Hello, ladies and gentlemen. Welcome to the Himax Technologies Incorporated Third Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Mark Schwalenberg, from MZ Group. Please go ahead. Welcome, everyone, to Himax's Fourth Quarter 2020 Earnings Call. Joining us from the company today are Mr. Jordan Wu, President and Chief Executive Officer, Ms. Jessica Pan, Chief Financial Officer, and Mr. Eric Li, Chief IR/PR Officer. After the company's prepared remarks, we have allocated time for questions in a Q&A session. If you have not yet received a copy of today's results, please email HIMX@mzgroup.us, access the press release on financial portals, or download a copy from Himax's website at www.himax.com.tw. Before we begin formal remarks, I'd like to remind everyone that some of the statements in this conference call, including statements regarding expected future financial results and industry growth, are forward-looking statements that involve a number of risks and uncertainties that could cause actual events or results to differ materially from those described in this conference call. Factors that could cause actual results or events to differ materially from those described in this conference call include, but are not limited to, general business and economic conditions, the state of the semiconductor industry, market acceptance, and competitiveness of the driver and non-driver products developed by Himax, demand for end-use application products, the uncertainty of continued success in technological innovations, as well as other operational and market challenges and other risks described from time to time in the company's SEC filings, including those risks identified in the section entitled Risk Factors in its Form 20-F for the year ended December 31st, 2019, filed with the SEC in March 2020. Except for the company's full year of 2019 financials, which were provided in the company's 20-F and filed with the SEC on March 25th, 2020, the financial information included in this conference call is unaudited and consolidated and prepared in accordance with IFRS accounting. Such financial information is generated internally and has not been subjected to the same review and scrutiny, including internal auditing procedures and external audits by an independent auditor to which we subject our annual consolidated financial statements and may vary materially from the audited consolidated financial information for the same period. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. I will now turn the call over to Mr. Eric Li. Eric, the floor is yours. Thank you, Mark Schwalenberg. Thank you, and thank you, everybody, for joining us. My name is Eric Li, and I am the Chief IR/PR Officer. Joining me are Jordan Wu, our CEO, and Jessica Pan, our CFO. On today's call, I'll first review the Himax consolidated financial performance for the first quarter and the full year 2020, followed by the first quarter 2021 outlook. Jordan will then give an update on the status of our business, after which we will take questions. We will review our financials on both IFRS and the non-IFRS basis. The non-IFRS financial excludes share-based compensation and acquisition-related charges. The impact of COVID-19 has persisted globally. New lifestyles, social activity, and economic practice are all dynamically evolving. One of these influences is the unexpected, long-lasting, strong demand for electronics devices and the component, which is broadening capacity shortage in semiconductor foundry and backends. In such a favorable but challenging business environment, we continue to steadily implement prudent execution and deliver strong business performance along the way. We pre-announced preliminary key financial results for the first quarter on January 7th, with revenues, gross margin, and EPS all exceeding the guidance issued on November 12th, 2020. Today, our reported results for the revenue, gross margin, and EPS are all in line with the pre-announced results. Both revenues and gross margin hit record highs in first quarter of 2020. For the first quarter, we recorded net revenues of $275.8 million, an increase of 14.9% sequentially and an increase of 57.6% compared to the same period last year. The 14.9% sequential increase of revenue exceeded our guidance of an increase of around 10% quarter-over-quarter, thanks to strong momentum across all major business segments. TV, monitor, automotive driver ICs, and the CMOS image sensor contributed more to the better-than-guided sales than other segments. Gross margin of 31.2% exceeded the prior guidance of around 29% and significantly improved from the 22.3% of the third quarter 2020. IFRS profit per diluted ADS was $0.1950, exceeding our guidance of around $0.15-$0.16. Strong sales and improved gross margin contributed to the better-than-expected earnings results. Non-IFRS profit per diluted ADS was $0.1970, exceeding our guidance of around $0.1510-$0.1610. Revenue from large display drivers was $64.2 million, up 15.2% sequentially and up 11% year-over-year. The sequential growth was driven by a continuous strong demand for IT products, including notebook and monitor, derived from the ongoing remote working and the distant education. TV revenue was up slightly quarter-over-quarter and outperformed our previous guidance of a mid-single digit sequential decline due to better home entertainment demand from the stay-at-home economy. Large panel driver IC accounted for 23.3% of total revenues for this quarter, compared to 23.2% in the third quarter of 2020 and 33.1% a year ago. Small and medium-sized display drivers continued to grow in the first quarter as guided, with revenue of $177.9 million, up 17.3% sequentially and up 119.4% year-over-year. Smartphone and tablet display TDDIs grew robustly in the first quarter, but was offset by a decline of DDICs. For a year-over-year perspective, both smartphone and tablet demonstrated extraordinary sales growth, yet growth was constrained by the severe foundry capacity shortage. Small and medium-sized segment accounted for 64.5% of total sales for the quarter, compared to 63.2% in the quarter of 2020 and 46.4% a year ago. Smartphone sales continued growing in the first quarter, with revenue reaching $66.6 million, up 5.1% sequentially and 173.1% year-over-year. It represented more than 24% of our total sales in Q4. Our smartphone TDDI sales were up around 10% sequentially and up more than 300% compared to the same period last year. The sequential growth was due to favorable mix of both product and clientele. In consideration of capacity limitation, our strategy is to prioritize our support to those customers with whom we are a major supplier or have long-term business relationships. Sales of traditional smartphone DDICs fell by around 10% sequentially and were up around 20% from the same period last year. As we have repeatedly indicated, traditional smartphone DDICs are quickly being replaced by TDDI and AMOLED. Our tablet revenue, one of our top sales contributors throughout 2020, reached $67.4 million for the first quarter, another record high. The Q4 sales grew 25.3% sequentially and 291.5% year-over-year. The tablet revenue accounted for more than 24% of our total sales in the first quarter, slightly higher than that of smartphone. Despite smartphone having a much bigger market size than tablet, sales of our smartphone and tablet were equally weighted for the first quarter, indicating our favorable capacity allocation toward tablet segment, a reflection of our leading position in that market. For tablet TDDI, the sequential revenue increased significantly by over 80%. This marked the third consecutive strong quarterly increase since the initial mass production in the first quarter of 2020. It reflects the robust customer demand from the Android tablet market, where we are main or sole source suppliers to all leading end customers. Improved product mix with increasing shipments in high-end products with active drivers also ascribed to the satisfactory sales growth and help our overall margin improvement. Revenue of traditional discrete driver ICs for tablet decreased 12.3% sequentially, increased 68.8% year-over-year in the first quarter. Our first quarter driver IC revenue for automotive amounted to $37.5 million, up 32.4% sequentially and up 11.9% year-over-year, as carmaker resume production in response to a recovery of global automotive demand from Q3 2020. We were unable to scale up fast enough to meet this surging demand for all customers due to capacity shortage. Automotive driver IC accounted for more than 13% of total revenues. During 2021, we expect to further our automotive display driver IC market share from the current level of more than 30%. Jordan will elaborate on this in a few minutes. First quarter revenue from our non-driver business was $33.7 million, up 3.3% sequentially, but down 6.4% year-over-year. The sequential increase was mainly a result of increased shipment of Tcon ICs for high frame rate and high-resolution displays, as well as CMOS image sensor products, with strong demand coming from notebook and web camera applications. The increase in sales was offset by a decrease in WLO shipments to an anchor customer. The year-over-year reduction in sales was due to a decrease in WLO shipment. Non-driver products accounted for 12.2% of total revenue as compared to 13.6% in third quarter of 2020 and 20.5% a year ago. Gross margin for the first quarter was 31.2%, up 890 basis points sequentially and up 1,060 basis points from the same period last year. The much improved gross margin can be ascribed to two main reasons. Favorable product mix and industrial capacity shortage. The growth of higher margin products, notably AMOLED DDIC, Tcon, and automotive drivers, outpaced that of other product categories during the quarter, thereby enhancing our corporate gross margin. The leap of gross margin for the first quarter also reflected strong overall demand and better product pricing on rising material costs across foundry, assembly, and testing, all undergoing severe capacity shortage. Not meeting all demands, we were able to allocate the limited capacity to the product with better margins. Our IFRS operating expenses were $43.8 million in the first quarter, down 0.8% from the preceding quarter, but up 17% from a year ago. The sequential decrease was caused by negative difference in RSU expenses, offset by increased cash bonus as we reported in the last earnings call to further reward employees for the better than expected financial results and higher R&D expenses. The year-over-year increase was result of increased salary and cash bonus, along with higher R&D expenses. Despite a year-over-year increase in operating expenses, the operating expenses ratio was reduced from 21.4% in Q4 2019 to 15.9% in Q4 2020, reflecting our careful management over operating expenses. Non-IFRS operating expenses for the first quarter were $43.5 million, up 11.8% from the previous quarter and up 18.1% from the same quarter in 2019. Reflecting higher sales and better gross margin, IFRS operating profit was $42.2 million for the first quarter, with operating margin of 15.3%, up from 3.9% in prior quarter and up from -0.8% in the same period last year. First quarter non-IFRS operating profit was $42.5 million or 15.4% of sales. Higher from $14.7 million or 6.1% of sales last quarter, and up from -0.4% from the same period last year. IFRS profit for the first quarter was $34 million or $0.195 per diluted ADS, compared to $8.5 million or $0.049 per diluted ADS in previous quarters, and $1 million or $0.006 per diluted ADS a year ago. First quarter non-IFRS profit was $34.2 million or $0.197 per diluted ADS, compared to non-IFRS profit of $12.6 million or $0.073 per diluted ADS last quarter, and the non-IFRS profit of $1.5 million or $0.009 per diluted ADS for the same period last year. Now let's have a quick overview on 2020 full year financial performance. Revenue totaled $887.3 million in 2020, a 32.1% growth over 2019. In the first half of the year, COVID-19 and the U.S. sanctions on China brought turbulence to the market. However, our business rebounded strongly throughout the second half with fresh demand brought by the new stay at home economy. Among all three major product categories, small and the medium-sized display driver posted the highest growth of 67.7% year-over-year in 2020, with sales totaling $515.7 million. As leading Android tablet brands all adopted our TDDI solutions and the global smartphone sales rebounded, we saw extraordinary business momentum for both product areas in 2020. Revenue from large panel display driver totaled $240.8 million in 2020, a mild increase of 1.5% year-over-year. During the pandemic, the surge in IT demand boosted our sales on monitor display drivers up by high teens and the notebook display driver up around 60% respectively. TV sales, however, declined by high single digit year-over-year due to weakness in global TV market, which was negatively impacted by COVID-19 outbreak. Non-driver product sales totaled $130.8 million, an increase of 2.9% year-over-year. The year-over-year increase was mainly from Tcon, amidst the growing need for high frame rate and high-resolution display and the CIS due to the continuous strong demand in notebook and the web camera for work from home and online education. This increase was offset by WLO as a legacy product of an anchor customer gradually decreased. Gross margin in 2020 was 24.9%, up from 20.5% in 2019. As previously mentioned, robust demand pushed foundry capacity constraints to a more severe level, which in turn enabled better pricing. Himax's operating expenses were $162.9 million, up $6.6 million or 4.2% compared to last year. The increase came from higher expenses in share-based compensation, cash bonus on the expenses, as well as salary, but offset by lower traveling fee. Notably, the stronger NT dollar against US dollar in 2020 contributed to the around $3.9 million of operating expenses increased. While our accounting was US dollar-dominated, we pay the bulk of our employees' salary, as well as much of our Taiwan local incurred expenses in NT dollar. However, the operating expense ratio of 2020 was reduced to 18.4% from 23.2% in 2019, indicating our consistent management of operating expenses. Himax's operating income was $57.9 million, in contrast to a loss of $18.3 million from 2019 due to higher sales and higher gross margin. For the same reason, non-IFRS operating income was $64.4 million, an increase of $80.9 million from a loss of $16.3 million in 2019. Our non-IFRS profit for the year was $47.1 million or $0.272 versus a loss of $13.6 million or $0.079 per diluted ADS. non-IFRS profit for 2020 was $52.3 million or $0.302 per diluted ADS, up $64.4 million year-over-year from a loss of $12.1 million last year. The upswing in income was a result of better sales and higher gross margin, along with well-managed operating expenses. Turning to the balance sheet. We have $201.4 million of cash equivalents, and other financial assets as December 31st, 2020, compared to $112.1 million at the same time last year, and $142.9 million a quarter ago. The high cash balance was mainly a result of an operating cash influx of $67.7 million during the quarter. Restricted cash was $104 million at the end of Q4, the same as the preceding quarter, compared to $164 million a year ago. The restricted cash was used to guarantee the short-term secured borrowings from the same amount. We had $58.5 million of long-term unsecured loans as of the end of Q4, of which $6 million was current portion. Our year-end inventory as December 31st, 2020, were $108.7 million, down from $125.7 million last quarter and $143.8 million a year ago. Accounts receivable at the end of December 2020 was $243.6 million, up from $221.1 million last quarter and up from $164.9 million a year ago. DSO was 100 days at the year-end, as compared to 90 days a year ago and 99 days at the end of last quarter. As highlighted in last earnings call. Given the foundry and the back-end capacity shortage, our inventory level will stay at a relatively low level in the quarters to come. Net cash inflow from operating activity for the first quarter was $67.7 million as compared to an inflow of $33.5 million last quarter, and an inflow of $23.4 million for the same period last year. Cash inflow from operations in 2020 was $102.6 million as compared to $7.7 million in 2019. First quarter capital expenditures amounted to $0.8 million, versus $1.2 million last quarter and $2.7 million a year ago. The first quarter CapEx was for R&D-related equipment. Total capital expenditure for the year was $5.8 million, mainly for design tools and R&D-related equipment. In comparison, the CapEx for 2019 was $45.9 million, of which the vast majority was for the purchase of land, the construction of a new building, and the WLO capacity expansion. As of December 31st, 2020, Himax has 173.8 million ADS outstanding, little changed from last quarter. On a fully diluted basis, the total number of ADS outstanding is 174.1 million. Turning to our first quarter 2021 guidance. For the first quarter, we expect further revenue growth from the already high level of Q4 2020 in most of our business sectors. Gross margin should see another uptick and could reach another quarter high. For the first quarter, we expect revenue to increase by 5%-10% sequentially. Gross margin is expected to be 37%-38%, depending on the final product mix. With the increase of both revenue and margin, net income should increase substantially in the first quarter. Non-IFRS profit attributable to shareholders is expected to be in the range of $0.30-$0.34 per fully diluted ADS. Now, IFRS profit attributable to shareholders is expected to be in the range of $0.301-$0.341 per fully diluted ADS. Revenue, gross margin, and the EPS will all likely reach quarterly highs during this quarter. With that, I will now turn the call over to Jordan. Jordan, the floor is yours. Thank you, Eric. As we highlighted before on previous earnings call, our capacity shortage appears to be a long-term phenomenon. As we enter the year 2021, the shortage has become even more severe and has extended to back-end facilities that include assembly and testing. As a leading industry player with superior resources and engineering capability to diversify and enlarge the vendor pool, along with long-term business relationships with both foundry and back-end suppliers, we engaged early and have successfully been securing more capacity for 2021 as compared to the level of Q4 2020, when we reached the recent peak quarterly shipment. We are also optimizing capacity allocation among our diversified foundry suppliers by making the right products at the right price, with an aim to fully utilize the capacity accessible to us. Among the product areas for which we have secured a meaningful capacity increase is automotive, where the global shortage for semiconductor supply is overwhelming. We expect the total capacity available to us to increase quarter by quarter in 2021, and we'll continue our efforts in securing further capacity. As far as we can see, the overall semiconductor industry supply will not have any significant increase anytime soon. While strong demand is likely to persist longer than expected. In such an environment, Himax is a preferred supplier to work with for our sizable scale, diversified vendor pool, and extensive product offerings. Our strength in a number of high-margin businesses will also help our ongoing margin improvement efforts. For example, with strong demand for tablet expected to remain, our being the preferred vendor for major Android names will ensure the high margin contribution continues. Likewise, our leading position in automotive display represents a solid support for our margins as we anticipate a robust sales growth in this high margin business for the coming years. Moreover, gross margin improvement can also come from new non-driver products, notably our high-end timing controller, WiseEye, ultra-low power AI, and 3D sensor. Again, gross margin expansion will always be one of our major business goals for this year and beyond. Now, let us start with an update on the large panel driver IC business. For the first quarter, we expect large display driver IC revenue to increase by low teens sequentially. For notebook IC segment, we anticipate another impressive quarter of high growth in Q1, a continuation from previous quarters, increasing substantially from the previous quarter due to the extension of strong demand derived from persisting remote working and e-learning. As for monitor IC sales, on the other hand, we expect a sequential decline in the first quarter due to the capacity shortage, as we are unable to meet all the demands. As TV sales through remains strong and TV panel shortage increases, our TV segment looks set to end the first quarter with a better-than-seasonal momentum of around 10% sequential growth. Recently, we saw customers proceeding with aggressive promotion in high-resolution models that require high-end drivers and Tcons in anticipation of sustained strong demand for home entertainment during the pandemic. However, our display driver IC and Tcon shipments are still capped by supply shortage in foundry and packaging, despite firm demand from customers. Now, let's turn to the small and medium-sized display driver IC business. In the first quarter, we see continuous strong TDDI sales for both smartphone and tablet, with demand still surpassing supply. Foundry capacity remains a major issue that adversely impacts our shipping capability. With smartphone and tablet sharing the same foundry pool, we strategically allocate capacity in favor of tablet, as we are the dominant supplier in the Android tablet market. For Q1 tablet sales, we expect another high single-digit sequential growth fueled by consumer demand for home working and remote learning needs, as well as higher TDDI penetration. We expect Q1 smartphone sales to slightly increase by mid-single digit. In which smartphone TDDI revenue is projected to have consecutive mid-teens growth and smartphone TDDI would continue its declining trend. Tablet was one of our top sales contributors in 2020, thanks largely to the fast rising TDDI penetration for Android names and the strong demand driven by the stay-at-home economy. To further broaden our product offering and solidify our market position, our tablet TDDI has moved toward higher frame rate, higher resolution, and larger screen size solutions. We have also enhanced touch accuracy through our leading active stylus design for better quality handwriting and drawing. As stated before, Himax is highly committed to AMOLED technology. Our development started from smartphone and has extended to wearable tablet and automotive. We have some encouraging progress with leading Chinese panel makers, and we'll report in due course. We believe AMOLED driver IC will soon become one of the major growth drivers for our small and medium panel driver IC business in 2021. Turning to the automotive sector. The global shortage of semiconductor components has brought great challenges to the world's automotive industry. As most of the world's lockdown periods end, tightening foundry capacity, combined with sudden surge in orders due to pent-up demand, have left the industry facing an even more severe shortage compared to other sectors. Customers now rely on just-in-time delivery of IC components to preserve production, and some reportedly already suspended production for days or even weeks. In consideration of unceasing sales demand amidst high capacity shortage, we work strategically with panel makers, Tier 1s, and end customers across different continents and have secured an enlarged volume of foundry capacity while managing swift production adjustment to meet customers' production schedules. By offering supportive logistics, we hope to further our relationships with customers who can in turn help accelerate our new technology into their new models going forward. Limited by large scale supply shortages, our automotive ICs segment is expected to deliver a mid-teens sequential increase in the first quarter. With electric vehicles quickly emerging as the next big thing, we see the car market embracing new display technologies and shifting towards larger, more sophisticated, and higher performing displays like never before. Already the market leader in automotive display driver business, we foresee further market share gains in the coming years in this fast-growing market. We continue to sustain our competitive position with a comprehensive product offering for advanced new features such as TDDI for in-cell touch, local dimming, cascade topology connection, point-to-point high speed interface bridging functions, and LTDI for large in-cell displays. As a reminder, we launched the world's first TDDI design for automotive displays technology, which started shipping in 2019, with meaningful volume anticipated starting 2021. As EV grows in popularity and autonomous driving develops, our technological prowess continues to separate us from peers for the next generation display for automotive. For the first quarter, revenue for the small and medium-sized driver IC business is expected to increase by around high single digit, with demand continuing to surpass supply. Capacity shortage, again, remains a major factor as our production has been unable to respond quickly enough to the unexpected rapid growth. Let me share some of the progress we made on the non-driver IC businesses in the last quarter. First, on timing controller. The aggressive promotion by major TV brands that I mentioned earlier will benefit our high-end Tcon business as our 8K TV timing controllers, as well as display drivers, have been widely adopted by multiple leading end customers. Our Tcon technology not only provides higher resolution, higher frame rate, and better image quality, it can also enable lower power in products where power consumption is critical. Already over 5% of our total sales timing controller products enjoy better margin and ASP than those of display drivers, and we expect this segment to be an extensive long-term growth area. Our Tcon revenue in the first quarter, while limited by capacity shortage in IC packaging, is expected to increase by high teens sequentially. Next is a quick update on WLO. The fourth quarter WLO revenue decline that Eric reported earlier was a result of lower shipment to an anchor customer. However, in the first quarter of 2021, sales are expected to increase substantially, thanks to resumed shipments to fulfill the anchor customer's higher demand. The sequential shipment increase and the higher capacity utilization in our WLO factory will positively contribute to our Q1 gross margin. Meanwhile, with our leading nano imprinting technologies and diffraction optics design capability, we continue to engage and collaborate with key customers and partners for their next-generation products, with focuses on ToF 3D sensing, AR/VR gadgets, biomedical devices, and others. Notably, we are seeing more ToF camera design activities among Android smartphone makers for 3D sensing, and are making good progress by offering our leading ToF optical components, including diffractive DOEs, micro lens arrays, and diffusers to meet diversified demand from a wide variety of customers/partners, including VCSEL suppliers, ToF sensor vendors, ToF module makers, and smartphone OEMs. Next, let me give you an update on 3D sensing for non-smartphone segment. As mentioned before, we provide customers who wish to design their own structured light-based 3D sensing solution with our proprietary 3D decoder IC. Our 3D decoder can accelerate total image processing for face recognition and offer best-in-class security authentication. It was already certified by the leading Chinese electronic payment standard, with requirements of accurate data decoding, timely operation, and strict privacy. We have started volume shipments in the last quarter with decent order pipeline throughout this year and further new design-in sockets on the way. On the other hand, for our structured light 3D sensing total solution, small volume shipments are expected for business access control and biomedical inspection devices in the first quarter. More designs and engagements are progressing. We continue to receive numerous inquiries, with new ideas of applications that never occurred to us. Now, switching gears to the WiseEye smart sensing solution. As I mentioned several times on previous earnings calls, in order for our WiseEye technology to maximize market visibility and satisfy demand for emerging applications, two business models are adopted, namely total solution and discrete component. For total solution, we are currently aiming at notebook, TV, and air conditioner applications, and have received positive feedbacks. We expect to start a solid production ramp-up by the end of 2021. With joint efforts with our subsidiary, Emza, and other algorithm partners, further engagements are on the way for more applications such as doorbell, door lock, automotive, and various IoT devices for industrial and commercial uses. We are thrilled about the business progress achieved. For the other business model where we provide key components, as reported earlier, our WE1 Plus AI processor adopted Google TensorFlow Lite for microcontroller framework, and has successfully demonstrated our unrivaled computing capability with ultra-low power. In December 2020, we partnered with SparkFun, an online retail store, to distribute Himax WE1 Plus Edge AI evaluation board and AoS sensor modules. Developers can now access our technologies easily from SparkFun and transform their AI-enabling concept, which call for ultra-low power and computer vision AI into real products. Furthermore, we teamed up with Edge Impulse, which provides a leading end-to-end AI developer platform offering intuitive user interface. On Edge Impulse platform, with a single button press and within seconds, developers can now generate the latest neural network AI model and export it directly onto the WE1 Plus evaluation board. The high technical obstacles developers usually face can therefore be dramatically lowered. Together with our partners, we are carrying out a wide range of promotional activities to broaden WiseEye's market reach and establish direct contacts with small AI developers. As an illustration, recently, Himax and Edge Impulse jointly hosted a webinar discussing ways to help developers get started with the world's most powerful platform that aims, enabling embedded machine learning everywhere at extremely low power consumption. We will continue to aggressively pursue such online marketing campaigns going forward. We believe the WiseEye offerings will start contributing to our top and bottom lines later this year. We aim to make it a major contributor to our long-term business growth. Now, turning to our CMOS image sensor business update. We see continuous surging demands for our CMOS image sensors for web camera and notebook, as the new norm of virtual conferences show no signs of receding. However, our actual shipment has been badly capped by the foundry capacity available to us. Separately, our industry first two-in-one CMOS image sensor that supports RGB mode for video conferencing and ultra-low power AI mode for facial recognition, has penetrated the laptop market for the most stylish super slim bezel designs. We have shipped small quantity in the fourth quarter and expected to ship more during 2021. Regarding ultra-low power always-on CMOS image sensor, which targets in battery powered or always-on applications. We are getting promising feedback and design adoptions from customers in various markets, such as car recorders, surveillance, smart electric meters, drones, home appliances, and consumer electronics. In Q1, the CIS revenue is expected to be up mid-single digits sequentially, although we still cannot fulfill all the demand due to foundry capacity constraint. For non-driver IC business, we expect revenue to increase by low teens sequentially in the first quarter. That concludes my report for this quarter. Thank you for your interest in Himax. We appreciate you joining today's call, and we are now ready to take questions. Are we ready to take questions at this time? Yes. Ladies and gentlemen, if you would like to ask a question, please press star then the number one on your telephone keypad. Again, that is star one. We'll pause for a moment to compile the Q&A roster. Again, that is star one. Your first question comes from the line of Jerry Su with Credit Suisse. Hi, Jordan and Eric. Thank you for taking my question, congratulations on the good results. I think the first question is surrounding the industry-wide capacity constraint. Can you give us a little bit more color about what is your fulfillment rate right now? I think in the next couple of quarters, do you think that the supply constraint can be eased for industry or for Himax? How should we think about the pricing environment for the upcoming quarters? Thank you. Thank you, Jerry. Honestly, I would rather not give specifics on our so-called fulfill rate because guess what? All our customers will be watching and trying to compare their fulfill rate against our average. That is kind of a sensitive topic. I can tell you it's not very high. I have to say, sometimes, you wonder whether 100% of those demands are real demands, whether they are customers inflating their demands because of the shortage. Right? Obviously, we try to screen them out. We try to support those demands with a solid foundation. We certainly have some doubts about some of the demands. As far as whether the situation will ease during the year, I think our view is that the industry-wide capacity shortage is going to last at least till the end of this year. I'm not economist, and I cannot really predict how the economy is going to evolve during this year with the pandemic and also the vaccination. I'm setting that aside, and I'm assuming we're not going to see a very strong rebound during this year. Even with that assumption, I think the capacity constraint is likely to persist for the simple reason that mature technology, simply, we are not seeing any meaningful increase in capacity. While there are just a ton of new applications queuing up to consume more of those capacities. Our display driver IC, which always require high output voltage and IE, we have to use mature technology. We are certainly one of the major users of those capacity. From our driver ICs point of view, certainly, we are not seeing any sign of the capacity constraint receding anytime soon, certainly not within this year. Having said that, though, I think I've touched base briefly on my prepared remarks. I can't say we are happy, but I think we are well-prepared for the capacity of this year. For that, I'm comparing our expected output, meaning capacity available to us, offered to us by their various foundry partners. I'm comparing those numbers on a quarterly basis to the number of last quarter, meaning Q4 of last year, when we reached our peak output, as we all know. I'm comparing this year's expected quarterly output to the highest output of last year. Even with that comparison, I think we expect to see increases from Q4 last year, and we expect to have quarter-by-quarter increase during this year. Very notably, I want to emphasize, our stronghold in particular is in automotive display driver IC, where we believe we are the world market leader. We have the number one market share. The pressure is the highest, obviously, as a result. Also that is an area we have secured the most meaningful capacity increase compared to last year. That's very good news for us, for our customers, including those end customers, who very often have established direct dialogues with us to get a better feel about the capacity increase. Not just that, we believe we have a good roadmap for next year as well, meaning the capacity will continue to increase from that of this year. I think that is very good news for us. That kind of ensures our continuous revenue growth for this year. I can say pretty much the same for all other major product areas. Only that I can say automotive display IC for Himax in particular, we have secured the most meaningful increase of capacity, and probably with the highest degree of certainty as well. That's something I wish to highlight. Sorry, I didn't exactly answer your question directly, but I hope I do try to give a good overall flavor and color of the capacity situation for Himax right now. Okay, that's great. Thank you. In terms of pricing, how should we think about the pricing going forward? I think you guided gross margin to improve to 37%, 38%, which is about six, seven percentage point increase. How much of that is coming from ASP increase? Well, firstly, it's confidential, secondly, it's really hard to compare, because you have to knock down the cost increase as well. I mean, very much cost also increased rather significantly, as you guys all know. Without addressing directly, without giving you directly this number, I can share with you why the margin improvement and how the margin outlook is going to be like going forward, at least this year. Firstly, in a capacity constraint, that certainly means a better pricing position for us. Meaning we can very often transfer the cost increase to customers and a bit more. We talk about better product mix as well. I want to probably elaborate a little bit on that. What do we mean by better product mix? It actually comes from several perspectives. Firstly, obviously, when you are facing shortage, you have a tendency to allocate more of your output to higher margin products to make more money. That's very obvious. That's the first, most obvious point. Secondly, for a similar reason, we also have a tendency, our customers as well, when our total capacity is kept, we want to produce more higher-end products. That applies to TV, monitor, notebook, smartphone, tablet, automotive, everything. I think, Himax being an industry leader and our customer recognize that. When our capacity is kept, they want us to focus more on those higher-end products, while probably leaving those lower-end products to some of our lesser competitors. That typically means better profit and better ASP for us. Thirdly, a few sectors, which is already happening, which happens to enjoy better margin historically. They are outgrowing our other businesses, that on a weighted average basis, certainly enhance our gross margin. I'm talking about automotive. drive IC for one, that's very obvious. Tablet TDDI and timing controller, higher-end timing controller. Automotive, I think if you ask me across all different industries we are in, I would say the sector with the highest confidence level for growth this year, I would say it will be the automotive, which is set to enjoy a good rebound from the very low of last year. That is going to outgrow our other businesses, very likely, it happens to enjoy the best margin among our products. Tablet TDDI as well. Whether tablet will enjoy growth this year is a big question mark. I don't know. I think for us, it's about TDDI penetration to tablet market. Last year, our estimate is TDDI penetration is about 20% last year. This year is set to grow to about 30%. With the same number of total units for the market, you're talking about 50% growth for TDDI, and that benefits us tremendously because we are the dominant TDDI provider for tablet in Android market. Especially, more of those TDDI tablets will start to offer active stylus, which represent even more margin for us. Right? Higher-end timing controller, I've talked a little about automotive, notebook, TV, certainly, and gaming monitor and so on. Again, Tcon is suffering big time from IC packaging shortage. For that, again, both customers and us are better off allocating our limited resources to higher-end products. I think for those reasons, I feel pretty good about our gross margin prospect for this year. Longer term, I do want you guys to focus on certain of our non-driver IC products. Notably, WiseEye, I think is really promising. I'm personally extremely excited about the progress we are making. We have our mass production-ready sample out only in last September. Look at the degree of engagement, the activities we already have. I've talked a lot about that in my prepared remarks, I don't want to repeat that, it's very exciting. Again, the important thing is, we feel the mass production will commence towards the end of this year. After that, I believe it's a very long tail, high entry barrier, high margin, high speed products. Where we are going to play a very unique role in terms of providing such AI for end devices with ultra-low power. I think that is something I feel very good about enhancing our long-term gross margin overall. I hope that kind of address your questions pretty thoroughly. Yes. Okay. Thank you. Thank you, Jordan. Thank you, Jerry. As a reminder, please limit yourselves to asking two questions, then press star one again to go back into the queue. Your next question comes from the line of Tristan Gerra with Baird. Hi, good evening. Just following up on the prior questions about gross margin, clearly helped by mix and the supply constraint. How should we look at the potential timing of peak? Some companies have talked about supply coming back in the second half of this calendar year, which presumably will alleviate a little bit the constraint. There's also the potential at some point for automotive to slow down given that there is probably some amount of double ordering given the tightness currently in the market. What I'm trying to get a sense is, when do you think, even as supply continues to be constrained, it actually gets less constrained than it is now? And when do you think supply will eventually catch up in automotive, meaning that you're starting to see a little bit of a normalization of supply-demand. Is there a way to assess whether that's something that may happen in the second half of this year, or what timing do you have in mind, potentially? I think my visibility is different for different product segments. Again, I just want to carry on with my previous answer to Jerry's question. The highest degree of confidence for me will be automotive sector, in which I think there's no sign of receding. In fact, customers backed by their end customers, or panel customers backed by Tier 1s, which are backed by end customers. They are prepared to place orders, firm orders, non-cancellable orders, way beyond the year-end. Now, rather than worry about double ordering or demand disappearing, our worry is more on how do we make our shipments in order for their production line not to be suspended? It's pretty serious, honestly. Pretty serious. They are talking about, because, without one single driver IC, they cannot ship a car because they will have no critical display, right? For that, I think the visibility is very, very low. We are actually going through different schemes with different customers and our foundry partners. Many of which are with contractual arrangements to secure that throughout the ecosystem. We know what we are doing, and our customers know what they are doing, and we can just focus on making more outputs and securing more capacities and making sure their production is not suspended. For automotive, honestly, I don't worry a bit, but it's certainly harder to say, for example, the IT demand. People are talking about the stay-at-home economy and all that, right? I don't have a crystal ball. I don't know how that demand is going to evolve with the vaccination and the COVID-19 situation and all that. What we do is, again, we follow the customers' production orders extremely closely. One thing, of particular interest is that throughout different sectors, we are now having a much closer business and certainly, shipment-related discussions directly with the end customer. Typically, our direct customers are panel makers, right, who in different industry varies, but they are not the end customers. Now whether it's notebook or TV or automotive or cell phone or otherwise. We have very direct frequent dialogues with leading customers in their respective sector. For that, our visibility certainly gets improved, right? Sometimes you see the end customer stepping in to secure capacity and help allocation decisions. For example, certain of our IC should be shipped to panel maker A rather than panel maker B and so on, right? We start, I think, again, we don't have a crystal ball. We just have to work very hard and make sure we are as close as possible to the end customers. Through end customers and through our direct customers, we are paid to have a good visibility about the backlog, the inventory level, the production status, even the demand status and all that, right? We just have to watch very closely. As far as we can tell right now, at least for display driver IC is concerned, we are not seeing any sign of the constraint receding. Again, I mean, the demand is very strong across different sectors, but there's simply no meaningful capacity increase in the industry. Okay. That's great, color. Thanks for that. For my follow-up. A few years ago, you obviously had traction with some early leading AR device providers with very high content. You also talked about, and that was maybe up to a year ago, about opportunities in holographic displays. Given the potential for Apple to launch AR devices by next year, which presumably will trigger a lot of companies to basically have similar devices over time. How do you feel you're positioned? What type of initial engagement you think you have in both AR and holographic displays, and what's the potential timing? That's leveraging on both your wafer on lens technology and also your LCOS technology. Well, thank you for the question, Tristan. A few years back, we talked about that a lot because there was real major customers and real products. Unfortunately, the launch of those products and the business result didn't unfold very well, as we all know, right? Certainly, we continue to play a critical role in terms of providing the microdisplay and related optics for AR/VR gadgets, in particular AR, which requires see-through feature rather than VR. With VR, your eyesight is blocked by the image. With AR, you see through. When you see through, our technology is needed. I can say with a good degree of confidence that if this does happen, if the industry does pick up momentum again, we are going to play a role. I don't want to be overly optimistic about this, because I think, to be honest, I still see lots of both technical and business barriers ahead of us for the AR goggles to become a real affordable and a real fun product for people in general to want to own. Certainly, people are talking about Apple, and I don't want to comment on customers, one way or the other, certainly not Apple. We'll see. Certainly, you are right. If Apple does launch something successfully and then other people will follow, certainly. Again, I can't comment the specifics on any specific customers. I want to give a warning that we are not too optimistic about it being the insider in the marketplace. Again, I'm seeing still barriers, both technically and technically being, how do you lower the price substantially? The lessons of the previous products are they're just way too expensive. It's way beyond any usual consumer's affordability. They are switching then that into industrial use, which means very low volume. For a company of our scale, it cannot be something very meaningful. The challenge is how do you create the kind of image, the size, the color, the power consumption, the processing power and so on. The kind of image that involves not just semiconductor, but also a lot about optics. How do you create that kind of image that an average consumer will find attractive, and yet you have to really substantially reduce the price. If you can achieve that, then the next barrier is how do you create enough attractive content. I think two years, I think is overly optimistic, to be honest. Again, we remain to be a key player. People do come to us still. We still engaging with customers for projects. We don't want to overspend on over investment, overspend on that sector until we feel we have a good position already and we just have to hunker down and wait for it to happen. A lot of things is really beyond our control. We are just a micro display and optics provider. We can't really cover the whole application and total cost and all that kind of issues. Great. Well, thanks for the color. Very much appreciated. Thank you, Tristan. Your next question comes from the line of Donnie Teng with Nomura Securities. Good evening, CEO and Eric. Congratulations on the result. I think I have two quick questions. The first one is that I think people are talking about how tight the capacity will be and when will it be likely to be eased. In the reality, for example, if we break it down to 8-inch or 12-inch capacity by different products, which one you think is most likely to be eased in the future? For example, if considering the node migration as well as the capacity expansion lead time, what kind of products you think that would be most likely to be eased in the future, and which one would be the most difficult to be eased? This is the first question. Okay. Donnie, it's not an easy question. It's a good question, but it's not easy to answer because, other than automotive, which for Himax, and I guess for the entire industry as well, I'm talking about display driver IC. Other than automotive, which is still strictly, exclusively on 8-inch. All others are either totally 12 inch or combination of 8-inch plus 12 inch. Now, with automotive, when we are moving into TDDI, in which we are the industry pioneer and leader at the moment. Good momentum expected for the next few years. TDDI automotive will be 12 inch as well. 8-inch for automotive, I mentioned earlier, 8-inch is extremely tight. Because of our early engagement and earlier both engineering business preparations, we have been able to secure good capacity increase, although it's 8-inch, which is super tight, as we all understand. For 12- inch, if you talk about for 12- inch, for Himax, and I guess for industry as well, for smartphone and tablet TDDI, it's all 12 inch because it requires a lot of logic processing. In certain cases, memory as well. You do need the 12-inch, more advanced nodes. For large panel, though, it is a combination of 8-inch and 12-inch. A large panel has still moved to 12 inch primarily because of capacity constraint of 8-inch That has started to take place a few years back. It's not that industry started to do this because of this capacity constraint. Now, a few years ago, the whole industry, Himax certainly is one of the pioneers, has been moving very aggressively into 12 inch as a way to alleviate the capacity issue of 8 inch for large display drivers. When we move to 12-inch, we typically represent the most mature process of 12-inch for large panel. For example, we are talking about 110-nanometer, as a mainstream, as an example. For smartphone and tablet TDDI, it's now moving from 80-nanometer to 55 to 40-nanometer. Certainly, there are technology reasons as well, but it's mainly to enlarge capacity. As we move into different, new nodes, we are competing against a new set of other applications. For example, AMOLED for smartphone is going to be the next big thing for display driver IC. AMOLED now, the mainstream in mass production is 44-nanometer, but people, us included, are moving to 28. With 28, we'll be competing with a different set of other applications. I think it's difficult to answer in the sense that, if 28 is extremely tight, which is not the case, I'm just saying as an example, if 28 is extremely tight, they will probably then move our product spec to 40 a bit more. Vice versa. If 40 is super tight, while 28 appears to have more accessible capacity, then people will move more aggressively into 28. Driver IC is a big capacity consuming product for semiconductors. Our move does make a difference in terms of the tightness level of different technology nodes. Our move is also reactionary, because, when something is very tight, we would then tend to move elsewhere. As far as I can see, even 28 right now is very tight. You tell me which node is not tight. People are talking about automotive, MCUs, for example, 40 and 50 nanometer logic process. They are so occupied by automotive right now. I can't really blame them, but foundry people, they claim they are giving more priority to those applications. 80 to 55, 40, and then 28. These are three little signs of loosening in capacity situation, in my mind. Certainly, my response may change next quarter. I just have to watch the industry situation very closely. The benefit of our preparation is that we tend to have products crossing different boundaries, even different technology nodes just to hedge our bets. We will be able to move with certain degree of flexibility. Sure. Just a quick follow-up, before I ask the second question. Are you able to quantify how much sales that we have right now is from 8 inch and how much is from 12 inch? I don't have the number in front of me, but certainly, 12 inch is much larger than 8-inch right now. Again, other than automotive, which is still right now about 15% or less of our total revenue, although it's probably outgrowing the rest. That is totally 8-inch and certain portion of large panel. Large panel in total, 30+% of our total sales. A portion of that is 12 inch and some other portion is 8-inch. 8-inch is now relatively small for us. Small panel, they are almost exclusively 12- inch other than automotive. I'm talking about tablet and smartphone. That is combined more than 50% of our sales already. You have timing controller and all others. They are all 12- inch as well. Okay, got it. Second question is on your automotive display driver ICs business. As you mentioned about that you have secured quite meaningful capacity already. I think at this time point, I would say it is very impressive because last year, lots of automotive semiconductor companies that pushed out the capacity in the second half last year. It looks like amazing decision at this time point. Could you elaborate more on what kind of trend you are seeing on automotive display driver ICs, as you just mentioned about it is migrating to TDDI. If you can give us more color on how structural the growth will be or how much volume it will grow in every car in terms of the bigger screen size or even a combination of different kind of display inside of the car. Thank you. Very good question. Firstly, indeed, in the first half of last year, our customers are actually cutting back their orders and the forecast. I remember we are road showing, and we are going around telling everybody, Tier 1 included, even some end customers across Europe and U.S., that don't overdo that because guess what? You're going to be in such shortage that you're going to kill to get capacity, right? In fact, during Q1 and Q2 last year, although our customers are cutting back their forecast, we didn't really slow down in our inventory preparedness because it was very obvious to us that it is going to run into bad capacity shortage. It was also during that time that we started to engage our key foundry supplier for long-term foundry arrangement. That involves both new process developments, and also porting of certain of our products from fab A to fab B to increase our flexibility, when the capacity is tight in individual fabs. Certainly also we enter into contractual arrangement to secure our capacity as well. I think thankfully, we make those moves and now we can go around telling our end customers that we are pretty well prepared, although we are still suffering from shortage, but I think our customers are very pleased to hear that we can actually enlarge our capacity quarter by quarter in a rather meaningful way, all the way to next year. I think that is very important at this stage for us. Having said that, though, 8-inch capacity is very tight, and it is going to remain very tight. I don't have the number exactly as far as the display driver IC content consumption per vehicle, how that trend is going to unfold. I can share with you now it's common industry understanding that 8-inch is hopelessly tight. Although we can secure more, and also automotive, unlike large panel or smartphone or tablet, which are more flexible in terms of introducing new capacities when it's needed. For automotive, it's notoriously hard, as we all understand. Rather than fighting to get the traditional discrete driver IC moving into 12-inch and having to deal with the barrier of qualification and so on. It's almost not worth it. We are encouraging our customers to speed up their TDDI adoption. Guess what. TDDI is 12-inch. The kind of capacity pool we are targeting for TDDI, again, we have entered into a certain contractual arrangement with our foundry partners. The 12-inch TDDI are primarily, for example, 80 to 55, which are basically occupied by smartphone and tablet, they are all on track to migrate into 40 and 28, as we all know. Our total demand for automotive, for TDDI, in terms of total amount, is nothing compared to the demand for smartphone or tablet. I think we'll be pretty safe there in terms of 12-inch TDDI for automotive. We are pretty well prepared for capacity over there as well. That is the big trend. I think a lot of customers and customers included, agree with us. I've seen the whole industry be mobilized to speed up the adoption and qualification for TDDI for automotive. That is one thing. Second thing is, the displays inside your cars are enlarging in size. With EV becoming more and more popular, the passenger space will be more roomy. When it's more roomy, you do need a larger screen for infotainment. When it's such large screen, typically you need your screen to be of the capability of free form, meaning it's not a stupid solid piece of flat glass. When it's free form, then in-cell becomes a necessity in order to achieve a reasonable production yield rate for displays. Therefore, we are actually, again, we are the industry pioneer in terms of working with our panel makers, partners, selected partners, in introducing, hopefully very soon, the world's first large display, very large display TDDI for automotive. I think it's going to be a very important trend because, again, when the display needs to be larger because your passenger room is larger, and when display is larger, then it needs to have free form. When free form is required, then you need to have in-cell display. For in-cell display, you need TDDI. That requires a very special design, as opposed to the ordinary small size display. We are leading the industry in terms of developing that kind of TDDI. Again, we are very happy with the progress. Again, because of all the reasons I mentioned, I think, in all likelihood, this penetration of such large screen display into automotives will also get speed up. automotive, I think, is the most exciting business for us. We have an industry leader, we are leading in technology, and we are seeing the high-growth potential. We are now very deeply engaged with Tier 1 and end customers. All these are very good signs for us in the long term. Thank you. Thank you, Donnie, for the patience. Thank you so much, Jordan. Congratulations again. Thank you. There are no further questions in queue. I will now hand the conference back over to Mr. Jordan Wu for closing remarks. As a final note, Eric Li, our Chief IR/ PR Officer, will maintain investor marketing activities and continue to attend investor conferences. We'll announce the details as they come about. Thank you, and have a nice day. Ladies and gentlemen, thank you for participating. This concludes today's conference call. You may now disconnect.