Google To Buy 6.3% Stake In Himax Display Unit

(RTTNews) - Taiwanese semiconductor company Himax Technologies Inc. (HIMX) said Monday that Internet search giant Google Inc. (GOOG) has agreed to invest in the company's display unit, Himax Display Inc. or HDI.

Under the deal, Google will initially buy a 6.3 percent stake in HDI, with an option to buy up to a stake of 14.8 percent with one year. HDI is a maker of chips for Google Glass devices. Shares of Himax are currently gaining more than 32 percent following the announement.

Himax noted that Google's investment will enable HDI to fund production upgrades, expand capacity and enhance production capabilities at its facilities that produce liquid crystal on silicon or LCOS chips as well as modules. The transaction is expected to close in the third quarter of 2013.

The LCOS chips made by HDI are used in applications, including head-mounted display such as Google Glass wearable-computing device, head-up display and pico-projector products. Google Glass is Google's new futuristic headset that can be used as a personal computer, capture videos and pictures, and display information similar to a smartphone.

Jordan Wu, President and Chief Executive Officer of Himax Technologies said, "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."

Under the deal, Google will buy preferred shares in HDI and hold a 6.3 percent stake in the company upon closing. Google also has an option to buy additional number of preferred shares at the same price within one year from closing.

If the option is exercised in full, Google will own a 14.8 percent stake in HDI. Himax said it will also make an additional investment in HDI to fund its ongoing capacity expansion.

Founded in 2004, HDI has focused on developing commercial applications for LCOS technologies. 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.

Himax currently holds an 81.5 percent stake in HDI and will remain the subsidiary's major shareholder after the transaction. Google will join the core group of HDI shareholders that include KPCB Holdings, Inc., Khosla Ventures I, L.P. and Intel Capital Corp.

In Monday's regular trading session, GOOG is trading at $903.99, up $7.39 or 0.82 percent on a volume of 1.21 million shares. HIMX is trading at $6.85, up $1.68 or 32.50 percent on a volume of 19.94 million shares.