As iPhone Outlook Is Tempered, So Too Baird's Himax Estimates

With concerns surrounding the iPhone 8, fear of anemic demand is spreading to ancillary component manufacturers.

3D sensing manufacturer Himax Technologies, Inc. HIMX had its estimates reduced by Baird Equity Research as a result of a weaker-than-expected iPhone outlook for the rest of the year.

Baird analyst Tristan Gerra left his $10 price target unchanged on the Outperform-rated Himax, citing that secular growth characteristics of 3D sensing remain intact for the medium term.

“We expect the technology to eventually become pervasive in consumer devices. Himax’s positioning in 3D sensing remains strong as one of the very few one-stop shop suppliers providing a turnkey solution,” said Gerra.

Gerra also believes Himax’s collaboration with QUALCOMM, Inc. QCOM continues to validate the company’s technology (see Gerra's track record here).

“The combination of cutting edge technology licensing and collaboration with an industry leading Taiwanese partner like Himax will help create groundbreaking new products in Taiwan, strengthening the global 3D depth sensing ecosystem and boosting Taiwan’s economy,” said Jim Cathey, senior vice president and president, Asia Pacific and India, Qualcomm Technologies, after the announcement in August.

Still, Himax’s touch and digital display integration adoption remains very limited so far, and the company will have to pick up market share in this key area next year as the TDDI adoption continues to ramp up in smartphones.

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