Image source: Himax Technologies, Inc.

What happened

Shares of Himax Technologies Inc. (HIMX 1.03%) fell 18% in the month of December, according to data provided by S&P Global Market Intelligence, on the heels of a negative analyst note.

So what

Himax shares began to decline in earnest on Dec. 13, 2016, falling more than 6% after Mizuho Securities downgraded shares of the fabless semiconductor company to "neutral" from "buy." Mizuho also lowered its per-share price target on Himax to $7.70 from $10.00. Shares of Himax then continued to march lower over the next 10 days, touching a fresh 52-week low at $5.85 per share on Dec. 23 before staging a modest rebound as value-seeking investors snapped up shares to end the year.

Now what

That's not to say there's a tremendous amount of new information with which investors can work. Himax most recently reported third-quarter 2016 results in mid-November, with 37.1% year-over-year revenue growth driven by strong performances from both its driver and non-driver business segments.

However, Himax CEO Jordan Wu also told investors at the time that the company expects "near-term headwinds" in its higher-margin non-driver business, as its LCOS and WLO product lines are set to suffer declines over the next several quarters "due to [Himax's] major AR [Augmented Reality] customer's shift in focus to the development of future generation devices."

Wu elaborated,

That being said, we still remain uniquely positioned in this market as the provider of choice for critical enablers to AR devices. To support anticipated growth in this segment, we have proceeded with the expansion plans for our next generation LCOS and WLO production lines, which will enable higher end product design and offer far better product quality for mass production and is expected to be completed by the end of 2017 or early 2018. We remain committed to our long-term strategy to diversify our product and customer base with innovative technologies, which ultimately, should increase shareholder value.

Even so, it's no mystery our fickle market hates being told to effectively "hurry up and wait" for Himax to realize the potential of the compelling growth opportunity represented by augmented reality devices. And given the longer-term time frames management has referenced before that happens, I suspect investors won't receive any positive news on this front for at least another few quarters. In the meantime, it should be hardly surprising to see analysts on Wall Street taking a step back as they assess Himax's near-term potential.