Shares of semiconductor maker Himax Technologies are jumping in pre-market trading with the news that Google has taken a 6.3% stake in Himax Display (HDI). HDI is a subsidiary of the Taiwanese company that focuses on liquid crystal on silicon (LCOS) chips and modules, which are used in Google Glass and other products. HDI also counts Kleiner Perkins, Khosla Ventures and Intel as investors.
Google’s stake is a sign that Glass production is ramping up: the company says that the invesmtment is being made to “fund production upgrades, expand capacity and further enhance production capabilities.”
It’s not clear what the valuations of HDI or Google’s stake are. Jackie Chang, the CFO of Himax, tells us the company is not making that information public right now. “We are not disclosing the information,” she told me in an email earlier. “This announcement allows us to disclose information that is required by the SEC. We are delighted to enter into the agreement with Google.” That SEC filing is here.
Himax Technologies itself, which trades on NASDAQ, has a current market cap of $876.7 million. Shares closed down on Friday at $5.17 (down 3.36%) but are trading nearly 40% higher before the market opens so will likely see a pop today.
What’s more clear is that this is a sign that growing interest in Google Glass and other products like it are putting some pressure on Himax, which has been around since 2004, to increase production facilities.
As Google makes more moves into positioning itself as a vertically-integrated tech player beyond software and cloud-based services, the company’s stake in HDI could grow. Himax says that the 6.3% stake includes an option to make an additional investment in more preferred shares within the next year. If exercised in full, Google can take up to a 14.8% share in HDI.
“Google is a preeminent global technology leader. We are delighted to receive this investment and to form a strategic partnership with Google,” said Jordan Wu, president and CEO of Himax, in a statement. “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.”
As part of the deal, Himax, which now owns 81.5% of the subsidiary, says it will also be investing money to expand production at HDI. Google’s share acquisition is expected to close in Q3 2013.