpal Electronics Co., Ltd.
|
Chipmore Technology Co., Ltd.
|
|
Sumitomo Metal Mining Package Material Co., Ltd.
|
ChipMOS Technologies Inc.
|
|
Global Testing Corporation
|
||
Greatek Electronics Inc.
|
||
King Yuan Electronics Co., Ltd.
|
||
Siliconware Precision Industries Co., Ltd.
|
||
Taiwan IC Packaging Corporation
|
Chip Probe Testing
|
|
Ardentec Corporation
|
|
Chipbond Technology Corporation
(1)
|
|
Chipmore International Trading Company Limited
|
|
Chipmore Technology Co., Ltd.
|
|
ChipMOS Technologies Inc.
|
|
Global Testing Corporation
|
|
Greatek Electronics Inc.
|
|
King Yuan Electronics Co., Ltd.
|
|
Siliconware Precision Industries Co., Ltd.
|
Note:
|
(1)
|
Chipbond Technology Corporation and International Semiconductor Technology Ltd. were both among our principal providers of gold bumping, assembly and testing and chip probe testing services in 2009. These two companies merged on April 1, 2010. Chipbond is the surviving company following the merger.
|
·
|
customer relations;
|
·
|
product performance;
|
·
|
design customization;
|
·
|
development time;
|
·
|
product integration;
|
·
|
technical services;
|
·
|
manufacturing costs;
|
·
|
supply chain management;
|
·
|
economies of scale; and
|
·
|
broad product portfolio.
|
Subsidiary
|
Main Activities
|
Jurisdiction of
Incorporation
|
Total Paid-in
Capital
|
Percentage of
Our Ownership
Interest
|
||||||
$ (in millions)
|
||||||||||
Himax Technologies Limited
|
IC design and sales
|
ROC
|
83.7
|
100.0%
|
||||||
Himax Technologies Anyang Limited
|
Sales
|
South Korea
|
0.5
|
100.0%
|
||||||
Himax Semiconductor, Inc. (formerly Wisepal Technologies, Inc.)
|
IC design and sales
|
ROC
|
11.4
|
100.0%
|
||||||
Himax Technologies (Samoa), Inc.
|
Investments
|
Samoa
|
2.5
|
100.0%
|
( 1) | |||||
Himax Technologies (Suzhou) Co., Ltd.
|
Sales
|
PRC
|
1.0
|
100.0%
|
(2) | |||||
Himax Technologies (Shenzhen) Co., Ltd.
|
Sales
|
PRC
|
1.5
|
100.0%
|
(2) | |||||
Himax Display, Inc.
|
IC design, manufacturing and sales
|
ROC
|
39.1
|
88.2%
|
(1) | |||||
Integrated Microdisplays Limited
|
IC design and sales
|
Hong Kong
|
1.1
|
88.2%
|
(3) | |||||
Himax Analogic, Inc.
|
IC design and sales
|
ROC
|
13.3
|
76.9%
|
(1) | |||||
Himax Imaging, Inc.
|
Investments
|
Cayman Islands
|
17.5
|
94.8%
|
||||||
Himax Imaging, Ltd.
|
IC design and sales
|
ROC
|
9.6
|
94.8%
|
(4) | |||||
Himax Imaging Corp.
|
IC design and sales
|
California, USA
|
8.2
|
94.8%
|
(4) | |||||
Argo Limited
|
Investments
|
Cayman Islands
|
9.0
|
100.0%
|
||||||
Tellus Limited
|
Investments
|
Cayman Islands
|
9.0
|
100.0%
|
(5) | |||||
Himax Media Solutions, Inc.
|
TFT-LCD television and monitor chipset operations
|
ROC
|
34.2
|
78.0%
|
(6) | |||||
Himax Media Solutions (Hong Kong) Limited
|
Investments
|
Hong Kong
|
0.0
|
(8) |
78.0%
|
(7) | ||||
Harvest Investment Limited
|
Investments
|
ROC
|
1.6
|
100.0%
|
1) |
(1)
|
Indirectly, through our 100.0% ownership of Himax Technologies Limited.
|
(2)
|
Indirectly, through our 100.0% ownership of Himax Technologies (Samoa), Inc.
|
(3)
|
Indirectly, through our 88.2% ownership of Himax Display, Inc.
|
(4)
|
Indirectly, through our 94.8% ownership of Himax Imaging, Inc.
|
(5)
|
Indirectly, through our 100.0% ownership of Argo Limited.
|
(6)
|
Directly, as to 44.0%, and indirectly, as to 34.0% through our 100.0% ownership of Himax Technologies Limited.
|
(7)
|
Indirectly, through our 78.0% ownership of Himax Media Solutions, Inc.
|
·
|
average selling prices;
|
·
|
unit shipments;
|
·
|
product mix;
|
·
|
design wins;
|
·
|
cost of revenues and cost reductions;
|
·
|
supply chain management;
|
·
|
share-based compensation expenses;
|
·
|
signing bonuses; and
|
·
|
tax exemptions.
|
·
|
introduce new models to improve the cost and/or performance of their existing products or to expand their product portfolio;
|
·
|
establish new fabs and seek to qualify existing or new components suppliers; and
|
·
|
replace existing display driver companies due to cost or performance reasons.
|
·
|
improving product design (e.g., having smaller die size allows for a larger number of dies on each wafer, thereby reducing the cost of each die);
|
·
|
improving manufacturing yields through our close collaboration with our semiconductor manufacturing service providers; and
|
·
|
achieving better pricing from a diversified pool of semiconductor manufacturing service providers and suppliers, reflecting our ability to leverage our scale, volume requirements and close relationships as well as our strategy of sourcing from multiple service providers and suppliers.
|
Year Ended December 31,
|
||||||||||||||||||||||||
2007
|
2008
|
2009
|
||||||||||||||||||||||
Amount
|
Percentage of
Revenues
|
Amount
|
Percentage of
Revenues
|
Amount
|
Percentage of
Revenues
|
|||||||||||||||||||
(in thousands, except percentages)
|
||||||||||||||||||||||||
Display drivers for large-sized applications
|
$ | 752,196 | 81.9 | % | $ | 651,504 | 78.2 | % | $ | 493,513 | 71.3 | % | ||||||||||||
Display drivers for mobile handsets applications
|
75,704 | 8.2 | 57,274 | 6.9 | 69,081 | 10.0 | ||||||||||||||||||
Display drivers for consumer electronics applications
|
66,634 | 7.3 | 81,866 | 9.8 | 83,527 | 12.1 | ||||||||||||||||||
Others
(1)
|
23,677 | 2.6 | 42,155 | 5.1 | 46,260 | 6.6 | ||||||||||||||||||
Total
|
$ | 918,211 | 100.0 | % | $ | 832,799 | 100.0 | % | $ | 692,381 | 100.0 | % |
Note:
|
(1)
|
Includes, among other things, timing controllers, TFT-LCD television and monitor chipsets, LCOS projector solutions, power ICs, CMOS image sensors and wafer level optics products.
|
Year Ended December 31,
|
||||||||||||||||||||||||
2007
|
2008
|
2009
|
||||||||||||||||||||||
Amount
|
Percentage of
Revenues
|
Amount
|
Percentage of
Revenues
|
Amount
|
Percentage of
Revenues
|
|||||||||||||||||||
(in thousands, except percentages)
|
||||||||||||||||||||||||
CMO and its affiliates
(1)
|
$ | 539,737 | 58.8 | % | $ | 520,461 | 62.5 | % | $ | 445,245 | 64.3 | % | ||||||||||||
Samsung and its affiliates
|
34,375 | 3.7 | 54,138 | 6.5 | 50,184 | 7.2 | ||||||||||||||||||
CPT and its affiliates
|
66,694 | 7.3 | 32,673 | 3.9 | 17,023 | 2.5 | ||||||||||||||||||
SVA-NEC
|
76,774 | 8.4 | 52,101 | 6.3 | 3,365 | 0.5 | ||||||||||||||||||
Others
|
200,631 | 21.8 | 173,426 | 20.8 | 176,564 | 25.5 | ||||||||||||||||||
Total
|
$ | 918,211 | 100.0 | % | $ | 832,799 | 100.0 | % | $ | 692,381 | 100.0 | % |
Note:
|
(1)
|
The above revenues from sales to CMO and its affiliates in 2007, 2008 and 2009 do not include any revenues from sales to Innolux or TPO or their respective affiliates. In 2007, 2008 and 2009, Innolux and its affiliates accounted for approximately 3.2%, 2.8% and 1.4% of our revenues, respectively, and TPO and its affiliates accounted for approximately 2.7%, 2.7% and 1.8% of our revenues, respectively.
|
·
|
cost of wafer fabrication;
|
·
|
cost of processed tape used in TAB packaging;
|
·
|
cost of gold bumping, assembly and testing; and
|
·
|
other costs and expenses.
|
Year
|
Balance at
Beginning
of Year
|
Additions Charged to Expense
|
Amounts
Utilized
|
Balance at
End of Year
|
||||||||||||
(in thousands)
|
||||||||||||||||
December 31, 2007
|
$ | 187 | $ | - | $ | (187 | ) | $ | - | |||||||
December 31, 2008
|
$ | - | $ | 25,305 | $ | (8 | ) | $ | 25,297 | |||||||
December 31, 2009
|
$ | 25,297 | $ | 218 | $ | - | $ | 25,515 |
Year
|
Balance at
Beginning
of Year
|
Additions Charged to Expense
|
Amounts
Utilized
|
Balance at
End of Year
|
||||||||||||
(in thousands)
|
||||||||||||||||
December 31, 2007
|
$ | 681 | $ | 1,705 | $ | (1,893 | ) | $ | 493 | |||||||
December 31, 2008
|
$ | 493 | $ | 1,657 | $ | (1,988 | ) | $ | 162 | |||||||
December 31, 2009
|
$ | 162 | $ | 2,391 | $ | (1,583 | ) | $ | 970 |
Year
|
Balance at Beginning
of Year
|
Additions Charged to Expense
|
Amount
Utilized
|
Balance at
End of Year
|
||||||||||||
(in thousands)
|
||||||||||||||||
December 31, 2007
|
$ | 630 | $ | 799 | $ | (1,094 | ) | $ | 335 | |||||||
December 31, 2008
|
$ | 335 | $ | 1,526 | $ | (1,612 | ) | $ | 249 | |||||||
December 31, 2009
|
$ | 249 | $ | 2,920 | $ | (2,490 | ) | $ | 679 |
Year ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Balance at beginning of year
|
$ | 1,276 | $ | 3,968 | $ | 5,718 | ||||||
Increase related to prior year tax positions
|
503 | - | - | |||||||||
Decrease related to prior year tax positions
|
- | (1,780 | ) | - | ||||||||
Increase related to current year tax positions
|
2,189 | 3,555 | 2,587 | |||||||||
Effect of exchange rate change
|
- | (25 | ) | 145 | ||||||||
Balance at end of year
|
$ | 3,968 | $ | 5,718 | $ | 8,450 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Revenues
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Costs and expenses:
|
||||||||||||
Cost of revenues
|
78.0 | 75.5 | 79.5 | |||||||||
Research and development
|
8.0 | 10.5 | 10.3 | |||||||||
General and administrative
|
1.6 | 2.3 | 2.4 | |||||||||
Bad debt expense
|
0.0 | 3.0 | - | |||||||||
Sales and marketing
|
1.0 | 1.4 | 1.5 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Total costs and expenses
|
88.7 | 92.8 | 93.7 | |||||||||
Operating income
|
11.3 | 7.2 | 6.3 | |||||||||
Non-operating income
|
0.6 | 0.5 | - | |||||||||
Income tax expense (benefit)
|
(0.2 | ) | (1.0 | ) | 1.1 | |||||||
Net income
|
12.1 | 8.7 | 5.2 | |||||||||
Net loss attributable to noncontrolling interests
|
0.1 | 0.4 | 0.6 | |||||||||
Net income attributable to Himax stockholders
|
12.3 | 9.2 | 5.7 |
·
|
Cost of Revenues.
Cost of revenues decreased 12.4% to $550.6 million in 2009 from $628.7 million in 2008. The decrease in cost of revenues was due primarily to a 18.6% decrease in average unit cost, partially offset by a 7.6% increase in unit shipments, as compared to 2008. The decrease in average unit cost was attributable primarily to our efforts to control cost though optimizing our supplier mix, improving design processes, increasing manufacturing yields and leveraging our scale and close relationship with semiconductor manufacturing service providers and suppliers. As a percentage of revenues, cost of revenues increased to 79.5% in 2009 from 75.5% in 2008.
|
·
|
Research and Development.
Research and development expenses decreased 18.5% to $71.4 million in 2009 from $87.6 million in 2008. This decrease was primarily attributable to decreases in salary expenses (including share-based compensation), mask and mold expenses, and wafer, tape and other related expenses. The decrease in salary expenses (including share-based compensation) was due primarily to the smaller amounts of performance-based bonus and signing bonus distributed in 2009, coupled with the weaker NT dollars against U.S. dollars in 2009. Our mask and mold expenses and wafer, tape and other related expenses decreased primarily as a result of our continued efforts in cost control and our more stringent decision making in approving research and development projects.
|
·
|
General and Administrative.
General and administrative expenses decreased 15.5% to $16.3 million in 2009 from $19.4 million in 2008, primarily as a result of a decrease in salary expenses (including share-based compensation), professional fees (including patent filing fees) and employee welfare expenses. The decrease in salary expenses (including share-based compensation) was due primarily to the smaller amounts of performance-based bonus and signing bonus distributed in 2009 and a smaller headcount of general and administrative staff, coupled with the weaker NT dollars against U.S. dollars in 2009.
|
·
|
Bad Debt Expense.
Bad debt expense decreased to $0.2 million in 2009 from $25.3 million in 2008. The significant bad debt expense in 2008 related mainly to the uncollected accounts receivable outstanding from SVA-NEC.
|
·
|
Sales and Marketing.
Sales and marketing expenses decreased 11.4% to $10.4 million in 2009 from $11.7 million in 2008, primarily as a result of a decrease in salary expenses (including share-based
|
|
compensation). The decrease in salary expenses was due primarily to a decrease in share-based compensation and lower average salaries.
|
·
|
Cost of Revenues.
Cost of revenues decreased 12.2% to $628.7 million in 2008 from $716.2 million in 2007. The decrease in cost of revenues was due primarily to a 19.9% decrease in average unit cost, partially offset by a 9.6% increase in unit shipments. The decrease in average unit cost was attributable primarily to our change in product mix and our efforts to control cost though optimizing our supplier mix, improving design processes, increasing manufacturing yields and leveraging our scale and close relationship with semiconductor manufacturing service providers and suppliers. Inventory write-downs, which were included in cost of revenues, were $18.0 million in 2008 compared to $14.8 million in 2007.
The increase in inventory write-downs was generally attributable to the shorter-than-expected product life cycle, overestimated market demand and significant changes in customers’ forecasts.
As a percentage of revenues, cost of revenues decreased to 75.5% in 2008 from 78.0% in 2007.
|
·
|
Research and Development.
Research and development expenses increased 18.5% to $87.6 million in 2008 from $73.9 million in 2007. This increase was primarily attributable to the increases in salary expenses, including share-based compensation, mask and mold expenses and depreciation. The increase in salary expenses was due to an increase in headcount and higher average salaries. The increase in mask and mold expenses resulted primarily from our increased effort to undertake research and development projects and our migration of certain manufacturing processes. The increase in depreciation consisted primarily of the increased depreciation expense relating to our research and development equipment and software. Such increases were partially offset by a decrease in amortization because of the large write-off of in-process research and development assets in the amount of $1.6 million related to the acquisition of Wisepal in 2007, which we did not have in 2008.
|
·
|
General and Administrative.
General and administrative expenses increased 29.9% to $19.4 million in 2008 from $14.9 million in 2007, primarily as a result of an increase in salary expenses, including share-based compensation, professional fees and depreciation. The increase in salary expenses was due to an increase in headcount and higher average salaries. The increase in professional fees was mainly attributable to an increase in patent filing fees. The increase in depreciation consisted primarily of the increased depreciation expense relating to our office equipment and software.
|
·
|
Bad Debt Expense.
In 2008, we recognized bad debt expense of $25.3 million compared to nil in 2007. This bad debt expense related mainly to the uncollected accounts receivable outstanding from SVA-NEC.
|
·
|
Sales and Marketing.
Sales and marketing expenses increased 25.3% to $11.7 million in 2008 from $9.3 million in 2007, primarily as a result of an increase in salary expenses, including share-based compensation, and expenses of samples. The increase in salary expenses was due to an increase in headcount and higher average salaries. The expenses of samples increased primarily as a result of the increase in samples used for sales promotion.
|
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Net cash provided by operating activities
|
$ | 77,162 | $ | 136,500 | $ | 73,630 | ||||||
Net cash used in investing activities
|
(25,019 | ) | (21,764 | ) | (7,255 | ) | ||||||
Net cash used in financing activities
|
(67,241 | ) | (74,350 | ) | (91,065 | ) | ||||||
Net increase (decrease) in cash and cash equivalents
|
(14,973 | ) | 40,420 | (24,276 | ) | |||||||
Cash and cash equivalents at beginning of period
|
109,753 | 94,780 | 135,200 | |||||||||
Cash and cash equivalents at end of period
|
94,780 | 135,200 | 110,924 |
Payment Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year
|
1-3 years
|
3-5
years
|
More than
5 years
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Operating lease obligations
|
$ | 4,586 | 1,493 | 1,163 | 350 | 1,580 | ||||||||||||||
Purchase obligations
(1)
|
92,481 | 92,481 | - | - | - | |||||||||||||||
Other obligations
(2)
|
1,055 | 608 | 447 | - | - | |||||||||||||||
Total
|
$ | 98,122 | 94,582 | 1,610 | 350 | 1,580 |
Notes:
|
(1)
|
Includes obligations for purchase of equipment, computer software and machinery and wafer fabrication, raw material, supplies, assembly and testing services.
|
(2)
|
Includes obligations under license agreements and donations for laboratories commitments.
|
Directors and Executive Officers
|
Age
|
Position/Title
|
Dr. Biing-Seng Wu
|
52
|
Chairman of the Board
|
Jordan Wu
|
49
|
President, Chief Executive Officer and Director
|
Jung-Chun Lin
|
61
|
Director
|
Chih-Chung Tsai
|
54
|
Director, Chief Technology Officer, Senior Vice President
|
Dr. Chun-Yen Chang
|
72
|
Director
|
Dr. Yan-Kuin Su
|
61
|
Director
|
Yuan-Chuan Horng
|
58
|
Director
|
Max Chan
|
43
|
Chief Financial Officer
|
John Chou
|
51
|
Vice President, Quality & Reliability Assurance & Support Design Center
|
Norman Hung
|
52
|
Vice President, Sales and Marketing
|
Name
|
Total RSUs
Granted
|
Ordinary Shares
Underlying Vested
Portion of RSUs
|
Ordinary Shares
Underlying
Unvested Portion
of RSUs
|
|||||||||
Dr. Biing-Seng Wu
|
30,842 | 15,422 | 46,262 | |||||||||
Jordan Wu
|
61,684 | 30,842 | 92,526 | |||||||||
Jung-Chun Lin
|
- | - | - | |||||||||
Chi-Chung Tsai
|
61,684 | 30,842 | 92,526 | |||||||||
Dr. Chun-Yen Chang
|
- | - | - | |||||||||
Dr. Yan-Kuin Su
|
- | - | - | |||||||||
Yuan-Chuan Horng
|
- | - | - | |||||||||
Max Chan
|
24,615 | 12,308 | 36,922 | |||||||||
John Chou
|
36,136 | 18,068 | 54,204 | |||||||||
Norman Hung
|
34,288 | 17,144 | 51,432 |
·
|
selecting the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors;
|
·
|
reviewing with the independent auditors any audit problems or difficulties and management’s response;
|
·
|
reviewing and approving all proposed related party transactions, as defined in Item 404 of Regulation SK under the Securities Act;
|
·
|
discussing the annual audited financial statements with management and the independent auditors;
|
·
|
reviewing major issues as to the adequacy of our internal controls and any special audit steps adopted in light of material internal control deficiencies;
|
·
|
annually reviewing and reassessing the adequacy of our audit committee charter;
|
·
|
meeting separately and periodically with management and the independent auditors;
|
·
|
reporting regularly to the board of directors; and
|
·
|
such other matters that are specifically delegated to our audit committee by our board of directors from time to time.
|
·
|
reviewing and making recommendations to our board of directors regarding our compensation policies and forms of compensation provided to our directors and officers;
|
·
|
reviewing and determining bonuses for our officers and other employees;
|
·
|
reviewing and determining share-based compensation for our directors, officers, employees and consultants;
|
·
|
administering our equity incentive plans in accordance with the terms thereof; and
|
·
|
such other matters that are specifically delegated to the compensation committee by our board of directors from time to time.
|
·
|
identifying and recommending to our board of directors nominees for election or re-election, or for appointment to fill any vacancy;
|
·
|
reviewing annually with our board of directors the current composition of our board of directors in light of the characteristics of independence, age, skills, experience and availability of service to us;
|
·
|
reviewing the continued board membership of a director upon a significant change in such director’s principal occupation;
|
·
|
identifying and recommending to our board of directors the names of directors to serve as members of the audit committee and the compensation committee, as well as the nominating and corporate governance committee itself;
|
·
|
advising the board periodically with respect to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to our board of directors on all matters of corporate governance and on any corrective action to be taken; and
|
·
|
monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
|
Function
|
Number
|
|||
Research and development
(1)
|
792 | |||
Engineering and manufacturing
(2)
|
166 | |||
Sales and marketing
(3)
|
186 | |||
General and administrative
|
85 | |||
Total
|
1,229 |
Notes:
|
(1)
|
Includes semiconductor design engineers, application engineers, assembly and testing engineers
and quality control engineers.
|
|
(2)
|
Includes manufacturing personnel of Himax Display, our subsidiary focused on design and
manufacturing of LCOS products and liquid crystal injection services.
|
|
(3)
|
Includes field application engineers.
|
·
|
providing the opportunity for our employees, directors and service providers to develop a sense of proprietorship and personal involvement in our development and financial success and to devote their best efforts to our business; and
|
·
|
providing us with a means through which we may attract able individuals to become our employees or to serve as our directors or service providers and providing us a means whereby those individuals, upon whom the responsibilities of our successful administration and management are of importance, can acquire and maintain share ownership, thereby strengthening their concern for our welfare.
|
·
|
based on 100% of the fair market value of the shares on the date of grant;
|
·
|
set at a premium to the fair market value of the shares on the day of grant; or
|
·
|
indexed to the fair market value of the shares on the date of grant, with the committee determining the index.
|
Name
|
Number
of Shares Owned
|
Percentage of Shares Owned
|
||||||
Dr. Biing-Seng Wu
|
67,592,344 | 19.0 | % | |||||
Jordan Wu
|
25,472,468 | 7.2 | % | |||||
Jung-Chun Lin
|
- | - | ||||||
Chih-Chung Tsai
|
6,161,812 | 1.7 | % | |||||
Dr. Chun-Yen Chang
|
1,599,614 | 0.4 | % | |||||
Dr. Yan-Kuin Su
|
- | - | ||||||
Yuan-Chuan Horng
|
916,104 | 0.3 | % | |||||
Max Chan
|
55,466 | * | ||||||
John Chou
|
221,884 | 0.1 | % | |||||
Norman Hung
|
197,444 | 0.1 | % |
Name of Beneficial Owner
|
Number of Shares
Beneficially Owned
|
Percentage of Shares
Beneficially Owned
|
||||||
Dr. Biing-Seng Wu
|
67,592,344 | 19.0% | ||||||
FMR LLC
(1)
|
56,404,948 | 15.9% | ||||||
Chimei Innolux
(2)
|
49,645,058 | 14.0% | ||||||
Jordan Wu
|
25,472,468 | 7.2% | ||||||
All directors and executive officers as a group
|
102,217,136 | 28.8% |
Note:
|
(1) |
According to the amendment to the Schedule 13G filed with the SEC on April 12, 2010, FMR LLC, together with its affiliates, beneficially owned
56,404,948
of our shares, some or all of which may include shares represented by our ADS, as of December 31, 2009. We do not have further information with respect to any changes in FMR LLC’s beneficial ownership of our shares subsequent to December 31, 2009.
|
(2)
|
As of April 30, 2010
, Chimei Innolux also beneficially owns an equity interest of approximately 6.6% in our subsidiary Himax Media Solutions.
|
·
|
payment of taxes;
|
·
|
recovery of prior years’ deficits, if any;
|
·
|
legal reserve (in an amount equal to 10% of annual net income after having deducted the above items until such time as its legal reserve equals the amount of its total paid-in capital);
|
·
|
special reserve based on relevant laws or regulations, or retained earnings, if necessary;
|
·
|
dividends for preferred shares, if any; and
|
·
|
cash or stock bonus to employees (in an amount less than 10% of annual net income) and remuneration for directors and supervisor(s) (in an amount less than 2% of the annual net income); after having deducted the above items, based on a resolution of the board of directors; if stock bonuses are paid to employees, the bonus may also be appropriated to employees of subsidiaries under the board of directors’ approval.
|
High
|
Low
|
Average Daily Trading Volume
|
||||||||||
(in thousand of ADSs)
|
||||||||||||
2006 (from March 31)
|
$ | 9.45 | $ | 4.21 | 813.4 | |||||||
2007
|
6.15 | 3.53 | 741.1 | |||||||||
2008
|
6.29 | 1.00 | 590.1 |
High
|
Low
|
Average Daily Trading Volume
|
||||||||||
(in thousand of ADSs)
|
||||||||||||
First quarter
|
5.75 | 3.18 | 758.4 | |||||||||
Second quarter
|
6.29 | 4.55 | 590.7 | |||||||||
Third quarter
|
5.45 | 2.62 | 620.1 | |||||||||
Fourth quarter
|
3.07 | 1.00 | 399.2 | |||||||||
2009
|
3.97 | 1.32 | 529.5 | |||||||||
First quarter
|
3.27 | 1.32 | 328.5 | |||||||||
Second quarter
|
3.80 | 2.47 | 708.8 | |||||||||
Third quarter
|
3.97 | 2.91 | 544.8 | |||||||||
Fourth quarter
|
3.32 | 2.16 | 529.3 | |||||||||
November
|
2.71 | 2.16 | 721.2 | |||||||||
December
|
3.24 | 2.57 | 396.2 | |||||||||
2010
|
||||||||||||
First quarter
|
3.20 | 2.72 | 270.5 | |||||||||
January
|
3.20 | 2.77 | 259.7 | |||||||||
February
|
3.12 | 2.72 | 287.1 | |||||||||
March
|
3.19 | 2.90 | 265.8 | |||||||||
April
|
3.28 | 3.01 | 261.7 | |||||||||
May
|
3.22 | 2.66 | 638.4 |
·
|
certain financial institutions;
|
·
|
dealers or traders in securities who use a mark-to-market method of tax accounting;
|
·
|
persons holding ordinary shares or ADSs as part of a hedging transaction, straddle, wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to the ordinary shares or ADSs;
|
·
|
persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
|
·
|
entities classified as partnerships for U.S. federal income tax purposes;
|
·
|
tax-exempt entities, including “individual retirement accounts” or “Roth IRAs”;
|
·
|
persons that own or are deemed to own ten percent or more of our voting stock;
|
·
|
persons who acquired our ordinary shares or ADSs pursuant to the exercise of an employee stock option or otherwise as compensation; or
|
·
|
persons holding ordinary shares or ADSs in connection with a trade or business conducted outside of the United States.
|
·
|
taxes and other governmental charges incurred by the depositary or the custodian on any ADSs or underlying shares, including any applicable interest and penalties thereon, and any stock transfer or other taxes and other governmental charges;
|
·
|
cable, telex, facsimile and electronic transmission and delivery expenses
|
·
|
transfer or registration fees for the registration of transfer of shares or other deposited securities with any applicable registrar in connection with the deposit or withdrawal of deposited securities and transfer of shares or other deposited securities to or from the name of the custodian, the depositary or any nominees upon the making of deposits and withdrawals;
|
·
|
expenses and charges of the depositary in connection with the conversion of foreign currency into U.S. dollars;
|
·
|
fees and expenses incurred by the depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to the shares, deposited securities, ADSs and ADRs;
|
·
|
fees and expenses incurred by the depositary in connection with the delivery of the deposited securities, including any fees of a central depository for securities in the local market, where applicable; and
|
·
|
any other additional fees, charges, costs or expenses that may be incurred by the depositary from time to time.
|
·
|
legal, audit and other fees incurred in connection with preparation of Form 20-F and annual reports and ongoing SEC compliance and listing requirements;
|
·
|
director and officer insurance;
|
·
|
stock exchange listing fees;
|
·
|
roadshow expenses;
|
·
|
costs incurred by financial printer and share certificate printer;
|
·
|
postage for communications to ADR holders;
|
·
|
costs of retaining third party public relations, investor relations, and/or corporate communications advisory firms in the U.S.; and
|
·
|
costs incurred in connection with participation in retail investor shows and capital markets days.
|
·
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
|
·
|
provide reasonable assurance that our transactions are recorded as necessary to permit preparation of our financial statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and our directors; and
|
·
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
Year ended December 31,
|
||||||||
Services
|
2008
|
2009
|
||||||
Audit Fees
(1)
|
$ | 720,000 | $ | 786,000 | ||||
All Other Fees
(2)
|
12,000 | 17,000 | ||||||
Total
|
$ | 732,000 | $ | 803,000 |
Note:
|
(1) |
Audit Fees. This category includes the audit of our annual financial statements and internal control over financial reporting, review of quarterly financial statements and services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for those fiscal years. This category also includes statutory audits required by the Tax Bureau of the ROC.
|
(2)
|
All Other Fees. This category consists of fees for the preparation of transfer pricing reports.
|
Period
|
(a) Total Number of ADSs Purchased
|
(b) Average Price Paid per ADS
|
(c) Total Number of ADSs Purchased as Part of Publicly Announced Plans or Programs
|
(d) Approximate Dollar Value of ADSs That May Yet Be Purchased Under the Plans or Programs
|
||||||||||||
2007 Share Buyback Program:
|
||||||||||||||||
November 8, 2007 to November 30, 2007
|
3,973,514 | $ | 4.38 | 3,973,514 | $ | 22,612,902 | ||||||||||
December 1, 2007 to December 31, 2007
|
2,595,594 | $ | 4.23 | 6,569,108 | $ | 11,633,090 | ||||||||||
January 1, 2008 to January 31, 2008
|
849,914 | $ | 4.24 | 7,419,022 | $ | 8,025,902 | ||||||||||
March 1, 2008 to March 18, 2008
|
224,128 | $ | 4.67 | 7,643,150 | $ | 6,980,313 | ||||||||||
July 1, 2008 to July 17, 2008
|
21,300 | $ | 4.21 | 7,664,450 | $ | 6,890,632 | ||||||||||
2008 Share Buyback Program:
|
||||||||||||||||
November 17, 2008 to November 30, 2008
|
561,411 | $ | 1.52 | 561,411 | $ | 49,144,319 | ||||||||||
December 1, 2008 to December 31, 2008
|
1,807,680 | $ | 1.35 | 2,369,091 | $ | 46,695,254 | ||||||||||
January 1, 2009 to January 31, 2009
|
1,243,903 | $ | 1.58 | 3,612,994 | $ | 44,728,654 | ||||||||||
February 1, 2009 to February 28, 2009
|
928,621 | $ | 1.70 | 4,541,615 | $ | 43,152,903 | ||||||||||
March 1, 2009 to March 31, 2009
|
643,884 | $ | 2.12 | 5,185,499 | $ | 41,785,487 | ||||||||||
April 1, 2009 to April 30, 2009
|
1,580,525 | $ | 2.73 | 6,766,024 | $ | 37,466,191 | ||||||||||
May 1, 2009 to May 18, 2009
|
734,939 | $ | 2.67 | 7,500,963 | $ | 35,501,073 | ||||||||||
July 8, 2009 to July 31, 2009
|
979,039 | $ | 3.63 | 8,480,002 | $ | 31,946,031 | ||||||||||
August 3, 2009 to August 31, 2009
|
1,734,252 | $ | 3.41 | 10,214,254 | $ | 26,029,399 | ||||||||||
September 1, 2009 to September 29, 2009
|
1,403,787 | $ | 3.36 | 11,618,041 | $ | 21,306,237 | ||||||||||
October 1, 2009 to October 30, 2009
|
1,574,538 | $ | 2.99 | 13,192,579 | $ | 16,590,908 | ||||||||||
November 2, 2009 to November 30, 2009
|
1,482,205 | $ | 2.44 | 14,674,784 | $ | 12,978,152 | ||||||||||
December 2, 2009 to December 31, 2009
|
819,558 | $ | 2.91 | 15,494,342 | $ | 10,597,029 | ||||||||||
January 22, 2010 to January 29, 2010
|
280,237 | $ | 2.95 | 15,774,579 | $ | 9,769,423 | ||||||||||
February 1, 2010 to February 26, 2010
|
752,978 | $ | 2.90 | 16,527,557 | $ | 7,586,933 | ||||||||||
March 2, 2010 to March 19, 2010
|
207,150 | $ | 2.99 | 16,734,707 | $ | 6,967,341 | ||||||||||
May 5, 2010 to May 25, 2010
|
780,239 | $ | 2.81 | 17,514,946 | $ | 4,772,512 |
·
|
We follow home country practice that permits our board of directors to have less than a majority of independent directors within the meaning of Rule 5605(a)(2) of the Nasdaq Rules, in lieu of complying with Rule 5605(b)(1) of the Nasdaq Rules that require boards of U.S. companies to have a board of directors which is comprised of a majority of independent directors.
|
·
|
We follow home country practice that permits our independent directors not to hold regularly scheduled meetings at which only independent directors are present in lieu of complying with Rule
5605
(b)(2).
|
·
|
We follow home country practice that permits a compensation committee to contain a director who does not meet the definition of “independence” within the meaning of Rule
5605(a)(2)
of the Nasdaq Rules, in
|
·
|
We follow home country practice that permits a nominations committee to contain a director who does not meet the definition of “independence” within the meaning of Rule 5605(a)(2) of the Nasdaq Rules, in lieu of complying with Rule 5605(e)(1)(B) of the Nasdaq Rules that requires the nominations committees of U.S. companies be comprised solely of independent directors.
|
Exhibit Number
|
Description of Document
|
1.1
|
Third Amended and Restated Memorandum and Articles of Association of the Registrant, as currently in effect.
|
2.1
|
Registrant’s Specimen American Depositary Receipt (included in Exhibit 2.3).
|
2.2
|
Registrant’s Specimen Certificate for Ordinary Shares. (Incorporated by reference to Exhibit 4.2 from our Registration Statement on Form F-1 (file no. 333-132372) filed with the Securities and Exchange Commission on March 13, 2006.)
|
2.3
|
Form of Deposit Agreement among the Registrant, the depositary and holders of the American depositary receipts. (Incorporated by reference to Exhibit (a) from our Registration Statement on Form F-6 (file no. 333-132383) filed with the Securities and Exchange Commission on March 13, 2006.)
|
2.4
|
Form of Amendment No.1 to Deposit Agreement among the Registrant and the depositary. (Incorporated by reference to Exhibit (a)(2) from our Post Effective Amendment No. 1 to Form F-6 (file no. 333-132383) filed with the Securities and Exchange Commission on August 6, 2009.)
|
2.5
|
Share Exchange Agreement dated June 16, 2005 between Himax Technologies, Inc. and Himax Technologies Limited. (Incorporated by reference to Exhibit 4.4 from our Registration Statement on Form F-1 (file no. 333-132372) filed with the Securities and Exchange Commission on March 13, 2006.)
|
2.6
|
Letter of the ROC Investment Commission, Ministry of Economic Affairs dated August 30, 2005 relating to the approval of Himax Technologies, Inc.’s inbound investment in Taiwan. (Incorporated by reference to Exhibit 4.5 from our Registration Statement on Form F-1 (file no. 333-132372) filed with the Securities and Exchange Commission on March 13, 2006.)
|
2.7
|
Letter of the ROC Investment Commission, Ministry of Economic Affairs dated September 7, 2005 relating to the approval of Himax Technologies Limited’s outbound investment outside of Taiwan. (Incorporated by reference to Exhibit 4.6 from our Registration Statement on Form F-1 (file no. 333-132372) filed with the Securities and Exchange Commission on March 13, 2006.)
|
4.1
|
Himax Technologies, Inc. 2005 Long-Term Incentive Plan. (Incorporated by reference to Exhibit 10.1 from our Registration Statement on Form F-1 (file no. 333-132372) filed with the Securities and Exchange Commission on March 13, 2006.)
|
4.2
|
Plant Facility Service Agreement dated April 22, 2010 between Himax Display, Inc. and Chi Mei Innolux Corporation
|
8.1
|
List of Subsidiaries.
|
12.1
|
Certification of Jordan Wu, President and Chief Executive Officer of Himax Technologies, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
12.2
|
Certification of Max Chan, Chief Financial Officer of Himax Technologies, Inc., pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
13.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
15.1
|
Consent of KPMG, Independent Registered Public Accounting Firm.
|
HIMAX TECHNOLOGIES, INC.
|
|||
By: |
/s/ Jordan Wu
|
||
Name: |
Jordan Wu
|
||
Title: |
President and Chief Executive Officer
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets as of December 31, 2008 and 2009
|
F-3
|
Consolidated Statements of Income for the Years Ended December 31, 2007, 2008 and 2009
|
F-5
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2007, 2008 and 2009
|
F-6
|
Consolidated Statements of Equity for the Years Ended December 31, 2007, 2008, and 2009
|
F-7
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2008 and 2009
|
F-10
|
Notes to Consolidated Financial Statements
|
F-12
|
December 31,
|
||||||||
2008
|
2009
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 135,200 | 110,924 | |||||
Investments in marketable securities available-for-sale
|
13,870 | 10,730 | ||||||
Accounts receivable, less allowance for doubtful accounts, sales returns and discounts of $25,364 and $26,327 at December 31, 2008 and 2009, respectively
|
51,029 | 64,496 | ||||||
Accounts receivable from related parties, less allowance for sales returns and discounts of $95 and $158 at December 31, 2008 and 2009, respectively
|
104,477 | 138,172 | ||||||
Inventories
|
96,921 | 67,768 | ||||||
Deferred income taxes
|
21,446 | 17,491 | ||||||
Prepaid expenses and other current assets
|
11,707 | 14,216 | ||||||
Total current assets
|
434,650 | 423,797 | ||||||
Investments in non-marketable equity securities
|
11,619 | 11,619 | ||||||
Equity method investments
|
- | 586 | ||||||
Property, plant and equipment, net
|
55,111 | 51,586 | ||||||
Deferred income taxes
|
23,029 | 24,548 | ||||||
Goodwill
|
26,846 | 26,846 | ||||||
Intangible assets, net
|
10,965 | 8,872 | ||||||
Restricted marketable securities
|
2,160 | 1,094 | ||||||
Other assets
|
1,168 | 1,500 | ||||||
130,898 | 126,651 | |||||||
Total assets
|
$ | 565,548 | 550,448 |
December 31,
|
||||||||
2008
|
2009
|
|||||||
Liabilities and Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 53,720 | 88,079 | |||||
Income taxes payable
|
15,455 | 14,147 | ||||||
Other accrued expenses and other current liabilities
|
20,968 | 18,425 | ||||||
Total current liabilities
|
90,143 | 120,651 | ||||||
Income taxes payable
|
474 | 902 | ||||||
Accrued pension liabilities
|
214 | 91 | ||||||
Deferred income taxes
|
3,224 | 2,217 | ||||||
Other liabilities
|
1,487 | 2,515 | ||||||
Total liabilities
|
95,542 | 126,376 | ||||||
Equity
|
||||||||
Himax Technologies, Inc. stockholders’ equity:
|
||||||||
Ordinary shares, US$0.3 par value, 1,000,000,000 shares authorized; 380,239,188 shares and 358,012,184
shares issued and outstanding at December 31, 2008 and 2009,
respectively
|
114,072 | 107,404 | ||||||
Additional paid-in capital
|
124,446 | 102,924 | ||||||
Accumulated other comprehensive income (loss)
|
(314 | ) | 4 | |||||
Unappropriated retained earnings
|
224,967 | 209,121 | ||||||
Total Himax Technologies, Inc. stockholders’ equity
|
463,171 | 419,453 | ||||||
Noncontrolling interests
|
6,835 | 4,619 | ||||||
Total equity
|
470,006 | 424,072 | ||||||
Commitments and contingencies
|
||||||||
Total liabilities and equity
|
$ | 565,548 | 550,448 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Revenues
|
||||||||||||
Revenues from third parties, net
|
$ | 371,267 | 312,336 | 245,075 | ||||||||
Revenues from related parties, net
|
546,944 | 520,463 | 447,306 | |||||||||
918,211 | 832,799 | 692,381 | ||||||||||
Costs and expenses:
|
||||||||||||
Cost of revenues
|
716,163 | 628,693 | 550,556 | |||||||||
Research and development
|
73,906 | 87,574 | 71,364 | |||||||||
General and administrative
|
14,903 | 19,353 | 16,346 | |||||||||
Bad debt expense
|
- | 25,305 | 218 | |||||||||
Sales and marketing
|
9,334 | 11,692 | 10,360 | |||||||||
Total costs and expenses
|
814,306 | 772,617 | 648,844 | |||||||||
Operating income
|
103,905 | 60,182 | 43,537 | |||||||||
Non operating income (loss):
|
||||||||||||
Interest income
|
5,433 | 3,315 | 766 | |||||||||
Gain (loss) on sale of marketable securities, net
|
112 | 913 | (87 | ) | ||||||||
Equity in
losses of equity method investees
|
- | - | (89 | ) | ||||||||
Foreign currency exchange losses, net
|
(319 | ) | (844 | ) | (510 | ) | ||||||
Interest expense
|
- | - | (3 | ) | ||||||||
Other income, net
|
464 | 469 | 111 | |||||||||
5,690 | 3,853 | 188 | ||||||||||
Earnings before income taxes
|
109,595 | 64,035 | 43,725 | |||||||||
Income tax expense (benefit)
|
(1,860 | ) | (8,689 | ) | 7,915 | |||||||
Net income
|
111,455 | 72,724 | 35,810 | |||||||||
Net loss attributable to noncontrolling interests
|
1,141 | 3,657 | 3,840 | |||||||||
Net income attributable to Himax Technologies, Inc. stockholders
|
$ | 112,596 | 76,381 | 39,650 | ||||||||
Basic earnings per ordinary share
attributable to Himax
Technologies, Inc.
stockholders
|
$ | 0.29 | 0.20 | 0.11 | ||||||||
Diluted earnings per ordinary share
attributable to Himax
Technologies, Inc.
stockholders
|
$ | 0.29 | 0.20 | 0.11 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Net income
|
$ | 111,455 | 72,724 | 35,810 | ||||||||
Other comprehensive income (loss):
|
||||||||||||
Unrealized gains (losses) on securities, not subject to income tax:
|
||||||||||||
Unrealized holding gains (losses) on available-for-sale marketable securities arising during the period
|
208 | 943 | (193 | ) | ||||||||
Reclassification adjustment for realized losses (gains) included in net income
|
(112 | ) | (913 | ) | 87 | |||||||
Foreign currency translation adjustments, net of tax of $(6), $0 and $0 in 2007, 2008 and 2009
, respectively
|
202 | (295 | ) | 464 | ||||||||
Net unrecognized actuarial loss, net of tax of
$22,
$(20) and $(18)
in 2007, 2008
and 2009, respectively
|
(38 | ) | (67 | ) | (22 | ) | ||||||
Comprehensive income
|
111,715 | 72,392 | 36,146 | |||||||||
Comprehensive loss
attributable to noncontrolling interests
|
1,149 | 3,682 | 3,822 | |||||||||
Comprehensive income
attributable to Himax Technologies, Inc. stockholders
|
$ | 112,864 | 76,074 | 39,968 |
Ordinary shares
|
Additional
|
Accumulated
other
|
Unappropriated
|
Total Himax
Technologies,
Inc. |
||||||||||||||||||||||||||||||||
Shares
|
Amount
|
paid-in
capital
|
Treasury
shares
|
comprehensive
income (loss ) |
retained
earnings |
stockholders’
equity
|
Noncontrolling
interests
|
Total
Equity
|
||||||||||||||||||||||||||||
Balance at January 1, 2007
|
387,200 | $ | 116,160 | 105,525 | - | (275 | ) | 142,517 | 363,927 | 1,396 | 365,323 | |||||||||||||||||||||||||
Issuance of ordinary shares in connection with the acquisition of Wisepal Technologies, Inc.
|
12,435 | 3,654 | 41,378 | - | - | - | 45,032 | - | 45,032 | |||||||||||||||||||||||||||
Ordinary shares to be issued in connection with the acquisition of Wisepal Technologies, Inc.
|
- | - | 1,687 | - | - | - | 1,687 | - | 1,687 | |||||||||||||||||||||||||||
Shares acquisition
|
(17,461 | ) | - | - | (39,207 | ) | - | - | (39,207 | ) | - | (39,207 | ) | |||||||||||||||||||||||
Shares retirement
|
- | (5,238 | ) | (33,969 | ) | 39,207 | - | - | - | - | - | |||||||||||||||||||||||||
Restricted stock granted
|
1,785 | 612 | (612 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Share-based compensation expenses
|
- | - | 5,883 | - | - | - | 5,883 | 12 | 5,895 | |||||||||||||||||||||||||||
New shares issued by subsidiaries
|
- | - | 833 | - | - | - | 833 | 10,981 | 11,814 | |||||||||||||||||||||||||||
Purchase of subsidiary shares from noncontrolling interests
|
- | - | - | - | - | - | - | (151 | ) | (151 | ) | |||||||||||||||||||||||||
Net unrecognized actuarial loss, net of tax of $22
|
- | - | - | - | (20 | ) | - | (20 | ) | (18 | ) | (38 | ) | |||||||||||||||||||||||
Unrealized holding gain on available-for-sale marketable securities
|
- | - | - | - | 86 | - | 86 | 10 | 96 | |||||||||||||||||||||||||||
Foreign currency translation adjustments, net of tax of $(6)
|
- | - | - | - | 202 | - | 202 | - | 202 | |||||||||||||||||||||||||||
Declaration of cash dividends, $0.100 per share
|
- | - | - | - | - | (39,710 | ) | (39,710 | ) | - | (39,710 | ) | ||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 112,596 | 112,596 | (1,141 | ) | 111,455 | ||||||||||||||||||||||||||
Balance at December 31, 2007
|
383,959 | 115,188 | 120,725 | - | (7 | ) | 215,403 | 451,309 | 11,089 | 462,398 |
Ordinary shares
|
Additional
|
Accumulated
other
|
Unappropriated
|
Total Himax
Technologies,
Inc. |
||||||||||||||||||||||||||||||||
Shares
|
Amount
|
paid-in
capital
|
Treasury
shares
|
comprehensive
income (loss ) |
retained
earnings |
stockholders’
equity
|
Noncontrolling
interests
|
Total
Equity
|
||||||||||||||||||||||||||||
Shares acquisition
|
(6,929 | ) | - | - | (8,372 | ) | - | - | (8,372 | ) | - | (8,372 | ) | |||||||||||||||||||||||
Shares retirement
|
- | (2,079 | ) | (6,293 | ) | 8,372 | - | - | - | - | - | |||||||||||||||||||||||||
Restricted stock granted
|
3,209 | 963 | (963 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Share-based compensation expenses
|
- | - | 8,937 | - | - | - | 8,937 | 149 | 9,086 | |||||||||||||||||||||||||||
New shares issued by subsidiary
|
- | - | 2,040 | - | - | - | 2,040 | (917 | ) | 1,123 | ||||||||||||||||||||||||||
Sale of subsidiary shares to noncontrolling interests
|
- | - | - | - | - | - | - | 196 | 196 | |||||||||||||||||||||||||||
Net unrecognized actuarial loss, net of tax of $(20)
|
- | - | - | - | (49 | ) | - | (49 | ) | (18 | ) | (67 | ) | |||||||||||||||||||||||
Unrealized holding gain (loss) on available-for-sale marketable securities
|
- | - | - | - | 36 | - | 36 | (6 | ) | 30 | ||||||||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | (294 | ) | - | (294 | ) | (1 | ) | (295 | ) | |||||||||||||||||||||||
Declaration of cash dividends, $0.175 per share
|
- | - | - | - | - | (66,817 | ) | (66,817 | ) | - | (66,817 | ) | ||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 76,381 | 76,381 | (3,657 | ) | 72,724 | ||||||||||||||||||||||||||
Balance at December 31, 2008
|
380,239 | 114,072 | 124,446 | - | (314 | ) | 224,967 | 463,171 | 6,835 | 470,006 |
Ordinary shares
|
Additional
|
Accumulated
other
|
Unappropriated
|
Total Himax
Technologies,
Inc. |
||||||||||||||||||||||||||||||||
Shares
|
Amount
|
paid-in
capital
|
Treasury
shares
|
comprehensive
income (loss ) |
retained
earnings |
stockholders’
equity
|
Noncontrolling
interests
|
Total
Equity
|
||||||||||||||||||||||||||||
Shares acquisition
|
(26,251 | ) | - | - | (36,462 | ) | - | - | (36,462 | ) | - | (36,462 | ) | |||||||||||||||||||||||
Shares retirement
|
- | (7,875 | ) | (28,587 | ) | 36,462 | - | - | - | - | - | |||||||||||||||||||||||||
Restricted stock granted
|
4,024 | 1,207 | (1,207 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Share-based compensation expenses
|
- | - | 8,181 | - | - | - | 8,181 | 372 | 8,553 | |||||||||||||||||||||||||||
New shares issued by subsidiary
|
- | - | (207 | ) | - | - | - | (207 | ) | 1,234 | 1,027 | |||||||||||||||||||||||||
Sale (purchase) of subsidiary shares to (from) noncontrolling interests
|
- | - | 285 | - | - | - | 285 | (2 | ) | 283 | ||||||||||||||||||||||||||
Dilution gain of equity method investments
|
- | - | 13 | - | - | - | 13 | 2 | 15 | |||||||||||||||||||||||||||
Net unrecognized actuarial loss, net of tax of $(18)
|
- | - | - | - | (41 | ) | - | (41 | ) | 19 | (22 | ) | ||||||||||||||||||||||||
Unrealized holding loss on available-for-sale marketable securities
|
- | - | - | - | (105 | ) | - | (105 | ) | (1 | ) | (106 | ) | |||||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | 464 | - | 464 | - | 464 | |||||||||||||||||||||||||||
Declaration of cash dividends, $0.150 per share
|
- | - | - | - | - | (55,496 | ) | (55,496 | ) | - | (55,496 | ) | ||||||||||||||||||||||||
Net income
|
- | - | - | - | - | 39,650 | 39,650 | (3,840 | ) | 35,810 | ||||||||||||||||||||||||||
Balance at December 31, 2009
|
358,012 | $ | 107,404 | 102,924 | - | 4 | 209,121 | 419,453 | 4,619 | 424,072 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 111,455 | 72,724 | 35,810 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
10,260 | 12,318 | 13,795 | |||||||||
Bad debt expense
|
- | 25,305 | 218 | |||||||||
Write-off of in-process research and development
|
1,600 | - | - | |||||||||
Share-based compensation expenses
|
5,895 | 9,086 | 8,553 | |||||||||
Loss on disposal of property and equipment
|
223 | 89 | 43 | |||||||||
Gain on disposal of subsidiary shares, net
|
(418 | ) | (341 | ) | - | |||||||
Loss (gain) on disposal of marketable securities, net
|
(112 | ) | (913 | ) | 87 | |||||||
Equity in losses of equity method investees
|
- | - | 89 | |||||||||
Deferred income tax expense (benefit)
|
(14,618 | ) | (12,348 | ) | 1,447 | |||||||
Inventories write downs
|
14,824 | 18,028 | 13,622 | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
25,971 | 12,342 | (13,686 | ) | ||||||||
Accounts receivable from related parties
|
(78,044 | ) | 89,850 | (33,685 | ) | |||||||
Inventories
|
(29,602 | ) | 1,371 | 14,401 | ||||||||
Prepaid expenses and other current assets
|
(4,477 | ) | 8,012 | (2,299 | ) | |||||||
Accounts payable
|
26,232 | (93,301 | ) | 34,360 | ||||||||
Income taxes payable
|
7,481 | (3,206 | ) | (880 | ) | |||||||
Other accrued expenses and other current liabilities
|
492 | (2,516 | ) | 2,452 | ||||||||
Other liabilities
|
- | - | (697 | ) | ||||||||
Net cash provided by operating activities
|
77,162 | 136,500 | 73,630 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(18,998 | ) | (17,490 | ) | (10,592 | ) | ||||||
Proceeds from disposal of property and equipment
|
9 | 32 | 25 | |||||||||
Purchase of available-for-sale marketable securities
|
(52,476 | ) | (68,892 | ) | (34,248 | ) | ||||||
Disposal of available-for-sale marketable securities
|
46,303 | 71,172 | 39,263 | |||||||||
Cash acquired in acquisition, net of cash paid
|
6,161 | - | - | |||||||||
Proceeds from disposal of subsidiary shares to noncontrolling interests by Himax Technologies Limited
|
562 | 719 | 529 | |||||||||
Purchase of investments in non-marketable equity securities
|
(6,321 | ) | (4,481 | ) | - | |||||||
Purchase of equity method investments
|
- | - | (663 | ) | ||||||||
Purchase of subsidiary shares from noncontrolling interests
|
(295 | ) | (673 | ) | (243 | ) | ||||||
Refund from (increase in) refundable deposits
|
25 | (86 | ) | (217 | ) | |||||||
Increase in other assets
|
- | - | (7 | ) | ||||||||
Release (pledge) of restricted marketable securities
|
11 | (2,065 | ) | (1,002 | ) | |||||||
Purchase of intangible assets
|
- | - | (100 | ) | ||||||||
Net cash used in investing activities
|
(25,019 | ) | (21,764 | ) | (7,255 | ) |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Distribution of cash dividends
|
$ | (39,710 | ) | (66,817 | ) | (55,496 | ) | |||||
Proceeds from issuance of new shares by subsidiaries
|
11,814 | 1,123 | 1,027 | |||||||||
Payments to acquire ordinary shares for retirement
|
(39,345 | ) | (8,656 | ) | (36,596 | ) | ||||||
Proceeds from borrowing of short-term debt
|
- | - | 80,000 | |||||||||
Repayment of short-term debt
|
- | - | (80,000 | ) | ||||||||
Net cash used in financing activities
|
(67,241 | ) | (74,350 | ) | (91,065 | ) | ||||||
Effect of foreign currency exchange rate changes on
cash and cash equivalents
|
125 | 34 | 414 | |||||||||
Net increase (decrease) in cash and cash equivalents
|
(14,973 | ) | 40,420 | (24,276 | ) | |||||||
Cash and cash equivalents at beginning of year
|
109,753 | 94,780 | 135,200 | |||||||||
Cash and cash equivalents at end of year
|
$ | 94,780 | 135,200 | 110,924 | ||||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$ | - | - | 3 | ||||||||
Income taxes
|
$ | 4,779 | 7,175 | 7,652 | ||||||||
Note 1.
|
Background, Principal Activities and Basis of Presentation
|
Jurisdiction of
|
Percentage of
Ownership
December 31,
|
|||||||||||
Subsidiary
|
Main activities
|
Incorporation
|
2008
|
2009
|
||||||||
Himax Technologies Limited
|
IC design and sales
|
ROC
|
100.00 | % | 100.00 | % | ||||||
Himax Technologies Anyang Limited
|
Sales
|
South Korea
|
100.00 | % | 100.00 | % | ||||||
Wisepal Technologies, Inc.
|
IC design and sales
|
ROC
|
100.00 | % | 100.00 | % | ||||||
Himax Technologies (Samoa), Inc.
|
Investments
|
Samoa
|
100.00 | % | 100.00 | % | ||||||
Himax Technologies (Suzhou), Co., Ltd.
|
Sales
|
PRC
|
100.00 | % | 100.00 | % | ||||||
Himax Technologies (Shenzhen), Co., Ltd.
|
Sales
|
PRC
|
100.00 | % | 100.00 | % | ||||||
Himax Display, Inc.
|
IC design, manufacturing and sales
|
ROC
|
89.49 | % | 88.73 | % | ||||||
Integrated Microdisplays Limited
|
IC design and sales
|
Hong Kong
|
89.49 | % | 88.73 | % | ||||||
Himax Analogic, Inc.
|
IC design and sales
|
ROC
|
75.59 | % | 77.56 | % | ||||||
Himax Imaging, Inc.
|
Investments
|
Cayman Islands
|
93.52 | % | 94.80 | % | ||||||
Himax Imaging, Ltd.
|
IC design and sales
|
ROC
|
93.52 | % | 94.80 | % | ||||||
Himax Imaging Corp.
|
IC design and sales
|
California, USA
|
93.52 | % | 94.80 | % | ||||||
Argo Limited
|
Investments
|
Cayman Islands
|
100.00 | % | 100.00 | % | ||||||
Tellus Limited
|
Investments
|
Cayman Islands
|
100.00 | % | 100.00 | % | ||||||
Himax Media Solutions, Inc.
|
TFT-LCD television and monitor chipset operations
|
ROC
|
79.44 | % | 77.91 | % | ||||||
Himax Media Solutions (Hong Kong) Limited
|
Investments
|
Hong Kong
|
79.44 | % | 77.91 | % |
Note 2.
|
Summary of Significant Accounting Policies
|
(a)
|
Principles of Consolidation
|
(b)
|
Use of Estimates
|
(c)
|
Cash and Cash Equivalents
|
(d)
|
Investment Securities
|
(e)
|
Allowance for Doubtful Accounts
|
(f)
|
Inventories
|
(g)
|
Property, Plant and Equipment
|
(h)
|
Goodwill
|
(i)
|
Intangible Assets
|
(j)
|
Impairment of Long-Lived Assets
|
(k)
|
Revenue Recognition
|
(l)
|
Product Warranty
|
(m)
|
Research and Development and Advertising Costs
|
(n)
|
Employee Retirement Plan
|
(o)
|
Income Taxes
|
(p)
|
Foreign Currency Translation and Foreign Currency Transactions
|
(q)
|
Earnings Per Ordinary Share
|
Year December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Net income attributable to Himax Technologies, Inc. stockholders (in thousands)
|
$ | 112,596 | 76,381 | 39,650 | ||||||||
Denominator for basic earnings per ordinary share:
|
||||||||||||
Weighted average number of ordinary shares outstanding (in thousands)
|
393,725 | 383,229 | 369,652 | |||||||||
Basic earnings per ordinary share attributable to Himax Technologies, Inc. stockholders
|
$ | 0.29 | 0.20 | 0.11 |
Year December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Net income attributable to Himax Technologies, Inc. stockholders (in thousands)
|
$ | 112,596 | 76,381 | 39,650 | ||||||||
Denominator for diluted earnings per ordinary share:
|
||||||||||||
Weighted average number of ordinary shares outstanding (in thousands)
|
393,725 | 383,229 | 369,652 | |||||||||
Unvested RSUs and contingent shares (in thousands)
|
1,318 | 524 | 577 | |||||||||
395,043 | 383,753 | 370,229 | ||||||||||
Diluted earnings per ordinary share
attributable to Himax Technologies, Inc. stockholders
|
$ | 0.29 | 0.20 | 0.11 |
(r)
|
Share-Based Compensation
|
(s)
|
Noncontrolling Interests
|
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
Net income attributable to Himax Technologies, Inc. stockholders
|
$ | 112,596 | 76,381 | 39,650 | ||||||||
Transfers (to) from the noncontrolling interests:
|
||||||||||||
Increase in Himax Technologies, Inc.’s paid-in capital for sale of shares of Himax Display, Himax Analogic and Himax Media Solutions
|
- | - | 285 | |||||||||
Increase in Himax Technologies, Inc.’s paid-in capital for new shares issued by Himax Display, Himax Media Solutions and Himax Analogic
|
833 | 2,040 | 35 | |||||||||
Decrease in Himax Technologies, Inc.’s paid-in capital for purchase of new shares issued by Himax Analogic
|
- | - | (242 | ) | ||||||||
Net transfers from noncontrolling interests
|
833 | 2,040 | 78 | |||||||||
Change from net income attributable to Himax Technologies, Inc. stockholders and transfers from noncontrolling interests
|
$ | 113,429 | 78,421 | 39,728 |
(t)
|
Fair Value Measurements
|
(u)
|
Recently Issued Accounting Pronouncements Not Yet Adopted
|
Note 3.
|
Acquisition
|
At February 1, 2007
|
||||
(in thousands)
|
||||
Cash
|
$ | 6,413 | ||
Current assets, other than cash
|
3,037 | |||
Property and equipment
|
622 | |||
Intangible assets - in-process R&D
|
1,600 | |||
- others
|
14,300 | |||
Goodwill
|
26,878 | |||
Total assets acquired
|
52,850 | |||
Current liabilities
|
(1,332 | ) | ||
Deferred income taxes
|
(4,547 | ) | ||
Total liabilities assumed
|
(5,879 | ) | ||
Net assets acquired
|
$ | 46,971 |
(unaudited
)
|
||||
Net revenues
|
$ | 919,105 | ||
Net income
|
$ | 112,406 | ||
Diluted earnings per ordinary share
|
$ | 0.28 |
Note 4.
|
Investments in Marketable Securities Available-for sale
|
December 31, 2008
|
||||||||||||||||
Aggregate
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Aggregate
Market
Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Time deposit with original maturities more than three months
|
$ | 151 | 2 | - | 153 | |||||||||||
Open-ended bond fund
|
13,564 | 153 | - | 13,717 | ||||||||||||
Total
|
$ | 13,715 | 155 | - | 13,870 |
|
December 31, 2009
|
|||||||||||||||
Aggregate
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Aggregate
Market
Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Time deposit with original maturities more than three months
|
$ | 2,212 | 6 | - | 2,218 | |||||||||||
Open-ended bond fund
|
8,469 | 43 | - | 8,512 | ||||||||||||
Total
|
$ | 10,681 | 49 | - | 10,730 |
Period
|
Proceeds
from sales |
Gross
realized gains
|
Gross
realized losses
|
|||||||||
(in thousands)
|
||||||||||||
Year ended December 31, 2007
|
$ | 46,303 | 112 | - | ||||||||
Year ended December 31, 2008
|
$ | 71,172 | 1,060 | (147 | ) | |||||||
Year ended December 31, 2009
|
$ | 39,263 | 179 | (266 | ) |
Note 5.
|
Allowance for Doubtful Accounts, Sales Returns and Discounts
|
Period
|
Balance at beginning
of
year
|
Additions
|
Amounts
utilized
|
Balance at
end of
year
|
||||||||||||
(in thousands)
|
||||||||||||||||
For the year ended December 31, 2007
|
$ | 187 | - | (187 | ) | - | ||||||||||
For the year ended December 31, 2008
|
$ | - | 25,305 | (8 | ) | 25,297 | ||||||||||
For the year ended December 31, 2009
|
$ | 25,297 | 218 | - | 25,515 |
Period
|
Balance at beginning
of
year
|
Additions
|
Amounts
utilized
|
Balance at
end of
year
|
||||||||||||
(in thousands)
|
||||||||||||||||
For the year ended December 31, 2007
|
$ | 681 | 1,705 | (1,893 | ) | 493 | ||||||||||
For the year ended December 31, 2008
|
$ | 493 | 1,657 | (1,988 | ) | 162 | ||||||||||
For the year ended December 31, 2009
|
$ | 162 | 2,391 | (1,583 | ) | 970 |
Note 6.
|
Equity Method Investments
|
Note 7.
|
Inventories
|
December 31,
|
||||||||
2008
|
2009
|
|||||||
(in thousands)
|
||||||||
Finished goods
|
$ | 44,965 | 27,802 | |||||
Work in process
|
46,210 | 28,043 | ||||||
Raw materials
|
5,730 | 11,874 | ||||||
Supplies
|
16 | 49 | ||||||
$ | 96,921 | 67,768 |
Note 8.
|
Goodwill and Intangible Assets
|
(a)
|
Intangible Assets
|
December 31, 2008
|
|||||||||
Gross
carrying
amount
|
Weighted
average amortization period |
Accumulated
amortization
|
|||||||
(in thousands)
|
|||||||||
Technology
|
$ | 6,339 |
7 years
|
1,837 | |||||
Customer relationship
|
8,100 |
7 years
|
2,218 | ||||||
Patents
|
742 |
5 years
|
161 | ||||||
Total
|
$ | 15,181 | 4,216 | ||||||
December 31, 2009
|
|||||||||
Gross
carrying
amount
|
Weighted
average amortization period |
Accumulated
amortization
|
|||||||
(in thousands)
|
|||||||||
Technology
|
$ | 6,339 |
7 years
|
2,723 | |||||
Customer relationship
|
8,100 |
7 years
|
3,375 | ||||||
Patents
|
842 |
6 years
|
311 | ||||||
Total
|
$ | 15,281 | 6,409 |
(b)
|
Goodwill
|
Note 9.
|
Property, Plant and Equipment
|
December 31,
|
||||||||
2008
|
2009
|
|||||||
(in thousands)
|
||||||||
Land
|
$ | 10,154 | 10,154 | |||||
Building and improvements
|
16,828 | 17,084 | ||||||
Machinery
|
7,569 | 18,828 | ||||||
Research and development equipment
|
14,640 | 15,008 | ||||||
Software
|
9,526 | 9,875 | ||||||
Office furniture and equipment
|
5,972 | 6,107 | ||||||
Others
|
5,098 | 7,712 | ||||||
69,787 | 84,768 | |||||||
Accumulated depreciation and amortization
|
(23,827 | ) | (34,388 | ) | ||||
Prepayment for purchases of equipment
|
9,151 | 1,206 | ||||||
$ | 55,111 | 51,586 |
Note 10.
|
Investments in Non-marketable Equity Securities
|
December 31,
|
|||||||||
2008
|
2009
|
||||||||
(in thousands)
|
|||||||||
Chi Lin Technology Co. Ltd.
|
$ | 1,057 | 1,057 | ||||||
Jetronics International Corp.
|
1,600 | 1,600 | |||||||
C Company
|
8,962 | 8,962 | |||||||
$ | 11,619 | 11,619 |
Note 11.
|
Other Accrued Expenses and Other Current Liabilities
|
December 31,
|
|||||||||
2008
|
2009
|
||||||||
(in thousands)
|
|||||||||
Accrued mask, mold fees and other expenses for RD
|
$ | 6,689 | 6,254 | ||||||
Payable for purchases of equipment
|
3,225 | 529 | |||||||
Accrued software maintenance
|
1,442 | 1,550 | |||||||
Accrued payroll and related expenses
|
2,649 | 2,951 | |||||||
Accrued litigation settlement and related costs
|
1,236 | - | |||||||
Accrued professional service fee
|
1,037 | 1,268 | |||||||
Accrued warranty costs
|
249 | 679 | |||||||
Accrued insurance, welfare expenses, etc.
|
4,441 | 5,194 | |||||||
$ | 20,968 | 18,425 |
Period
|
Balance at beginning
of
year
|
Additions charged to
expense
|
Amounts
utilized
|
Balance at
end of
year
|
||||||||||||
(in thousands)
|
||||||||||||||||
Year ended December 31, 2007
|
$ | 630 | 799 | (1,094 | ) | 335 | ||||||||||
Year ended December 31, 2008
|
$ | 335 | 1,526 | (1,612 | ) | 249 | ||||||||||
Year ended December 31, 2009
|
$ | 249 | 2,920 | (2,490 | ) | 679 |
Note 12.
|
Unused Credit Lines
|
Note 13.
|
Government Grants
|
Authority
|
Total
Grant
|
Execution Period
|
Product Description
|
|||
(in thousands)
|
||||||
DOIT of MOEA
|
NT$
|
22,670 (US$703)
|
August 2007 to July 2009
|
Display Port IC
|
||
DOIT of MOEA
|
30,240 (US$919)
|
October 2008 to September 2010
|
Multi-standard Decoder iDTV SOC
|
|||
III
|
1,860 (US$57)
|
March 2009 to November 2009
|
Himax Headquarter Excellent Program
|
Note 14.
|
Retirement Plan
|
December 31,
|
||||||||
2008
|
2009
|
|||||||
(in thousands)
|
||||||||
Change in projected benefit obligation:
|
||||||||
Benefit obligation at beginning of year
|
$ | 1,090 | 1,243 | |||||
Service cost
|
- | - | ||||||
Interest cost
|
34 | 31 | ||||||
Actuarial loss
|
119 | 58 | ||||||
Benefit obligation at end of year
|
1,243 | 1,332 | ||||||
Change in plan assets:
|
||||||||
Fair value at beginning of year
|
1,129 | 1,581 | ||||||
Actual return on plan assets
|
45 | 11 | ||||||
Employer contribution
|
407 | 277 | ||||||
Fair value at end of year
|
1,581 | 1,869 | ||||||
Funded status
|
$ | 338 | 537 | |||||
Amounts recognized in the balance sheet consist of:
|
||||||||
Prepaid pension costs
|
$ | 552 | 628 | |||||
Accrued pension liabilities
|
(214 | ) | (91 | ) | ||||
Net amount recognized
|
$ | 338 | 537 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Service cost
|
$ | 3 | - | - | ||||||||
Interest cost
|
26 | 34 | 31 | |||||||||
Expected return on plan assets
|
(20 | ) | (35 | ) | (40 | ) | ||||||
Net amortization
|
96 | 34 | 25 | |||||||||
Net periodic pension cost
|
$ | 105 | 33 | 16 |
December 31,
|
||||||||||||
2008
|
2009
|
|||||||||||
Himax Taiwan,
Himax Media
Solutions,
Himax Display &
Himax Analogic |
Wisepal
|
Himax Taiwan,
Himax Media Solutions,
Himax Display, Himax
Analogic & Wisepal |
||||||||||
Discount rate
|
2.50% | 2.50% | 2.25% | |||||||||
Rate of increase in compensation levels
|
4.00% | 5.00% | 4.00% |
Year Ended December 31,
|
||||||||||||||||||||
2007
|
2008
|
2009
|
||||||||||||||||||
Himax Display &
Himax Analogic |
Himax Taiwan,
Wisepal &
Himax Media Solutions |
Himax Taiwan,
Himax Media Solutions,
Himax
Display & Himax Analogic |
Wisepal
|
Himax Taiwan,
Himax Media Solutions,
Himax Display, Himax
Analogic
&
Wisepal
|
||||||||||||||||
Discount rate
|
3.00% | 3.00% | 2.50% | 2.50% | 2.25% | |||||||||||||||
Rate of increase in compensation levels
|
4.00% | 5.00% | 4.00% | 5.00% | 4.00% | |||||||||||||||
Expected long-term rate of return on pension assets
|
3.00% | 3.00% | 2.50% | 2.50% | 2.25% |
Note 15.
|
Share-Based Compensation
|
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Cost of revenues
|
$ | 422 | 435 | 264 | ||||||||
Research and development
|
15,393 | 15,861 | 10,936 | |||||||||
General and administrative
|
2,182 | 2,813 | 1,959 | |||||||||
Sales and marketing
|
2,324 | 2,691 | 1,902 | |||||||||
$ | 20,321 | 21,800 | 15,061 |
Number of Underlying
Shares for RSUs
|
Weighted
Average Grant
Date Fair Value
|
|||||||
Balance at January 1, 2007
|
2,508,143 | $ | 6.39 | |||||
Granted
|
6,694,411 | 3.95 | ||||||
Vested
|
(4,507,170 | ) | 4.46 | |||||
Cancelled
|
(361,046 | ) | 3.98 | |||||
Forfeited
|
(680,949 | ) | 5.27 | |||||
Balance at December 31, 2007
|
3,653,389 | 4.75 | ||||||
Granted
|
7,108,675 | 2.95 | ||||||
Vested
|
(5,914,336 | ) | 3.55 | |||||
Forfeited
|
(311,433 | ) | 4.10 | |||||
Balance at December 31, 2008
|
4,536,295 | 3.54 | ||||||
Granted
|
3,577,686 | 3.25 | ||||||
Vested
|
(4,014,338 | ) | 3.58 | |||||
Forfeited
|
(261,891 | ) | 3.57 | |||||
Balance at December 31, 2009
|
3,837,752 | 3.23 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Cost of revenues
|
$ | 422 | 435 | 264 | ||||||||
Research and development
|
15,164 | 14,906 | 10,078 | |||||||||
G
eneral and
adm
inistrative
|
2,182 | 2,813 | 1,938 | |||||||||
Sales and marketing
|
2,323 | 2,671 | 1,853 | |||||||||
$ | 20,091 | 20,825 | 14,133 |
(b)
|
Nonvested Shares Issued to Employees
|
(i)
|
In September 2005, Himax Analogic granted nonvested shares of its ordinary shares to certain employees for their future service. The shares vested over four years after the grant date. The Company recognized compensation expenses of $59 thousand, $45 thousand, and $15 thousand in 2007, 2008 and 2009, respectively. Such compensation expense was recorded as research and development expenses in the accompanying consolidated statements of income with a corresponding increase to noncontrolling interests in the accompanying consolidated balance sheets. The fair value of shares on grant date was estimated based on the then most recent price of new shares issued to unrelated third parties, which was NT$10 (US$0.319) per share.
|
Number of
Shares
|
Weighted Average Grant
Date Fair Value
|
|||||||
Balance at January 1, 2007
|
769,000 | $ | 0.319 | |||||
Forfeited
|
(66,000 | ) | 0.319 | |||||
Balance at December 31, 2007
|
703,000 | 0.319 | ||||||
Forfeited
|
(30,000 | ) | 0.319 | |||||
Balance at December 31, 2008
|
673,000 | 0.319 | ||||||
Forfeited
|
(15,000 | ) | 0.319 | |||||
Vested
|
(658,000 | ) | 0.319 | |||||
Balance at December 31, 2009
|
- | - |
(ii)
|
During September 2007 to December 2009, Himax Imaging Inc. (“Himax Imaging”, a consolidated subsidiary) granted nonvested shares of its ordinary shares to certain employees for their future service, and the employees must pay $0.15 or $0.3 (employees hired after March 1, 2009) per share. The shares vest over four years after the grant date. If employees leave Himax Imaging before completing the four year service period, they would sell these shares back to Himax Imaging at their original purchase price. The Company recognized compensation expenses of $56 thousand, $261 thousand and $340 thousand in 2007, 2008 and 2009, respectively. Such compensation expense was recorded as research and development expenses, general and administrative expense and sales and marketing expense in the accompanying consolidated statements of income with a corresponding increase to noncontrolling interests in the accompanying consolidated balance sheets. The fair value of shares on grant date was estimated based on the then most recent price of new shares issued, which was US$0.33 per share.
|
Number of
Shares
|
Weighted Average Grant
Date Fair Value
|
|||||||
Balance at January 1, 2007
|
- | $ | - | |||||
Granted
|
5,559,000 | 0.33 | ||||||
Balance at December 31, 2007
|
5,559,000 | 0.33 | ||||||
Granted
|
1,258,000 | 0.33 | ||||||
Vested
|
(1,996,229 | ) | 0.33 | |||||
Forfeited
|
(250,000 | ) | 0.33 | |||||
Balance at December 31, 2008
|
4,570,771 | 0.33 | ||||||
Granted
|
2,253,000 | 0.33 | ||||||
Vested
|
(903,882 | ) | 0.33 | |||||
Forfeited
|
(271,000 | ) | 0.33 | |||||
Balance at December 31, 2009
|
5,648,889 | 0.33 |
(iii)
|
As stated in Note 15 (a) above, in December 2007, Himax Media Solutions granted 3,416,714 nonvested shares of its ordinary shares to 145 employees transferred from Himax Taiwan to exchange for 361,046 units of these employees’ unvested RSUs. The modification of equity award incurred an incremental compensation cost of $148 thousand for the excess of the fair value of the modified award issued over the fair value of the original unvested RSUs at the date of modification. The Company then added incremental compensation cost to the remaining unrecognized compensation cost of the original award at the date of modification and the total compensation cost are recognized as compensation expenses ratably over the requisite service period of the modified award.
|
Number of
Shares
|
Weighted Average Grant
Date Fair Value
|
|||||||
Balance at January 1, 2007
|
- | $ | - | |||||
Granted
|
3,416,714 | 0.464 | ||||||
Forfeited
|
(18,000 | ) | 0.464 | |||||
Balance at December 31, 2007
|
3,398,714 | 0.464 | ||||||
Forfeited
|
(376,189 | ) | 0.464 | |||||
Balance at December 31, 2008
|
3,022,525 | 0.464 | ||||||
Vested
|
(1,432,000 | ) | 0.464 | |||||
Forfeited
|
(469,525 | ) | 0.464 | |||||
Balance at December 31, 2009
|
1,121,000 | 0.464 |
(c)
|
RSUs issued in connection with the acquisition of Wisepal
|
Number of Underlying
Shares for RSUs
|
Weighted Average Grant
Date Fair Value
|
|||||||
Balance at January 1, 2007
|
- | $ | - | |||||
Granted
|
418,440 | 7.064 | ||||||
Vested
|
(165,114 | ) | 7.064 | |||||
Forfeited
|
(200,760 | ) | 7.064 | |||||
Balance at December 31, 2007
|
52,566 | 7.064 | ||||||
Forfeited
|
(52,566 | ) | 7.064 | |||||
Balance at December 31, 2008
|
- | - |
(d)
|
Employee stock options
|
2007
|
2009
|
|||||||
Valuation assumptions:
|
||||||||
Expected dividend yield
|
0 | % | 0 | % | ||||
Expected volatility
|
39.94 | % | 51.52 | % | ||||
Expected term (years)
|
4.375 | 4.375 | ||||||
Risk-free interest rate
|
2.4776 | % | 2 | % |
Number
of shares
|
Weighted
average
exercise
price
|
Weighted
average
remaining
contractual
term
|
||||||||||
Balance at January 1, 2007
|
- | $ | - | |||||||||
Granted
|
6,495,500 | 0.464 | ||||||||||
Forfeited
|
(5,000 | ) | 0.464 | |||||||||
Balance at December 31, 2007
|
6,490,500 | 0.464 | 4.375 | |||||||||
Forfeited
|
(823,000 | ) | 0.464 | |||||||||
Balance at December 31, 2008
|
5,667,500 | 0.464 | 3.375 | |||||||||
Granted
|
2,299,000 | 0.311 | ||||||||||
Exercised
|
- | - | ||||||||||
Forfeited
|
(1,193,500 | ) | 0.446 | |||||||||
Balance at December 31, 2009
|
6,773,000 | 0.416 | 2.826 | |||||||||
Exercisable at December 31, 2009
|
2,387,250 | 0.464 |
Note 16.
|
Equity
|
(a)
|
Share capital
|
(i)
|
Increase of authorized share capital
: to increase the authorized share capital of the
Company from US$50
thousand
divided into 500,000
thousand
shares of par value US$0.0001 each to US$300,000
thousand
divided into 3,000,000,000
thousand
shares of par value US$0.0001 each.
|
(ii)
|
Distribution
of
stock dividends
:
distribute 5,999 shares
of st
ock dividend
for each ordinary share
then outstanding
as of August 7, 2009 from the
additional paid-in capital
account
.
|
(iii)
|
Share
s
c
onsolidation:
immediately following the
issuance of stock dividend
,
every three thousand issued and unissued shares of p
ar value US$0.0001 each
are consolidated
into one
ordinary
share of US$0.3 par value each.
|
(iv)
|
Change of par value: change the par value of ordinary shares from US$0.0001 per share to US$0.3 per share
effect from August 10, 2009
.
|
(b)
|
Earnings distribution
|
Note 17.
|
Income Taxes
|
Date of investment
|
Tax exemption period
|
||
Himax Taiwan:
|
|||
September 1, 2003
|
April 1, 2004-March 31, 2009
|
||
October 29, 2003
|
January 1, 2006-December 31, 2010
|
||
September 20, 2004
|
January 1, 2008-December 31, 2012
|
||
Wisepal:
|
|||
August 26, 2004
|
January 1, 2009-December 31, 2013
|
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Current income tax expense
|
$ | 12,770 | 3,659 | 6,467 | ||||||||
Deferred income tax expense (benefit)
|
(14,630 | ) | (12,348 | ) | 1,448 | |||||||
Income tax expense (benefit)
|
$ | (1,860 | ) | (8,689 | ) | 7,915 |
Year Ended December 31,
|
||||||||||||
2007
|
|
2008
|
2009
|
|||||||||
(in thousands)
|
||||||||||||
Deferred income tax benefit, exclusive of the effects of other components listed below
|
$ | (20,652 | ) | (21,056 | ) | (11,182 | ) | |||||
Adjustments to deferred tax assets and liabilities for changes in enacted tax laws and rates
|
- | (14 | ) | 5,224 | ||||||||
Increase in the beginning-of-the-year balance of the valuation allowance for deferred tax assets
|
6,022 | 8,722 | 7,406 | |||||||||
$ | (14,630 | ) | (12,348 | ) | 1,448 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Expected income tax expense
|
$ | 27,399 | 16,009 | 10,931 | ||||||||
Tax-exempted income
|
(27,099 | ) | (25,185 | ) | (9,377 | ) | ||||||
Tax on undistributed retained earnings
|
11,616 | 10,281 | 5,816 | |||||||||
Tax benefit resulting from setting aside legal reserve from prior year’s income
|
(689 | ) | (1,148 | ) | (953 | ) | ||||||
Adjustment to deferred tax assets and liabilities for enacted change in tax laws and rates
|
- | (14 | ) | 5,224 | ||||||||
Nontaxable gains on sale of marketable securities
|
(133 | ) | (313 | ) | (44 | ) | ||||||
Increase in investment tax credits
|
(20,597 | ) | (17,191 | ) | (13,809 | ) | ||||||
Increase in deferred tax asset valuation allowance
|
5,366 | 9,144 | 8,450 | |||||||||
Non-deductible share-based compensation expenses
|
260 | 298 | 458 | |||||||||
Provision for uncertain tax position in connection with share-based compensation expenses
|
217 | 367 | 416 | |||||||||
Decrease in unrecognized tax benefits related to prior year
uncertain
tax positions, net of its impact to tax-exempted income
|
- | (1,780 | ) | - | ||||||||
Foreign tax rate differential
|
(1,399 | ) | 537 | 1,184 | ||||||||
Variance from audits of prior years
’
income tax filings
|
3,000 | 441 | (538 | ) | ||||||||
Others
|
199 | (135 | ) | 157 | ||||||||
Actual income tax expense (benefit)
|
$ | (1,860 | ) | (8,689 | ) | 7,915 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Income from c
ontinuin
g operations
|
$ | (1,860 | ) | (8,689 | ) | 7,915 | ||||||
Other comprehensive income (loss)
|
16 | (20 | ) | ( 18 | ) | |||||||
Tax benefit allocated to reduce goodwill
|
- | (32 | ) | - | ||||||||
Total income tax
expense (
benefit
)
|
$ | (1,844 | ) | (8,741 | ) | 7,897 |
December 31,
|
||||||||
2008
|
|
2009
|
||||||
(in thousands)
|
||||||||
Deferred tax assets:
|
||||||||
Inventory
|
$ | 6,735 | 4,133 | |||||
Allowance for doubtful accounts
|
5,917 | 4,678 | ||||||
Capitalized expense for tax purposes
|
102 | 36 | ||||||
Accrued compensated absences
|
114 | 59 | ||||||
Allowance for sales return, discounts and warranty
|
102 | 222 | ||||||
Unused investment tax credits
|
41,699 | 47,849 | ||||||
Unused loss carry-forward
|
10,903 | 14,006 | ||||||
Accrued pension cost
|
101 | 114 | ||||||
Other
|
282 | 337 | ||||||
Total gross deferred tax assets
|
65,955 | 71,434 | ||||||
Less: valuation allowance
|
(21,022 | ) | (28,428 | ) | ||||
Net deferred tax assets
|
44,933 | 43,006 | ||||||
Deferred tax liabilities:
|
||||||||
Unrealized foreign exchange gain
|
(10 | ) | - | |||||
Prepaid pension cost
|
(314 | ) | (332 | ) | ||||
Acquired intangible assets
|
(3,302 | ) | (2,269 | ) | ||||
Depreciation
|
(50 | ) | (62 | ) | ||||
Deferred shared based compensation
|
- | (518 | ) | |||||
Other
|
(6 | ) | (3 | ) | ||||
Total gross deferred tax liabilities
|
(3,682 | ) | (3,184 | ) | ||||
Net deferred tax assets
|
$ | 41,251 | 39,822 |
For the year ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Balance at beginning of year
|
$ | 1,276 | 3,968 | 5,718 | ||||||||
Increase related to prior year tax positions
|
503 | - | - | |||||||||
Decrease related to prior year tax positions
|
- | (1,780 | ) | - | ||||||||
Increase related to current year tax positions
|
2,189 | 3,555 | 2,587 | |||||||||
Effect of exchange rate change
|
- | (25 | ) | 145 | ||||||||
Balance at end of year
|
$ | 3,968 | 5,718 | 8,450 |
Note 18.
|
Fair Value Measurement
|
(a)
|
Fair Value of Financial Instruments
|
(b)
|
Fair Value
Hierarchy
|
(i)
|
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
|
(ii)
|
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
|
(iii)
|
Level 3 inputs are unobservable inputs for the asset or liability.
|
Fair Value Measurements at
December 31, 200
8
Using
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
(in thousands)
|
||||||||||||
Cash and cash equivalents:
|
||||||||||||
Time deposits with original maturities less than three months
|
$ | 115,120 | - | - | ||||||||
Marketable securities available-for-sale:
|
||||||||||||
Time deposit with original maturities more than three months
|
- | 153 | - | |||||||||
Open-ended bond fund
|
13,717 | - | - | |||||||||
Restricted marketable securities:
|
||||||||||||
Time deposits with original m
aturities of more than three months
|
- | 2,160 | - | |||||||||
Total
|
$ | 128,837 | 2,313 | - |
Note 19.
|
Significant Concentrations
|
Note 20.
|
Related-party Transactions
|
(a)
|
Name and relationship
|
Name of related parties
|
Relationship
|
|
Chi Mei Optoelectronics Corp. (CMO)
|
The Company’s Chairman represented on CMO’s Board of Directors
|
|
Chi Mei Optoelectronics Japan, Co., Ltd. (CMO-Japan)
|
Wholly owned subsidiary of CMO
|
|
Contrel Technology Co., Ltd. (Contrel)
|
Related party in substance
|
|
Ampower Technology Co., Ltd. (Ampower)
|
Related party in substance
|
|
Chi Mei Corporation (CMC)
|
Major shareholder of CMO
|
|
NEXGEN Mediatech Inc. (NEXGEN)
|
Related party in substance
|
|
Chi Lin Technology Co., Ltd. (Chi Lin Tech)
|
Related party in substance
|
Name of related parties
|
Relationship
|
|
NingBo Chi Mei Electronics Ltd. (CME-NingBo)
|
The subsidiary of CMO
|
|
NingBo Chi Mei Optoelectronics Ltd. (CMO-NingBo)
|
The subsidiary of CMO
|
|
Chi Mei EL Corporation (CMEL)
|
The subsidiary of CMO
|
|
NanHai Chi Mei Optoelectronics Ltd. (CMO- NanHai)
|
The subsidiary of CMO
|
|
Chi Hsin Electronics Corp. (Chi Hsin)
|
The subsidiary of CMO, which merged with CMO on May 31, 2009, CMO was the surviving company
|
|
Chi Mei Logistics Corp. (CMLC)
|
The subsidiary of CMO
|
|
NingBo Chi Mei Logistics Corp. (CMLC-NingBo)
|
The subsidiary of CMO
|
|
Dongguan Chi Hsin Electronics Co., Ltd. (Chi Hsin-Dongguan)
|
The subsidiary of CMO
|
|
NingBo ChiHsin Electronics Ltd. (Chi Hsin-NingBo)
|
The subsidiary of CMO
|
|
Fulintec Science Engineering Co., Ltd. (Fulintec)
|
The subsidiary of CMO
|
|
Amlink (Shanghai) Ltd. (Amlink)
|
Related party in substance
|
|
Linklinear Development Co, Ltd. (LDC)
|
Related party in substance
|
|
Shinyoptics Corp. (Shinyoptics)
|
Equity method investee of the Company
|
|
Hangzhou Crystal Display Technology Co., Ltd. (Crystal)
|
Equity method investee of the Company
|
(b)
|
Significant transactions with related parties
|
(i)
|
Revenues and accounts receivable
|
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
CMO- NingBo
|
$ | 249,117 | 292,231 | 230,299 | ||||||||
CMO
|
281,766 | 143,132 | 101,569 | |||||||||
CMO- NanHai
|
7,141 | 69,865 | 86,612 | |||||||||
Chi Hsin- NingBo
|
- | 4,382 | 23,789 | |||||||||
Chi Hsin- Dongguan
|
- | 2,397 | 2,792 | |||||||||
Amlink
|
- | - | 1,933 | |||||||||
Chi Hsin
|
1,499 | 6,359 | 129 | |||||||||
Chi Lin Tech
|
7,162 | - | 60 | |||||||||
CMEL
|
214 | 288 | 45 | |||||||||
Crystal
|
- | - | 45 | |||||||||
Shinyoptics
|
- | - | 23 | |||||||||
CMO- Japan
|
- | 3 | 10 | |||||||||
Ampower
|
- | 2 | - | |||||||||
CME- NingBo
|
- | 1,804 | - | |||||||||
NEXGEN
|
45 | - | - | |||||||||
$ | 546,944 | 520,463 | 447,306 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Display driver for large-size applications
|
$ | 536,610 | 498,771 | 417,099 | ||||||||
Display driver for consumer electronics applications
|
1,434 | 16,486 | 25,542 | |||||||||
Display driver for mobile handsets
|
771 | 4,029 | 1,487 | |||||||||
Others
|
922 | 1,175 | 1,117 | |||||||||
$ | 539,737 | 520,461 | 445,245 |
December 31,
|
||||||||
2008
|
2009
|
|||||||
(in thousands)
|
||||||||
CMO- NingBo
|
$ | 56,241 | 73,029 | |||||
CMO
|
29,385 | 30,360 | ||||||
CMO- NanHai
|
18,029 | 27,088 | ||||||
Chi Hsin- NingBo
|
670 | 6,361 | ||||||
Amlink
|
- | 1,010 | ||||||
Chi Hsin- Dongguan
|
211 | 350 | ||||||
Chi Lin Tech
|
- | 63 | ||||||
Crystal
|
- | 45 | ||||||
Shinyoptics
|
- | 16 | ||||||
CMEL
|
3 | 8 | ||||||
Chi Hsin
|
32 | - | ||||||
CME- NingBo
|
1 | - | ||||||
|
104,572 | 138,330 | ||||||
Allowa
nce for sales returns and discounts
|
(95 | ) | (158 | ) | ||||
$ | 104,477 | 138,172 |
(ii)
|
Property transactions
|
(iii)
|
Lease
|
Duration
|
Amount
|
|||
(in thousands)
|
||||
January 1, 2010~December 31, 2010
|
$ | 487 | ||
January 1, 2011~December 31, 2011
|
447 | |||
January 1, 2012~December 31, 2012
|
181 | |||
January 1, 2013~December 31, 2013
|
180 | |||
January 1, 2014~December 31, 2014
|
170 | |||
After January 1, 2015
|
1,580 | |||
$ | 3,045 |
(iv)
|
Others
|
Note 21.
|
Commitments and Contingencies
|
(a)
|
As of December 31, 2008 and 2009, the Company entered into a license agreement which is secured by standby Letter of Credit by bank both amounting to $250 thousand. As of December 31, 2009, amount of outstanding letters of credit for the purchase of machinery and equipment was $262 thousand.
|
(b)
|
As of December 31, 2008, and 2009 the Company had entered into several contracts for the acquisition of equipment and computer software. Total contract prices amounted to $3,872 thousand and $5,010 thousand, respectively. As of December 31, 2008 and 2009, the remaining commitments were $3,710 thousand and $3,761 thousand, respectively.
|
(c)
|
The Company leases its office and buildings pursuant to operating lease arrangements with unrelated third parties. The lease arrangement will expire gradually from 2010 to 2012. As of December 31, 2008 and 2009, deposits paid amounted to $515 thousand and $662 thousand, respectively, and were recorded as refundable deposit in the accompanying consolidated balance sheets.
|
Duration
|
Amount
|
|||
(in thousands)
|
||||
January 1, 2010~December 31, 2010
|
$ | 1,006 | ||
January 1, 2011~December 31, 2011
|
529 | |||
January 1, 2012~December 31, 2012
|
6 | |||
$ | 1,541 |
(d)
|
The Company entered into several sales agent agreements, based on these agreements, the Company shall pay commissions at the rates ranging from 1.5% to 4% of the sales to customers in the specific territory or referred by agents as stipulated in these agreements.
|
(e)
|
In June 2007, the Company entered into a license agreement for the use of HDMI 1.3 receiver core relevant technology for product development. In accordance with the agreement, the Company was required to pay an initial license fee based on the progress of the project development and a royalty based on shipments. The license fee paid and charged to research and development expense in 2007 was $500 thousand. In 2007, 2008 and 2009, no royalty was paid.
|
(f)
|
The company has entered into two agreements to provide donations
for
laboratories with two top local universities in
Taiwan
.
The total d
onation amounts
based on the
modified agreements
amounted to
NT$
55.4
million ($1.
7
million).
As of December 31, 2009, the remaining commitments were NT$24.0 million ($0.7 million).
|
(g)
|
The Company from time to time is subject to claims regarding the proprietary use of certain technologies. Currently, management is not aware of any such claims that it believes could have a material adverse effect on the Company’s financial position or results of operations.
|
(h)
|
Since Himax Taiwan is not a listed company, it will depend on Himax Technologies, Inc. to meet its equity financing requirements in the future. Any capital contribution by Himax Technologies, Inc. to Himax Taiwan may require the approval of the relevant ROC authorities. The Company may not be able to obtain any such approval in the future in a timely manner, or at all. If Himax Taiwan is unable to receive the equity financing it requires, its ability to grow and fund its operations may be materially and adversely affected.
|
(i)
|
The Company has entered i
nto several wafer fabrication or assembly and testing service arrangements with service providers. The Company may be obligated to make payments for purchase orders entered into pursuant to these arrangements.
Contractual obligations resulted from above
arrangements approximate
$20,496
thousand and
$63,129
thousand as of December 31, 2008 and 2009, respectively.
|
Note 22.
|
Segment Information
|
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Display drivers for large-size applications
|
$ | 752,196 | 651,504 | 493,513 | ||||||||
Display drivers for mobile handsets applications
|
75,704 | 57,274 | 69,081 | |||||||||
Display drivers for consumer electronics applications
|
66,634 | 81,866 | 83,527 | |||||||||
Others
|
23,677 | 42,155 | 46,260 | |||||||||
$ | 918,211 | 832,799 | 692,381 |
Year Ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Taiwan
|
$ | 785,334 | 646,011 | 548,384 | ||||||||
China
|
82,572 | 116,947 | 86,451 | |||||||||
Other Asia Pacific (Korea and Japan)
|
50,115 | 69,570 | 57,414 | |||||||||
Europe (Netherlands and France)
|
190 | 271 | 132 | |||||||||
$ | 918,211 | 832,799 | 692,381 |
December 31,
|
||||||||
2008
|
2009
|
|||||||
(in thousands)
|
||||||||
Taiwan
|
$ | 53,822 | 50,254 | |||||
China
|
1,002 | 1,006 | ||||||
U.S.
|
282 | 296 | ||||||
Korea
|
5 | 30 | ||||||
$ | 55,111 | 51,586 |
December 31,
|
||||||||
2008
|
2009
|
|||||||
|
(in thousands)
|
|||||||
CMO and its affiliates, a related party
|
$ | 104,572 | 137,196 | |||||
SVA-NEC
|
27,947 | 25,524 | ||||||
$ | 132,519 | 162,720 |
Note 23.
|
Subsequent Events
|
(a)
|
Ordinary share buybacks
|
(b)
|
Declaration of cash dividend
|
Note 24.
|
Himax Technologies, Inc. (the Parent Company only)
|
December 31,
|
||||||||
2008
|
2009
|
|||||||
(in thousands)
|
||||||||
Cash
|
$ | 2,903 | 77 | |||||
Other current assets
|
2,015 | 1,898 | ||||||
Investment in non-marketable securities
|
1,600 | 1,600 | ||||||
Investments in subsidiaries
|
518,373 | 572,574 | ||||||
Total assets
|
$ | 524,891 | 576,149 | |||||
Current liabilities
|
$ | 1,720 | 1,296 | |||||
Debt borrowing from a subsidiary
|
60,000 | 155,400 | ||||||
Total equity
|
463,171 | 419,453 | ||||||
Total liabilities and equity
|
$ | 524,891 | 576,149 |
Year ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Revenues
|
$ | - | - | - | ||||||||
Costs and expenses
|
(683 | ) | (1,162 | ) | (1,080 | ) | ||||||
Operating loss
|
(683 | ) | (1,162 | ) | (1,080 | ) | ||||||
Equity in earnings from subsidiaries
|
107,583 | 76,082 | 40,834 | |||||||||
Other non operating income (loss)
|
5,696 | 1,461 | (104 | ) | ||||||||
Earnings before income taxes
|
112,596 | 76,381 | 39,650 | |||||||||
Income taxes
|
- | - | - | |||||||||
Net Income
|
$ | 112,596 | 76,381 | 39,650 |
Year ended December 31,
|
||||||||||||
2007
|
2008
|
2009
|
||||||||||
(in thousands)
|
||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 112,596 | 76,381 | 39,650 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||||||
Share-based compensation expense
|
5 | 22 | 24 | |||||||||
Equity in earnings from subsidiaries
|
(107,583 | ) | (76,082 | ) | (40,834 | ) | ||||||
Changes in operating assets and liabilities:
|
||||||||||||
Other current assets
|
16,821 | 330 | (826 | ) | ||||||||
Other accrued expenses and other current liabilities
|
(499 | ) | 78 | 654 | ||||||||
Net cash provided by (used in) operating activities
|
21,340 | 729 | (1,332 | ) | ||||||||
Net cash used in investing activities
|
(24,141 | ) | (8,481 | ) | (11,400 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Distribution of cash dividends
|
(39,710 | ) | (66,817 | ) | (55,496 | ) | ||||||
Proceeds from borrowing of short-term debt
|
- | - | 80,000 | |||||||||
Repayment of short-term debt
|
- | - | (80,000 | ) | ||||||||
P
roceeds from issue of RSUs from a subsidiary
|
4,853 | 7,540 | 6,598 | |||||||||
Proceeds from debt from a subsidiary
|
- | 60,000 | 95,400 | |||||||||
Acquisitions of ordinary shares for retirement
|
(39,345 | ) | (8,656 | ) | (36,596 | ) | ||||||
Net cash provided by (used in) financing activities
|
(74,202 | ) | (7,933 | ) | 9,906 | |||||||
Net decrease in cash
|
(77,003 | ) | (15,685 | ) | (2,826 | ) | ||||||
Cash at beginning of year
|
95,591 | 18,588 | 2,903 | |||||||||
Cash at end of year
|
$ | 18,588 | 2,903 | 77 | ||||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Interest paid during the year:
|
$ | - | - | 3 |
|
1.
|
The name of the Company is Himax Technologies, Inc.
|
|
2.
|
The Registered Office of the Company shall be at the offices of Codan Trust Company (Cayman) Limited, Century Yard, Cricket Square, Hutchins Drive, P.O. Box 2681 GT, George Town, Grand Cayman, British West Indies.
|
|
3.
|
Subject to the following provisions of this Memorandum, the objects for which the Company is established are unrestricted.
|
|
4.
|
Subject to the following provisions of this Memorandum, the Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided by Section 27(2) of The Companies Law.
|
|
5.
|
Nothing in this Memorandum shall permit the Company to carry on a business for which a licence is required under the laws of the Cayman Islands unless duly licensed.
|
|
6.
|
The Company shall not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this clause shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands.
|
|
7.
|
The liability of each member is limited to the amount from time to time unpaid on such member's shares.
|
|
8.
|
The share capital of the Company is US$300,000,000 divided into 1,000,000,000 shares of a nominal or par value of US$0.3 each.
|
|
9.
|
The Company may exercise the power contained in the Companies Law to deregister in the Cayman Islands and be registered by way of continuation in another jurisdiction.
|
SUBJECT
|
Article No. | |
Table A
|
1
|
|
Interpretation
|
2
|
|
Share Capital
|
3
|
|
Alteration Of Capital
|
4-7
|
|
Share Rights
|
8-9
|
|
Variation Of Rights
|
10-11
|
|
Shares
|
12-15
|
|
Share Certificates
|
16-21
|
|
Lien
|
22-24
|
|
Calls On Shares
|
25-33
|
|
Forfeiture Of Shares
|
34-42
|
|
Register Of Members
|
43-44
|
|
Record Dates
|
45
|
|
Transfer Of Shares
|
46-51
|
|
Transmission Of Shares
|
52-54
|
|
Untraceable Members
|
55
|
|
General Meetings
|
56-58
|
|
Notice Of General Meetings
|
59-60
|
|
Proceedings At General Meetings
|
61-65
|
|
Voting
|
66-77
|
|
Proxies
|
78-83
|
|
Corporations Acting By Representatives
|
84
|
|
No Action By Written Resolutions Of Members
|
85
|
|
Board Of Directors
|
86
|
|
Retirement of Directors
|
87-88
|
|
Disqualification Of Directors
|
89
|
|
Executive Directors
|
90-91
|
|
Alternate Directors
|
92-95
|
|
Directors’ Fees And Expenses
|
96-99
|
|
Directors’ Interests
|
100-103
|
|
General Powers Of The Directors
|
104-109
|
|
Borrowing Powers
|
110-113
|
|
Proceedings Of The Directors
|
114-123
|
|
Managers
|
124-126
|
|
Officers
|
127-130
|
|
Register of Directors and Officers
|
131
|
|
Minutes
|
132
|
|
Seal
|
133
|
|
Authentication Of Documents
|
134
|
|
Destruction Of Documents
|
135
|
|
Dividends And Other Payments
|
136-145
|
|
Reserves
|
146
|
|
Capitalisation
|
147-148
|
|
Subscription Rights Reserve
|
149
|
|
Accounting Records
|
150-154
|
|
Audit
|
155-160
|
|
Notices
|
161-163
|
|
Signatures
|
164
|
|
Winding Up
|
165-166
|
Indemnity
|
167
|
|
Amendment To Memorandum and Articles of Association
And Name of Company
|
168
|
|
Information
|
169
|
|
“Audit Committee”
|
the audit committee of the Company formed by the Board pursuant to Article 120(1) hereof, or any successor audit committee.
|
|
“Auditor”
|
the independent auditor of the Company which shall be an internationally recognized firm of independent accountants.
|
|
“Articles”
|
these Articles in their present form or as supplemented or amended or substituted from time to time.
|
|
“Board” or “Directors”
|
the board of directors of the Company or the directors present at a meeting of directors of the Company at which a quorum is present.
|
|
“capital”
|
the share capital from time to time of the Company.
|
|
“clear days”
|
in relation to the period of a notice, that period excluding the day when the notice is given or deemed to be given and the day for which it is given or on which it is to take effect.
|
|
“clearing house”
|
a clearing house
recognised by the laws of the jurisdiction in which the shares of the Company (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such jurisdiction.
|
|
“Company”
|
Himax Technologies, Inc.
|
|
“competent regulatory
authority”
|
a competent regulatory authority in the territory where
the shares of the Company (or depositary receipts therefor) are listed or quoted on a stock exchange or interdealer quotation system in such territory.
|
|
“debenture” and
|
include debenture stock and debenture stockholder
|
|
“debenture holder”
|
respectively.
|
|
“Designated Stock
|
the National Market of The Nasdaq Stock Market, Inc.
|
|
Exchange”
|
|
“dollars” and “$”
|
dollars, the legal currency of the United States of America.
|
|
“Exchange Act”
|
the Securities Exchange Act of 1934, as amended.
|
|
“head office”
|
such office of the Company as the Directors may from time to time determine to be the principal office of the Company.
|
|
“Law”
|
The Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands.
|
|
“Member”
|
a duly registered holder from time to time of the shares in the capital of the Company.
|
|
“month”
|
a calendar month.
|
“NASD”
|
National Association of Securities Dealers.
|
“NASD Rules”
|
the rules set forth in the NASD Manual.
|
|
“Notice”
|
written notice unless otherwise specifically stated and as further defined in these Articles.
|
|
“Office”
|
the registered office of the Company for the time being.
|
|
“ordinary resolution”
|
a resolution shall be an ordinary resolution when it has been passed by a simple majority of votes cast by such Members as, being entitled so to do, vote in person or, in the case of any Member being a corporation, by its duly authorised representative or, where proxies are allowed, by proxy at a general meeting of which not less than ten (10) clear days’ Notice has been duly given;
|
|
“paid up”
|
paid up or credited as paid up.
|
|
“Register”
|
the principal register and where applicable, any branch register of Members of the Company to be maintained at such place within or outside the Cayman Islands as the Board shall determine from time to time.
|
|
“Registration Office”
|
in respect of any class of share capital such place as the Board may from time to time determine to keep a branch
register of Members in respect of that class of share
|
“SEC”
|
the United States Securities and Exchange Commission.
|
|
“Seal”
|
common seal or any one or more duplicate seals of the Company (including a securities seal) for use in the Cayman Islands or in any place outside the Cayman Islands.
|
|
“Secretary”
|
any person, firm or corporation appointed by the Board to perform any of the duties of secretary of the Company and includes any assistant, deputy, temporary or acting secretary.
|
|
“special resolution”
|
a resolution shall be a special resolution when it has been passed by a majority of not less than two-thirds of votes cast by such Members as, being entitled so to do, vote in person or, in the case of such Members as are corporations, by their respective duly authorised representative or, where proxies are allowed, by proxy at a general meeting of which not less than ten (10) clear days’ Notice, specifying (without prejudice to the power contained in these Articles to amend the same) the intention to propose the resolution as a special resolution, has been duly given. Provided that, except in the case of an annual general meeting, if it is so agreed by a majority in number of the Members having the right to attend and vote at any such meeting, being a majority together holding not less than ninety-five (95) per cent. in nominal value of the shares giving that right and in the case of an annual general meeting, if it is so agreed by all Members entitled to attend and vote thereat, a resolution may be proposed and passed as a special resolution at a meeting of which less than ten (10) clear days’ Notice has been given;
|
|
“Statutes”
|
the Law and every other law of the Legislature of the Cayman Islands for the time being in force applying to or affecting the Company, its Memorandum of Association and/or these Articles.
|
|
“year”
|
a calendar year.
|
|
(a)
|
words importing the singular include the plural and vice versa;
|
|
(b)
|
words importing a gender include both gender and the neuter;
|
|
(c)
|
words importing persons include companies, associations and bodies of persons whether corporate or not;
|
|
(i)
|
“may” shall be construed as permissive;
|
|
(ii)
|
“shall” or “will” shall be construed as imperative;
|
|
(e)
|
expressions referring to writing shall, unless the contrary intention appears, be construed as including printing, lithography, photography and other modes of representing words or figures in a visible form, and including where the representation takes the form of electronic display, provided that both the mode of service of the relevant document or notice and the Member’s election comply with all applicable Statutes, rules and regulations;
|
|
(f)
|
references to any law, ordinance, statute or statutory provision shall be interpreted as relating to any statutory modification or re-enactment thereof for the time being in force;
|
|
(g)
|
save as aforesaid words and expressions defined in the Statutes shall bear the same meanings in these Articles if not inconsistent with the subject in the context;
|
|
(h)
|
references to a document being executed include references to it being executed under hand or under seal or by electronic signature or by any other method and references to a notice or document include a notice or document recorded or stored in any digital, electronic, electrical, magnetic or other retrievable form or medium and information in visible form whether having physical substance or not.
|
|
(a)
|
increase its capital by such sum, to be divided into shares of such amounts, as the resolution shall prescribe;
|
|
(b)
|
consolidate and divide all or any of its capital into shares of larger amount than its existing shares;
|
|
(c)
|
without prejudice to the powers of the Board under Article 12, divide its shares into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto respectively any preferential, deferred, qualified or special rights, privileges, conditions or such restrictions which in the absence of any such determination by the Company in general meeting, as the Directors may determine provided always that, for the avoidance of doubt, where a class of shares has been authorized by the Company no resolution of the Company in general meeting is required for the issuance of shares of that class and the Directors may issue shares of that class and determine such rights, privileges, conditions or restrictions attaching thereto as aforesaid, and further provided that where the Company issues shares which do not carry voting rights, the words “non-voting” shall appear in the designation of such shares and where the equity capital includes shares with different voting rights, the designation of each class of shares, other than those with the most favourable voting rights, must include the words “restricted voting” or “limited voting”;
|
|
(d)
|
sub-divide its shares, or any of them, into shares of smaller amount than is fixed by the Memorandum of Association (subject, nevertheless, to the Law), and may by such resolution determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may have any such preferred, deferred or other rights or be subject to any such restrictions as compared with the other or others as the Company has power to attach to unissued or new shares;
|
|
(e)
|
cancel any shares which, at the date of the passing of the resolution, have not been taken, or agreed to be taken, by any person, and diminish the amount of its capital by the amount of the shares so cancelled or, in the case of shares, without par value, diminish the number of shares into which its capital is divided.
|
(a)
|
the necessary quorum (whether at a separate general meeting or at its adjourned meeting) shall be a person or persons (or in the case of a Member being a corporation, its duly authorized representative) together holding or representing
|
|
(b)
|
every holder of shares of the class shall be entitled on a poll to one vote for every such share held by him; and
|
|
(c)
|
any holder of shares of the class present in person or by proxy or authorised representative may demand a poll.
|
34.
|
1)
|
If a call remains unpaid after it has become due and payable the Board may give to the person from whom it is due not less than fourteen (14) clear days’ Notice:
|
|
(a)
|
requiring payment of the amount unpaid together with any interest which may have accrued and which may still accrue up to the date of actual payment; and
|
|
(b)
|
stating that if the Notice is not complied with the shares on which the call was made will be liable to be forfeited.
|
|
(a)
|
the name and address of each Member, the number and class of shares held by him and the amount paid or agreed to be considered as paid on such shares;
|
|
(b)
|
the date on which each person was entered in the Register; and
|
|
(c)
|
the date on which any person ceased to be a Member.
|
|
(a)
|
a fee of such maximum sum as the Designated Stock Exchange may determine to be payable or such lesser sum as the Board may from time to time require is paid to the Company in respect thereof;
|
|
(b)
|
the instrument of transfer is in respect of only one class of share;
|
|
(c)
|
the instrument of transfer is lodged at the Office or such other place at which the Register is kept in accordance with the Law or the Registration Office (as the case may be) accompanied by the relevant share certificate(s) and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer (and, if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do); and
|
|
(d)
|
if applicable, the instrument of transfer is duly and properly stamped.
|
|
(a)
|
all cheques or warrants in respect of dividends of the shares in question, being not less than three in total number, for any sum payable in cash to the holder of such shares in respect of them sent during the relevant period in the manner authorised by the Articles of the Company have remained uncashed;
|
|
(b)
|
so far as it is aware at the end of the relevant period, the Company has not at any time during the relevant period received any indication of the existence of the Member who is the holder of such shares or of a person entitled to such shares by death, bankruptcy or operation of law; and
|
|
(c)
|
the Company, if so required by the rules governing the listing of shares on the Designated Stock Exchange, has given notice to, and caused advertisement in newspapers to be made in accordance with the requirements of, the Designated Stock Exchange of its intention to sell such shares in the manner required by the Designated Stock Exchange, and a period of three months or such shorter period as may be allowed by the Designated Stock Exchange has elapsed since the date of such advertisement.
|
|
(a)
|
in the case of a meeting called as an annual general meeting, by all the Members entitled to attend and vote thereat; and
|
|
(b)
|
in the case of any other meeting, by a majority in number of the Members having the right to attend and vote at the meeting, being a majority together holding not less than ninety-five per cent. (95%) in nominal value of the issued shares giving that right.
|
|
(a)
|
by the chairman of such meeting; or
|
|
(b)
|
by at least three Members present in person or in the case of a Member being a corporation by its duly authorised representative or by proxy for the time being entitled to vote at the meeting; or
|
|
(c)
|
by a Member or Members present in person or in the case of a Member being a corporation by its duly authorised representative or by proxy and representing not less than one-tenth of the total voting rights of all Members having the right to vote at the meeting; or
|
|
(d)
|
by a Member or Members present in person or in the case of a Member being a corporation by its duly authorised representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all shares conferring that right.
|
|
(a)
|
any objection shall be raised to the qualification of any voter; or
|
|
(b)
|
any votes have been counted which ought not to have been counted or which might have been rejected; or
|
|
(c)
|
any votes are not counted which ought to have been counted;
|
|
(2)
|
becomes of unsound mind or dies;
|
|
(5)
|
is prohibited by law from being a Director; or
|
|
(a)
|
hold any other office or place of profit with the Company (except that of Auditor) in conjunction with his office of Director for such period and upon such terms as the Board may determine. Any remuneration (whether by way of salary, commission, participation in profits or otherwise) paid to any Director in respect of any such other office or place of profit shall be in addition to any remuneration provided for by or pursuant to any other Article;
|
|
(b)
|
act by himself or his firm in a professional capacity for the Company (otherwise than as Auditor) and he or his firm may be remunerated for professional services as if he were not a Director;
|
|
(c)
|
continue to be or become a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or member of any other company promoted by the Company or in which the Company may be interested as a vendor, shareholder or otherwise and (unless otherwise agreed) no such Director shall be accountable for any remuneration, profits or other benefits received by him as a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer or member of or from his interests in any such other company. Subject as otherwise provided by these Articles the Directors may exercise or cause to be exercised the voting powers conferred by the shares in any other company held or owned by the Company, or exercisable by them as Directors of such other company in such manner in all respects as they think fit (including the exercise thereof in favour of any resolution appointing themselves or any of them directors, managing directors, joint managing directors, deputy managing directors, executive directors, managers or other officers of such company) or voting or providing for the payment of remuneration to the director, managing director, joint managing director, deputy managing director, executive director, manager or other officers of such other company and any Director may vote in favour of the exercise of such voting rights in manner aforesaid notwithstanding that he may be, or about to be, appointed a director, managing director, joint managing director, deputy managing director, executive director, manager or other officer of such a company, and that as such he is or may become interested in the exercise of such voting rights in manner aforesaid.
|
|
(a)
|
he is a member or officer of a specified company or firm and is to be regarded as interested in any contract or arrangement which may after the date of the Notice be made with that company or firm; or
|
|
(b)
|
he is to be regarded as interested in any contract or arrangement which may after the date of the Notice be made with a specified person who is connected with him;
|
|
(a)
|
To give to any person the right or option of requiring at a future date that an allotment shall be made to him of any share at par or at such premium as may be agreed.
|
|
(b)
|
To give to any Directors, officers or employees of the Company an interest in any particular business or transaction or participation in the profits thereof or in the general profits of the Company either in addition to or in substitution for a salary or other remuneration.
|
|
(c)
|
To resolve that the Company be deregistered in the Cayman Islands and continued in a named jurisdiction outside the Cayman Islands subject to the provisions of the Law.
|
|
(a)
|
of all elections and appointments of officers;
|
|
(b)
|
of the names of the Directors present at each meeting of the Directors and of any committee of the Directors;
|
|
(c)
|
of all resolutions and proceedings of each general meeting of the Members, meetings of the Board and meetings of committees of the Board and where there are managers, of all proceedings of meetings of the managers.
|
|
(2)
|
Minutes shall be kept by the Secretary at the Office.
|
|
(a)
|
any share certificate which has been cancelled at any time after the expiry of one (1) year from the date of such cancellation;
|
|
(b)
|
any dividend mandate or any variation or cancellation thereof or any notification of change of name or address at any time after the expiry of two (2) years from the date such mandate variation cancellation or notification was recorded by the Company;
|
|
(c)
|
any instrument of transfer of shares which has been registered at any time after the expiry of seven (7) years from the date of registration;
|
|
(d)
|
any allotment letters after the expiry of seven (7) years from the date of issue thereof; and
|
|
(e)
|
copies of powers of attorney, grants of probate and letters of administration at any time after the expiry of seven (7) years after the account to which the relevant power of attorney, grant of probate or letters of administration related has been closed;
|
|
(a)
|
all dividends shall be declared and paid according to the amounts paid up on the shares in respect of which the dividend is paid, but no amount paid up on a share in advance of calls shall be treated for the purposes of this Article as paid up on the share; and
|
|
(b)
|
all dividends shall be apportioned and paid pro rata according to the amounts paid up on the shares during any portion or portions of the period in respect of which the dividend is paid.
|
|
(a)
|
that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the Members entitled thereto will be entitled to elect to receive such dividend (or part thereof if the Board so determines) in cash in lieu of such allotment. In such case, the following provisions shall apply:
|
|
(i)
|
the basis of any such allotment shall be determined by the Board;
|
|
(ii)
|
the Board, after determining the basis of allotment, shall give not less than ten (10) days’ Notice to the holders of the relevant shares of the right of election accorded to them and shall send with such notice forms of election and specify the procedure to be followed and the place at which and the latest date and time by which duly completed forms of election must be lodged in order to be effective;
|
|
(iii)
|
the right of election may be exercised in respect of the whole or part of that portion of the dividend in respect of which the right of election has been accorded; and
|
|
(iv)
|
the dividend (or that part of the dividend to be satisfied by the allotment of shares as aforesaid) shall not be payable in cash on shares in respect whereof the cash election has not been duly exercised (“the non-elected shares”) and in satisfaction thereof shares of the relevant class shall be allotted credited as fully paid up to the holders of the non-elected shares on the basis of allotment determined as aforesaid and for such purpose the Board shall capitalise and apply out of any part of the undivided profits of the Company (including profits carried and standing to the credit of any reserves or other special account, share premium account, capital redemption reserve other than the Subscription Rights Reserve) as the Board may determine, such sum as may be required to pay up in full the appropriate number of shares of the relevant class for allotment and distribution to and amongst the holders of the non-elected shares on such basis; or
|
|
(b)
|
that the Members entitled to such dividend shall be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as the Board may think fit. In such case, the following provisions shall apply:
|
|
(i)
|
the basis of any such allotment shall be determined by the Board;
|
|
(ii)
|
the Board, after determining the basis of allotment, shall give not less than ten (10) days’ Notice to the holders of the relevant shares of the right of election accorded to them and shall send with such notice forms of election and specify the procedure to be followed and the place at which and the latest date and time by which duly completed forms of election must be lodged in order to be effective;
|
|
(iii)
|
the right of election may be exercised in respect of the whole or part of that portion of the dividend in respect of which the right of election has been accorded; and
|
(iv)
|
the dividend (or that part of the dividend in respect of which a right of election has been accorded) shall not be payable in cash on shares in respect whereof the share election has been duly exercised (“the elected shares”) and in lieu thereof shares of the relevant class shall be allotted credited as fully paid up to the holders of the elected shares on the basis of allotment determined as aforesaid and for such purpose the Board shall capitalise and apply out of any part of the undivided profits of the Company (including profits carried and standing to the credit of any reserves or other special account, share premium account, capital redemption reserve other than the Subscription Rights Reserve) as the Board may determine, such sum as may be required to pay up in full the appropriate number of shares of the relevant class for allotment and distribution to and amongst the holders of the elected shares on such basis.
|
|
(2)
|
(a)
|
The shares allotted pursuant to the provisions of paragraph (1) of this Article shall rank pari passu in all respects with shares of the same class (if any) then in issue save only as regards participation in the relevant dividend or in any other distributions, bonuses or rights paid, made, declared or announced prior to or contemporaneously with the payment or declaration of the relevant dividend unless, contemporaneously with the announcement by the Board of their proposal to apply the provisions of sub-paragraph (a) or (b) of paragraph (2) of this Article in relation to the relevant dividend or contemporaneously with their announcement of the distribution, bonus or rights in question, the Board shall specify that the shares to be allotted pursuant to the provisions of paragraph (1) of this Article shall rank for participation in such distribution, bonus or rights.
|
|
|
(b)
|
The Board may do all acts and things considered necessary or expedient to give effect to any capitalisation pursuant to the provisions of paragraph (1) of this Article, with full power to the Board to make such provisions as it thinks fit in the case of shares becoming distributable in fractions (including provisions whereby, in whole or in part, fractional entitlements are aggregated and sold and the net proceeds distributed to those entitled, or are disregarded or rounded up or down or whereby the
|
|
(1)
|
If, so long as any of the rights attached to any warrants issued by the Company to subscribe for shares of the Company shall remain exercisable, the Company does any act or engages in any transaction which, as a result of any adjustments to the subscription price in accordance with the provisions of the conditions of the warrants, would reduce the subscription price to below the par value of a share, then the following provisions shall apply:
|
|
(a)
|
as from the date of such act or transaction the Company shall establish and thereafter (subject as provided in this Article) maintain in accordance with the provisions of this Article a reserve (the “Subscription Rights Reserve”) the amount of which shall at no time be less than the sum which for the time being would be required to be capitalised and applied in paying up in full the nominal
amount of the additional shares required to be issued and allotted credited as fully paid pursuant to sub-paragraph (c) below on the exercise in full of all the subscription rights outstanding and shall apply the Subscription Rights Reserve in paying up such additional shares in full as and when the same are allotted;
|
|
(b)
|
the Subscription Rights Reserve shall not be used for any purpose other than that specified above unless all other reserves of the Company (other than share premium account) have been extinguished and will then only be used to make good losses of the Company if and so far as is required by law;
|
|
(c)
|
upon the exercise of all or any of the subscription rights represented by any warrant, the relevant subscription rights shall be exercisable in respect of a nominal amount of shares equal to the amount in cash which the holder of such warrant is required to pay on exercise of the subscription rights represented thereby (or, as the case may be the relevant portion thereof in the event of a partial exercise of the subscription rights) and, in addition, there shall be allotted in respect of such subscription rights to the exercising warrantholder, credited as fully paid, such additional nominal amount of shares as is equal to the difference between:
|
|
(i)
|
the said amount in cash which the holder of such warrant is required to pay on exercise of the subscription rights represented thereby (or, as the case may be, the relevant portion thereof in the event of a partial exercise of the subscription rights); and
|
|
(ii)
|
the nominal amount of shares in respect of which such subscription rights would have been exercisable having regard to the provisions of the conditions of the warrants, had it been possible for such subscription rights to represent the right to subscribe for shares at less than par and immediately upon such exercise so much of the sum standing to the credit of the Subscription Rights Reserve as is required to pay up in full such additional nominal amount of shares shall be capitalised and applied in paying up in full such additional nominal amount of shares which shall forthwith be allotted credited as fully paid to the exercising warrantholders; and
|
|
(d)
|
if, upon the exercise of the subscription rights represented by any warrant, the amount standing to the credit of the Subscription Rights Reserve is not
|
|
(a)
|
if served or delivered by post, shall where appropriate be sent by airmail and shall be deemed to have been served or delivered on the day following that on which the envelope containing the same, properly prepaid and addressed, is put into the post; in proving such service or delivery it shall be sufficient to prove that the envelope or wrapper containing the notice or document was properly addressed and put into the post and a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board that the envelope or wrapper containing the notice or other document was so addressed and put into the post shall be conclusive evidence thereof;
|
|
(b)
|
if sent by electronic communication, shall be deemed to be given on the day on which it is transmitted from the server of the Company or its agent. A notice placed on the Company’s website is deemed given by the Company to a Member on the day following that on which a notice of availability is deemed served on the Member;
|
|
(c)
|
if served or delivered in any other manner contemplated by these Articles, shall be deemed to have been served or delivered at the time of personal service or delivery or, as the case may be, at the time of the relevant despatch or transmission; and in proving such service or delivery a certificate in writing signed by the Secretary or other officer of the Company or other person appointed by the Board as to the act and time of such service, delivery, despatch or transmission shall be conclusive evidence thereof; and
|
(d)
|
may be given to a Member either in the English language or the Chinese language, subject to due compliance with all applicable Statutes, rules and regulations.
|
Article 1
|
Location of the Premises
|
1.1
|
Party A agrees to provide a certain area of a plant facility located at 12 Nanke 8th Road, Tainan Science and Industrial Park, for Party B to research, develop, design, experiment, and establish a clean room for the production of Liquid Crystal on Silicon (L-COS).
|
1.2
|
The square measure provided by Party A to Party B is 2980 square
meters.
|
Article 2
|
Administrative Management
|
2.1
|
Personnel of Party B shall obey and act in compliance with all the administrative, management and operational regulations and processing directives of the plant.
|
2.2
|
Party B shall pay a management fee of NT$708,000 (tax excluded) to Party A monthly, as prescribed in Appendix I.
|
2.3
|
Party B shall buy all necessary insurances, liability insurances, or arrange necessary risk management measures for the benefit of the properties located and personnel worked in the premises.
|
2.4
|
Party B represents and warrants that business operations and production activities engaged within the premises will not disturb Party A as a result of an argument and/or dispute between a third person and Party B or its personnel. In the event where Party A, its representative, or personnel suffers, Party B shall be liable for the damages. If the damage is substantial, Party A is entitled to terminate this Agreement immediately.
|
2.5
|
With respect to payments of management fee, the following, without limitation, shall be taken into account:
|
|
1.
|
cost of land used;
|
|
2.
|
cost of plant construction;
|
|
3.
|
cost of monthly water and electricity supply; and
|
|
4.
|
cost of special gas and high-pressure electricity.
|
2.6
|
The management fee mentioned above may be adjusted reasonably and fairly upon the agreement of the parties based on the actual usage and costs of the premises.
|
2.7
|
When Party B moves to another office, it shall compensate Party A for the expenses in connection with remaining interior design, physical facilities and damages.
|
Article 3
|
Clean Room
|
|
Area to be used by Party B: Party A agrees to provide an area prescribed in Appendix II for Party B.
|
Article 4
|
Supply and Management of Energy
|
4.1
|
Party A shall provide power and energy for Party B’s L-COS production. Party B shall collaborate with Party A, providing Party A necessary assistance (such as planning on water and power usage), so that Party A may provide Party B all the necessary power and utility.
|
4.2
|
Party B shall, depending on the actual volume of its usage, pay Party A every month a fee of energy supply and management. Computation of such fee is prescribed in Appendix III.
|
Article 5
|
Confidentiality
|
5.1
|
During the term of this Agreement, the parties shall treat this
Agreement, the information provided by the counter party, and/or any and all information of the counter party which may be known or accessed due to this Agreement confidential and shall not disclose to the third parties for any usage for the benefits of itself or others; the confidentiality obligation set herein shall survive even if this Agreement is expired or terminated.
|
5.2
|
The parties shall enter non-disclose agreement including the same
confidentiality obligations as set forth above with their employees to ensure their employees shall not disclose the other party’s trade secrets. If there is any breach of the confidentiality obligations set herein, the breaching party shall indemnify the damages incurred to the other party.
|
Article 6
|
Work Safety
|
6.1
|
Hazard Prevention Center and emergency response: Party B shall share the costs of supporting the Hazard Prevent Center in accordance with the area of its lease, which is prescribed in Appendix IV. Party B shall establish an emergency response team, which shall collaborate with Party A in emergencies in accordance with the emergency response procedures of Party A.
|
6.2
|
Fire control examination: Party B shall conduct maintenance and repair of fire control facilities within the premises, and share the costs prescribed in Appendix IV.
|
6.3
|
Public safety and hygiene management: Party B shall be responsible for providing safety and hygiene within the premises in accordance with the applicable laws and regulations, conduct public safety examinations in collaboration with Party A, and share relevant costs in proportion to the area it used.
|
6.4
|
Management of Party B’s contractors: Party B and its contractors shall comply with the contractors’ management rules promulgated by Party A, as prescribed in Appendix V.
|
6.5
|
Waste disposal: Party B shall, in accordance with applicable laws and regulations, dispose wastes generated in the course of producing L-COS.
|
6.6
|
Party B shall not store any illicit or illegal goods at Party A’s plant.
|
6.7
|
Party B shall comply with the standard of applicable laws when releasing the waste gas and sewage; if Party B is seized by the governing authorities, environmental protection bureau, or Party A of any illegal emission which is attributable to Party B, Party B shall pay the fine to the authorities and Party A may issue a penalty statement to Party B and claim the penalty in accordance with item 9.4 of Contract Safety and Sanitation Penalty Clauses attached hereto; the penalty amount shall be then upon further agreement by the parties.
|
6.8
|
If Party B breaches Section 6.7 set above, Party A may increase the waste gas or sewage process fee based on the breach and the price shall be then upon further agreement by the parties; however, if Party B repeatedly fails to meet applicable environmental protection regulation standard, and does not improve upon Party A’s notice, Party A may have Party B cease emission, and Party B shall handle the waste gas and sewage incurred thereof properly in compliance with applicable environmental protection regulations.
|
Article 7
|
Changes of Fees
|
7.1
|
In the event where Party B increases its staff or expands its area usage, it shall pay Party A additional fees regarding the area, water and power utilities and other fees.
|
7.2
|
In the event where extra fees are incurred due to Party B’s requirement regarding equipment (such as telephones) or its maintenance, such amounts shall become payable in the first month of the following year.
|
Article 8
|
Payments
|
Article 9
|
Maintenance
|
9.1
|
With respect to the usage and entry of the premises specified in this Agreement, Party B shall exercise due care as a faithful manager to safekeep, maintain, and repair relevant facilities, and shall comply with the management rules promulgated by Party A. With respect to facilities out of Party B’s reach (such as air conditioning and fire control system), Party B may engage Party A to provide assistance.
|
9.2
|
Party B shall not alter or add structures and exterior of the premises and the internal office facilities without Party A’ consent.
|
Article 10
|
Representations and Warranties
|
10.1
|
The parties represent and warrant that this Agreement is executed by their duly authorized representatives.
|
10.2
|
The parties represent and warrant that execution of this Agreement will not breach another contract, agreement, or obligation in any form having been made by either party with a third party.
|
Article 11
|
Breach and Remedies
|
Article 12
|
Term and Termination
|
12.1
|
This Agreement shall become effective on January 1, 2010 and expire on December 31, 2010.
|
12.2
|
The term of this Agreement shall automatically extend by a period of one year unless with a written notice to terminate this Agreement within 60 days prior to its expiration.
|
12.3
|
This Agreement may be terminated if either party commits a breach or is financially exhausted, provided that the other party shall give such party a 60-days’ prior written notice.
|
12.4
|
This Agreement may be terminated at any time upon the written consent of both parties.
|
12.5
|
This Agreement shall terminate immediately in the event of liquidation, reorganization, or bankruptcy of either party.
|
12.6
|
The detailed items of maintenances and maintenance fee may be
amended annually upon the consent of both parties.
|
Article 13
|
Restoration
|
Article 14
|
Amendment and Assignment
|
14.1
|
Amendment of this Agreement shall be done by duly authorized representatives of the parties.
|
14.2
|
Without prior written consent of the parties, this Agreement may not be assigned to any third person; provided, however, that in the event that Party B desires to terminate this Agreement as a result of a change in its business or an internal restructure, Party B shall notify Party A of such event immediately in writing. In the event of termination by the foregoing, Party B shall cause the new business affiliate to enter into an agreement with the same terms and conditions of this Agreement. Until the new business affiliate enters into the aforementioned agreement with Party A, the termination of this Agreement pursuant to
|
14.3
|
Party B shall not permit any third person to use the premises without consent of Party A.
|
Article 15
|
Governing Law and Jurisdiction
|
Article 16
|
Partial invalidation
|
16.1
|
The non-affected part shall continue valid and effective when any clause of this Agreement is determined invalid.
|
16.2
|
Any addition, deletion and amendments to this Agreement shall be done in writing by the parties.
|
16.3
|
The heading of each article and item in this Agreement is for the parties’ conveniences of references and reading and shall not be used to explain, restrict, or affect the meaning that each article and item shall refer.
|
Article 17
|
Integration
|
17.1
|
The content of this Agreement and the appendices attached hereto evidence the complete agreement between the parties. The parties shall not be restricted by any mutual agreement or commitment made prior to this Agreement, if it is not stated in this Agreement or the appendices attached hereto.
|
17.2
|
This Agreement and the appendices attached hereto are in the same effectiveness; however, if there is any conflict, this Agreement shall prevail.
|
Article 18
|
Assignment and Transfer
|
Article 19
|
Copies of Agreement
|
/Seals/
Chimei Innolux Corporation
Representative: Liao Jin-xiang
Unified Code: 16130303
Address: 3 Section 1 Huan Xi Rd., Tainan Science and Industrial Park, Tainan County
Telephone: 06-505-1888
|
/Seals/
Himax Display Inc.
Representative: Wu Bing-sheng
Unified Code: 13111296
Address: 12 Nanke 8th Rd., Tainan Science and Industrial Park, Tainan County
Telephone: 06-505-6888
|
Category
|
Item
|
CHI MEI PLANT
|
Remarks
|
|||||||
Cost
|
Depreciation
|
Unit Price (Depreciated)
|
Amount
|
Unit
|
Cost
|
Maintenance Cost
|
Total Cost
|
|||
Location
|
Office Area 55%
|
151
|
410
|
n2
|
61,910
|
61,910
|
$500 per
ping
|
|||
Office Area Public Amenities 45%
|
151
|
335
|
n2
|
50,585
|
50,585
|
|||||
Clean Room 55%
|
151
|
1,047
|
n2
|
158,097
|
158,097
|
|||||
Clean Room Public Amenities 45%
|
151
|
857
|
n2
|
129,407
|
129,407
|
|||||
Outdoor Dock and Sewage Tank 55%
|
20
|
182
|
n2
|
3,636
|
3,636
|
|||||
Outdoor Dock and Sewage Tank 45%
|
20
|
149
|
n2
|
2,975
|
2,975
|
|||||
Sub
-
total
|
2,980
|
n2
|
406,610
|
Interior Decoration
|
Office Desk/ Chair/ Partition
|
-
|
6
|
-
|
1
|
Set
|
0
|
0
|
0
|
Already paid
|
Major Interior Decoration
|
1,300,178
|
26
|
4,167
|
1
|
Month
|
4,167
|
0
|
0
|
Total 59 month (January 2010 – November 2014): 1,300,178 – 4,167*59 = 1,054,325
|
|
Light Partition
|
1,950,000
|
26
|
6,250
|
1
|
Month
|
6,250
|
0
|
6,250
|
||
Ceiling
|
620,000
|
26
|
1,987
|
1
|
Month
|
1,987
|
0
|
1,987
|
||
Seamless Flooring
|
400,000
|
26
|
1,282
|
1
|
Month
|
1,282
|
0
|
1,282
|
||
Conference room Whiteboard/ Notice Board
|
-
|
6
|
-
|
0
|
Item
|
0
|
0
|
0
|
Already paid
|
|
Shoe Cabinet
|
-
|
6
|
-
|
0
|
Item
|
0
|
0
|
0
|
Already paid
|
|
Facility
|
Network Equipment
|
-
|
4
|
-
|
1
|
Month
|
0
|
0
|
0
|
|
Telephone System
|
-
|
6
|
-
|
1
|
Month
|
0
|
0
|
0
|
||
Air Conditioning
|
2,305,148
|
Equipment cost maintenance fee (effective from January, 2010)
|
21,344
|
1
|
Month
|
21,344
|
46,103
|
67,447
|
||
Electrical Equipment
|
853,400
|
7,902
|
1
|
Month
|
7,902
|
17,068
|
24,970
|
|||
Firefighting Equipment
|
500,000
|
4,630
|
1
|
Month
|
4,630
|
10,000
|
14,630
|
|||
Kitchen Equipment
|
433,609
|
6,022
|
1
|
Month
|
6,022
|
8,672
|
14,694
|
NT.15,740,000 per 1815 uses * 50 people
|
||
ID Card System
|
234,250
|
3,253
|
1
|
Month
|
3,253
|
4,685
|
7,938
|
NT.9,370,000 per 200 sets * 5 sets
|
||
Surveillance System
|
409,655
|
5,690
|
1
|
Month
|
5,690
|
8,193
|
13,883
|
NT.19,800,000 per 145 sets * 3 sets
|
||
Projector Screen
|
-
|
6
|
-
|
1
|
Month
|
0
|
0
|
0
|
Already paid
|
|
Sub-total
|
9,006,240
|
62,527
|
94,721
|
153,081
|
Electricity & Water
|
Water Cost
|
27
|
65
|
Person
|
1,755
|
0
|
1,755
|
Excludes clean room
|
||
Lighting/Operational Equipment Electricity Cost
|
148.3
|
410
|
m2
|
60,803
|
0
|
60,803
|
Excludes clean room
|
|||
Air Conditioning Electricity Cost
|
108.8
|
410
|
m2
|
44,608
|
0
|
44,608
|
Excludes clean room
|
|||
Fees
|
MIS Service Fee
|
1
|
Month
|
0
|
0
|
0
|
||||
Office Cleaning
|
25,000
|
0.0
|
Man hour
|
0
|
0
|
0
|
||||
Public Area Cleaning
|
112
|
65
|
Person
|
7,280
|
0
|
7,280
|
||||
Green Belt Plants
|
41
|
65
|
Person
|
2,665
|
0
|
2,665
|
||||
Lobby Reception
|
19
|
0
|
Person
|
0
|
0
|
0
|
||||
Administration Service Fee
|
35,000
|
0
|
Person
|
0
|
0
|
0
|
||||
Garbage Cleaning and Disposal
|
40Kg/person * 2.65
|
106
|
65
|
Person
|
6,890
|
0
|
6,890
|
NT.2,605/ton
|
||
Security
|
315
|
65
|
Person
|
20,475
|
0
|
20,475
|
||||
Medical
|
50
|
65
|
Person
|
3,250
|
0
|
3,250
|
||||
Washroom Supplies (e.g. toilet paper)
|
17
|
65
|
Person
|
1,105
|
0
|
1,105
|
||||
Parking Space (13 basic parking spots)
|
0
|
0
|
For each space over 13, additional charge of NT.2300 per month
|
|||||||
Fire Inspection
|
0
|
0
|
||||||||
Sub-total
|
148,831
|
|||||||||
Total
|
Rent (excludes tax)
|
708,552
|
C.M.O.
LCM Plant Himax Display Opto-Electronics Project
Compressed Dry Air (CDA) Cost Calculation Table
|
||||
Fixed
Cost
|
(1) Investment Cost
|
|||
Name
|
Total Investment Amount
|
Monthly Cost (amortized over 5 years)
|
Remarks
|
|
Screw Air Compressor
|
NT.13345716
|
NT.185358
|
||
Air Dryer
|
NT.8555144
|
NT.118822
|
||
Pipeline
|
NT.39484094
|
NT.548390
|
||
Sub-Total
|
NT.61384954
|
NT.852570 per month
|
||
(2) Land and Infrastructure Investment Cost
|
||||
Amortized Monthly Total
(852570)/0.7*0.3
|
NT.365387 per month
|
|||
(3) Equipment, Land and one-time Power Supply Work Total Investment Cost Monthly Interest
|
||||
((1) + (2)) * 0.5% (annual interest rate 6%)
|
NT.6090 per month
|
|||
Sub-Total: (1) + (2) +(3) = 852570 + 365387 +6090
= NT.1224047 per month
|
||||
Fixed Cost: 1224047/8752 CMH = NT.140/CMH–month) = NT.0.194 CMH-HR)
Note: 8752 CMH: (2188 CMH/SET * 4 SETS = 8752 CMH)
|
1.
|
Share in for one-fifth of the burden for the following distributors
|
2.
|
Share in one half of the burden for the following distributors
|
3.
|
Emergency Power Supply
|
Year 2003
|
Year 2004
|
|||||
Month
|
September
|
October
|
November
|
December
|
January
|
February
|
Hyperpure Water Usage (M
3
)
|
100
|
|||||
Monthly Sewage Charge
|
0
|
|||||
Cumulative Flow Rate at Start of Month
|
100
|
|||||
Cumulative Flow Rate at End of Month
|
200
|
|||||
Hyperpure Water Charge =
|
Monthly Volume (M
3
) * unit price
|
Unit price
|
Monthly Sewage Charge * 1.3
|
Monthly Sewage Charge
|
||
100
|
40
|
1.3
|
5200
|
Total Annual Cost
|
Floor Square Measure M
2
|
Price/M
2
/Year
|
Rental M
2
|
Rental Cost/Year
|
Interest 5%/Year
|
Monthly Cost
|
Average Cost/M
2
/Month
|
Average Unit Cost/Ping/Month
|
1,512,000
|
206,569
|
7.32
|
2,980
|
21,812
|
1,091
|
1,909
|
0.6
|
2.1
|
Total Annual Cost
|
Floor Square MeasureM
2
|
RentalM
2
|
Unit Cost/M
2
/Month
|
Unit Cost/Ping/Month
|
361,350
|
206,569
|
2,980
|
1.7
|
6
|
Category
|
Item
|
Violation
|
Disposal
|
Penalty Amount
(NT)
|
Work Permit
|
1-1
|
Did not return daily work permit on time (including emergency maintenance sheet, special operation checklist).
|
Review and Improvement
|
1,000 each
|
1-2
|
Work permit or Inter Link by-pass application not displayed at work site (ready for examination in case of display difficulty).
|
Improvement and then return to work
|
1,000 each
|
|
1-3
|
Use of equipment not verified for use by this company. (Such as arc welders); or alteration after verification without re-verification
|
No use of such equipment
|
5,000 each
|
|
1-4
|
Did not apply for work permit or a permit for special operations. (such as elevation, sealed space , use of naked flame, combination and allocation of construction frame, electricity transmission, disassembly/ dig of dangerous pipe, suspension, Inter Lock by-pass, open line operation…and etc.)
|
Suspension of work
|
5,000 each
|
|
1-5
|
Use of dangerous equipment regulated by applicable laws not performed by qualified certificate (including
personnel involved in work
)
|
Suspension of work
|
above10,000
|
|
1-6
|
Did not attend the work safty meeting held by the outsourcing contractor; or did not notify the personnel or subcontractors involved in work with the resolutions and meeting minutes made by such meeting.
|
Suspension of work
|
above10,000
|
|
1-7
|
Contractor did not hold workbox meeting prior to that day (or tomorrow’s) operations; did not hold a co-operation meeting to appoint a co-operation supervisor; did not pan and implement the auto check and keep records for examination.
|
Improvement and then return to work
|
3,000 each
|
Plant Maintenance and Security
|
2-1
|
Photographed or videotaped without permission (traditional camera-->confiscate film; digital camera-->delete memory).
|
Expel from the fab
|
3,000 each
|
2-2
|
Unauthorized removal or use of items such as the company’s electrical equipment and warning signs etc.
|
Improvement and then return to work
|
3,000 each
|
|
2-3
|
If causing equipment damages, the contractor is responsible for immediately arranging for its repair. (including other contractors’ equipment)
|
Immediate repair
|
3,000 each
|
|
2-4
|
Personnel
’
s negligence
that may result in the company
’
s asset
or personnel damages and losses (Indemnification shall be made subject to
the real price of damages and losses which may occur.)
|
Review meeting
|
3,000 each
|
|
2-5
|
Unauthorized use of electrical (must use authorized electrical distribution board), water or gas sources.
|
Improvement and then return to work
|
10,000 each
|
|
2-6
|
Operation without appropriate isolation or protection measures that activates the alarm system
|
Suspension of work
|
above 10,000
|
|
2-7
|
No appropriate protection measures taken against events with potential risks.
|
Suspension of work
|
above 10,000
|
|
Command and Control Operations
|
3-1
|
Personnel involved in work did not dress appropriately, wear badge on obvious place, or comply with the working rules to rest or dine in the rest area.
|
Improvement and then return to work
|
500 each
|
3-2
|
Did not wear safety hamlet when riding motorcycle on site (wearing working hamlet would be deemed as no wearing of safety hamlet.)
|
Expel from the fab
|
500 each
|
|
3-3
|
Personnel Management:
Personnel operated without working permit or wearing identification badge (such as working on site wearing a guest badge), or carried or drank alcoholic beverages. (such as Whisbih type drinks), betel nuts and other contraband goods.
|
Review and improvement
|
3,000 each
|
|
3-4
|
Vehicle Management:
Vehicle did not have identification badge, did not parked as directed, or blocked traffic;
drove a vehicle at a speed which caused risks of danger (exceeding the speed limit of each site; if there was no specific speed limit, the speed limit should be 20Km/hr).
|
Expel such personnel and vehicle from the fab
|
3,000 each
|
|
3-5
|
Contractor’s site supervisor and safety/sanitation personnel did not attend safety and sanitation related meeting held by this company without causes.
|
Review meeting
|
3,000 each
|
|
3-6
|
No personnel on site to command and coordinate when discharging of cargo.
|
Improvement and then return to work
|
3,000 each
|
|
3-7
|
Safety/Sanitation supervision personnel not appointed at site or such personnel did not wear identification vest/armband.
|
Improvement and then return to work
|
3,000 each
|
|
3-8
|
Personnel involved in work did not complete the safety and sanitation training course before starting work inside plant.
|
Expel from the fab
|
5,000 each
|
|
3-9
|
Special operations with less than two personnel in co-operation (such as elevation, sealed space , use of naked flame, combination and allocation of construction frame, electricity transmission, disassembly/ dig of dangerous pipe, suspension, Inter Lock by-pass, open line operation…and etc.)
|
Improvement and then return to work
|
5,000 each
|
|
3-10
|
Using other personnel’s identification badge to enter the site; personnel or vehicle entering or leaving the plant without the permission of the security staff.
|
Expel from the fab
|
10,000 each
|
|
3-11
|
Special operations, no commander/ supervisor or relevant operation manager appointed on site (such as elevation, sealed space , use of naked flame, combination and allocation of construction frame,…and etc.)
|
Suspension of work
|
10,000 each
|
|
3-12
|
Did not comply with relevant signed recycling field regulations (such as covering protection mask when carrying and delivery flakily waste, leaving fab records, …and etc.)
|
Review meeting
|
5,000 each
|
Fire Prevention
|
5-1
|
Chemicals brought into the fab were not approved by relevant regulations or no mark of danger was attached to the obvious part of such containers.
|
Bring out of the fab immediately
|
1,000 each
|
5-2
|
1. Oxygen, acetylene and other steel cylinders not secured vertically or appropriately labeled.
2. Gas cylinders in use not placed on trolley.
3. Gas pipe lying across road.
|
Immediate improvement
|
1,500 each
|
|
5-3
|
Unauthorized use or damage of firefighting equipment in the absence of an emergency. (Such as using fire hose to hoist equipment, get water or displacement of firefighting equipment)
|
Immediate reinstatement and indemnity
|
3,000 each
|
|
5-4
|
No smoking in non-smoking areas.
|
Notice the supervi
sor and control
|
3,000 each
|
|
5-5
|
Insufficient protective measures in flammable and combustible liquid work area
|
Return to work after improvement
|
3,000 each
|
|
5-6
|
1. During open flame operations at least two fire extinguishers must be supplied by contractor within a five meter radius. (each at least 10 pounds, with CO2 extinguishers to be used in clean room)
2. Fire extinguisher pressure indicator should be normal, and still within the expiry date.
|
Return to work after
|
3,000 each
|
|
5-7
|
1. Electric arc welder casing not grounded.
2. Electric arc welder not fitted with an automatic electric shock prevention device; or
3. Other safety measures required by applicable regulations
|
Improvement or forbidden use
|
5,000 each
|
|
5-8
|
Oxygen, acetylene and other steel cylinders were not secured with pressure adjustment, pressure meter, anti-temper devices, or such devices were out of order, balata tube was broken, or joint was not constricted with special band or clip.
|
Improvement or forbidden use
|
5,000 each
|
|
5-9
|
1. Failed to remove all flammable materials in work area or cover them fully with a fire blanket.
2. Safety/Sanitation supervision personnel not present during use of open flame.
3. Cutting and welding tools in poor condition, with inadequate protective measures.
|
I
mprovement and return to work
|
5,000 each
|
|
Safe Electricity Use
|
6-1
|
1. Electrical wiring placed on wet surface.
2. Use of electrical wiring with broken sheath or poor insulation.
3. Naked wires plugged into power socket.
4. Did not correctly install fuse or circuit breaker.
5. Did not elevate crossover wires
6. Violation of the facility power usage, socket (including extension wires) usage or other power usage rules of the company.
|
Improvement or forbidden use
|
3,000 each
|
6-2
|
Electrical wiring not properly secured or placed in such a manner as to adversely affect personnel or operation safety.
|
Improvement and return to work
|
3,000 each
|
|
6-3
|
Generator: No sunshade device to cover outdoor fuel cans, no fire distinguisher, or no grounding device.
|
Improvemen
t or forbidden use
|
3,000 each
|
|
6-4
|
Electricity divider tray did not use electric leakage broken circuit switch
; no grounding device;
power c
ord did not use wiring terminal;
electric wire did no pierce through the box
bottom to connect electricity; or
elec
tricity tray did not lock up.
|
Improvement or forbidden use
|
3,000 each
|
Environment Protection
|
7-1
|
1. Free blowing dust (did not spray water or take other effective dust suppression measures)
2. Build up of waste.
3. Other situations which cause environmental pollution.
4. Work site not cleaned up after completion of work.
|
Review Meeting
|
3,000 each
|
7-2
|
Tools and materials
1. Not placed in the designated storage area
2. Did not apply for temporary storage
3. Physically exceeded the designated storage area or exceeded the allowed time.
4. Stored in a disorganized manner.
5. Interfered with passage way or fire prevention facilities.
|
Improvement and return to work
|
3,000 each
|
|
7-3
|
Did not follow the park management office’s directives for contractors’ and their staff.
|
Punishment upon the situation
|
5,000 each
|
|
Regulatory Issues
|
8-1
|
Did not report occupational injury that occurred at work site (cumulative punishment upon situation).
|
Suspension of work
|
5,000 each
|
8-2
|
Hiring illegal labors; hiring female labors, child labors to conduct dangerous operation.
|
Suspension of work
|
10,000 each
|
|
8-3
|
Penalized by the examination authorities or environmental protection agency for labor safety and sanitation laws or environmental protection law violation.
|
Suspension of wo
rk
|
10,000 each
|
|
8-4
|
Fake
or
copy the company
’
s relevant execution or application documents (civil indemnity and criminal litigation would be claimed additionally).
|
Punishment upon situation
|
20,000 each
|
|
8-5
|
Other
violations
of relevant labors safety an
d sanitation regulations.
|
Punishment upon situation
|
5,000 each
|
|
Audit of Rectification
|
9-1
|
After being notified of a minor flaw to rectify, but later found to not have resolved the issue on time.
|
Review meeting
|
3,000 each
|
9-2
|
After being issued a financial penalty, did not pay the penalty or submit an appeal within 20 days.
|
Review and improvement
|
Withhold payment
|
|
9-3
|
Obstruct or did not follow the company’s personnel or delegate audit to process audit, or threat or harm such auditor
(civil and criminal
actions
may
be
pursued
additionally).
|
Suspension of work
|
20,000 each
|
|
9-4
|
Should there is any material damage and loss incurred to the company due to contractor
’
s negligence, the company will hold a meeting to decide the indemnity measures (the maximum i
ndemnity amount is subject to the calculation of the company).
|
Punishment
dependent on the circumstances
|
30,000 each
|
1.
|
These penalty clauses are applicable to all those who have a direct or indirect contractor relationship with this company.
|
2.
|
Rights of audit and report may be exercised by CMO
’
s each unit . “
Contractor
’
s penalty / penalty amount sheet (FMU316)”
|
3.
|
Each incident of violation is in principle limited to one penalty per day, with the exception of special or severe violations upon notice.
|
4.
|
The penalty for involved personnel or equipment is to be based upon the actual number of violations.
|
5.
|
Unless otherwise specified, all rectification of faults should all be completed before the next work period. If faults are not rectified, work may not resume.
|
6.
|
Depending on the severity of the situation, the labor safety department may call for a meeting to decide how repeat offenders (multiple occurrences of the same violation or having been repeatedly penalized) will be dealt with. Measures include doubling of penalties, dismissal of offending personnel, contractor’s signing of guarantee, offending personnel barred from working in the plant, termination of contractor status, and notification to relevant units that the contractor is prohibited from tendering.
|
7.
|
Unless plead conditions
are
satisfied
,
the
basic penalty amount
shall not be adjusted
.
|
Subsidiary
|
Jurisdiction of
Incorporation
|
Percentage of
Our Ownership
Interest
|
||
Himax Technologies Limited
|
ROC
|
100.0%
|
||
Himax Technologies Anyang Limited
|
South Korea
|
100.0%
|
||
Himax Semiconductor, Inc. (formerly Wisepal Technologies, Inc.)
|
ROC
|
100.0%
|
||
Himax Technologies (Samoa), Inc.
|
Samoa
|
100.0%
(1)
|
||
Himax Technologies (Suzhou) Co., Ltd.
|
PRC
|
100.0%
(2)
|
||
Himax Technologies (Shenzhen) Co., Ltd.
|
PRC
|
100.0%
(2)
|
||
Himax Display, Inc.
|
ROC
|
88.2%
(1)
|
||
Integrated Microdisplays Limited
|
Hong Kong
|
88.2%
(3)
|
||
Himax Analogic, Inc.
|
ROC
|
76.9%
(1)
|
||
Himax Imaging, Inc.
|
Cayman Islands
|
94.8%
|
||
Himax Imaging, Ltd.
|
ROC
|
94.8%
(4)
|
||
Himax Imaging Corp.
|
California, USA
|
94.8%
(4)
|
||
Argo Limited
|
Cayman Islands
|
100.0%
|
||
Tellus Limited
|
Cayman Islands
|
100.0%
(5)
|
||
Himax Media Solutions, Inc.
|
ROC
|
78.0%
(6)
|
||
Himax Media Solutions (Hong Kong) Limited
|
Hong Kong
|
78.0%
(7)
|
||
Harvest Investment Limited
|
ROC
|
100.0%
(1)
|
||
(1)
|
Indirectly, through our 100.0% ownership of Himax Technologies Limited.
|
(2)
|
Indirectly, through our 100.0% ownership of Himax Technologies (Samoa), Inc.
|
(3)
|
Indirectly, through our 88.2% ownership of Himax Display, Inc.
|
(4)
|
Indirectly, through our 94.8% ownership of Himax Imaging, Inc.
|
(5)
|
Indirectly, through our 100.0% ownership of Argo Limited.
|
(6)
|
Directly, as to 44.0%, and indirectly, as to 34.0% through our 100.0% ownership of Himax Technologies Limited.
|
(7)
|
Indirectly, through our 78.0% ownership of Himax Media Solutions, Inc.
|
1.
|
I have reviewed this annual report on Form 20-F of Himax Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
By: |
/s/ Jordan Wu
|
||
Name: |
Jordan Wu
|
||
Title: |
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 20-F of Himax Technologies, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
|
5.
|
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
|
By: |
/s/ Max Chan
|
||
Name: |
Max Chan
|
||
Title: |
Chief Financial Officer
|
|
1.
|
the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
|
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Himax Technologies, Inc.
|
By: |
/s/ Jordan Wu
|
||
Name: |
Jordan Wu
|
||
Title: |
President and Chief Executive Officer
|
By: |
/s/ Max Chan
|
||
Name: |
Max Chan
|
||
Title: |
Chief Financial Officer
|