If the name "Himax" prompted you to shrug, then you're not alone, but it's the latest company to receive a cash injection from Eric Schmidt's checking account. The Taiwanese semiconductor firm is selling Google a 6.3 percent stake in Himax Display Technologies, a subsidiary that's most famous for making the liquid-crystal on silicon chips used to drive Google Glass' head-mounted display. The cash will be used to expand capacity at the manufacturer, which already counts Intel as an investor -- and if Google likes what it sees, the search giant has an option to buy a further 8.5 percent worth of stock within the next calendar year. It's probably too early to hope that the project will help bring the price of future Glass headsets down, but we're going to, so there.
Himax Technologies Signs Technology Investment Agreement With Google
TAINAN, Taiwan, July 22, 2013 (GLOBE NEWSWIRE) -- Himax Technologies, Inc. (Nasdaq: HIMX) ("Himax" or "Company"), a supplier and fabless manufacturer of advanced display drivers and other semiconductor products, today announced that it has entered into an agreement ("the Agreement") with Google Inc. pursuant to which Google has agreed to invest in the Company's subsidiary, Himax Display Inc. ("HDI"). The purpose of the investment is to fund production upgrades, expand capacity and further enhance production capabilities at HDI's facilities that produce liquid crystal on silicon ("LCOS") chips and modules used in applications including head-mounted display (HMD) such as Google Glass, head-up display (HUD) and pico-projector products. Under the Agreement, Himax will also invest additional amount in HDI to fund its ongoing capacity expansion. HDI will also use a portion of the proceeds to substantially reduce its loan from Himax. The transaction is expected to close in the third quarter of 2013 subject to regulatory approvals and other closing conditions.
Under the Agreement, Google will purchase certain amount of preferred shares in HDI. Upon closing, Google will hold a 6.3% interest in HDI. Google also has an option to make additional investment of preferred shares at the same price within one year from closing. If the option is exercised in full, Google will own a total of up to 14.8% in HDI. Himax Technologies, Inc. holds 81.5% of HDI at present and will remain the major shareholder of HDI after the transaction. Google will join the core group of HDI shareholders including KPCB Holdings, Inc., Khosla Ventures I, L.P. and Intel Capital Corporation.
Google's investment in HDI will not have a dilutive effect on Himax's Nasdaq-traded shares, HIMX.
"Google is a preeminent global technology leader. We are delighted to receive this investment and to form a strategic partnership with Google," stated Jordan Wu, President and Chief Executive Officer of Himax. "Beginning the second quarter of this year, we had already begun expanding capacity to meet demand for our LCOS product line. This investment from Google further validates our commitment to developing breakthrough technologies and state-of-the-art production facilities. We look forward to leveraging this investment and our collective expertise with Google to create unique and transformational LCOS technologies for many years ahead."
Founded in 2004, Himax Display, Inc. has focused on developing commercial applications for LCOS technologies, in-house manufacturing expertise and production lines with proven, high-volume shipment track records. Over the last few years, HDI has devoted its research and development of its LCOS technology for new applications of head-mounted display and other wearable computing applications.