Good afternoon, everyone. Thank you for joining Novatek's 2023 fourth quarter online earnings call. This is David Chen, Vice President and Company Spokesperson. I'll be the host of today's conference. Joining me on the call today are our Vice Chairman, Steve Wang, our CFO, Mr. S.C. Tsao, and our IR Director, Tony and Yvonne. The agenda for today's event will be as follows: First, our IR Director, Tony, will be reporting Novatek's fourth quarter results in English. After that, our Vice Chairman, Mr. Steve Wang, will provide more details on our Q4 results and 2024 Q1 guidance. Following that will be our Q&A sessions. We've already received some questions from our investors, and if you have any questions you would like to ask, please send them to us online.
Our IR Director, Tony, will process and read out the investors' questions one at a time, both in Chinese and English. Our Vice Chairman, Steve, and our CFO, Mr. Tsao, and myself will answer all your questions in Chinese and will be translated into English later. Now, I will hand over the time to Tony, our IR, IR Director, to report our Q4 results.
Thank you, David. Good afternoon and good morning. This is Tony Tseng. So please take a look at the first page, our safe harbor notice. Now we are going down to our financial results. The first slide is our revenue. Our quarter four revenue of TWD 27.15 billion exceeded our guidance of TWD 26.1 billion-TWD 27.1 billion, which is down slightly 6% quarter-over-quarter, but still increased year-over-year by 21%. The next page. As for the consolidated gross profit in quarter four, reached TWD 11.26 billion, down about 8% sequentially, but still increased about 24% year-over-year. Next page. Now, moving to the next page about our gross margin.
In quarter four, our gross margin of 41.48%, again, exceeded our guidance of 38.5%-40.5%. On a quarter-over-quarter comparison, this is slightly down from 42.25% in Q3 , 2023, but still up year-over-year from 40.55% a year ago. Next page. Regarding our operating expense. Our operating expense of TWD 4.96 billion in quarter four are down slightly 2% quarter-over-quarter, but still increased 27.7% year-over-year. Next page. Then on the operating income, quarter four still reached TWD 6.3 billion in dollar, which is down 11.7% sequentially, but still increased 21% year-over-year. Next page. Thank you. Now let's look at our operating margin.
Our operating margin of 23.22% in quarter four, again, exceeded our guidance of 21%-23%. On the sequential comparison, it's down slightly from 24.69% in quarter three, and also almost sluggish year-over-year from 23.24% a year ago. Next page. Now let's take a look at our net income. In quarter four, our net income reached TWD 5.33 billion, which is down 16% quarter-over-quarter, but still rose 31.8% year-over-year. Next. Now let's look at our EPS for quarter four. We reached EPS of TWD 8.76 in quarter four, down from 10.46 in quarter three last year, but still increased from 6.64 from a year ago.
Now let's take a summary of our overall income statement for quarter four compared with quarter three last year, as well as quarter four of 2022, as we already highlighted in the previous pages. Now look at our the full year income statement for 2023. For overall 2023, our revenue was almost sluggish year-over-year and reached TWD 110 billion. Profit also reached TWD 46 billion, which is down 9% year-over-year. Operating expense of TWD 19.55 billion increased 7.35%, mainly due to the increase from the R&D expense. As for the net income, TWD 23.3 billion, which is down 16.6%, also partially due to a little bit lower non-operating income.
The EPS of TWD 38.32, down from a year ago, TWD 45.96. Next page. This slide shows our revenue breakdown for three major business group for quarter four last year. The small medium-sized driver accounting for 37% revenue in quarter four, down from 39% in quarter three. The second largest business group, System on Chip SoC, accounting for 35% of quarter four revenue, also down from 38% in quarter three. Lastly, regarding our large-sized drivers, which accounting for 26% of quarter four revenue, up from 23% in quarter three. Next page. This page show our monthly revenue for both 2022 and 2023. As you can see, we started to deliver year-over-year revenue growth from middle of last year.
This page, we just reported our January revenue at TWD 8.6 billion, which is almost sluggish month-over-month, but still posted 20.7% year-over-year growth. Regard with the breakdown, you can see with SoC and the drivers. On a relative basis, SoC continue to be more resilient and accounting for 38% of Jan- of revenue in January. Next page. This is also again the monthly revenue to show the sequential trend over the past one year, and you can see a big year-over-year growth for January 2024. This page is the key financial numbers for quarter four versus previous quarter. The cash position increased again to TWD 54 billion level.
It's up around 18% quarter-over-quarter, and also around 10% year-over-year, due to our lower accounts receivable as well as inventory dollar. Now, switch gears to look at accounts receivable, and also the amount reduced by about 18% quarter-over-quarter to TWD 16.9 billion in quarter four, but slightly increased 7% year-over-year. The balance on inventory, our inventory dollar further slipped to TWD 8.55 billion, about down 6% quarter-over-quarter, and around 29% year-over-year. This is also the lowest dollar level since the COVID period. Now, let me pass the call back to David.
Thank you, Tony. The following slide is a recap of our recent ESG major events. Novatek has been selected to Business Weekly's top 100 enterprises in carbon competitiveness. And, you know, we have stood out among nearly 1,000 listed companies, maintaining its position as one of the top 100 carbon competitive enterprises for two years in a row. And we've also been recognized with an excellent result, great, in the Temperature Rating Index Pathway, which called TRIP. And we've been also recognized as one of the Future Investment Initiative Institute's top 250 most sustainable emerging market companies, based on the inclusive ESG score.
Novatek has also been honored with the Ministry of Education 2023 Taiwan iSports Certification , and this demonstrated Novatek commitment to caring for the physical and mental well-being of its employees, and help to make work-life balance a reality. We've also been given the 2023 Education Business Volunteer Service Award by the Ministry of Education. Please also visit our website for more information on our ESG achievement, and the link is below. Now, I'll turn over the call to our Vice Chairman, Mr. Steve Wang, to provide us more details on Q3, Q4 results and Q1 guidance.
[Foreign language] Thank you, David. I think, Tony, just gave a detailed explanation of Novatek's fourth quarter results....
[那第四季我们的营收呢，比第三季大概减少了6.1%，这个主要是因为消费电子的终端需求回升力度不足呢，年底的厂商呢调控库存，以致我们Q4的营收呢，比Q3呢减少了6.1%。不过我们的营收呢，能达到了预期，预期的这个上限，TWD 271亿。第四季的毛利率呢，41.48%，比第三季的42.25%减少了1.77个百分点，但是比我们的guidance呢，38.5%-40.5%要好。这个主要的原因为是因为有，这个存货跌价回升，还有这个NRE的收入的，这个因素呢，所以比预期呢来得好]
As Tony already reported our Q4 results, the revenue for the fourth quarter actually decreased by 6.1% QOQ, but YOY up by 21.1%. This is mainly due to the weaker slower recovery of consumer electronics and market demand, and year-end inventory adjustment. But overall revenue reached near the upper bar of our guidance TWD 26.1 billion-TWD 27.1 billion. And as for the Q4 margins, our Q4 margin was 41.48%, QOQ declined by 77 basis points, but better than our guidance 28.5%-40.5%. This is mainly due to gain from recovery of inventory and NRE.
[Foreign language]
Next, regarding the Q1 outlook, we now observe that the first quarter is generally the traditional off-season for consumer electronics, and moreover, plus the impact of the Spring Festival working days also decreasing, we expect Q1's revenue should decline. And at the current stage, due to demand still being not too clear, so customers mostly are with rush orders and short orders for this business more. So, in the revenue aspect, we expect Q1's revenue probably will be between TWD 24 billion-TWD 25 billion, TWD 24 billion-TWD 25 billion, this if using exchange rate 31.2 against the US dollar exchange rate 31.2 to calculate. Then gross margin, we expect probably between 38.5%-40.5%, and profit margin probably is 19.5%-21.5%.
As for our Q1 guidance, normally, Q1 usually is a low season for consumer electronics, plus we have Lunar New Year, which has less number of working days. Therefore, Q1 revenue is expected to decline quarter over quarter. Due to the demand uncertainty in Q1, and most customers rely on short and rush orders. Based on the above, our 2024 Q1 guidance will be as follow: revenue will be within TWD 24 billion-TWD 25 billion, with an exchange rate of 1:31.2, and the gross margin will be 38.5%-40.5% range, and operating margins will be 19.5%-21.5% range. Thank you, Steve, for the Q1 guidance. Next, we'll move on to Q&A sessions. Please be reminded to send in your questions if you have any questions that you would like to ask. Tony, please, we'll go first with some of the questions that we have already received.
[Foreign language] 谢谢David。第一个问题，谢谢管理层给的这个第一季的guidance，那可以就，公司几个主要的终端应用需求的趋势，在第一季的情况分享一下看法吗？
[Foreign language]
Regarding the demand for several terminal applications, in the first quarter, because it is the traditional off-season for consumer electronics, currently we observe that various applications all have a declining situation. This includes TV, as well as monitor, NB, notebook, mobile phone, as well as VR, even auto; it seems they all have this demand declining trend.
Could management share the view on the sequential trend across major applications for the overall demand into the first quarter?
Well, the demand across applications such as TV, monitor, notebook, smartphone, VR, even auto tends to be weak in Q1 due to low seasonality.
[Foreign language] 那，管理层刚刚提到，讲完这个整个产业的趋势，那可以再给一下对公司的三大产品线季对季营收的表现，在第一季会是如何呢？
[Foreign language] 第一季呢，针对聯詠的三大产品线来看的话呢，我们看到季对季呢，SoC的营收呢，大概是会略微减少，哦，这个因为主要是Q4呢，已经有提早做了预......
[Foreign language] 那在中小尺寸的driver IC方面呢，QOQ的这个营收是减少的，这个主要是手机的补货呢，看起来告一段落，啊，接着可能在观察这个春节的这个销售的情况。那手机方面呢，看起来TDDI的出货呢，应该会下滑，那OLED呢，可能大致上会持平，大致上会持平，持平。那auto方面呢，客户目前看起来是在调整库存呢，出货也会下滑，也会下降。那在大尺寸LDDI方面呢，QOQ衰退的幅度看起来是比较大，啊，最主要是因为Q1呢，看起来在TV、NB、Monitor的需求呢，是需求的淡季，那面板厂呢，目前是调整生产来这个因应，所以大尺寸方面的这个衰退幅度，在三个产品线里面可能会衰退得比较大一点。
Consequently, could you also provide some guidance on your quarterly revenue trend across your three business groups?
Well, based on the three major business group, the first one is the System on Chip. We are expecting QOQ will decline slightly. Basically, it's mainly because of the early correction in Q4. So in other words, a lower base in Q4. And as for the small medium business group, QOQ will also decline. And the smartphone inventory replenishment pretty much done.
Following that, we need to keep watch for Chinese New Year sell-through, but we expect smartphone TDDI shipment to decline, but OLED TDDI to be flat. As for the auto, the shipment will decline due to customer inventory adjustment. And the other business line, business group, is the large driver, which QOQ will decline the most, and it is due to the soft demand across notebook, monitor, and TV, and also the lower utilization rate at the panel customer side.
[Foreign language] 那，根据公司的这个第四季的结果，还有第一季的指引，你有注意到，公司中小尺寸的驱动IC营收，在第四季和第一季连续两季下滑，请问，原因为何？
[Foreign language]
For small and medium-sized driver ICs, the decline in the fourth quarter is mainly due to the off-season shipments of VR and Auto, resulting in reduced revenue. Although our shipments of TDDI and OLED for mobile phones in the fourth quarter increased, but it is because of VR and Auto's off-season shipment revenue reduction, resulting in Q4 decline. Then the decrease in the first quarter, currently the main thing we see is due to the decline in mobile phone demand, as well as the impact from Auto's continued inventory adjustment. So Q4 and ...
Q1 跟 Q4 的这个减少是不一样的，这个原因。
What are major factors for the sequential decline of your small- and medium-sized driver revenue in both quarters for last year as well as first quarter this year?
Well, the small and medium driver revenue in Q4 was largely dragged by weak VR and Auto, while the shipment of OLED and TDDI actually increased quarter-on-quarter. However, the revenue in Q1 will decrease QOQ, but this will be mainly due to the soft smartphone demand. So it's a little bit different than Q4 and Q1.
[Foreign language]
那，公司之前的法說會有提到一些對2024年預期成長的產品，那現在來看的话，其中對營收成長貢獻比較大的產品可能會有哪幾樣呢？
[Foreign language]
看起來呢，第一個產品線主要是這個手機的OLED driver IC，這個看起來2024年應該可以有這個不錯的這個成長的機會。第二個，有關TV SoC方面呢，我們看起來今年應該有一些新產品，還有一些新客戶的加入呢，看起來應該有一些這個成長的機會。另外，在PC跟NB這裡呢，因為今年應該expect會有這個換機的需求，特別是有一些AI這個function的這個drive，所以看起來高階產品的比例會提升，這個對聯詠来讲呢，應該也是，成長的一個契機。
Could you share your view on the top revenue growth drivers into 2024?
Well, the growth for 2024, and first of all, is the OLED TDDI. We are anticipating decent growth for smartphone OLED TDDI IC in 2024. And as for our TV SoC, we are also benefit from new customers and from new product launch, and which should be a growth opportunity for Novatek. And last but not the least, the PC and notebook, and we also expect the replacement demand and also some of the high-end products like the AI, which should provide more room for growth opportunity.
... but the OLED, but the overall TDDI in 2024 will not grow.
[Foreign language] 下一题是想，请教一下公司，可以就去年有跟AI相关的产品营收，占比大概是怎么样的？那想请教一下公司有预期AI PC与手机或其他相关的产品将如何影响公司的成长？还有也可以特别谈谈公司在传输界面IC的布局吗？因为这个产业也可能将来会收回。
[Foreign language]
As I just reported to everyone, due to AI PC and NB or AI smartphone having new functions added, it should be able to stimulate some replacement demand. And on this, in the display specifications, it should have some improvement. This I believe should be beneficial to us, in the AI application aspect. Additionally, on Edge devices, there are also some demands to introduce AI functions, for example like some security, or gaming monitor, even on some PV, there are some AI function demands. Additionally, in the transmission interface here, I think this transmission interface is one of Novatek's core technologies, oh. Currently, our product development has already extended towards the high-speed transmission direction to develop. So here I think we should not be absent, not be absent.
Wonder if you could provide percentage of revenue from AI related product in 2023. How will AI related product will drive your growth in the future? Could you also share your view on the interface IC, which seems to benefit from this AI trend?
As mentioned earlier, the AI PC or AI notebook, or even AI smartphone, some of these new functions and features will trigger the replacement demand, and especially, some of the display upgrade in terms of specification. And on the other hand, the adoption of Edge AI in some of the applications like surveillance, TV, gaming monitor, will also be positive for our growth. And as mentioned about the transmission interface, and, this has always been, one of our core technologies. So our product development has already moved towards higher transmission speed, and, we'll, we'll definitely have our presence in that area.
[Foreign language]
那，可以请教一下公司去年，关于ASIC的产品在营收的比重是怎么样的？那主要是在哪些产品线？那对ASIC产品有一些成长或者在营收的目标吗？
[Foreign language]
我想这个 ASIC business 呢，是因为有些客户呢，为了强调产品的这个差异化呢，而有这个 ASIC 这个，需求出来。目前呢，Novatek 在驱动 IC 产品线和 SoC 的产品线呢，目前我们都有 ASIC business 在做。那看来今年在 ASIC business 上面呢，Novatek 这上面的营收应该会有一些成长，应该会有一些成长。
What percentage of revenue in 2023 came from ASIC product, and also for which product line? Could you also provide, if you have any growth or revenue target for your ASIC business?
The overall ASIC business is mainly driven by some of our customers' needs for product differentiation. Currently, Novatek has ASIC business for both driver and SoC product line. Yes, we do expect our ASIC business to grow year-over-year in 2024.
[Foreign language]
公司之前有提到，已经开始使用先进制程，达到了6nm，那请问相关的产品在2023年在营收的比重，那主要用在哪方面的产品？那公司也可以分享一下，进入先进制程对公司的成长将来会有什么样的帮助？
[Foreign language]
目前，6nm的产品呢，占联咏的这个营收比重是不高的，那，主要是些强调智慧影像，还有这个显示画质的产品呢，会用到这个6nm的这个制程。我想这个，导入6nm这种先进制程的初期导入呢，对联咏Novatek长期的产品研发呢，以及ASIC business的开拓呢，我想应该是帮助的，应该是帮助的。
What percentage of your revenue in 2023 came from 6nm products? For which product line? Could you also provide some color on how these advanced process now will help your business in the future?
Well, currently the 6nm product contribution is still low, and the advanced node is mainly adopted for products related to smart imaging and also picture quality.
For Novatek, the early engagement or implementation of DD's advanced node is accurate and beneficial to our long-term product and also the ASIC business development.
[Foreign language]
那管理层刚刚也提到了，OLED这边的DDIC是公司未来成长的一大关键，那可以就下面几点有多一些说明吗？比如说产能的布置，差异化的产品，制程的提升，甚至是，关于有竞争力的制造成本。
[Foreign language]
我想为了因应这个 OLED driver IC 呢，长期在各种应用渗透的这个需求趋势呢，在产能方面呢，联咏我们是提早就已经有准备。那 Novatek 呢，我们会持续开发一系列的这个差异化，差异化的这个产品组合呢，来满足客户各种的需求，包括这个 RAM 啊，或者 RAMless 啦，or even 这个 OLED TDDI 的这个产品。至于这个，成本的竞争力呢，我想在产品设计阶段的时候呢，我们就会进行对制程还有晶圆厂的选用的各方面的一个竞争力的评估，这个是我们 在产品设计阶段的时候就会进行评估。
Earlier, you mention about the OLED DDIC will be one of your key growth driver in the future. Could you give more comments on a few topics such as your foundry capacity plan, your differentiated product line, the node process, and also, potential competitive cost structure?
Well, for Novatek, we are well prepared for the future capacity needs, given the long-term rising adoptions of OLED products across applications. And, Novatek will continue to develop a full series of, differentiated products portfolio to meet our customer needs. For example, like RAM, RAMless, or OLED TDDI. And, for us, the evaluation of process nodes of foundry partners are basically based on price performances, and it is usually done at an early stage during the product design stage.
[Foreign language]
那，关于OLED的产品中，刚刚比较讨论是关于手机的DDIC，可以提一下，其他产品，OLED其他产品的布局的机会吗？
[Foreign language]
我想这个OLED的产品呢，除了手机的，应用以外呢，事实上Novatek我们已经推出了，或者是在开发中呢，有各种应用所需要的对应的产品，这个包括了TV啦，或者是IT用的，或者是车载啊，以及T-CON的相关的产品。
Follow-up question, OLED, could you also give some color on other OLED related products?
Besides a smartphone application that we've been talking about, and Novatek has also developed and launched OLED products for various applications, including TV, IT, auto, and even T-CON related.
[Foreign language]
那，也可以请公司稍微谈一谈，您 的车用产品吗？比如说，在去年的营收占比，还有未来的成长动能会来自于哪类的产品？那最近我们看到上周的法说会，其中一位你的客户也有做一些垂直的整合，那不知道这里会对您的车用的布局会不会有什么影响？
[Foreign language]
我想那个依据呢，这个市调公司的研究报告呢，Omdia呢，我们目前这个联咏车用的产品呢，营收呢，目前看起来已经是top two，已经是top two。现在依据我们的观察呢，车用的面板呢，采用这个LCD的DDIC，还有这个LDDI，以及OLED的比例呢，未来此方面呢，应该会持续提升，所以呢，它的成长性呢，我们是可以期待的。
What percentage of your revenue in 2003 came from auto related products? Could you also, share with us about your growth driver, auto related products in the future, and also any comments on, AUO's recent vertical acquisition into the supply chain in Europe.
Well, according to Omdia, Novatek currently ranks top two in the auto TDDI--DDIC market in terms of revenue. And, from what we see is that in the future, the adoption of higher dollar content products such as LCD TDDI, LDDI, OLED, and the automotive display will increase, and this will provide a growth opportunity for us.
[Foreign language]
在上周，我们看到，一个您主要的晶圆供应商宣布跟Intel合作，从2027年在美国会量产12奈米的产品，那请问公司会考虑去投片吗？那如果会的话，是哪方面的产品？
[Foreign language]
...我想这个只要具有竞争力的这个先进制程或者是晶圆厂呢，Novatek我想应该我们都会视需求来这个评估采用，会视需求来评估采用。
Given UMC's announced partnership with Intel as a 12nm product starting from 2027 in the United States, will Novatek utilize these capacity?
Well, the adoption of any new process nodes or foundry partners will all depends on its competitiveness and also the needs of our customers.
[Foreign language]
那，公司也一直强调，就是说对新客户，新产品一直都是，继续在投入。那可以提一下，对于新客户这边有没有其他产品线的可能性呢？
[Foreign language]
我想不断地拓展客户群呢，和这个应用呢，是Novatek我们一贯的这个目标，我想我们会配合客户的需求呢，去开发出市场需要的，这些产品。
Previously, you mentioned you have worked mostly with new customers. Wonder if you will potentially expand the offerings?
know, expanding customer base or adding new customer or new application, this has always been our major goal, and we'll, we'll continue to work closely with our customers to develop the new products to meet their needs.
[Foreign language]
那，公司之前也提到了产业的库存已逐渐降低到接近正常的水准，那预期今年的季营收有机会恢复正常的季节性。那不知道...但是最近又不同公司有一些不同的看法，那不知道公司现在对2024年季节性的看法会是怎么样的？
[Foreign language]
我想经过了这个一年多的调整呢，目前产业的库存呢，应该已经是回到，相对健康的状态。接下来呢，我想最重要的还是要观察总经跟地缘政治呢，对终端消费的影响。我想这个，市场的变化快速呢，我们也只有密切地做这个，观察，密切地做观察。
As previously you mentioned, inventory level in the supply chain across product are returning into the normal level. Do you still hold this view at this moment for your business through 2024?
Oh, yes, the overall inventory level in the supply chain has returned to relatively healthy level after more than a year of adjustment. But we still need to keep close watch on the end demand, which is subjected to overall macroeconomics and geopolitics, and we need to keep a very close watch on the changes.
[Foreign language]
那我们也看到公司，第四季存货的金额较上季持续的下降。可以请财务长给我们一下存货天数吗？那对于第一季的，末的库存金额或天数，也可以分享一下趋势吗？
[Foreign language]
[F2023 年全年的平均销售天数是 72 天，那相比于前三季平均销售天数 74 天，是减少了 2 天。那 2024 年第一季末的存货金额预估与 2023 年第四季末相当，处于健康的水位。
What are your inventory days at the end of quarter four compared with quarter three last year? Would you also provide some comment on inventory dollar or days into the first quarter 2024?
The average days of inventory in 2023 came down to 72 days, 72, 72 days, and down from Q4, which was Q3, which was 74 days. Inventory dollar at the end of Q1 2024 is projected to be close to 2023 Q4 level, which is a rather healthy level.
[Foreign language]
那我们有接着几个问题，我想，也蛮多关于这个毛利率、售价成本这边的的问题。第一个问题是想请教一下，第四季的毛利率又高于这个指引的上缘，那可以问一下关于NRE或库存回升这个贡献的比重，那有对2024年全年NRE的估计，或者，相比2023年的趋势会是怎么样的？
[Foreign language]
第四季 NRE 与存货跌价回升，贡献毛利率约1.6个百分点。那2024年NRE营收金额预估将较2023年增加。
Your quarter four gross margin exceeded the upper end of your guidance. How did NRE and inventory reversal gain have the beat? Could you also provide the trend for your NRE into 2024?
The Q4 NRE and the reversal gain from inventory write down actually contributed roughly around 160 basis points to our gross margin. As for 2024, we expect the NRE income to increase year-over-year.
[Foreign language]
那我们也注意到，您第一季毛利率的指引是较第四季的结果略低，请问主要的原因为何？
...
[Foreign language]
第一季毛利率的指引比第四季的结果呢，会稍微低一点，最主要就是这个，第一个有产品组合销售的这个，产品的组合的不同，销售产品组合的不同。那第二个部分就是部分的产品呢，我们有做一些ASP的调整，ASP的调整。第三个部分呢，是Q4呢，第四季我们有存货跌价的回冲，那目前预估呢，Q1是，不会再有这个存货跌价的回冲，主要这三个部分的不一样。
Why is your first quarter gross margin guidance is lower than your reported quarter four results?
Well, the Q1 guidance lower than Q4 mainly due to three reasons. First of all, in Q1, the product mix is different, and also, there's some ASP erosion for some products, and also in Q1, there's lack of reversal gain.
[Foreign language]
那，管理层有提到第一季的毛利率有受到，ASP的调整，请问哪些产品的第一季的价格压力比较大？
[Foreign language]
因为 Q1 呢，是这个行业的需求淡季呢，所以在 8 寸的驱动 IC 这里呢，以及手机的这个，TDDI 这里呢，看起来这个价格的压力相对会比较大一点。不过看起来呢，这个应该后面应该会逐渐的趋于这个稳定，会逐渐趋于稳定。
In first quarter, which product are facing more pricing competition?
Well, given the big seasonality in Q1, the large DDIC and smartphone DDIC are facing more pricing competition. However, we do expect pricing to become more stabilized moving forward.
[Foreign language]
接下来几个关于比较是结构性或竞争的问题。那么想请问一下，除了您目前主要的这个晶圆供应商的28nm的High- V的OLED的产能外，其他的供应商进度为何？之前有提到也会进入到下一个制程22nm，可以分享一下时间表吗？那，有可以提一下您的OLED DDIC的制程或有往更先进制程的一些计划吗？谢谢。
[Foreign language]
我想第一个，主要是有竞争力的这个晶圆厂呢，我想Novatek我们都会评估，然后来采用。那UMC呢，我们将会因应客户需求呢，持续采用这个先进的制程，来设计出具性价比的优势的产品，我想这个22nm的高压呢，是其中的一项，那是其中的一部分。其实这个除了这个制程以外呢，这个产品设计的竞争力呢，我想还是相当重要的一个关键，相当重要的一个关键。
Would you share with us about your capacity timetable for other foundry suppliers at the 28nm High- V? When will you start mass producing product at the 22nm? And also, which node process will you use for your OLED TDDI, and also any timetable for more advanced node as High- V product.
For Novatek, we'll definitely evaluate and adopt any fab as long as it is competitive enough. And, for us, we'll continue to adopt new process nodes, according to our customer needs, and also try to develop competitive cost performance products, and 22nm is just one of them, okay? And, besides process, I think the other key factor is the design capability, which we need to enhance as we move forward.
[Foreign language]
那，公司刚刚也强调了，有很多OLED的机会，那也可以跟我们分享一下，目前对于大陆驱动IC竞争对手在这一块的进展跟对公司的影响吗？
[Foreign language]
我想目前对于一些低阶的产品呢，在OLED这里可能或有竞争的这个状态。不过呢，相对的OLED panel规格呢，目前也持续的这个在进化当中，而相应的IC规格呢，也会持续地，做一些这个upgrade，相对的IC规格也会持续地upgrade。我想Novatek呢，我们唯有提升自己的设计技术能力呢，开发具有附加价值跟差异化的产品呢，以及提供优化的产品组合呢，来提供给客户竞争力的解决方案呢，这个是，fundamental的一个竞争力，fundamental的竞争力。
Could you also provide some comments on potential impact from competitors in China, particularly for OLED DDIC?
Yes, we are seeing some competition at the entry-level segment, but at the same time, we are also seeing the demand for the higher specification for OLED solution, which leads to also the upgrade in the IC specification. For Novatek, our strategy is continue to deliver a competitive solution to our customers by continuously enhancing our design capability, and try to develop value-added and differentiated products portfolio. And this is our most fundamental competitive or the core technology that we need to enhance and provide our customers.
[Foreign language]
最后有几个关于财务方面的数字，想请教一下，公司可以对2024年营业费用或费用率这边有一些指引吗？再来想请教一下，可以对2024年的所得税率，相对2023年的情况怎么样？因为有注意到第四季的所得税率有比较低，尤其是最近，看到台湾晶片法，那，公司似乎也是qualify在这一块。
[Foreign language]
2023年全年的营业费用率是17.71%，那2024年相关营业费用金额预估变化不大，但是营业费用率会随着营收波动而变化。另外，有关于2023年的所得税率是17.4%，原本预估为18%，那已经反映了前瞻创新研究发展投资抵减税率由15%提高到25%的效果。那2024年的所得税率预估约与2023年相当。
Well, management, provide some guidance for your operating expense or operating expense ratio for 2023 compared with 2023. Also, how about the tax rate for 2024? As we notice, your tax rate in quarter four last year was a bit lower than the first three quarters, given the new CHIPS Act.
The operating expense ratio in 2023 is 17.71%. Looking into 2024, OpEx amount will be similar to those in 2023, while the operating expense ratio is basically subjected to the revenue size. The income tax, on the other hand, the income tax rate is in 2023 is at 17.4%, lower than the previous estimate of 18%. This is mainly due to the adoption of higher tax credits, which has gone up from 15%-25% under the new Tax Act. Thus, the tax rate in 2024 will be at the similar level.
[Foreign language]
在一开始这个，第四季的财务数字中，我们注意到第四季的业外的金额有比第三季大幅的下降，可以请给一下这个业外，第四季业外的项目的比较明细吗？
[Foreign language]
第四季因业外的收入，主要 是利息收入有 TWD 3.46 亿，另外股利收入有 TWD 0.98 亿，不过有汇率损失 TWD 4.49 亿，所以整体的业外收入金额仅有 TWD 0.23 亿。
What are major items for your non-operating income in quarter four last year?
The non-operating income in Q4 mainly came from interest income of TWD 346 million and dividend of TWD 98 million despite the Forex loss of TWD 449 million.
[Foreign language]
那，想请教一下，今年，公司股利的发放率可以维持在往年80%的水准吗？那有考虑增加发放的频率吗？
我想 Novatek 呢，在过去几年，我们公司的这个股利发放呢，都是维持在80%左右的这个 high payout ratio。相信今年呢，应该也不会有太大的这个变动，不过我们仍然要等待这个，董事会的这个讨论。至于说这个发放的频率呢，目前公司是没有规划要考虑增加，没有考虑增加发放的频率。
Will you maintain your cash payout ratio at 80% for 2024? Also, will you increase the payout frequency?
Regarding the payout ratio, we expect it to likely stay at the high level of 80%, but the actual ratio will be decided by the board meeting. And as for the increase of payout frequency, at this moment, there is no plan. Tony, I think we have gone through most of the questions. So, yeah, see if there's any other. If no, then I would like to hand back the time to our Vice Chairman, Steve Wang.
谢谢各位哈。今天在这里，因为过新年也快到了，在这里先跟大家拜个早年，祝福大家这个新年快乐，身体健康，万事如意。谢谢！
As the Lunar New Year is approaching, I would like to take this opportunity to wish you all a Happy New Year and the best of health. Thank you so much for joining in. Thank you once again.