Ladies and gentlemen, welcome to Himex Technologies, Inc., 3rd Quarter 2026 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 call is being recorded. I would now like to turn the conference over to Ms. Karen Tiao, Head of IR, PR, and Himex. Ms. Tiao, please go ahead.

Welcome, everyone. My name is Karen Tiao, head of IRPI at Hymex. Joining me today are Jordan Wu, president and chief executive officer, and Jessica Pan, chief financial officer. After the company's prepared comments, we have allocated time for questions in a Q&A section. If you have not yet received a copy of today's result release, please email hx-ir at hymex.com.tw. or download a copy from HIMAC's website. Before we begin a formal remark, I would 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. They involve a number of risks and uncertainties that could cause actual event or result to differ materially from those described in the conference call. A list of the risk factors can be found in the company's latest SAC filing, Form 20-S, in the section entitled Risk Factors, as may be amended. Except for the company's four years of 2025 financials, which were provided in the company's 20-S and filed with SAC on March 27, 2026, the financial information included in this conference call is unaudited. and consolidated and prepared in accordance with the IFRS accounting. Such financial information is generated internally and has not been subjected to the same review and scrutiny and may vary materially from the audited consolidated financial information for the same period. On today's call, I will first review HiMED's consolidated financial performance for the third quarter of 2026. Followed by our fourth quarter outlook. Jordan will then give an update on the status of our business and after which we will take questions. You can submit your questions online through the webcast or by phone.

We will review our financials on an IFRS basis.

We are pleased to report that our QFIT profit exceeded the guidance range announced on August 6, while revenues and gross margin were both in line with the guidance. Third quarter revenue registered $246.8 million, representing a sequential increase of 8.5%. Gross margin was 34.2%, in line with our guidance of around 34%. and up from 33.1% in the previous quarter. Q3 profits per diluted ADA was 10.7 cents, exceeding the guidance rate of the 8.0 to 10.0 cents attributable to lower than expected operating expenses. Revenue from large dispatch of IC coming at $19.0 million. a slight decline of 1% from the previous quarter. Both Monitor and Notebook IC sales declined quarter over quarter as customers had already pulled forward inventory purchases in the prior quarters. In contrast, sales for TV IC products increased sequentially due to higher legacy product shipment to key customers. Sales of large panel driver IEC accounted for 7.7% of total revenue for the quarter, compared to 8.4% last quarter and 9.5% a year ago. Revenue from small and medium-sized display driver IEC segments totaled $176.8 million, reflecting an increase of 8.9% sequentially. Q3 automotive driver sales, including both the traditional DDI-Z and TDDI, increased by solid double-digit quarter-over-quarter, marking the second consecutive quarter of strong growth. This was primarily driven by the broad customer demand for DDI-Z and TDDI products. Some panel makers also accelerated IC purchases in response to a surge in orders from Chinese automakers. which are expended overseas amid slowing demand in their domestic market. The mass production of multiple LTDI projects across automotive brands worldwide also contributed to the quarter-over-quarter growth. Q3's marble IC cells covering LCD and OLED products increased sequentially, driven by continued shipment of a leading smartphone brand's mainstream model and inventory built out for its new premium models. In contrast, tablet IC sales decreased sequentially as expected, primarily reflecting customers' accelerated purchases in the first half of the year against the backdrop of the rising number price sentiment in the market. The small and medium-sized drug IV segment accounted for 71.6% of total sales for the quarter, compared to 71.4% in the previous quarter and 70.8% a year ago. Q3 non-driver sales reached $51.0 million, an 11.2% increase from the previous quarter attributable to robot and automotive T-Con shipment that extended the strong momentum from Q2. This growth was supported by the continued legacy product shipment to a bold, diversified customer base, as well as several new projects entering mass production. T-Con business accounted for over 10% of the total sales, with more than half contributed by Automotive T-Con. Himex continues to hold undisputed leadership position with the dominant market share in Automotive T-Con, particularly in solutions featuring local teaming functionality. We expect the strong growth momentum to continue into next year, and Nam Driver Product accounted for 20.7% of total revenues as compared to 28.2% in the previous quarter and 19.7% a year ago. Third quarter operating expenses were $61.8 million, an increase of 21.9% from the previous quarter and 1.7% compared to the same period last year. The sequential increase was mainly attributed to the annual bonus compensation, which we award employees at the end of September each year and result in a much higher employee compensation expense compared to our quarter of the year. Our annual bonus compensation grant for 2026 was $13.3 million, slightly higher than the guidance of the $13 million as the bonus amount. determined by the expected four-year profit was revised upward following an improved Q3 profit. Of the $13.3 million, $11.8 million was immediately vested and expended in the Q3, including a portion of the award granted in prior years. The total bonus expenses for the Q3 2026 amounted to the $11.9 million Hsien-Hsien Wu, Jordan Wu, Jordan Wu We continue to exercise prudent cost management while prioritizing strategic investment in non-driver IC business that offer attractive long-term growth opportunity. Third quarter operating income was $22.7 million, representing an operating margin of 9.2%, compared to 10.8% in the previous quarter and negative 0.3% for the same period last year. The sequential decline was primarily attributable to the higher employee bonus expense, which, as I mentioned earlier, totaled $11.9 million. compared to $0.2 million last quarter. Meanwhile, the year-over-year increase was primarily driven by higher revenue and improved gross margin. Third quarter after tax profit was $18.6 million, or $0.107 per diluted ADA, compared to $19.9 million, or $0.114 per diluted ADA last quarter, and up from $1.1 million or 0.6 cents in the same period last year. Turning to the balance sheet, we had $285.3 million cash, cash equivalent and other financial assets as of September 13, 2026. This compares to $278.2 million at the same time last year and $298.7 million a quarter ago. The sequential decline in cash balance mainly reflected the $44 million in dividend and $11.9 million employee bonus payout. Q3 operating cash inflow was $23.9 million, compared to an inflow of $17.5 million in Q2. The employee bonus paid out this year included $11.4 million for the immediately vested portion of this year's award, and $.05 million for vested award granted over the past three years. Our quarter-end inventory as of September 30, 2026, were $159.8 million, up from $151.1 million last quarter and higher than $137.4 million in the same period last year. Our inventory level remains healthy, particularly considering extended manufacturing lead time across the industry. Account receivable at the end of September was $228.4 million, up from $220.3 million last quarter and $200.7 million a year ago. DSO was 93 days at the quarter end, the same as last quarter and 87 days a year ago. Third quarter capital expenditures, primarily on R&D-related equipment for our IC design business, was $3.9 million, versus $4.3 million last quarter and $6.3 million a year ago. As of September 30, 2026, HiMAP had a $174.5 million ADS outstanding, little changed from last quarter. On a fully diluted basis, the total number of ADS outstanding for the third quarter was 174.4 million. Regarding the proposed divestiture of our stake in an equity method invented announced in July, the transaction is progressing as planned and expected to close in Q4, such as Q's customary closing conditions and regulatory approvals. Upon closing, we expect to recognize a pre-tax gain of approximately $23 to $24 million and an after-tax gain of approximately $19 to $20 million. We will provide further updates as appropriate. Now, turning to our Q4 2026 guidance. We expect Q4 revenue to decrease 22% to 26% sequentially. The gross margin is expected to be flat to slightly up depending on the product mix. Cube profit attributable to shareholders is estimated to be in the range of 4.5 to 6.5 cents per fully diluted ADS. This estimate does not yet include the potential gain from the proposed diversified just mentioned earlier. I will now turn the call over to Jordan to discuss our Q4 Outlook. Jordan, the floor is yours.

Thank you, Karen. Demand for data center AI applications remains robust, with no signs of slowing. Notably, AI-related demand expands beyond advanced process nodes. to a wide range of supporting applications involving legacy process nodes, such as photonic IC or PICs, interposers, power management IC, and MOSFETs. As the supply-demand imbalance continues to intensify, capacity and legacy process nodes is expected to tighten further in 2027. against this backdrop, foundries, as well as packaging and testing providers, including those in China, have recently announced significant price increases for 2027. In the face of these multi-supply chain pressures, securing sufficient capacity has become our top priority, particularly as automotive now accounts for and many more. Automotive customers have far more stringent requirements for supply stability, long-term capacity assurance and delivery reliability than consumer electronics customers do. Through a series of recent proactive measures, we have fully secured capacity commitments for 2037 from our key suppliers and for key product areas. In terms of costs, we continue to work closely with customers to share the impact of rising costs. As just mentioned, our Q4 revenue is projected to decline sequentially. This is primarily due to an abrupt and significant correction in automotive drive ICU CDDI, and DDIC. Automotive T-Con sales, on the other hand, are expected to continue growing sequentially. It is worth highlighting that automotive IT sales recorded a decent 16% year-over-year increase in the first nine months of 2026. Despite the sharp correction in Q4, we still expect full-year automotive IT revenue to grow by approximately 10% year-over-year, outperforming the global automotive market, with worldwide vehicle production expected to decline this year. Now, let me elaborate on what we have seen in automotive demand lately. The year started on a soft note in Q1, followed by robust inventory replenishment in Q2 and Q3, as certain panel makers accelerated IT purchases to meet surging orders from Chinese automakers expanding overseas. In Q4, however, shortly after China's National Day holidays in early October, We saw a sudden and sizable decline in demand among the customers that had purchased aggressively in prior quarters. In recent weeks, certain panel makers with high exposure to China