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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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x |
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, 2010
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o |
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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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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·
|
the terms “we,” “us,” “our company,” “our,” and “Himax” refer to Himax Technologies, Inc., its predecessor entities and subsidiaries;
|
·
|
the term “Himax Taiwan” refers to Himax Technologies Limited, our wholly owned subsidiary in Taiwan and our predecessor;
|
·
|
“shares” or “ordinary shares” refers to our ordinary shares, par value $0.3 per share;
|
·
|
“RSUs” refers to restricted share units;
|
·
|
“ADSs” refers to our American depositary shares, each of which represents two ordinary shares;
|
·
|
“ADRs” refers to the American depositary receipts that evidence our ADSs;
|
·
|
“TDRs” refers to our proposed Taiwan depositary receipts to be listed on the Taiwan Stock Exchange upon the successful completion of our Taiwan listing plan;
|
·
|
“ROC” or “Taiwan” refers to the island of Taiwan and other areas under the effective control of the Republic of China;
|
·
|
“PRC” or “China” for purposes of this annual report refers to the People’s Republic of China, excluding Taiwan and the special administrative regions of Hong Kong and Macau;
|
·
|
“AMOLED” refers to active matrix organic light-emitting diode;
|
·
|
“CMOS” refers to complementary metal oxide semiconductor;
|
·
|
“IC” refers to integrated circuit;
|
·
|
“LCOS” refers to liquid crystal on silicon;
|
·
|
“LED” refers to light-emitting diode;
|
·
|
“LTPS” refers to low temperature poly silicon;
|
·
|
“OLED” refers to organic light-emitting diode;
|
·
|
“TFT-LCD” refers to amorphous silicon thin film transistor liquid crystal display, or “a-Si TFT-LCD;”
|
·
|
“processed tape” refers to polyimide tape plated with copper foil that has a circuit formed within it, which is used in tape-automated bonding packaging;
|
·
|
“semiconductor manufacturing service providers” refers to third-party wafer fabrication foundries, gold bumping houses and assembly and testing houses;
|
·
|
“large-sized panels” refers to panels that are typically above ten inches in diagonal measurement;
|
·
|
“small and medium-sized panels” refers to panels that are typically around ten inches or less in diagonal measurement;
|
·
|
all references to “New Taiwan dollars,” “NT dollars” and “NT$” are to the legal currency of the ROC; and
|
·
|
all references to “dollars,” “U.S. dollars” and “$” are to the legal currency of the United States.
|
Year Ended December 31,
|
||||||||||||||||||||
2006
|
2007
|
2008
|
2009
|
2010
|
||||||||||||||||
(in thousands, except per share data)
|
||||||||||||||||||||
|
Diluted
|
390,180 | 395,043 | 383,753 | 370,229 | 355,690 | |||||||||||||||
Cash dividends declared per ordinary share
(3)
|
$ | - | $ | 0.100 | $ | 0.175 | $ | 0.150 | $ | 0.125 | ||||||||||
Cash dividends declared per ADS
|
$ | - | $ | 0.200 | $ | 0.350 | $ | 0.300 | $ | 0.250 |
Note:
|
(1)
|
The amount of share-based compensation included in applicable costs and expenses categories is summarized as follows:
|
Year Ended December 31, | ||||||||||||||||||||
2006
|
2007
|
2008
|
2009
|
2010
|
||||||||||||||||
(in thousands) | ||||||||||||||||||||
Cost of revenues
|
$ | 275 | $ | 422 | $ | 435 | $ | 264 | $ | 240 | ||||||||||
Research and development
|
11,806 | 15,393 | 15,861 | 10,936 | 8,803 | |||||||||||||||
General and administrative
|
1,444 | 2,182 | 2,813 | 1,959 | 1,525 | |||||||||||||||
Sales and marketing
|
1,625 | 2,324 | 2,691 | 1,902 | 1,613 | |||||||||||||||
Total
|
$ | 15,150 | $ | 20,321 | $ | 21,800 | $ | 15,061 | $ | 12,181 |
(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. The effect of such tax exemption on our historical results was an increase on net income and basic and diluted earnings per share attributable to our stockholders of $16.7 million, $0.04 and $0.04, respectively, for the year ended December 31, 2006, $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, $9.4 million, $0.03 and $0.03, respectively, for the year ended December 31, 2009, and $3.6 million, $0.01 and $0.01, respectively, for the year ended December 31, 2010. A portion of these tax exemptions expired or will expire on March 31, 2009, December 31, 2010, December 31, 2012 and December 31, 2013.
|
(3)
|
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 and our dividend policy.
|
As of December 31, | ||||||||||||||||||||
2006
|
2007
|
2008
|
2009
|
2010
|
||||||||||||||||
(in thousands) | ||||||||||||||||||||
Consolidated Balance Sheet Data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 109,753 | $ | 94,780 | $ | 135,200 | $ | 110,924 | $ | 96,842 | ||||||||||
Accounts receivable, net
|
112,767 | 88,682 | 51,029 | 64,496 | 80,212 | |||||||||||||||
Accounts receivable from related parties, net
|
116,850 | 194,902 | 104,477 | 138,172 | 95,964 | |||||||||||||||
Inventories
|
101,341 | 116,550 | 96,921 | 67,768 | 117,988 | |||||||||||||||
Total current assets
|
466,715 | 538,272 | 434,650 | 423,797 | 485,924 | |||||||||||||||
Total assets
|
518,794 | 652,762 | 565,548 | 550,448 | 619,620 | |||||||||||||||
Accounts payable
|
120,407 | 147,221 | 53,720 | 88,079 | 115,922 | |||||||||||||||
Total current liabilities
|
153,279 | 185,048 | 90,143 | 120,651 | 205,748 | |||||||||||||||
Total liabilities
|
153,471 | 190,364 | 95,542 | 126,376 | 212,644 | |||||||||||||||
Ordinary shares
|
116,160 | 115,188 | 114,072 | 107,404 | 106,153 | |||||||||||||||
Total equity
|
365,323 | 462,398 | 470,006 | 424,072 | 406,976 |
Year Ended December 31, | ||||||||||||||||||||
2006
|
2007
|
2008
|
2009
|
2010
|
||||||||||||||||
(in thousands) | ||||||||||||||||||||
Consolidated Cash Flow Data:
|
||||||||||||||||||||
Net cash provided by operating activities
|
$ | 29,696 | $ | 77,162 | $ | 136,500 | $ | 73,630 | $ | 57,631 | ||||||||||
Net cash used in investing activities
|
(9,296 | ) | (25,286 | ) | (21,810 | ) | (7,541 | ) | (75,099 | ) | ||||||||||
Net cash provided by (used in) financing activities
|
82,255 | (66,974 | ) | (74,304 | ) | (90,779 | ) | 3,305 |
Noon Buying Rate
|
||||||||||||||||
Average
(1)
|
High
|
Low
|
Period-end
|
|||||||||||||
(NT dollars per U.S. dollar)
|
||||||||||||||||
Period
|
||||||||||||||||
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 | ||||||||||||
2010
|
31.50 | 32.43 | 29.14 | 29.14 | ||||||||||||
November
|
30.32 | 30.52 | 30.12 | 30.47 | ||||||||||||
December
|
29.90 | 30.37 | 29.14 | 29.14 | ||||||||||||
2011
|
||||||||||||||||
January
|
29.11 | 29.36 | 28.98 | 29.03 | ||||||||||||
February
|
29.28 | 29.76 | 28.78 | 29.74 | ||||||||||||
March
|
29.49 | 29.63 | 29.35 | 29.40 | ||||||||||||
April
|
28.98 | 29.31 | 28.67 | 28.67 | ||||||||||||
May (through May 13)
|
28.59 |
28.67
|
28.50
|
28.64
|
Note: (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;
|
·
|
a surge in manufacturing capacity due to the ramping up of new fabrication facilities and/or improvements in production yields; and
|
·
|
manufacturers operating at high levels of capacity utilization in order to reduce fixed costs per panel.
|
·
|
consumer demand and the general economic conditions;
|
·
|
the cyclical nature of both the TFT-LCD industry, including fluctuations in average selling prices, and its downstream industries;
|
·
|
the speed at which TFT-LCD panel manufacturers expand production capacity;
|
·
|
brand companies’ continued need for original equipment manufacturing services provided by TFT-LCD panel manufacturers;
|
·
|
access to raw materials, components, equipment and utilities on a timely and economical basis;
|
·
|
technological changes;
|
·
|
the rescheduling and cancellation of large orders;
|
·
|
access to funding on satisfactory terms; and
|
·
|
fluctuations in the currencies of TFT-LCD panels exporting countries against the U.S. dollar.
|
·
|
hire, train, integrate, retain and manage additional qualified engineers, senior managers, sales and marketing personnel and information technology personnel;
|
·
|
implement additional, and improve existing, administrative and operations systems, procedures and controls;
|
·
|
expand our accounting and internal audit team, including hiring additional personnel with U.S. GAAP and internal control expertise;
|
·
|
continue to expand and upgrade our design and product development capabilities;
|
·
|
manage multiple relationships with semiconductor manufacturing service providers, customers, suppliers and certain other third parties; and
|
·
|
continue to develop and commercialize non-driver products, including, among others, timing controllers, touch controller ICs, 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;
|
·
|
changes in share-based compensation;
|
·
|
the loss of one or more of our key customers;
|
·
|
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;
|
·
|
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;
|
·
|
changes in our payment terms with our customers and our suppliers;
|
·
|
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;
|
·
|
the rate at which new markets emerge for new products under development;
|
·
|
the evolution of industry standards and technologies;
|
·
|
product obsolescence and our ability to manage product transitions;
|
·
|
increase in cost of revenues due to inflation;
|
·
|
our involvement in litigation or other types of disputes;
|
·
|
changes in general economic conditions, especially the impact of the global financial crisis on economic growth and consumer spending and the unease in the Middle East;
|
·
|
changes in our tax exemptions, transfer pricing policy and applicable income tax regulations; and
|
·
|
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.
|
·
|
failure to secure necessary manufacturing capacity, or being able to obtain required capacity only at higher costs;
|
·
|
risks of our proprietary information leaking to our competitors through the foundries we use;
|
·
|
limited control over delivery schedules, quality assurance and control, manufacturing yields and production costs;
|
·
|
the unavailability of, or potential delays in obtaining access to, key process technologies; and
|
·
|
financial risks of certain of our foundry suppliers, including those that are owned by ailing dynamic random access memory, or DRAM, companies.
|
·
|
potential capacity constraints faced by the limited number of high-voltage foundries and the lack of investment in new and existing high-voltage foundries;
|
·
|
difficulty in attaining consistently high manufacturing yields from high-voltage foundries;
|
·
|
delay and time required (approximately one year) to qualify and ramp up production at new high voltage foundries; and
|
·
|
price increases.
|
·
|
stop selling products or using technology or manufacturing processes that contain the allegedly infringing intellectual property;
|
·
|
pay damages to the party claiming infringement;
|
·
|
attempt to obtain a license for the relevant intellectual property, which may not be available on commercially reasonable terms or at all; and
|
·
|
attempt to redesign those products that contain the allegedly infringing intellectual property with non-infringing intellectual property, which may not be possible.
|
·
|
problems integrating the acquired operations, technologies or products into our existing business and products;
|
·
|
diversion of management’s time and attention from our core business;
|
·
|
adverse effects of losses of the acquired target upon our financial condition and results of operations;
|
·
|
adverse effects on existing business relationships with customers;
|
·
|
the need for financial resources above our planned investment levels;
|
·
|
dilution of share ownership of current shareholders under share swap transactions;
|
·
|
failures in realizing anticipated synergies;
|
·
|
difficulties in retaining business relationships with suppliers and customers of the acquired company;
|
·
|
risks associated with entering markets in which we lack experience;
|
·
|
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;
|
·
|
conditions in the TFT-LCD panel market;
|
·
|
changes in the economic performance or market valuations of other display semiconductor companies;
|
·
|
announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
·
|
the addition or departure of key personnel;
|
·
|
fluctuations in exchange rates between the U.S. dollar and the NT dollar;
|
·
|
litigation related to our intellectual property and shareholders’ lawsuit; and
|
·
|
the release of lock-up or other transfer restrictions on our outstanding ADSs or sales of additional ADSs.
|
·
|
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 such transaction
. Our articles of association, however, contain provisions that require our directors to disclose their interest in a transaction
;
|
·
|
dissenting shareholders do not have comparable appraisal rights if a scheme of arrangement is approved by the Grand Court of the Cayman Islands;
|
·
|
shareholders may not be able to bring class action or derivative action suits before a Cayman Islands court
except in certain exceptional circumstances
; and
|
·
|
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.
|
|
Industry Background
|
·
|
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.
|
·
|
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.
|
·
|
Scaler
. For certain displays, a scaler is installed to magnify or shrink image data in order for the image to fill the panel.
|
·
|
Operational Amplifier.
An operational amplifier supplies the reference voltage to source drivers in order to make their output voltage uniform.
|
·
|
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.
|
·
|
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.
|
·
|
Others.
Flat panel displays also require multiple general purpose semiconductors such as memory, power converters and inverters.
|
·
|
display drivers and timing controllers;
|
·
|
touch controller ICs,
|
·
|
TFT-LCD television and monitor semiconductor solutions;
|
·
|
LCOS products;
|
·
|
power ICs;
|
·
|
CMOS image sensors; and
|
·
|
wafer level optics products.
|
·
|
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.
|
·
|
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.
|
·
|
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.
|
·
|
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.
|
·
|
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, mini-low voltage differential signaling, or mini-LVDS, and mobile industry processor interface, or MIPI. Among these, RSDS, mini-LVDS and MIPI 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. Moreover, there are some panel manufacturers developing their proprietary point-to-point interfaces, such as embedded panel interface, or EPI, and advanced intra-panel interface, or AIPI,
|
·
|
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.
|
Product
|
Features
|
||
TFT-LCD Source Drivers
|
· |
384 to 1,032 output channels
|
|
· |
6-bit (262K colors), 8-bit (16 million colors) or 10-bit (1 billion colors)
|
||
· |
one gamma-type driver
|
||
· |
three gamma-type drivers (RGB independent gamma curve to enhance color image)
|
||
· |
output driver voltage ranging from 4.5V to 24V and support half VDDA
|
||
· |
input logic voltage ranging from standard 3.3V to low power 1.5V
|
||
· |
low power consumption and low EMI
|
||
· |
support TCP, COF and COG package types
|
||
· |
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
|
||
· |
support dual gate and triple gate panel designs
|
||
TFT-LCD Gate Drivers
|
· |
192 to 600 output channels
|
|
· |
output driving voltage ranging from 10 to 50V
|
||
· |
input logic voltage ranging from standard 3.3V to low power 1.5V
|
||
· |
low power consumption
|
||
· |
support TCP, COF and COG package types
|
||
· |
support dual gate and triple gate panel designs
|
||
|
|||
Timing Controllers
|
· |
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)
|
|
· |
support TTL, RSDS, mini-LVDS, DETTL, turbo RSDS, CMDI and customized output interface technologies
|
||
· |
input logic voltage ranging from standard 3.3V to low power 1.5V
|
||
· |
embedded overdrive function to improve response time
|
||
· |
support CABC to save power and color engine to enhance color and sharpness
|
||
· |
support TTL, LVDS and DisplayPort input interface technologies
|
Product
|
Features
|
||
TFT-LCD Drivers
|
· |
highly integrated single chip embedded with the source driver, gate driver, power circuit, timing controller and memory
|
|
· |
suitable for a wide range of resolutions from QQVGA (128 x 160 pixels) to WVGA (480 x 864 pixels)
|
||
· |
support 262K colors to 16 million colors
|
||
· |
support RGB separated gamma adjustment
|
||
· |
support CABC
|
||
· |
support mobile display digital interface, or MDDI, and mobile industry processor interface, or MIPI
|
||
· |
low power consumption and low EMI
|
||
· |
utilize die shrink technology to reduce die size and cost
|
||
· |
fewer external components to reduce costs
|
||
· |
slimmer die for compact module to fit smaller mobile handset designs
|
||
· |
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)
|
||
LTPS Drivers
|
· |
highly integrated single chip embedded with the source driver, power circuit, timing controller and memory
|
|
· |
suitable for higher resolutions such as nHD (360 x 640 pixels), WVGA (480 x 864 pixels), or HD720 (720 x 1280 pixels)
|
||
· |
support 16 million colors
|
||
· |
support RGB separated gamma adjustment
|
||
· |
support CABC
|
||
· |
support compact display port, or CDP, MDDI, and MIPI
|
||
· |
utilize die shrink technology to reduce die size and cost
|
||
· |
slimmer die for compact module
|
||
· |
ASIC can be designed to meet customized requirements
(e.g., gateless or multi-bank output driver
)
|
Product
|
Features
|
||
TFT-LCD Source Drivers
|
· |
240 to 1,366 output channels
|
|
· |
products for analog and digital interfaces
|
||
· |
support 262K colors to 16.7 million colors
|
||
· |
input logic voltage ranging from standard 3.3V to low power 2.3V
|
||
· |
low power consumption and low EMI
|
||
TFT-LCD Gate Drivers
|
· |
96 to 1,600 output channels
|
|
· |
input logic voltage ranging from standard 3.3V to low power 2.3V
|
||
· |
output driving voltage ranging from 10 to 40V
|
||
TFT-LCD Integrated Drivers
|
· |
highly integrated single chip embedded with source driver, gate driver, timing controller and power circuit
|
|
· |
resolutions include WVGA (846 x 480 pixels), SVGA (800 x 600 pixels),WSVGA (1,024 x 600 pixels) and WXGA (1,280 x 800 pixels)
|
||
· |
products for analog or digital interfaces
|
||
· |
low power consumption
|
||
· |
CABC function integrated for backlight power saving
|
||
Timing Controllers
|
· |
products for analog or digital interfaces
|
|
· |
products for E-readers
|
||
· |
support various resolutions from 800 x 400 pixels to 1,366 x 768 pixels
|
Product
|
Features
|
||
Capacitive Touch Controller
|
· |
complete single chip touch controller solutions for handheld devices, supporting smartphones (up to 5”), MIDs (up to 8”), or tablet PCs (up to 11”)
|
|
· |
real multi-point capability support of up to 10 points
|
||
· |
proprietary hardware and software design with minimum external components and good noise immunity
|
||
· |
minimum components: simple, neat, and flexible mechanical design
|
||
· |
good noise immunity without shielding layer or air-gap
|
·
|
Audio Processor/Amplifier.
Demodulates, processes and amplifies sound from television signals.
|
·
|
Analog Interfaces.
Convert analog video signals into digital video signals. Video decoder and analog-to-digital converter, or ADC, are included.
|
·
|
Digital Interfaces.
Receive digital signals via digital receivers. Digital visual interfaces, or DVI, and high-definition multimedia interfaces, or HDMI, are included.
|
·
|
Channel Receiver.
Demodulates input signals so that the output becomes compressed bit stream data.
|
·
|
DTV Decoder.
Converts video and audio signals from compressed bit stream data into regular video and audio signals.
|
·
|
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.
|
Product
|
Features
|
||
Analog TV Single-Chip Solutions
|
· |
ideal for LCD TV, multi-function monitor TV, LCOS and plasma display panel applications
|
|
· |
integrated with high performance ADC, scaler and de-interlacer
|
||
· |
built-in HDMI receiver and USB on-the-go, or USB OTG
|
||
· |
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
|
||
· |
integrated with vertical blanking interval slicer for closed caption, viewer-control chip and teletext functions
|
||
· |
built-in Himax 5th generation video engine which supports variable dynamic video enhancement features
|
||
· |
built-in analog audio demodulator, audio processor and surround integrated high speed microprocessor control unit, or MCU
|
||
· |
integrated with timing control for additional cost-down
|
||
· |
output resolutions range from 640 x 480 pixels up to 1,920 x 1,080 pixels
|
||
Digital TV Integrated Solutions
|
· |
embedded digital demodulators: ATSC, DVB-T, DVB-C, and DVMB
|
|
· |
embedded analog demodulator: picture intermediate frequency for NTSC, PAL and SECAM
|
Product
|
Features
|
||
· |
embedded multi-format video stream decoder: MPEG2, MPEG4, AVS, Real Video and H.264 up to full HD
|
||
· |
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
|
||
· |
built-in HDMI receiver and USB OTG
|
||
· |
embedded audio processor: sound retrieval system
|
||
· |
embedded high performance RISC CPU
|
||
· |
embedded 3D video processor
|
||
· |
input resolution up to full HD (1,920 x 1,080 pixels)
|
||
· |
output resolution up to full HD (1,920 x 1,080 pixels)
|
Product
|
Features
|
||
Monitor Scaler Integrated Solutions
|
· |
ideal for monitor applications
|
|
· |
integrated with high performance ADC and scaler
|
||
· |
built-in HDMI and DVI receiver
|
||
· |
built-in audio digital-to-analog converter
|
||
· |
built-in high performance color engine
|
||
· |
integrated high speed MCU
|
||
· |
integrated with timing control for additional cost-down
|
||
· |
input/output resolutions range from 640 x 480 pixels up to 1,920 x 1,080 pixels
|
Product
|
Features
|
||
Power-Saving iCT Solutions
|
· |
built-in single/dual path 8/10-bit LVDS receiver
|
|
· |
support up to 1920x1080@75HZ resolution
|
||
· |
built-in single/dual path 6/8-bit RSDS transmitter for low power consumption and low EMI
|
||
· |
built-in single/dual 8/10-bit LVDS transmitter
|
||
· |
built-in single/dual 6/8-bit 3/6-pair mini-LVDS transmitter
|
||
· |
support polarity 1 or 1+2 line inversion mode and dual-gate/Z-inversion panel structure
|
||
· |
embedded aging generator for simplifying TFT-LCD panel dynamic burn-in test
|
||
· |
support low color shift, initial download from electrically-erasable programmable read-only memory, or EEPROM
|
||
· |
support serial bus programming from scaler to select up to 4 different initial download value settings (depend on the size of EEPROM)
|
Product
|
Features
|
||
· |
embedded 3D color engine, 10-bit gamma correction look-up table
|
||
· |
programmable sRGB matrix coefficients
|
||
· |
embedded dynamic analog gamma control, dynamic exposure adaptation control, CABC and over drive
|
||
· |
support up to external 20+1-channel gamma buffer with 10-bit resolution control by 2-wire serial bus
|
||
2D to 3D Conversion Solutions
|
· |
convert 2D video sequence to 3D video sequence for 3D display
|
|
· |
enable virtual 3D experience on 2D display based on human 3D perception characteristics
|
||
· |
use human perception based processing with better performance and fewer side effects
|
||
· |
support 2D bypass mode, 2D to 3D converter mode and 3D bypass mode
|
||
· |
support a wide range of display formatting and interface, including LVDS and TTL
|
||
· |
support anaglyph, pattern retarder or micro-retarder and CheckerBoard 2-view 3D display
|
||
· |
configurable stereoscopic density; support in-front-of-screen, behind-the-screen and on-the-screen configurations
|
||
· |
support resolutions up to full HD
|
||
· |
enable integration into existing TV, monitor, portable DVD, digital photo frame and other 3D display devices
|
||
· |
support top-and-bottom, frame packing, side-by-side (full) and side-by-side (half) 3D formats
|
||
· |
support dual LVDS, front/back quad LVDS, non-front/back quad LVDS and left/right parallel quad LVDS for output format
|
||
· |
support 8-bit/10-bit LVDS for both input and output formats
|
Color-Sequential LCOS
|
· 0.22” (640 x 360 pixels) | · toy projectors / embedded projectors | |
Microdisplays
|
·
0.28” (852 x 480 pixels)
·
0.38” (640 x 480 pixels)
·
0.37” (800 x 600 pixels)
·
0.37” (1366 x 768 pixels)
·
0.45” (1024 x 768 pixels)
·
Customized design
|
·
embedded projectors
·
versatile projectors
·
multimedia projectors
·
multimedia projectors
·
multimedia projectors
·
specialized
|
Product
|
Features
|
|
Integrated Multi-Channel Power Solutions for Notebooks
|
·
Built-in power MOSFET
·
step-up PWM converter
·
charge pump regulator
·
LDO regulator
·
voltage detector
·
gate pulse modulator
·
Vcom operational amplifier
·
With/without LED drivers
|
|
Integrated Multi-Channel Power Solutions for Monitors
|
·
Built-in power MOSFET
·
step-up PWM converter
·
HV LDO regulator
·
voltage detector
·
gate pulse modulator
·
programmable Vcom voltage / Vcom operational amplifier
·
level shifter
|
|
Integrated Multi-Channel Power Solutions for TVs
|
·
Built-in power MOSFET
·
step-up PWM converter
·
step-down PWM converter
·
charge pump regulator
·
HV LDO regulator
·
voltage detector
·
gate pulse modulator
·
Vcom operational amplifier
|
Product
|
Features
|
|
WLED Drivers for NB
|
·
4.5V to 24V input voltage range
·
built-in 1.3MHz step-up PWM converter (max. boost voltage: 40V)
·
8 constant current source channels
·
capable of driving up to 10 LEDs in serial for each channel
|
|
WLED Drivers for LED MNT
|
·
5V to 33V input voltage range
·
built-in 2MHz step-up PWM controller
·
8 constant current source channels
·
Up to 60mA per channel
·
60V sustainable voltage for LED pins
·
capable of driving up to 16 LEDs in serial for each channel
|
|
WLED Drivers for LED TV
|
·
8V to 40V input voltage range
·
8-channel current sinks
·
Up to 80mA per channel
·
65V sustainable voltage for LED pins
|
Product
|
Features
|
|
CIF 1elements wafer level lens
|
·
For 1/13” CIF CIS (3.0
μm pixel pitch)
·
One-element and two-surface design for cost-competitive market
·
Double-side manufacture process
·
Already in mass production
|
|
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
·
Double-side manufacture process
|
·
|
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 Technology Co., Ltd.
|
|
Macronix International Co., Ltd.
|
ChipMOS Technologies Inc.
|
|
Maxchip Electronics Corp.
|
||
Shanghai Hua Hong NEC Electronics Company, Ltd.
|
||
Semiconductor Manufacturing International Corporation
|
||
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.
|
Advanced Semiconductor Engineering Inc.
|
|
Samsung Techwin Co., Ltd.
|
Chipbond Technology Corporation
(1)
|
|
Simpal Electronics Co., Ltd.
|
Chipmore Technology Co., Ltd.
|
|
Sumitomo Metal Mining Package Material Co., Ltd.
|
ChipMOS Technologies Inc.
|
|
Global Testing Corporation
|
||
Greatek Electronics Inc.
|
||
Jiangsu Changjiang Electronics Technology Co., Ltd
|
||
Jiangyin Changdian Advanced Packaging Co., Ltd
|
||
King Yuan Electronics Co., Ltd.
|
||
Orient Semicondictor Electronics
|
||
Siliconware Precision Industries Co., Ltd.
(2)
|
||
Taiwan IC Packaging Corporation
|
||
Xintec Inc
|
Chip Probe Testing
|
|
Ardentec Corporation
|
|
Chipbond Technology Corporation
(1)
|
|
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.
|
(2)
|
Siliconware Precision Industries Co., Ltd. closed its gold bumping manufacturing service in July 2010.
|
·
|
customer relations;
|
·
|
product performance;
|
·
|
design customization;
|
·
|
development time;
|
·
|
product integration;
|
·
|
technical services;
|
·
|
manufacturing costs;
|
·
|
supply chain management;
|
·
|
timely delivery;
|
·
|
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
|
3.0
|
100.0%
(1)
|
|||||||
Himax Technologies (Suzhou) Co., Ltd.
|
Sales
|
PRC
|
1.0
|
100.0%
(2)
|
|||||||
Himax Technologies (Shenzhen) Co., Ltd.
|
Sales
|
PRC
|
2.0
|
100.0%
(2)
|
|||||||
Himax Display, Inc.
|
IC design, manufacturing and sales
|
ROC
|
39.1
|
88.0%
(1)
|
|||||||
Integrated Microdisplays Limited
|
IC design and sales
|
Hong Kong
|
1.1
|
88.0%
(3)
|
|||||||
Himax Analogic, Inc.
|
IC design and sales
|
ROC
|
13.3
|
75.1%
(1)
|
|||||||
Himax Imaging, Inc.
|
Investments
|
Cayman Islands
|
18.5
|
93.4%
|
|||||||
Himax Imaging, Ltd.
|
IC design and sales
|
ROC
|
25.9
|
93.9%
(4)
|
|||||||
Himax Imaging Corp.
|
IC design and sales
|
California, USA
|
8.2
|
93.4%
(5)
|
|||||||
Argo Limited
|
Investments
|
Cayman Islands
|
9.0
|
100.0%
|
|||||||
Tellus Limited
|
Investments
|
Cayman Islands
|
9.0
|
100.0%
(6)
|
|||||||
Himax Media Solutions, Inc.
|
TFT-LCD television and monitor chipset operations
|
ROC
|
34.2
|
78.0%
(7)
|
|||||||
Himax Media Solutions (Hong Kong) Limited
|
Investments
|
Hong Kong
|
0.0
(9)
|
78.0%
(8)
|
|||||||
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 88.0% ownership of Himax Display, Inc.
|
(4)
|
Indirectly, as to 92.1% through our 93.4% ownership of Himax Imaging, Inc. and as to 7.9% through our 100.0% ownership of Himax Technologies Limited.
|
(5)
|
Indirectly, through our 93.4% ownership of Himax Imaging, Inc.
|
(6)
|
Indirectly, through our 100.0% ownership of Argo Limited.
|
(7)
|
Directly, as to 44.0%, and indirectly, as to 34.0% through our 100.0% ownership of Himax Technologies Limited.
|
(8)
|
Indirectly, through our 78.0% ownership of Himax Media Solutions, Inc.
|
(9)
|
Total paid-in capital is HK$10,000.
|
·
|
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 credits and 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,
|
||||||||||||||||||||||||
2008
|
2009
|
2010
|
||||||||||||||||||||||
Amount
|
Percentage of
Revenues
|
Amount
|
Percentage of
Revenues
|
Amount
|
Percentage of
Revenues
|
|||||||||||||||||||
(in thousands, except percentages)
|
||||||||||||||||||||||||
Display drivers for large-sized applications
|
$ | 651,504 | 78.2 | % | $ | 493,513 | 71.3 | % | $ | 366,492 | 57.0 | % | ||||||||||||
Display drivers for mobile handsets applications
|
57,274 | 6.9 | 69,081 | 10.0 | 119,623 | 18.6 | ||||||||||||||||||
Display drivers for consumer electronics applications
|
81,866 | 9.8 | 83,527 | 12.1 | 103,942 | 16.2 | ||||||||||||||||||
Others
(1)
|
42,155 | 5.1 | 46,260 | 6.6 | 52,635 | 8.2 | ||||||||||||||||||
Total
|
$ | 832,799 | 100.0 | % | $ | 692,381 | 100.0 | % | $ | 642,692 | 100.0 | % |
Note:
|
(1)
|
Includes, among other things, timing controllers, touch controller ICs, TFT-LCD television and monitor chipsets, LCOS projector solutions, power ICs, CMOS image sensors, wafer level optics products and 2D to 3D conversion solutions.
|
Year Ended December 31,
|
||||||||||||||||||||||||
2008
|
2009
|
2010
|
||||||||||||||||||||||
Amount
|
Percentage of
Revenues
|
Amount
|
Percentage of
Revenues
|
Amount
|
Percentage of
Revenues
|
|||||||||||||||||||
(in thousands, except percentages)
|
||||||||||||||||||||||||
Chimei Innolux and its affiliates
(1)
|
$ | 565,550 | 67.9 | % | $ | 467,388 | 67.5 | % | $ | 339,220 | 52.8 | % | ||||||||||||
CPT and its affiliates
|
32,673 | 3.9 | 17,023 | 2.5 | 37,067 | 5.8 | ||||||||||||||||||
Samsung and its affiliates
|
54,138 | 6.5 | 50,184 | 7.2 | 29,983 | 4.7 | ||||||||||||||||||
SVA-NEC
|
52,101 | 6.3 | 3,365 | 0.5 | - | - | ||||||||||||||||||
Others
|
128,337 | 15.4 | 154,421 | 22.3 | 236,422 | 36.7 | ||||||||||||||||||
Total
|
$ | 832,799 | 100.0 | % | $ | 692,381 | 100.0 | % | $ | 642,692 | 100.0 | % |
Note:
|
(1)
|
Represents combined revenues from CMO, Innolux and TPO and their respective affiliates prior to the
merger in March 2010 and
Chimei Innolux and its affiliates
after the merger for the periods indicated
.
|
·
|
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
|
Charges (credits) to earnings
|
Amounts
Utilized
|
Balance at
End of Year
|
||||||||||||
(in thousands)
|
||||||||||||||||
December 31, 2008
|
$ | - | $ | 25,305 | $ | (8 | ) | $ | 25,297 | |||||||
December 31, 2009
|
$ | 25,297 | $ | 218 | $ | - | $ | 25,515 | ||||||||
December 31, 2010
|
$ | 25,515 | $ | (8,788 | ) | $ | - | $ | 16,727 |
Year
|
Balance at
Beginning
of Year
|
Additions Charged to Expense
|
Amounts
Utilized
|
Balance at
End of Year
|
||||||||||||
(in thousands)
|
||||||||||||||||
December 31, 2008
|
$ | 493 | $ | 1,657 | $ | (1,988 | ) | $ | 162 | |||||||
December 31, 2009
|
$ | 162 | $ | 2,391 | $ | (1,583 | ) | $ | 970 | |||||||
December 31, 2010
|
$ | 970 | $ | 4,551 | $ | (4,930 | ) | $ | 591 |
Year
|
Balance at Beginning
of Year
|
Additions Charged to Expense
|
Amount
Utilized
|
Balance at
End of Year
|
||||||||||||
(in thousands)
|
||||||||||||||||
December 31, 2008
|
$ | 335 | $ | 1,526 | $ | (1,612 | ) | $ | 249 | |||||||
December 31, 2009
|
$ | 249 | $ | 2,920 | $ | (2,490 | ) | $ | 679 | |||||||
December 31, 2010
|
$ | 679 | $ | 3,772 | $ | (3,772 | ) | $ | 679 |
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Balance at beginning of year
|
$ | 3,968 | $ | 5,718 | $ | 8,450 | ||||||
Increase related to prior year tax positions
|
- | - | - | |||||||||
Decrease related to prior year tax positions
|
(1,780 | ) | - | (2,295 | ) | |||||||
Increase related to current year tax positions
|
3,555 | 2,587 | 133 | |||||||||
Effect of exchange rate change
|
(25 | ) | 145 | 604 | ||||||||
Balance at end of year
|
$ | 5,718 | $ | 8,450 | $ | 6,892 |
Year Ended December 31,
|
|||||||||||||||
2008
|
2009
|
2010
|
|||||||||||||
Revenues
|
100.0 | % | 100.0 | % | 100.0 | % | |||||||||
Costs and expenses:
|
|||||||||||||||
Cost of revenues
|
75.5 | 79.5 | 79.0 | ||||||||||||
Research and development
|
10.5 | 10.3 | 11.9 | ||||||||||||
General and administrative
|
2.3 | 2.4 | 2.9 | ||||||||||||
(Recovery of) bad debt expense
|
3.0 | - | (1.4 | ) | |||||||||||
Sales and marketing
|
1.4 | 1.5 | 2.1 | ||||||||||||
Total costs and expenses
|
92.8 | 93.7 | 94.5 | ||||||||||||
Operating income
|
7.2 | 6.3 | 5.5 | ||||||||||||
Non-operating income (loss)
|
0.5 | - | - | ||||||||||||
Income tax expense (benefit)
|
(1.0 | ) | 1.1 | 1.0 | |||||||||||
Net income
|
8.7 | 5.2 | 4.5 | ||||||||||||
Net loss attributable to noncontrolling interests
|
0.4 | 0.6 | 0.6 | ||||||||||||
Net income attributable to Himax stockholders
|
9.2 | 5.7 | 5.2 |
·
|
Cost of Revenues.
Cost of revenues decreased 7.8% to $507.6 million in 2010 from $550.6 million in 2009. The decrease in cost of revenues was due primarily to a 8.1% decrease in average unit cost, partially offset by a 0.3% increase in unit shipments, as compared to 2009. The decrease in average unit cost was attributable primarily to changes in product mix, our efforts to control cost through 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 decreased to 79.0% in 2010 from 79.5% in 2009.
|
·
|
Research and Development.
Research and development expenses increased 7.1% to $76.4 million in 2010 from $71.4 million in 2009. This increase was primarily attributable to increases in salary expenses, mask and mold expenses, verification expenses, and wafer, tape and other related expenses. The increase in salary expenses was due primarily to a larger headcount of research and development staff and higher average salaries. Our mask and mold expenses, inspection expenses and wafer, tape and other related expenses increased primarily as a result of our continued efforts in increasing research and development expenditures.
|
·
|
General and Administrative.
General and administrative expenses increased 14.8% to $18.8 million in 2010 from $16.3 million in 2009, primarily as a result of an increase in salary expenses, professional fees and employee welfare expenses. The increase in salary expenses was due primarily to a larger headcount of general and administrative staff and higher average salaries. The increase in professional fees was due primarily to increasing patent filing fees and certain expenses relating to our listing application with the Taiwan Stock Exchange on its main board in 2010.
|
·
|
Recovery of Bad Debt Expense.
We recorded recovery of bad debt expense of $8.8 million in 2010, compared to bad debt expense of $0.2 million in 2009. We recovered such amount in 2010 from SVA-NEC.
|
·
|
Sales and Marketing.
Sales and marketing expenses increased 28.2% to $13.3 million in 2010 from $10.4 million in 2009, primarily as a result of an increase in salary expenses and travelling expenses. The increase in salary expenses was due primarily to a larger headcount of sales and marketing staff and higher average salaries.
|
·
|
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 through 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.
|
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Net cash provided by operating activities
|
$ | 136,500 | $ | 73,630 | $ | 57,631 | ||||||
Net cash used in investing activities
|
(21,810 | ) | (7,541 | ) | (75,099 | ) | ||||||
Net cash provided by (used in) financing activities
|
(74,304 | ) | (90,779 | ) | 3,305 | |||||||
Net increase (decrease) in cash and cash equivalents
|
40,420 | (24,276 | ) | (14,082 | ) | |||||||
Cash and cash equivalents at beginning of period
|
94,780 | 135,200 | 110,924 | |||||||||
Cash and cash equivalents at end of period
|
135,200 | 110,924 | 96,842 |
Payment Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year
|
1-3 years
|
3-5
years
|
More than
5 years
|
||||||||||||||||
(in thousands)
|
||||||||||||||||||||
Operating lease obligations
|
3,778 | 1,131 | 725 | 374 | 1,548 | |||||||||||||||
Purchase obligations
(1)
|
133,388 | 133,388 | - | - | - | |||||||||||||||
Other obligations
(2)
|
2,167 | 1,349 | 518 | 300 | - | |||||||||||||||
Total
|
139,333 | 135,868 | 1,243 | 674 | 1,548 |
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
|
53
|
Chairman of the Board
|
||
Jordan Wu
|
50
|
President, Chief Executive Officer and Director
|
||
Tien-Jen Lin
|
48
|
Director
|
||
Chih-Chung Tsai
|
55
|
Director, Chief Technology Officer, Senior Vice President
|
||
Dr. Chun-Yen Chang
|
73
|
Director
|
||
Dr. Yan-Kuin Su
|
62
|
Director
|
||
Yuan-Chuan Horng
|
59
|
Director
|
||
Jessica Pan
|
41
|
Acting Chief Financial Officer
|
||
John Chou
|
52
|
Vice President, Quality & Reliability Assurance & Support Design Center
|
||
Norman Hung
|
53
|
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
|
-
|
-
|
-
|
|||
Jordan Wu
|
-
|
-
|
-
|
|||
Tien-Jen Lin
|
-
|
-
|
-
|
|||
Chi-Chung Tsai
|
-
|
-
|
-
|
|||
Dr. Chun-Yen Chang
|
-
|
-
|
-
|
|||
Dr. Yan-Kuin Su
|
-
|
-
|
-
|
|||
Yuan-Chuan Horng
|
-
|
-
|
-
|
|||
Max Chan
(1)
|
10,729
|
9,716
|
-
|
|||
Jessica Pan
(2)
|
15,182
|
9,716
|
20,648
|
|||
John Chou
|
17,004
|
9,716
|
24,292
|
|||
Norman Hung
|
18,219
|
9,716
|
26,722
|
(1)
|
Max Chan resigned as our Chief Financial Officer, with effect from October 1, 2010.
|
(2)
|
Jessica Pan was appointed as our Acting Chief Financial Officer, with effect from October 1, 2010.
|
·
|
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)
|
828 | |||
Engineering and manufacturing
(2)
|
199 | |||
Sales and marketing
(3)
|
223 | |||
General and administrative
|
91 | |||
Total
|
1,341 |
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
|
67,710,206 | 19.1 | % | ||||||
Jordan Wu
|
25,627,522 | 7.2 | % | ||||||
Tien-Jen Lin
|
- | - | |||||||
Chih-Chung Tsai
|
6,316,866 | 1.8 | % | ||||||
Dr. Chun-Yen Chang
|
1,599,614 | 0.5 | % | ||||||
Dr. Yan-Kuin Su
|
- | - | |||||||
Yuan-Chuan Horng
|
916,104 | 0.3 | % | ||||||
Jessica Pan
|
20,420 | * | |||||||
John Chou
|
280,214 | 0.1 | % | ||||||
Norman Hung
|
280,770 | 0.1 | % |
* Less than 0.1%
|
Name of Beneficial Owner
|
Number of Shares
Beneficially Owned
|
Percentage of Shares
Beneficially Owned
|
||||
Dr. Biing-Seng Wu
|
67,710,206
|
19.1%
|
||||
FMR LLC
(1)
|
53,701,826
|
15.2%
|
||||
Chimei Innolux
(2)
|
50,799,506
|
14.4%
|
||||
Jordan Wu
|
25,627,522
|
7.2%
|
||||
All directors and executive officers as a group
|
102,751,716
|
29.1%
|
Notes:
|
(1)
|
According to the amendment to the Schedule 13G filed with the SEC on February 14, 2011, FMR LLC, together with its affiliates, beneficially owned 53,701,826 of our shares, some or all of which may include shares represented by our ADS, as of December 31, 2010. We do not have further information with respect to any changes in FMR LLC’s beneficial ownership of our shares subsequent to December 31, 2010.
|
(2)
|
As of March 31, 2011
, 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
|
||
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
|
||
2010
|
3.28
|
2.00
|
297.0
|
||
First quarter
|
3.20
|
2.72
|
270.5
|
||
Second quarter
|
3.28
|
2.66
|
369.2
|
||
Third quarter
|
3.10
|
2.30
|
243.8
|
||
Fourth quarter
|
2.50
|
2.00
|
304.3
|
||
November
|
2.40
|
2.04
|
240.1
|
||
December
|
2.37
|
2.00
|
455.3
|
||
2011
|
|||||
First quarter
|
2.69
|
2.17
|
240.7
|
||
January
|
2.69
|
2.37
|
344.0
|
||
February
|
2.68
|
2.45
|
246.4
|
||
March
|
2.67
|
2.17
|
146.1
|
||
April
|
2.53
|
2.30
|
86.8
|
||
May (through May 19
)
|
2.56
|
2.13
|
127.3
|
·
|
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;
|
·
|
non-deal 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
|
2009
|
2010
|
||||||
Audit Fees
(1)
|
$ | 786,000 | $ | 936,000 | ||||
All Other Fees
(2)
|
17,000 | 3,300 | ||||||
Tax Fees
(3)
|
- | 1,700 | ||||||
Total
|
$ | 803,000 | $ | 941,000 |
Notes:
|
(1)
|
Audit Fees. This category includes the audit of our annual financial statements and internal control over financial reporting, review of quarterly financial statements, services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for those fiscal years and Taiwan listing program. 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.
|
(3)
|
Tax Fees. This category consists of fees for general tax planning and advice.
|
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 | ||||||||||
June 2, 2010 to June 30, 2010
|
234,007 | $ | 2.98 | 17,748,953 | $ | 4,074,515 | ||||||||||
July 1, 2010 to July 26, 2010
|
362,497 | $ | 2.96 | 18,111,450 | $ | 3,002,786 | ||||||||||
August 5, 2010 to August 31, 2010
|
1,092,118 | $ | 2.43 | 19,203,568 | $ | 350,516 | ||||||||||
September 1, 2010 to September 7, 2010
|
144,800 | $ | 2.42 | 19,348,368 | $ | 25 |
·
|
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 lieu of complying with Rule 5605(d)(1)(B) and (2)(B) of the Nasdaq Rules which requires the compensation committees of U.S. companies to be comprised solely of independent directors.
|
·
|
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. (Incorporated by reference to Exhibit 1.1 from our Annual Report on Form 20-F (file no. 000-51847) filed with the Securities and Exchange Commission on June 3, 2010.)
|
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. (Incorporated by reference to Exhibit 4.2 from our Annual Report on Form 20-F (file no. 000-51847) filed with the Securities and Exchange Commission on June 3, 2010.)
|
4.3*
|
Agreement and Plan of Merger dated November 8, 2010 among Himax Display, Inc., Spatial Photonics, Inc. and Wen Hsieh.
|
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 Jessica Pan, Acting 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-1
|
Consolidated Balance Sheets as of December 31, 2009 and 2010
|
F-2
|
Consolidated Statements of Income for the Years Ended December 31, 2008, 2009 and 2010
|
F-4
|
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2008, 2009 and 2010
|
F-5
|
Consolidated Statements of Equity for the Years Ended December 31, 2008, 2009, and 2010
|
F-6
|
Consolidated Statements of Cash Flows for the Years Ended December 31, 2008, 2009 and 2010
|
F-9
|
Notes to Consolidated Financial Statements
|
F-11
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 110,924 | 96,842 | |||||
Investments in marketable securities available-for-sale
|
10,730 | 8,632 | ||||||
Accounts receivable, less allowance for doubtful accounts, sales returns and discounts of $26,327 and $17,180 at December 31, 2009 and 2010, respectively
|
64,496 | 80,212 | ||||||
Accounts receivable from related parties, less allowance for sales returns and discounts of $158 and $138 at December 31, 2009 and 2010, respectively
|
138,172 | 95,964 | ||||||
Inventories
|
67,768 | 117,988 | ||||||
Deferred income taxes
|
17,491 | 11,977 | ||||||
Restricted cash and cash equivalents
|
- | 58,500 | ||||||
Prepaid expenses and other current assets
|
14,216 | 15,809 | ||||||
Total current assets
|
423,797 | 485,924 | ||||||
Investment securities, including securities measured at fair value of $0 and $5,196 at December 31, 2009 and 2010, respectively
|
11,619 | 24,622 | ||||||
Equity method investments
|
586 | 869 | ||||||
Property, plant and equipment, net
|
51,586 | 47,561 | ||||||
Deferred income taxes
|
24,548 | 24,729 | ||||||
Goodwill
|
26,846 | 26,846 | ||||||
Intangible assets, net
|
8,872 | 6,674 | ||||||
Restricted marketable securities
|
1,094 | 172 | ||||||
Other
assets
|
1,500 | 2,223 | ||||||
126,651 | 133,696 | |||||||
Total assets
|
$ | 550,448 | 619,620 |
December 31, | ||||||||
2009
|
2010
|
|||||||
Liabilities and Equity
|
||||||||
Current liabilities:
|
||||||||
Short-term debt
|
$ | - | 57,000 | |||||
Accounts payable
|
88,079 | 115,922 | ||||||
Income taxes payable
|
14,147 | 9,125 | ||||||
Deferred income taxes
|
- | 96 | ||||||
Other accrued expenses and other current liabilities
|
18,425 | 23,605 | ||||||
Total current liabilities
|
120,651 | 205,748 | ||||||
Income taxes payable
|
902 | 133 | ||||||
Accrued pension liabilities
|
91 | 168 | ||||||
Deferred income taxes
|
2,217 | 1,215 | ||||||
Other liabilities
|
2,515 | 5,380 | ||||||
Total liabilities
|
126,376 | 212,644 | ||||||
Equity
|
||||||||
Himax Technologies, Inc. stockholders’ equity:
|
||||||||
Ordinary shares, US$0.3 par value, 1,000,000,000 shares authorized; 358,012,184 shares and 353,842,764
shares issued and outstanding at December 31, 2009 and 2010,
respectively
|
107,404 | 106,153 | ||||||
Additional paid-in capital
|
102,924 | 100,291 | ||||||
Accumulated other comprehensive income
|
4 | 1,204 | ||||||
Unappropriated retained earnings
|
209,121 | 198,230 | ||||||
Total Himax Technologies, Inc. stockholders’ equity
|
419,453 | 405,878 | ||||||
Noncontrolling interests
|
4,619 | 1,098 | ||||||
Total equity
|
424,072 | 406,976 | ||||||
Commitments and contingencies
|
||||||||
Total liabilities and equity
|
$ | 550,448 | 619,620 |
Year Ended December 31,
|
|||||||||||||
2008
|
2009
|
2010
|
|||||||||||
Revenues
|
|||||||||||||
Revenues from third parties, net
|
$ | 312,336 | 245,075 | 304,068 | |||||||||
Revenues from related parties, net
|
520,463 | 447,306 | 338,624 | ||||||||||
832,799 | 692,381 | 642,692 | |||||||||||
Costs and expenses:
|
|||||||||||||
Cost of revenues
|
628,693 | 550,556 | 507,647 | ||||||||||
Research and development
|
87,574 | 71,364 | 76,426 | ||||||||||
General and administrative
|
19,353 | 16,346 | 18,770 | ||||||||||
(Recovery of ) bad debt expense
|
25,305 | 218 | (8,788 | ) | |||||||||
Sales and marketing
|
11,692 | 10,360 | 13,279 | ||||||||||
Total costs and expenses
|
772,617 | 648,844 | 607,334 | ||||||||||
Operating income
|
60,182 | 43,537 | 35,358 | ||||||||||
Non operating income (loss):
|
|||||||||||||
Interest income
|
3,315 | 766 | 607 | ||||||||||
Gain (loss) on sale of marketable securities, net
|
913 | (87 | ) | 296 | |||||||||
Equity in
losses of equity method investees
|
- | (89 | ) | (410 | ) | ||||||||
Foreign currency exchange losses, net
|
(844 | ) | (510 | ) | (899 | ) | |||||||
Interest expense
|
- | (3 | ) | (182 | ) | ||||||||
Other income, net
|
469 | 111 | 524 | ||||||||||
3,853 | 188 | (64 | ) | ||||||||||
Earnings before income taxes
|
64,035 | 43,725 | 35,294 | ||||||||||
Income tax expense (benefit)
|
(8,689 | ) | 7,915 | 6,228 | |||||||||
Net income
|
72,724 | 35,810 | 29,066 | ||||||||||
Net loss attributable to noncontrolling interests
|
3,657 | 3,840 | 4,140 | ||||||||||
Net income attributable to Himax Technologies, Inc. stockholders
|
$ | 76,381 | 39,650 | 33,206 | |||||||||
Basic earnings per ordinary share
attributable to Himax
Technologies, Inc.
stockholders
|
$ | 0.20 | 0.11 | 0.09 | |||||||||
Diluted earnings per ordinary share
attributable to Himax
Technologies, Inc.
stockholders
|
$ | 0.20 | 0.11 | 0.09 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
Net income
|
$ | 72,724 | 35,810 | 29,066 | ||||||||
Other comprehensive income:
|
||||||||||||
Unrealized gains (losses) on securities, not subject to income tax:
|
||||||||||||
Unrealized holding gains (losses) on available-for-sale marketable securities arising during the period
|
943 | (193 | ) | 1,511 | ||||||||
Reclassification adjustment for realized losses (gains) included in net income
|
(913 | ) | 87 | (296 | ) | |||||||
Foreign currency translation adjustments, not subject to income tax
|
(295 | ) | 463 | 210 | ||||||||
Net unrecognized actuarial loss, net of tax of $(20)
,
$(18) and $(54)
in 2008, 2009
and 2010, respectively
|
(67 | ) | (22 | ) | (203 | ) | ||||||
Comprehensive income
|
72,392 | 36,145 | 30,288 | |||||||||
Comprehensive loss
attributable to noncontrolling interests
|
3,682 | 3,823 | 4,118 | |||||||||
Comprehensive income
attributable to Himax Technologies, Inc. stockholders
|
$ | 76,074 | 39,968 | 34,406 |
Ordinary shares
|
Additional paid-in capital | Treasury shares |
Accumulated
other
comprehensive
income (loss
)
|
Un-appropriated retained earnings | Total Himax Technologies, Inc. stockholders' equity | Non-controlling interests |
Total
Equity
|
|||||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||
Balance at January 1, 2008
|
383,959 | $ | 115,188 | 120,725 | - | (7 | ) | 215,403 | 451,309 | 11,089 | 462,398 | |||||||||||||||||||||||||
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 gains (losses) 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 (loss)
|
- | - | - | - | - | 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 paid-in capital | Treasury shares |
Accumulated
other
comprehensive
income (loss
)
|
Un-appropriated retained earnings | Total Himax Technologies, Inc. stockholders' equity | Non-controlling interests |
Total
Equity
|
|||||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||
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 | 1 | 286 | |||||||||||||||||||||||||||
Dilution gain of equity method investments
|
- | - | 13 | - | - | - | 13 | - | 13 | |||||||||||||||||||||||||||
Net unrecognized actuarial loss, net of tax of $(18)
|
- | - | - | - | (41 | ) | - | (41 | ) | 19 | (22 | ) | ||||||||||||||||||||||||
Unrealized holding losses on available-for-sale marketable securities
|
- | - | - | - | (105 | ) | - | (105 | ) | (1 | ) | (106 | ) | |||||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | 464 | - | 464 | (1 | ) | 463 | ||||||||||||||||||||||||||
Declaration of cash dividends, $0.150 per share
|
- | - | - | - | - | (55,496 | ) | (55,496 | ) | - | (55,496 | ) | ||||||||||||||||||||||||
Net income (loss)
|
- | - | - | - | - | 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 |
Ordinary shares
|
Additional paid-in capital | Treasury shares |
Accumulated
other
comprehensive
income (loss
)
|
Un-appropriated retained earnings | Total Himax Technologies, Inc. stockholders' equity | Non-controlling interests |
Total
Equity
|
|||||||||||||||||||||||||||||
Shares
|
Amount
|
|||||||||||||||||||||||||||||||||||
Shares acquisition
|
(7,708 | ) | - | - | (10,755 | ) | - | - | (10,755 | ) | - | (10,755 | ) | |||||||||||||||||||||||
Shares retirement
|
- | (2,312 | ) | (8,443 | ) | 10,755 | - | - | - | - | - | |||||||||||||||||||||||||
Restricted stock granted
|
3,539 | 1,061 | (1,061 | ) | - | - | - | - | - | - | ||||||||||||||||||||||||||
Share-based compensation expenses
|
- | - | 6,219 | - | - | - | 6,219 | 92 | 6,311 | |||||||||||||||||||||||||||
New shares issued by subsidiary
|
- | - | - | - | - | - | - | 353 | 353 | |||||||||||||||||||||||||||
Sale (purchase) of subsidiary shares to (from) noncontrolling interests
|
- | - | 652 | - | - | - | 652 | 152 | 804 | |||||||||||||||||||||||||||
Net unrecognized actuarial loss, net of tax of $(54)
|
- | - | - | - | (201 | ) | - | (201 | ) | (2 | ) | (203 | ) | |||||||||||||||||||||||
Unrealized holding gains on available-for-sale marketable securities
|
- | - | - | - | 1,193 | - | 1,193 | 22 | 1,215 | |||||||||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | - | 208 | - | 208 | 2 | 210 | |||||||||||||||||||||||||||
Declaration of cash dividends, $0.125 per share
|
- | - | - | - | - | (44,097 | ) | (44,097 | ) | - | (44,097 | ) | ||||||||||||||||||||||||
Net income (loss)
|
- | - | - | - | - | 33,206 | 33,206 | (4,140 | ) | 29,066 | ||||||||||||||||||||||||||
Balance at December 31, 2010
|
353,843 | $ | 106,153 | 100,291 | - | 1,204 | 198,230 | 405,878 | 1,098 | 406,976 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 72,724 | 35,810 | 29,066 | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
Depreciation and amortization
|
12,318 | 13,795 | 13,626 | |||||||||
Bad debt expense
|
25,305 | 218 | - | |||||||||
Share-based compensation expenses
|
9,086 | 8,553 | 6,311 | |||||||||
Loss on disposal of property and equipment
|
89 | 43 | 34 | |||||||||
Gain on disposal of subsidiary shares, net
|
(341 | ) | - | - | ||||||||
Loss (gain) on disposal of marketable securities, net
|
(913 | ) | 87 | (296 | ) | |||||||
Unrealized gain on conversion option
|
- | - | (320 | ) | ||||||||
Interest income from amortization of discount on investment in corporate bonds
|
- | - | (52 | ) | ||||||||
Equity in losses of equity method investees
|
- | 89 | 410 | |||||||||
Deferred income tax expense (benefit)
|
(12,348 | ) | 1,448 | 4,481 | ||||||||
Inventories write downs
|
18,028 | 13,622 | 10,557 | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Accounts receivable
|
12,342 | (13,686 | ) | (14,782 | ) | |||||||
Accounts receivable from related parties
|
89,850 | (33,685 | ) | 41,306 | ||||||||
Inventories
|
1,371 | 14,401 | (60,777 | ) | ||||||||
Prepaid expenses and other current assets
|
8,012 | (2,300 | ) | (1,590 | ) | |||||||
Accounts payable
|
(93,301 | ) | 34,360 | 27,843 | ||||||||
Income taxes payable
|
(3,206 | ) | (880 | ) | (5,793 | ) | ||||||
Other accrued expenses and other current liabilities
|
(2,516 | ) | 2,452 | 4,767 | ||||||||
Other liabilities
|
- | (697 | ) | 2,840 | ||||||||
Net cash provided by operating activities
|
136,500 | 73,630 | 57,631 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of property and equipment
|
(17,490 | ) | (10,592 | ) | (7,172 | ) | ||||||
Proceeds from disposal of property and equipment
|
32 | 25 | - | |||||||||
Purchase of available-for-sale marketable securities
|
(68,892 | ) | (34,248 | ) | (34,976 | ) | ||||||
Disposal of available-for-sale marketable securities
|
71,172 | 39,263 | 33,443 | |||||||||
Purchase of investment securities
|
(4,481 | ) | - | (7,524 | ) | |||||||
Purchase of equity method investments
|
- | (663 | ) | (906 | ) | |||||||
Refund from (increase in) refundable deposits
|
(86 | ) | (217 | ) | 298 | |||||||
Increase in other assets
|
- | (7 | ) | (684 | ) | |||||||
Pledge of restricted cash, cash equivalents and marketable securities
|
(2,065 | ) | (1,002 | ) | (57,578 | ) | ||||||
Purchase of intangible assets
|
- | (100 | ) | - | ||||||||
Net cash used in investing activities
|
(21,810 | ) | (7,541 | ) | (75,099 | ) |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
Cash flows from financing activities:
|
||||||||||||
Distribution of cash dividends
|
$ | (66,817 | ) | (55,496 | ) | (44,097 | ) | |||||
Proceeds from disposal of subsidiary shares to noncontrolling interests by Himax Technologies Limited
|
719 | 529 | 1,011 | |||||||||
Purchase of subsidiary shares from noncontrolling interests
|
(673 | ) | (243 | ) | (207 | ) | ||||||
Proceeds from issuance of new shares by subsidiaries
|
1,123 | 1,027 | 353 | |||||||||
Payments to acquire ordinary shares for retirement
|
(8,656 | ) | (36,596 | ) | (10,755 | ) | ||||||
Proceeds from borrowing of short-term debt
|
- | 80,000 | 217,000 | |||||||||
Repayment of short-term debt
|
- | (80,000 | ) | (160,000 | ) | |||||||
Net cash provided by (used in) financing activities
|
(74,304 | ) | (90,779 | ) | 3,305 | |||||||
Effect of foreign currency exchange rate changes on
cash and cash equivalents
|
34 | 414 | 81 | |||||||||
Net increase (decrease) in cash and cash equivalents
|
40,420 | (24,276 | ) | (14,082 | ) | |||||||
Cash and cash equivalents at beginning of year
|
94,780 | 135,200 | 110,924 | |||||||||
Cash and cash equivalents at end of year
|
$ | 135,200 | 110,924 | 96,842 | ||||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$ | - | 3 | 170 | ||||||||
Income taxes
|
$ | 7,175 | 7,652 | 8,329 |
Note 1.
|
Background, Principal Activities and Basis of Presentation
|
Jurisdiction of
|
Percentage of
Ownership
December 31,
|
|||||||
Subsidiary
|
Main activities
|
Incorporation
|
2009
|
2010
|
||||
Himax Technologies Limited
|
IC design and sales
|
ROC
|
100.00%
|
100.00%
|
||||
Himax Technologies Anyang Limited
|
Sales
|
South Korea
|
100.00%
|
100.00%
|
||||
Himax Semiconductor, Inc. (formerly 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
|
88.73%
|
87.96%
|
||||
Integrated Microdisplays Limited
|
IC design and sales
|
Hong Kong
|
88.73%
|
87.96%
|
||||
Himax Analogic, Inc.
|
IC design and sales
|
ROC
|
77.56%
|
75.11%
|
||||
Himax Imaging, Inc.
|
Investments
|
Cayman Islands
|
94.80%
|
93.37%
|
||||
Himax Imaging, Ltd.
|
IC design and sales
|
ROC
|
94.80%
|
93.37%
|
||||
Himax Imaging Corp.
|
IC design and sales
|
California, USA
|
94.80%
|
93.37%
|
||||
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
|
77.91%
|
78.11%
|
Jurisdiction of
|
Percentage of
Ownership
December 31,
|
|||||||
Subsidiary
|
Main activities
|
Incorporation
|
2009
|
2010
|
||||
Himax Media Solutions (Hong Kong) Limited
|
Investments
|
Hong Kong
|
77.91%
|
78.11%
|
||||
Harvest Investment Limited
|
Investments
|
ROC
|
-
|
100.00%
|
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 Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
Net income attributable to Himax Technologies, Inc. stockholders (in thousands)
|
$ | 76,381 | 39,650 | 33,206 | ||||||||
Denominator for basic earnings per ordinary share:
|
||||||||||||
Weighted average number of ordinary shares outstanding (in thousands)
|
383,229 | 369,652 | 355,037 | |||||||||
Basic earnings per ordinary share attributable to Himax Technologies, Inc. stockholders
|
$ | 0.20 | 0.11 | 0.09 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
Net income attributable to Himax Technologies, Inc. stockholders (in thousands)
|
$ | 76,381 | 39,650 | 33,206 | ||||||||
Denominator for diluted earnings per ordinary share:
|
||||||||||||
Weighted average number of ordinary shares outstanding (in thousands)
|
383,229 | 369,652 | 355,037 | |||||||||
Unvested RSUs (in thousands)
|
524 | 577 | 653 | |||||||||
383,753 | 370,229 | 355,690 | ||||||||||
Diluted earnings per ordinary share
attributable to Himax Technologies, Inc. stockholders
|
$ | 0.20 | 0.11 | 0.09 |
|
(r)
|
Share-Based Compensation
|
|
(s)
|
Noncontrolling Interests
|
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
Net income attributable to Himax Technologies, Inc. stockholders
|
$ | 76,381 | 39,650 | 33,206 | ||||||||
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 | 652 | |||||||||
Increase in Himax Technologies, Inc.’s paid-in capital for new shares issued by Himax Display, and Himax Media Solutions
|
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
|
2,040 | 78 | 652 | |||||||||
Change from net income attributable to Himax Technologies, Inc. stockholders and transfers from noncontrolling interests
|
$ | 78,421 | 39,728 | 33,858 |
(t)
|
Fair Value Measurements
|
(u)
|
Reclassifications
|
Note 3.
|
Investments in Marketable Securities Available-for sale
|
December 31, 2009
|
||||||||||||||||
Aggregate
|
Gross
Unrealized
|
Gross
Unrealized
|
Aggregate
Market
|
|||||||||||||
Cost
|
Gains
|
Losses
|
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 |
December 31, 2010
|
||||||||||||||||
Aggregate
|
Gross
Unrealized
|
Gross
Unrealized
|
A
ggregate
Market
|
|||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Time deposit with original maturities more than three months
|
$ | 150 | 21 | - | 171 | |||||||||||
Open-ended bond fund
|
7,995 | 466 | - | 8,461 | ||||||||||||
Total
|
$ | 8,145 | 487 | - | 8,632 |
Period
|
Proceeds
from sales
|
Gross
realized gains
|
Gross
realized losses
|
|||||||||
(in thousands) | ||||||||||||
Year ended December 31, 2008
|
$ | 71,172 | 1,060 | (147 | ) | |||||||
Year ended December 31, 2009
|
$ | 39,263 | 179 | (266 | ) | |||||||
Year ended December 31, 2010
|
$ | 33,443 | 326 | (30 | ) |
Note 4.
|
Allowance for Doubtful Accounts, Sales Returns and Discounts
|
Period
|
Balance at
beginning
of year
|
Charges (credits) to earnings
|
Amounts
utilized
|
Balance
at
end of
year
|
||||||||||||
(in thousands)
|
||||||||||||||||
For the year ended December 31, 2008
|
$ | - | 25,305 | (8 | ) | 25,297 | ||||||||||
For the year ended December 31, 2009
|
$ | 25,297 | 218 | - | 25,515 | |||||||||||
For the year ended December 31, 2010
|
$ | 25,515 | (8,788 | ) | - | 16,727 |
Period
|
Balance at
beginning
of year
|
Additions
|
Amounts
utilized
|
Balance
at
end of
year
|
||||||||||||
(in thousands)
|
||||||||||||||||
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 | ||||||||||
For the year ended December 31, 2010
|
$ | 970 | 4,551 | (4,930 | ) | 591 |
Note 5.
|
Equity Method Investments
|
December 31,
|
||||||||||||||||
2009
|
2010
|
|||||||||||||||
Amount
|
Holding
%
|
Amount
|
Holding
%
|
|||||||||||||
Hangzhou Crystal Display Technology Co., Ltd.
|
$ | 284 | 30.00 | 125 | 30.00 | |||||||||||
Shinyoptics Corp.
|
302 | 15.15 | - | - | ||||||||||||
Create Electronic Optical Co., Ltd.
|
- | - | 744 | 21.11 | ||||||||||||
$ | 586 | 869 |
Note 6.
|
Inventories
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
Finished goods
|
$ | 27,802 | 38,709 | |||||
Work in process
|
28,043 | 66,271 | ||||||
Raw materials
|
11,874 | 12,987 | ||||||
Supplies
|
49 | 21 | ||||||
$ | 67,768 | 117,988 |
Note 7.
|
Goodwill and Intangible Assets
|
(a)
|
Intangible Assets
|
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 |
December 31, 2010
|
||||||||||
Gross
carrying
amount
|
Weighted average
amortization p
eriod
|
Accumulated
amortization
|
||||||||
(in thousands)
|
||||||||||
Technology
|
$ | 6,339 |
7 years
|
3,609 | ||||||
Customer relationship
|
8,100 |
7 years
|
4,532 | |||||||
Patents
|
842 |
6 years
|
466 | |||||||
Total
|
$ | 15,281 | 8,607 |
(b)
|
Goodwill
|
Note 8.
|
Property, Plant and Equipment
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
Land
|
$ | 10,154 | 10,154 | |||||
Building and improvements
|
17,084 | 17,199 | ||||||
Machinery
|
18,828 | 21,195 | ||||||
Research and development equipment
|
15,008 | 16,484 | ||||||
Software
|
9,875 | 10,267 | ||||||
Office furniture and equipment
|
6,107 | 6,463 | ||||||
Others
|
7,712 | 10,029 | ||||||
84,768 | 91,791 | |||||||
Accumulated depreciation and amortization
|
(34,388 | ) | (45,582 | ) | ||||
Prepayment for purchases of equipment
|
1,206 | 1,352 | ||||||
$ | 51,586 | 47,561 |
Note 9.
|
Investment securities, including securities measured at fair value
|
(a)
|
Investments in Non-marketable Equity Securities
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
Chi Lin Technology Co. Ltd.
|
$ | 1,057 | 1,057 | |||||
Jetronics International Corp.
|
1,600 | 1,600 | ||||||
C Company
|
8,962 | 8,962 | ||||||
Spatial Photonics, Inc.
|
- | 6,500 | ||||||
eTurboTouch Technology Inc.
|
- | 715 | ||||||
Oculon Optoelectronics Inc.
|
- | 309 | ||||||
Shinyoptics Corp.
|
- | 283 | ||||||
$ | 11,619 | 19,426 |
(b)
|
Investments in corporate convertible bonds
|
Aggregate
Cost
|
Gross
unrealized
gains
|
Discount amortization | Aggregate market Value | |||||||||||||
(in thousands)
|
||||||||||||||||
Corporate bond-available for sale
|
$ | 4,365 | 779 | 52 | 5,196 |
Aggregate
|
Gross unrealized
|
Fair
|
||||||||||||||
Cost
|
gains
|
losses
|
value
|
|||||||||||||
(in thousands)
|
||||||||||||||||
Conversion option
|
$ | 684 | 320 | - | 1,004 |
Note 10.
|
Other Accrued Expenses and Other Current Liabilities
|
December 31,
|
|||||||||
2009
|
2010
|
||||||||
(in thousands)
|
|||||||||
Accrued mask, mold fees and other expenses for RD
|
$ | 6,254 | 7,080 | ||||||
Payable for purchases of equipment
|
529 | 739 | |||||||
Accrued software maintenance
|
1,550 | 1,700 | |||||||
Accrued payroll and related expenses
|
2,951 | 3,356 | |||||||
Accrued professional service fee
|
1,268 | 1,438 | |||||||
Accrued warranty costs
|
679 | 679 | |||||||
Accrued insurance, welfare expenses, etc.
|
5,194 | 8,613 | |||||||
$ | 18,425 | 23,605 |
Period
|
Balance at beginning
of year
|
Additions charged to
expense
|
Amounts
utilized
|
Balance at
end of
year
|
||||||||||||
(in thousands)
|
||||||||||||||||
Year ended December 31, 2008
|
$ | 335 | 1,526 | (1,612 | ) | 249 | ||||||||||
Year ended December 31, 2009
|
$ | 249 | 2,920 | (2,490 | ) | 679 | ||||||||||
Year ended December 31, 2010
|
$ | 679 | 3,772 | (3,772 | ) | 679 |
Note 11.
|
Short-Term Debts
|
Note 12.
|
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 (I)
|
||||
III
|
4,340 (US$140)
|
January 2010 to November 2011
|
Himax Headquarter Excellent Program (II)
|
||||
III
|
18,700 (US$582)
|
January 2010 to December 2011
|
LCOS Projector Development Program
|
Note 13.
|
Retirement Plan
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
Change in projected benefit obligation:
|
||||||||
Benefit obligation at beginning of year
|
$ | 1,243 | 1,332 | |||||
Service cost
|
- | - | ||||||
Interest cost
|
31 | 29 | ||||||
Actuarial loss
|
58 | 352 | ||||||
Benefit obligation at end of year
|
1,332 | 1,713 | ||||||
Change in plan assets:
|
||||||||
Fair value at beginning of year
|
1,581 | 1,869 | ||||||
Actual return on plan assets
|
11 | 31 | ||||||
Employer contribution
|
277 | 276 | ||||||
Fair value at end of year
|
1,869 | 2,176 | ||||||
Funded status
|
$ | 537 | 463 | |||||
Amounts recognized in the balance sheet consist of:
|
||||||||
Prepaid pension costs
|
$ | 628 | 631 | |||||
Accrued pension liabilities
|
(91 | ) | (168 | ) | ||||
Net amount recognized
|
$ | 537 | 463 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Service cost
|
$ | - | - | - | ||||||||
Interest cost
|
34 | 31 | 29 | |||||||||
Expected return on plan assets
|
(35 | ) | (40 | ) | (43 | ) | ||||||
Net amortization
|
34 | 25 | 27 | |||||||||
Net periodic pension cost
|
$ | 33 | 16 | 13 |
December 31,
|
||||||||
2009
|
2010
|
|||||||
Discount rate
|
2.25% | 2.00% | ||||||
Rate of increase in compensation levels
|
4.00% | 4.00% |
Year Ended December 31,
|
||||||||||||||||||
2008
|
2009
|
2010
|
||||||||||||||||
Himax Taiwan, Himax Media Solutions, HimaxDisplay & Himax
Analogic
|
Himax
Semiconductor
|
Himax Taiwan, Himax Media Solutions, HimaxDisplay & Himax Analogic |
Himax
Semiconductor
|
Whole | ||||||||||||||
Discount rate
|
2.50% | 2.50% | 2.25% | 2.00% | ||||||||||||||
Rate of increase in compensation levels
|
4.00% | 5.00% | 4.00% | 4.00% | ||||||||||||||
Expected long-term rate of return on pension assets
|
2.50% | 2.50% | 2.25% | 2.00% |
Note 14.
|
Share-Based Compensation
|
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Cost of revenues
|
$ | 435 | 264 | 240 | ||||||||
Research and development
|
15,861 | 10,936 | 8,803 | |||||||||
General and administrative
|
2,813 | 1,959 | 1,525 | |||||||||
Sales and marketing
|
2,691 | 1,902 | 1,613 | |||||||||
$ | 21,800 | 15,061 | 12,181 |
(a)
|
Long-term Incentive Plan
|
Number of Underlying
Shares for RSUs
|
Weighted Average Grant
Date Fair Value
|
|||||||
Balance at January 1, 2008
|
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 | ||||||
Granted
|
3,488,952 | 2.47 | ||||||
Vested
|
(4,145,854 | ) | 2.84 | |||||
Forfeited
|
(492,468 | ) | 3.10 | |||||
Balance at December 31, 2010
|
2,688,382 | 2.87 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Cost of revenues
|
$ | 435 | 264 | 240 | ||||||||
Research and development
|
14,906 | 10,078 | 8,153 | |||||||||
General and administrative
|
2,813 | 1,938 | 1,505 | |||||||||
Sales and marketing
|
2,671 | 1,853 | 1,587 | |||||||||
$ | 20,825 | 14,133 | 11,485 |
(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 $45 thousand and $15 thousand in 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 Sh
ares
|
Weighted Average Grant
Date Fair Value
|
|||||||
Balance at January 1, 2008
|
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 2010, 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 $261 thousand, $340 thousand and $355 thousand in 2008, 2009 and 2010, 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, 2008
|
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 | ||||||
Granted
|
1,380,000 | 0.33 | ||||||
Vested
|
(868,390 | ) | 0.33 | |||||
Forfeited
|
(813,722 | ) | 0.33 | |||||
Balance at December 31, 2010
|
5,346,777 | 0.33 |
(i
i
i)
|
As stated in Note 14 (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, 2008
|
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 | ||||||
Vested
|
(988,000 | ) | 0.464 | |||||
Forfeited
|
(133,000 | ) | 0.464 | |||||
Balance at December 31, 2010
|
- | - |
(c)
|
RSUs issued in connection with the acquisition of Himax Semiconductor
|
Number of Underlying
Shares for RSUs
|
Weighted Average Grant
Date Fair Value
|
|||||||
Balance at January 1, 2008
|
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, 2008
|
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 | |||||||||
Granted
|
- | - | ||||||||||
Exercised
|
- | - | ||||||||||
Forfeited
|
(997,500 | ) | 0.420 | |||||||||
Balance at December 31, 2010
|
5,775,500 | 0.415 | 2.452 | |||||||||
Exercisable at December 31, 2010
|
2,944,125 | 0.464 |
Note 15.
|
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 stock dividend for each ordinary share then outstanding as of August 7, 2009 from the additional paid-in capital account.
|
(iii)
|
Shares consolidation: immediately following the issuance of stock dividend, every three thousand issued and unissued shares of par 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 16.
|
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
|
||
Himax Semiconductor:
|
|||
August 26, 2004
|
January 1, 2009-December 31, 2013
|
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Taiwan operations
|
$ | 64,141 | 45,160 | 38,235 | ||||||||
US operations
|
(155 | ) | 39 | (55 | ) | |||||||
China operations
|
(305 | ) | (215 | ) | 157 | |||||||
Korea operations
|
55 | (75 | ) | 177 | ||||||||
Others
|
299 | (1,184 | ) | (3,220 | ) | |||||||
$ | 64,035 | 43,725 | 35,294 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Current:
|
||||||||||||
Taiwan operations
|
$ | 3,628 | 6,407 | 1,589 | ||||||||
US operations
|
25 | 26 | 33 | |||||||||
China operations
|
- | 34 | 112 | |||||||||
Korea operations
|
6 | - | 12 | |||||||||
Others
|
- | - | 1 | |||||||||
Total current
|
3,659 | 6,467 | 1,747 | |||||||||
Deferred:
|
||||||||||||
Taiwan operations
|
(12,232 | ) | 1,443 | 4,518 | ||||||||
US operations
|
50 | 12 | (30 | ) | ||||||||
China operations
|
(166 | ) | 1 | (15 | ) | |||||||
Korea operations
|
- | (8 | ) | 8 | ||||||||
Others
|
- | - | - | |||||||||
Total deferred
|
(12,348 | ) | 1,448 | 4,481 | ||||||||
Income tax expense (benefit)
|
$ | (8,689 | ) | 7,915 | 6,228 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Deferred income tax benefit, exclusive of the effects of other components listed below
|
$ | (21,056 | ) | (11,182 | ) | (13,141 | ) | |||||
Adjustments to deferred tax assets and liabilities for changes in enacted tax laws and rates
|
(14 | ) | 5,224 | 3,144 | ||||||||
Increase in the beginning-of-the-year balance of the valuation allowance for deferred tax assets
|
8,722 | 7,406 | 14,478 | |||||||||
$ | (12,348 | ) | 1,448 | 4,481 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Expected income tax expense
|
$ | 16,009 | 10,931 | 6,000 | ||||||||
Tax-exempted income
|
(25,185 | ) | (9,377 | ) | (3,567 | ) | ||||||
Tax on undistributed retained earnings
|
10,281 | 5,816 | 1,643 | |||||||||
Tax benefit resulting from setting aside legal reserve from prior year’s income
|
(1,148 | ) | (953 | ) | (639 | ) | ||||||
Adjustment to deferred tax assets and liabilities for enacted change in tax laws and rates
|
(14 | ) | 5,224 | 3,144 | ||||||||
Increase in investment tax credits
|
(17,191 | ) | (13,809 | ) | (3,687 | ) | ||||||
Increase in deferred tax asset valuation allowance
|
9,144 | 8,450 | 12,408 | |||||||||
Non-deductible share-based compensation expenses
|
298 | 458 | 178 | |||||||||
Provision for uncertain tax position in connection with share-based compensation expenses
|
367 | 416 | 133 | |||||||||
Decrease in unrecognized tax benefits related to prior year uncertain
tax positions, net of its impact to tax-exempted income
|
(1,780 | ) | - | (2,295 | ) | |||||||
Tax effect resulting from foreign entities’ monetary assets or liabilities that are denominated in functional currency
|
- | - | (4,885 | ) | ||||||||
Transaction gain or loss resulted from remeasuring deferred foreign tax liabilities or assets
|
835 | (1,016 | ) | (3,392 | ) | |||||||
Tax effect of the difference resulting from remeasuring foreign entities’ nonmonetary assets
|
(1,966 | ) | 691 | (1,043 | ) | |||||||
Foreign tax rate differential
|
537 | 1,184 | 1,320 | |||||||||
Variance from audits of prior years’ income tax filings
|
441 | (538 | ) | 1,205 | ||||||||
Others
|
683 | 438 | (295 | ) | ||||||||
Actual income tax expense (benefit)
|
$ | (8,689 | ) | 7,915 | 6,228 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Income from continuing operations
|
$ | (8,689 | ) | 7,915 | 6,228 | |||||||
Other comprehensive loss
|
(20 | ) | (18 | ) | (54 | ) | ||||||
Tax benefit allocated to reduce goodwill
|
(32 | ) | - | - | ||||||||
Total income tax expense (benefit)
|
$ | (8,741 | ) | 7,897 | 6,174 |
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
Deferred tax assets:
|
||||||||
Inventory
|
$ | 4,133 | 4,482 | |||||
Allowance for doubtful accounts
|
4,678 | 2,556 | ||||||
Equity method investments
|
- | 38 | ||||||
Capitalized expense for tax purposes
|
36 | 28 | ||||||
Accrued compensated absences
|
59 | 67 | ||||||
Allowance for sales return, discounts and warranty
|
222 | 223 | ||||||
Unused investment tax credits
|
47,849 | 49,084 | ||||||
Unused loss carry-forward
|
14,006 | 18,466 | ||||||
Unrealized foreign exchange loss
|
- | 5,178 | ||||||
Accrued pension cost
|
114 | 168 | ||||||
Other
|
337 | 325 | ||||||
Total gross deferred tax assets
|
71,434 | 80,615 | ||||||
Less: valuation allowance
|
(28,428 | ) | (42,906 | ) | ||||
Net deferred tax assets
|
43,006 | 37,709 | ||||||
Deferred tax liabilities:
|
||||||||
Unrealized foreign exchange gain
|
- | (293 | ) | |||||
Prepaid pension cost
|
(332 | ) | (360 | ) | ||||
Acquired intangible assets
|
(2,269 | ) | (1,541 | ) | ||||
Property, plant and equipment
|
(62 | ) | (31 | ) | ||||
Deferred shared based compensation
|
(518 | ) | (89 | ) | ||||
Other
|
(3 | ) | - | |||||
Total gross deferred tax liabilities
|
(3,184 | ) | (2,314 | ) | ||||
Net deferred tax assets
|
$ | 39,822 | 35,395 |
For
the year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Balance at beginning of year
|
$ | 3,968 | 5,718 | 8,450 | ||||||||
Increase related to prior year tax positions
|
- | - | - | |||||||||
Decrease related to prior year tax positions
|
(1,780 | ) | - | (2,295 | ) | |||||||
Increase related to current year tax positions
|
3,555 | 2,587 | 133 | |||||||||
Effect of exchange rate change
|
(25 | ) | 145 | 604 | ||||||||
Balance at end of year
|
$ | 5,718 | 8,450 | 6,892 |
Note 17.
|
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, 2009 Using
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
(in thousands)
|
||||||||||||
Cash and cash equivalents:
|
||||||||||||
Time deposits with original maturities less than three months
|
$ | 87,600 | - | - | ||||||||
Marketable securities available-for-sale:
|
||||||||||||
Time deposit with original maturities more than three months
|
- | 2,218 | - | |||||||||
Open-ended bond fund
|
8,512 | - | - | |||||||||
Restricted marketable securities:
|
||||||||||||
Time deposits with original maturities of more than three months
|
- | 1,094 | - | |||||||||
Total
|
$ | 96,112 | 3,312 | - |
Corporate
straight
bonds
|
Derivatives-Conversion
option
|
Total
|
||||||||||
(in thousands)
|
||||||||||||
Balance at December 31, 2009
|
$ | - | - | - | ||||||||
Purchases, issuances, and settlements
|
4,365 | 684 | 5,049 | |||||||||
Total unrealized gains included in earnings
|
- | 320 | 320 | |||||||||
Total unrealized gains included in other comprehensive income, net
|
831 | - | 831 | |||||||||
Balance at December 31, 2010
|
$ | 5,196 | 1,004 | 6,200 | ||||||||
The amount of total gains in 2010 included in earnings attributable to the change in unrealized gains relating to assets and liabilities still held December 31, 2010
|
$ | - | 320 | 320 |
Note 18.
|
Significant Concentrations
|
Note 19.
|
Related-party Transactions
|
(a)
|
Name and relationship
|
Name of related parties
|
Relationship
|
Chimei Innolux Corporation (CMI)
|
Principal Owner (1)
|
|
Chi Mei Optoelectronics Corp. (CMO)
|
The Company’s Chairman represented on CMO’s Board of Directors, expired on March 18, 2010
(1)
|
Chi Mei Optoelectronics Japan, Co., Ltd. (CMO-Japan)
|
Wholly owned subsidiary of CMI (2)
|
|
Chi Mei Corporation (CMC)
|
Major shareholder of CMI
|
Name of related parties
|
Relationship
|
NEXGEN Mediatech Inc. (NEXGEN)
|
The Company’s Chairman represented on NEXGEN’s Board of Directors
|
|
Chi Lin Technology Co., Ltd. (Chi Lin Tech)
|
The Company’s Chairman represented on Chi Lin Tech’s Board of Directors
|
|
NingBo Chi Mei Electronics Ltd. (CME-NingBo)
|
The subsidiary of CMI
(2)
|
|
NingBo Chi Mei Optoelectronics Ltd. (CMO-NingBo)
|
The subsidiary of CMI
(2)
|
|
Chi Mei EL Corporation (CMEL)
|
The subsidiary of CMI
(2)
|
|
NanHai Chi Mei Optoelectronics Ltd. (CMO- NanHai)
|
The subsidiary of CMI
(2)
|
|
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 CMI (2)
|
|
NingBo Chi Mei Logistics Corp. (CMLC-NingBo)
|
The subsidiary of CM
I (2)
|
|
Foshan
Chi Mei Logistics Ltd. (
CMLC-Foshan)
|
The subsidiary of CM
I (2)
|
|
Dongguan Chi Hsin Electronics Co., Ltd. (Chi Hsin-Dongguan)
|
The subsidiary of CM
I (2)
|
|
NingBo ChiHsin Electronics Ltd. (Chi Hsin-NingBo)
|
The subsidiary of CM
I (2)
|
|
Fulintec Science Engineering Co., Ltd. (Fulintec)
|
The subsidiary of CM
I (2)
|
|
ShenZhen Nexgen Trading Co., Ltd. (ShenZhen Nexgen)
|
The subsidiary of NEXGEN
|
|
TPO Displays Japan K.K. (TPO Japan)
|
The subsidiary of CMI, as related party since March 18, 2010
|
Name of related parties
|
Relationship
|
TPO Displays Hong Kong Limited (TPO Hong Kong)
|
The subsidiary of CMI, as related party since March 18, 2010
|
|
TPO Displays (Shanghai) Ltd. (TPO Shanghai)
|
The subsidiary of CMI, as related party since March 18, 2010
|
|
Contrel Technology Co., Ltd. (Contrel)
|
Related party in substance, not included as related party since
March 18, 2010
|
|
Ampower Technology Co., Ltd. (Ampower)
|
Related party in substance, not included as related party since
March 18, 2010
|
|
Amlink (Shanghai) Ltd. (Amlink)
|
Related party in substance, not included as related party since
March 18, 2010
|
|
Linklinear Development Co, Ltd. (LDC)
|
Related party in substance, not included as related party since
March 18, 2010
|
|
Shinyoptics Corp. (Shinyoptics)
|
Equity method investee of the Company,
not included as related party since
October 1, 2010
|
|
Hangzhou Crystal Display Technology Co., Ltd. (Crystal)
|
Equity method investee of the Company
|
(1)
|
CMO, InnoLux Display Corporation, and TPO Displays Corporation agreed to conduct a merger of the three companies. The merger transaction was completed on March 18, 2010. Innolux is the surviving entity following the merger and is renamed Chimei Innolux Corporation, or CMI.
|
(2)
|
The entities are the subsidiary of CMO before
March 18, 2010.
|
(b)
|
Significant transactions with related parties
|
(i)
|
Revenues and accounts receivable
|
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
CMO- NingBo
|
$ | 292,231 | 230,299 | 167,255 | ||||||||
CMI
|
- | - | 56,770 | |||||||||
CMO- NanHai
|
69,865 | 86,612 | 51,821 | |||||||||
Chi Hsin- NingBo
|
4,382 | 23,789 | 19,730 | |||||||||
CMO
|
143,132 | 101,569 | 15,602 | |||||||||
ShenZhen Nexgen
|
- | - | 13,037 | |||||||||
CME- NingBo
|
1,804 | - | 8,592 | |||||||||
Shinyoptics
|
- | 23 | 992 | |||||||||
Amlink
|
- | 1,933 | 912 | |||||||||
TPO Japan
|
- | - | 853 | |||||||||
TPO Hong Kong
|
- | - | 827 | |||||||||
Crystal
|
- | 45 | 723 | |||||||||
Chi Hsin- Dongguan
|
2,397 | 2,792 | 604 | |||||||||
Chi Lin Tech
|
- | 60 | 401 | |||||||||
TPO Shanghai
|
- | - | 347 | |||||||||
CMO-Japan
|
3 | 10 | 87 | |||||||||
CMEL
|
288 | 45 | 70 | |||||||||
Ampower
|
2 | - | 1 | |||||||||
Chi Hsin
|
6,359 | 129 | - | |||||||||
$ | 520,463 | 447,306 | 338,624 |
Year Ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Display driver for large-size applications
|
$ | 498,771 | 417,099 | 297,146 | ||||||||
Display driver for consumer electronics applications
|
16,486 | 25,542 | 27,189 | |||||||||
Display driver for mobile handsets
|
4,029 | 1,487 | 10,170 | |||||||||
Others
|
1,175 | 1,117 | 1,090 | |||||||||
$ | 520,461 | 445,245 | 335,595 |
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
CMO- NingBo
|
$ | 73,029 | 39,793 | |||||
CMI
|
- | 27,275 | ||||||
CMO- NanHai
|
27,088 | 16,305 | ||||||
Chi Hsin- NingBo
|
6,361 | 6,474 | ||||||
CME- NingBo
|
- | 4,823 | ||||||
TPO Hong Kong
|
- | 634 | ||||||
TPO Japan
|
- | 335 | ||||||
Crystal
|
45 | 220 | ||||||
TPO Shanghai
|
- | 177 | ||||||
Chi Lin Tech
|
63 | 28 | ||||||
CMEL
|
8 | 28 | ||||||
CMO-Japan
|
- | 10 | ||||||
CMO
|
30,360 | - | ||||||
Amlink
|
1,010 | - | ||||||
Chi Hsin- Dongguan
|
350 | - | ||||||
Shinyoptics
|
16 | - | ||||||
138,330 | 96,102 | |||||||
Allowance for sales returns and discounts
|
(158 | ) | (138 | ) | ||||
$ | 138,172 | 95,964 |
(ii)
|
Property transactions
|
(iii)
|
Lease
|
Duration
|
Amount
|
||||
(in thousands)
|
|||||
January 1, 2011~December 31, 2011
|
$ | 198 | |||
January 1, 2012~December 31, 2012
|
198 | ||||
January 1, 2013~December 31, 2013
|
197 | ||||
January 1, 2014~December 31, 2014
|
187 | ||||
January 1, 2015~December 31, 2015
|
187 | ||||
After January 1, 2016
|
1,548 | ||||
$ | 2,515 |
(iv)
|
Others
|
Note 20.
|
Commitments and Contingencies
|
(a)
|
As of December 31, 2009 and 2010, 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, 2010, amount of outstanding letters of credit for the purchase of machinery and equipment was $1,839 thousand.
|
(b)
|
As of December 31, 2009, and 2010 the Company had entered into several contracts for the acquisition of equipment and computer software. Total contract prices amounted to $5,010 thousand and $8,825 thousand, respectively. As of December 31, 2009 and 2010, the remaining commitments were $3,761 thousand and $7,715 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 2011 to 2013. As of December 31, 2009 and 2010, deposits paid amounted to $662 thousand and $535 thousand, respectively, and were recorded as refundable deposit in the accompanying consolidated balance sheets.
|
Duration
|
Amount
|
||||
(in thousands)
|
|||||
January 1, 2011~December 31, 2011
|
$ | 933 | |||
January 1, 2012~December 31, 2012
|
298 | ||||
January 1, 2013~December 31, 2013
|
32 | ||||
$ | 1,263 |
(d)
|
The Company entered into several sales agent agreements, based on these agreements, the Company shall pay commissions at the rates ranging from 0.5% to 5% 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. In 2008, 2009 and 2010, 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 donation amounts based on the modified agreements amounted to NT$55.4 million ($1.7 million).
As of December 31, 2010, the remaining commitments were NT$12.0 million ($0.4 million).
|
(g)
|
According to the Agreement and Plan of Merger
, signed with Spatial Photonics, Inc. (“Spatial Photonics”) on October 25, 2010,
the Company was granted a purchase option to acquire all of the outstanding shares of ordinary shares of Spatial Photonics on and before, October 31, 2011 with agreed merger consideration which is up to 20% of the Company’s subsidiary, Himax Display Inc.’s ordinary shares determined in accordance with specific milestones.
As of December 31, 2010, the Company had paid $6,500 thousand to acquire
Spatial Photonics‘ Series D-1 Preferred Stock standing for 15.41% equity ownership of Spatial Photonics.
|
(h)
|
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.
|
(i)
|
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.
|
(j)
|
The Company has entered into 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 $63,129 thousand and $106,419 thousand as of December 31, 2009 and 2010, respectively.
|
Note 21.
|
Product and Geographic Information
|
Year Ended December 31,
|
||||||||||||||||
2008
|
2009
|
2010
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Display drivers for large-size applications
|
$ | 651,504 | 493,513 | 366,492 | ||||||||||||
Display drivers for mobile handsets applications
|
57,274 | 69,081 | 119,623 | |||||||||||||
Display drivers for consumer electronics applications
|
81,866 | 83,527 | 103,942 | |||||||||||||
Others
|
42,155 | 46,260 | 52,635 | |||||||||||||
$ | 832,799 | 692,381 | 642,692 |
Year Ended December 31,
|
||||||||||||||||
2008
|
2009
|
2010
|
||||||||||||||
(in thousands)
|
||||||||||||||||
Taiwan
|
$ | 646,011 | 548,384 | 492,687 | ||||||||||||
China
|
116,947 | 86,451 | 112,845 | |||||||||||||
Other Asia Pacific (Korea and Japan)
|
69,570 | 57,414 | 37,121 | |||||||||||||
Europe (Europe and America)
|
271 | 132 | 39 | |||||||||||||
$ | 832,799 | 692,381 | 642,692 |
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
Taiwan
|
$ | 50,254 | 46,336 | |||||
China
|
1,006 | 983 | ||||||
U.S. | 296 | 223 | ||||||
Korea
|
30 | 19 | ||||||
$ | 51,586 | 47,561 |
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
CMI and its affiliates, a related party
|
$ | - | 95,854 | |||||
SVA-NEC
|
25,524 | 16,727 | ||||||
CMO and its affiliates, a related party
|
137,196 | - | ||||||
$ | 162,720 | 112,581 |
Note 22.
|
Himax Technologies, Inc. (the Parent Company only)
|
December 31,
|
||||||||
2009
|
2010
|
|||||||
(in thousands)
|
||||||||
Cash
|
$ | 77 | 375 | |||||
Other current assets
|
1,898 | 356 | ||||||
Investment in non-marketable securities
|
1,600 | 1,600 | ||||||
Investments in subsidiaries
|
572,574 | 612,703 | ||||||
Total assets
|
$ | 576,149 | 615,034 | |||||
Current liabilities
|
$ | 1,296 | 2,156 | |||||
Short-term debt
|
- | 44,000 | ||||||
Debt borrowing from a subsidiary
|
155,400 | 163,000 | ||||||
Total equity
|
419,453 | 405,878 | ||||||
Total liabilities and equity
|
$ | 576,149 | 615,034 |
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Revenues
|
$ | - | - | - | ||||||||
Costs and expenses
|
(1,162 | ) | (1,080 | ) | (1,210 | ) | ||||||
Operating loss
|
(1,162 | ) | (1,080 | ) | (1,210 | ) | ||||||
Equity in earnings from subsidiaries
|
76,082 | 40,834 | 36,427 | |||||||||
Other non-operating income (loss)
|
1,461 | (104 | ) | (2,010 | ) | |||||||
Earnings before income taxes
|
76,381 | 39,650 | 33,207 | |||||||||
Income taxes
|
- | - | 1 | |||||||||
Net Income
|
$ | 76,381 | 39,650 | 33,206 |
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income
|
$ | 76,381 | 39,650 | 33,206 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
||||||||||||
Share-based compensation expense
|
22 | 24 | - | |||||||||
Equity in earnings from subsidiaries
|
(76,082 | ) | (40,834 | ) | (36,427 | ) | ||||||
Changes in operating assets and liabilities:
|
||||||||||||
Other current assets
|
330 | (826 | ) | 1,543 | ||||||||
Other accrued expenses and other current liabilities
|
78 | 654 | (2,542 | ) | ||||||||
Net cash provided by (used in) operating activities
|
729 | (1,332 | ) | (4,220 | ) | |||||||
Net cash used in investing activities
|
(8,481 | ) | (11,400 | ) | - |
Year ended December 31,
|
||||||||||||
2008
|
2009
|
2010
|
||||||||||
(in thousands)
|
||||||||||||
Cash flows from financing activities:
|
||||||||||||
Distribution of cash dividends
|
(66,817 | ) | (55,496 | ) | (44,097 | ) | ||||||
Proceeds from borrowing of short-term debt
|
- | 80,000 | 204,000 | |||||||||
Repayment of short-term debt
|
- | (80,000 | ) | (160,000 | ) | |||||||
P
roceeds from issue of RSUs from a subsidiary
|
7,540 | 6,598 | 4,370 | |||||||||
Proceeds from debt from a subsidiary
|
60,000 | 95,400 | 11,000 | |||||||||
Acquisitions of ordinary shares for retirement
|
(8,656 | ) | (36,596 | ) | (10,755 | ) | ||||||
Net cash provided by (used in) financing activities
|
(7,933 | ) | 9,906 | 4,518 | ||||||||
Net increase (decrease) in cash
|
(15,685 | ) | (2,826 | ) | 298 | |||||||
Cash at beginning of year
|
18,588 | 2,903 | 77 | |||||||||
Cash at end of year
|
$ | 2,903 | 77 | 375 | ||||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Interest paid during the year
|
$ | - | 3 | 156 | ||||||||
Income taxes paid during the year
|
$ | - | - | 1 |
Note 23.
|
Subsequent Events
|
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.
|
If to the Purchaser or the Merger Sub: | Himax Display, Inc. | |
No.26 Zih Lian Road
|
||
Tree Valley Park
|
||
Sihshih Township
|
||
Tainan County 74148
|
||
Republic of China Attention:
|
||
Facsimile:
|
||
With copies to:
|
Baker & McKenzie
|
|
15/F, 168 Tun Hwa North Road
|
||
Taipei 105, Taiwan,
|
||
Republic of China
|
||
Attention:
|
||
Facsimile:
|
||
Baker & McKenzie LLP
|
||
660 Hansen Way
|
||
Palo Alto, CA 94034
|
||
Attention: Jenny C. Yeh
|
||
Facsimile: +1.650.856.9299
|
||
If to the Company
|
Spatial Photonics, Inc.
|
|
930 Hamlin Ct.
|
||
Sunnyvale, CA 94089
|
||
Attention: Wald Siskens, President
|
||
Facsimile:
|
||
With a copy to:
|
Fenwick & West LLP
|
|
801 California Street
|
||
Mountain View, CA 94041
|
||
Attention: Sayre Stevick
|
||
Mark Porter
|
||
Facsimile: 650-938-5200
|
“Purchaser”
|
“Company”
|
|||||
Himax Display, Inc.
a Republic of China corporation
|
Spatial Photonics, Inc.,
a Delaware corporation
|
|||||
By:
|
/s/ Biing-Seng Wu
|
By:
|
/s/ Wald Siskens
|
|||
Name:
|
Biing-Seng Wu |
Name:
|
Wald Siskens
|
|||
Title:
|
Chairman of the Board of Directors
|
Title:
|
President and Chief Executive Officer
|
“Stockholder Representative”
|
||||||
|
||||||
Wen Hsieh, solely for the purposes related to the
Stockholder Representative as set forth herein
|
||||||
By:
|
/s/ Wen Hsieh | |||||
|
||||||
|
Exhibit A
|
Definitions
|
Exhibit B
|
Milestones; Determination of Milestones
|
Exhibit B-1
|
*
|
Exhibit C
|
Final Merger Consideration Allocation Schedule [Reserved]
|
Exhibit D
|
FIRPTA Certificate [Reserved]
|
Exhibit E
|
[Reserved]
|
Exhibit F
|
Form of Agreement to Exchange Shares
|
Exhibit G
|
Form of Cooperation Agreement
|
Exhibit H
|
Intellectual Property Agreement
|
Exhibit I
|
Form of Joinder Agreement [Reserved]
|
E. Number of tier-1
brand
customers
starting
mass production AMB first MP order placed of at least 1K pieces. Parties agree that
*
are considered tier-1. Other customers to be agreed between parties on case by case basis
|
10%
|
*
|
*
|
*
|
*
|
|||||
F. SP Sales at acquisition date
III
|
10%
|
*
|
*
|
*
|
*
|
|||||
G. Q3 2011 SP
operating expenses excluding cost of sales and but including depreciation
|
10%
|
*
|
*
|
*
|
*
|
|||||
H. Percentage of Purchaser Fully Diluted Capital Stock issuable as a result of milestone achievements.
|
100%
|
0%
|
8%
|
15%
|
20%
|
High Score Row H x Milestone A Weight Factor
|
(20% x 20%)
|
4.0%
|
High Score Row H x Milestone B Weight Factor
|
(20% x 30%)
|
6.0%
|
Medium Score Row H x Milestone C Weight Factor:
|
(15% x 10%)
|
1.5%
|
Medium Score Row H x Milestone D Weight Factor
|
(15% x 10%)
|
1.5%
|
Low Score Row H x Milestone E Weight Factor
|
(8% x 10%)
|
0.8%
|
Less than Low Score Row H x Milestone F Weight Factor
|
(0% x 10%)
|
0.0%
|
Less than Low Score Row H x Milestone G Weight Factor
|
(0% x 10%)
|
0.0%
|
Percentage of Purchaser Fully Diluted Equity Capital
|
13.8%
|
(i)
|
Himax Display Inc., a corporation organized under the laws of the Republic of China, located (the “
Himax Display
”); and
|
(ii)
|
EACH OF THE PARTIES LISTED IN EXHIBIT A HERETO (collectively, the “
Equityholders
” and each an “
Equityholder
”).
|
1.
|
Exchange of Shares.
|
2.
|
Termination.
This Agreement shall terminate automatically and be of no further force and effect upon the termination of the Merger Agreement in accordance with its terms.
|
3.
|
Governing Law.
This Agreement shall be governed by, and construed in accordance with, the laws of the Republic of China.
|
4.
|
Amendment of Agreement.
Any provision of this Agreement may be amended by a written instrument signed by (i) Equityholders having the right to receive a majority of Himax Display’s common stock to be issued pursuant to the Merger Agreement; and (ii) Himax Display.
|
Himax Display, Inc.
|
||||||
By:
|
|
|||||
Title:
|
|
|
||||
[ ]
|
|
[Name of Equityholder]
|
||||||
By:
|
|
|||||
Title:
|
|
|
||||
Address:
|
|
Name of Equityholder
|
Type of Company Equity Interests
|
Number of Company Equity Interests
|
TOTAL
|
1.1
|
Spatial Photonics agrees to cooperate with and help to effect the Share Exchange and facilitate the implementation of the Share Exchange Agreement to the extent Spatial Photonics is able to do so.
|
1.2
|
Himax Display shall issue its common shares to Spatial Photonics’ shareholders lawfully and
|
4.1
|
This Agreement is governed by the law of the Republic of China. The parties agree to refer any dispute by either party over the interpretation or performance of this Agreement to the R.O.C. Arbitration Association for arbitration in Taipei. Both parties agree that for the panel, each party will appoint its own arbitrators, and the two arbitrators will together appoint a chief arbitrator in accordance with the R.O.C. Arbitration Law, and the arbitration will be conducted in English.
|
4.2
|
Where it is necessary to amend any provision of this Agreement pursuant to the instruction of the competent government authority, amendment of this Agreement shall as soon as possible be made according to the instruction of the competent authority.
|
4.3
|
Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal, or unenforceable in
|
4.4
|
No amendment or revision of this Agreement will be effective without the prior written consent of the parties hereto.
|
4.5
|
Headings used in this Agreement are inserted for ease of reference only and are not to be considered in construing or interpreting this Agreement.
|
4.6
|
Neither party may assign the rights to this Agreement to any third party or have a third party assume the obligations under this Agreement, absent the prior written consent of the other party.
|
4.7
|
This Agreement does not grant any right or compensation to any party other than the parties to this Agreement, whether in an express or implied manner.
|
4.8
|
Each party is to bear its costs and taxes arising out of this Agreement.
|
4.9
|
All attachments to this Agreement shall form an integral part of this Agreement.
|
[signatures follow on next page]
|
Himax Display Inc.
|
Spatial Photonics, Inc.
|
|||
By:
|
By:
|
|||
Title
|
Title
|
|||
Address:
2F No. 26 Zih Lian Road
Tree Valley Park
Sinshih Township
Tainan County74148
Taiwan
|
Address:
930 Hamlin Ct.
Sunnyvale, CA 94089
United States of America
|
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
|
88.0%
(1)
|
|||
Integrated Microdisplays Limited
|
Hong Kong
|
88.0%
(3)
|
|||
Himax Analogic, Inc.
|
ROC
|
75.1%
(1)
|
|||
Himax Imaging, Inc.
|
Cayman Islands
|
93.4%
|
|||
Himax Imaging, Ltd.
|
ROC
|
93.9%
(4)
|
|||
Himax Imaging Corp.
|
California, USA
|
93.4%
(5)
|
|||
Argo Limited
|
Cayman Islands
|
100.0%
|
|||
Tellus Limited
|
Cayman Islands
|
100.0%
(6)
|
|||
Himax Media Solutions, Inc.
|
ROC
|
78.0%
(7)
|
|||
Himax Media Solutions (Hong Kong) Limited
|
Hong Kong
|
78.0%
(8)
|
|||
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 88.0% ownership of Himax Display, Inc.
|
(4)
|
Indirectly, as to 92.1% through our 93.4% ownership of Himax Imaging, Inc. and as to 7.9% through our 100.0% ownership of Himax Technologies Limited.
|
(5)
|
Indirectly, through our 93.4% ownership of Himax Imaging, Inc.
|
(6)
|
Indirectly, through our 100.0% ownership of Argo Limited.
|
(7)
|
Directly, as to 44.0%, and indirectly, as to 34.0% through our 100.0% ownership of Himax Technologies Limited.
|
(8)
|
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)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(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
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(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.
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By:
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/s/ Jessica Pan
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||
Name:
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Jessica Pan
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||
Title:
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Acting Chief Financial Officer
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1.
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and
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|
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:
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/s/ Jordan Wu | |
Name: Jordan Wu | |||
Title: President and Chief Executive Officer | |||
|
By:
|
/s/ Jessica Pan | |
Name: Jessica Pan | |||
Title: Acting Chief Financial Officer | |||