Where Himax’s optics sit in a co-packaged optics module. Illustrative; Zero One Investment Research.
Share price — HIMX US
Jun 2025 – Jun 2026 (US$).
Company Snapshot
Himax Technologies (HIMX US) is a Taiwan-headquartered fabless semiconductor company and the world's leading supplier of display driver ICs, the chips that control flat-panel screens. It holds roughly 40% global share in automotive display drivers and over half the market in automotive TDDI (touch and display driver integration). Non-driver products, about 20% of revenue, include WiseEye ultralow power AI sensing, LCoS (liquid crystal on silicon) microdisplays for AR glasses, and the wafer-level optics business behind its CPO entry. FY2025 revenue was US$832m at a roughly 31% gross margin, on a net cash balance sheet.
Our first TechChain Insights Q&A with Himax, published 29 March 2026, covered the whole portfolio. For this second exchange we put written questions focused on co-packaged optics and silicon photonics to the company, and management answered in June 2026. The takeaways below distill that exchange; the full Q&A follows.
Key Takeaways
Silicon photonics is the use of light to replace wires in data centers. Chips have always exchanged data as electrical signals over copper, but each AI chip generation must move several times more data than the last, and at those speeds copper wiring loses signal and burns power that data centers cannot spare. Light carries far more data with far less loss, so converting data to light as close to the processor as possible has become the only practical way to keep scaling. Co-packaged optics (CPO) is that end point: the conversion to light happens inside the chip package itself, beside the processor. NVIDIA (NVDA US) says its CPO switches deliver 3.5x better power efficiency than today's pluggable optical modules, and CPO sits on the roadmaps of NVIDIA, Broadcom (AVGO US), and TSMC (2330 TT).
Himax is understood to be supplying into NVIDIA's CPO program, although neither company has said so. Hunterbrook, an investigative outlet that discloses a long position in the stock, reported in March 2026, from matched patent filings and supply chain checks, that Himax makes the optics in the fiber array units feeding TSMC's COUPE engine, the platform behind NVIDIA's photonics switches. Analyst Ming-Chi Kuo named Himax a potential supplier for TSMC's CPO and NVIDIA's Rubin chips back in December 2024.
Himax's product is the precision optics inside the fiber array unit (FAU): the lenses, prisms, and V-grooves that couple optical fibers to the photonic chip with minimal signal loss. They are made with the nanoimprint wafer-level optics process Himax has run for 15 years; management is explicit that silicon photonics builds on that manufacturing base, not on the display driver business.
Small-quantity shipments of Himax's Gen 1 silicon photonics product are expected from 2H26. Gen 1, developed with FOCI (3363 TT) and end customers, supports 1.6 and 3.2 terabit per second transmission; Gen 2 doubles that to 6.4 terabit and is nearing the end of customer validation for AI data center applications management says carry significant volume potential.
Silicon photonics inverts the display driver business model: potentially lower volumes, much higher value per unit, higher technical barriers. Management does not position it as a replacement; automotive remains the company's cash-generating foundation, funding selective investment in CPO, smart glasses, and ultralow power AI.
Where Himax sits in the CPO supply chain
In today's AI data centers, data leaves a switch or accelerator chip electrically and is converted to light in pluggable optical modules at the edge of the box. Co-packaged optics (CPO) moves that electrical-to-optical conversion inside the chip package, next to the switch or accelerator ASIC, shortening the electrical path and cutting the power each transmitted bit consumes. The approach has moved from concept to roadmap: NVIDIA (NVDA US) has announced silicon photonics versions of its networking switches, Broadcom (AVGO US) has shipped CPO switch variants, and TSMC (2330 TT) has built a dedicated platform, COUPE, for stacking photonic and electronic dies. As bandwidth multiplies with each AI chip generation, the power draw and connector density of pluggable modules become limits that optics inside the package relieve.
Himax supplies a key enabling technology at the most upstream layer of this stack, and it is becoming a significant business for the company. Where the optical fibers meet the photonic chip, a fiber array unit (FAU) holds and aligns each fiber at sub-micron precision. Inside that assembly sit the micro optics, lenses that focus, prisms that bend the light path, V-grooves that seat each fiber, which Himax manufactures with its nanoimprint WLO process. Himax's partner FOCI (3363 TT) builds the fiber-optic connector assemblies, and the two are developing the Gen 1 and Gen 2 CPO solutions together with end customers. Management kept its own description to that upstream component layer and names no end customers; the fuller mapping below is our own.
Third-party research goes further on who is on the other end. Hunterbrook, an investigative outlet that discloses a long position in Himax shares, reported in March 2026 that Himax and TSMC patent filings describe matching 22-channel fiber array structures, and concluded, alongside supply chain checks, that Himax's FAU optics feed TSMC's COUPE engine, the platform behind NVIDIA's photonics switches. TF International analyst Ming-Chi Kuo had named Himax a potential wafer-level optics supplier for TSMC's CPO and NVIDIA's Rubin generation AI chips as early as December 2024, citing the FOCI partnership and Himax's 5.3% equity stake in FOCI. Neither finding is confirmed by Himax, TSMC, or NVIDIA.
The milestones to watch are the ones management set: small-quantity shipments of the Gen 1 silicon photonics product from 2H26, and completion of Gen 2 customer product validation.
The CPO stack, and where Himax sits
Layer
What it does
Representative names
Switch / accelerator ASIC
The electrical chip whose data CPO carries off-package
Converts electrical signals to light beside the ASIC
TSMC (2330 TT) COUPE platform; Broadcom (AVGO US)
External laser source
Supplies the light, kept outside the package for serviceability
Lumentum (LITE US), Coherent (COHR US)
Fiber array unit (FAU)
Aligns and couples optical fibers to the photonic chip
FOCI (3363 TT)
Optics inside the FAU
Lenses, prisms, V-grooves that shape and steer light for coupling
Himax (HIMX US), via nanoimprint WLO
Optical fiber
Carries the signal across the rack and the data center
Corning (GLW US), fiber cabling suppliers
Source: Zero One Investment Research, based on Himax management correspondence (June 2026), company announcements, and public reporting including Hunterbrook (March 2026), TF International Securities analyst Ming-Chi Kuo (December 2024), and NVIDIA technical publications.
FOCI's ReLFACon fiber array unit (FAU) — the co-packaged optics connector that houses Himax's precision optics; the inset shows the V-groove fiber channels. Source: FOCI (illustration).
Consensus forecasts imply substantial growth into 2028E
Bloomberg consensus already assumes a steep ramp. Consensus has revenue growing from US$832m in 2025 to US$934m in 2026E, US$1.16bn in 2027E, and US$1.42bn in 2028E, growth of 12%, then 24%, then 22%.
Profit growth to benefit from operating leverage, and its expected timing matches the CPO schedule management gave us. Consensus has operating margin moving from 5% in 2025 to roughly 21% by 2028E. With small-quantity shipments of the Gen 1 silicon photonics product expected only from 2H26, the 2026E year rests on the established display driver and automotive businesses; the steeper 2027E and 2028E steps fall where CPO volume would build. Consensus does not publish product-level assumptions; reading that acceleration as the CPO ramp is our interpretation.
Full Q&A with Management
The questions below were prepared by Zero One Investment Research and put to Himax management in writing. Answers are not reproduced verbatim; each is our own summary of the company's written response. Figures and specific claims attributed to management are preserved as given.
What Himax is building
Q1:Himax has described silicon photonics as a meaningful new growth vector. In concrete product terms, what is Himax actually building, and where does it sit inside a co-packaged optics system?
At a high level, the underlying technology is wafer-level optics (WLO), which leverages nanoimprint technology to create optical structures on wafers. Himax supplies several optical components, lenses, prisms, V-grooves (channels that position and secure optical fibers with high precision), and others, each serving a different optical function. Depending on the customer's design, the components are used to redirect, bend, and shape the direction of the light signal. The objective, management said, is high-quality, high-precision optical coupling: moving light between fiber and chip with minimal loss.
Q2:Himax has built significant wafer-level optics manufacturing capabilities over the years. What specifically from that process expertise transfers to silicon photonics, and what has required building genuinely new capabilities?
What transfers is the manufacturing system Himax has built over 15 years in WLO: optical design, nanoimprint processing, metrology (the measurement discipline that verifies nanometer-scale dimensions), process control, and high-volume manufacturing under tight performance tolerances. Silicon photonics still requires additional expertise and know-how, management said, but the existing WLO infrastructure lets Himax meet many of the key manufacturing requirements without having to build everything from scratch.
Q3:Himax's core expertise is in designing ICs that precisely drive optical elements such as display panels. How does that design DNA apply to what Himax is building for silicon photonics?
Management drew the line more sharply than our question did: the entry into silicon photonics is not a natural extension of the display driver IC business. It is built instead on the in-house manufacturing capabilities and expertise developed over 15 years in WLO, the optical design, nanoimprint, metrology, and process-control disciplines described above, not on driver IC design.
The CPO supply chain and AI demand
Q4:Where in the CPO supply chain does Himax sit? If you map the components from the photonic chip to the laser source to the package to the switch ASIC, which layers is Himax involved in, and who sits on either side?
Very upstream. Himax focuses on the optical components within the FAU, the fiber array unit that aligns and couples optical fibers to the photonic chip. Management kept its description to that layer; our own mapping of the surrounding stack, including FOCI's role in the connector assembly, is in the supply chain section above.
Q5:What is it about AI data center infrastructure specifically, compared to previous generations of cloud infrastructure, that creates demand for what Himax is developing?
Management pointed to the public record: many leading AI semiconductor companies have announced plans to adopt CPO and silicon photonics in future generations of AI infrastructure. In its reading, that means the industry increasingly recognizes optical interconnects as a necessary solution to the bandwidth, power, cost, and scalability challenges of next-generation AI applications.
Manufacturing and the fab base
Q6:What does it take at a process level to manufacture silicon photonics components to spec? How does Himax's existing semiconductor infrastructure position it to meet those requirements?
Management grouped this with the capability-transfer question: the process disciplines silicon photonics demands, nanoimprint processing, metrology, process control, and high-volume manufacturing under tight performance tolerances, are the ones its WLO infrastructure already runs every day. Additional expertise and know-how are still required in places, but the starting point means Himax does not have to build the manufacturing base from scratch.
Q7:Himax's LCoS products use liquid crystal layers on silicon to control light for AR and projection applications. Is there a direct technical connection between that work and Himax's silicon photonics development?
No. LCoS and silicon photonics are different technologies with different manufacturing processes, and Himax supports them with two separate in-house fabs.
Commercial progress
Q8:Without naming customers, how far along is Himax from having silicon photonics products in commercial production versus still in development and qualification?
Gen 1 and Gen 2 are progressing as planned together with FOCI and end customers. The Gen 1 solution supports 1.6 and 3.2 terabit per second transmission bandwidth, with small-quantity shipments expected to commence from 2H26. Gen 2, at 6.4 terabit, is nearing completion of customer product validation and targets AI data center applications that management says are poised to carry significant volume potential.
Q9:What has Himax seen from the market, customer interest, design-in requests, competitive signals, that validates silicon photonics as a real business rather than an R&D exploration?
The validation management cited is public: leading AI semiconductor companies have announced plans to adopt CPO and silicon photonics in future generations of AI infrastructure, which Himax reads as industry-wide recognition that optical interconnects are needed. Alongside that, its own Gen 2 product is going through customer product validation for AI data center applications.
The business model
Q10:Display drivers are high-volume, lower-ASP products. Silicon photonics looks like the inverse, lower unit volumes, much higher value per unit. How does Himax think about that shift as a business model?
Management accepts the framing: silicon photonics is a different business model from traditional display driver ICs, with potentially lower volumes but significantly higher value per unit and higher technical barriers. It does not view the business as a replacement for what exists. Automotive in particular continues to grow organically on larger displays, OLED adoption, head-up displays, and increasingly sophisticated smart cockpit architectures, segments where Himax holds leading market positions; management called automotive an important growth driver and the company's cash-generating foundation. The strategy is to leverage the established businesses while selectively investing in high-value-added spaces, CPO, smart glasses, and ultralow power AI, to diversify revenue, increase exposure to higher-value markets, and support long-term gross margin and profit growth.
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