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Magnachip Reports Results for Third Quarter 2022

  • Revenue of $71.2 million was within our guidance range. The year-over-year and sequential decline were primarily driven by the supply shortages of OLED wafers in the 2nd half of this year that impacted design-in projects from our large panel customer in Korea.
  • Gross profit margin was 24.2%, below the low end of our guidance range as we recorded a $3.3 million charge to scrap 12-inch wafers as a result of slowing demand caused by elevated smartphone inventories in China.
  • GAAP diluted loss per share was $0.38.
  • Non-GAAP diluted earnings per share was $0.02.

 

SEOUL, South Korea, Nov. 2, 2022 /PRNewswire/ — Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the third quarter of 2022.

(PRNewsfoto/Magnachip Semiconductor)Commenting on the results for the third quarter of 2022, YJ Kim, Magnachip’s chief executive officer stated, “Our Q3 revenue of $71.2 million was within our guidance range. As we mentioned last quarter, our Display business in the 2nd half is impacted by supply shortages of 28nm 12-inch OLED wafers that impacted design-in projects from our large panel customer in Korea, which are typically given in advance based on future wafer supply allocation. In addition, China covid lockdowns and the dramatic slowdown in consumer spending due to inflationary pressures reduced demand for smartphones and TVs and resulted in an oversupply of channel inventories, particularly in China. Our Power business also slowed due to lower consumer spending.”

YJ Kim continued, “While the global economic situation remains challenging, our balance sheet is strong, and we are focused on executing a recovery of our Display business. During the quarter, we successfully released our new OLED DDIC sample to our new panel customer and we expect to begin mass production in 2023. In addition, due to the global economic slowdown, we are seeing more wafer capacity availability and we are in discussion with multiple foundries to secure capacity and believe that our 2023 wafer supply will be more than two times higher than 2022. As such, we expect to see a significant recovery of Display business in 2023.”

 

Q3 2022 Financial Highlights

In thousands of U.S. dollars, except share data
GAAP
Q3 2022 Q2 2022 Q/Q change Q3 2021 Y/Y change
Revenues
Standard Products Business
Display Solutions 6,355 28,336 down 77.6 % 58,528 down 89.1 %
Power Solutions 56,416 62,952 down 10.4 % 58,887 down 4.2 %
Transitional Fab 3 foundry services(1) 8,428 10,088 down 16.5 % 9,585 down 12.1 %
Gross Profit Margin 24.2 % 28.6 % down 4.4 %pts 36.7 % down 12.5 %pts
Operating Income (Loss) (10,008) 2,002 down n/a 20,001 down n/a
Net Income (Loss) (17,195) (3,340) down n/a 10,768 down n/a
Basic Earnings (Loss) per Common Share (0.38) (0.07) down n/a 0.23 down n/a
Diluted Earnings (Loss) per Common Share (0.38) (0.07) down n/a 0.23 down n/a
In thousands of U.S. dollars, except share data
Non-GAAP(2)
Q3 2022 Q2 2022 Q/Q change Q3 2021 Y/Y change
Adjusted Operating Income (Loss) (6,646) 4,787 down n/a 22,691 down n/a
Adjusted EBITDA (2,995) 8,525 down n/a 26,361 down n/a
Adjusted Net Income 1,097 10,567 down 89.6 % 20,073 down 94.5 %
Adjusted Earnings per Common Share—Diluted 0.02 0.23 down 91.3 % 0.42 down 95.2 %

 

___________
(1) Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, and for a period of up to three years, we will provide transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi (“Transitional Fab 3 Foundry Services”). Management believes that disclosing revenue of Transitional Fab 3 Foundry Services separately from the standard products business allows investors to better understand the results of our core standard products display solutions and power solutions business lines.
(2) Management believes that non-GAAP financial measures, when viewed in conjunction with GAAP results, can provide a meaningful understanding of the factors and trends affecting our business and operations and assist in evaluating our core operating performance. However, such non-GAAP financial measures have limitations and should not be considered as a substitute for net income (loss) or as a better indicator of our operating performance than measures that are presented in accordance with GAAP. A reconciliation of GAAP results to non-GAAP results is included in this press release.

 

Q4 2022 Financial Guidance
The Company’s near-term outlook is being challenged by previous OLED wafer allocation constraints that impacted 2nd half design-in projects, elevated smartphone channel inventories, a pushout of the initial mass production ramp of our new OLED customer and weakening demand in consumer end markets on growing recession fears and cost increases, including labor, due to inflationary pressures. In addition, we estimate our Q4 revenue will be further negatively impacted by approximately $5 million of foreign exchange hedging instruments. While actual results may vary, looking into the next quarter, Magnachip currently expects:

  • Revenue to be in the range of $57 million to $62 million, including about $7 million of Transitional Fab 3 Foundry Services.
  • Gross profit margin to be in the range of 26 % to 28%.

 

Q3 2022 Earnings Conference Call
Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, November 2, 2022, to discuss its financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this event including the dial-in numbers, a PIN number, and an e-mail with detailed instructions to join the conference call. A live and archived webcast of the conference call and a copy of earnings release will be accessible from the ‘Investors’ section of the Company’s website at www.magnachip.com.

 

Online registration: https://register.vevent.com/register/BIccd8bcc64c4a4092bc5e11273a22e8f2

 

Safe Harbor for Forward-Looking Statements
Information in this release regarding Magnachip’s forecasts, business outlook, expectations and beliefs are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include expectations about estimated historical or future operating results and financial performance, outlook and business plans, including fourth quarter 2022 revenue and gross profit margin expectations, and the impact of market conditions associated with inflation and rising interest rates, the COVID-19 pandemic or the emergence of various variants of the virus, geopolitical conflict between Russia and Ukraine, and escalated trade tensions and supply constraints on Magnachip’s fourth quarter 2022 and future operating results. All forward-looking statements included in this release are based upon information available to Magnachip as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include, among others: the impact of changes in macroeconomic and/or general economic conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest; the COVID-19 pandemic or the emergence of various variants of the virus or other outbreaks of disease, and governmental lock-downs or other measures implemented in response thereto, and the Russia-Ukraine conflict; manufacturing capacity constraints or supply chain disruptions that may impact our ability to deliver our products or affect the price of components, which may lead to an increase in our costs, as well as impacting demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely design acceptance by our customers; timely introduction of new products and technologies; ability to ramp new products into volume production; industry wide shifts in supply and demand for semiconductor products; industry and/or company overcapacity; effective and cost efficient utilization of manufacturing capacity; financial stability in foreign markets and the impact of foreign exchange rates; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors, including those related to the Russia-Ukraine conflict; change or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, including the COVID-19 pandemic or the emergence of various variants of the virus; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products, including uncertainties regarding the impacts of the COVID-19 pandemic or the emergence of various variants of the virus that may result in factory closures, reduced workforces, scarcity of raw materials and goods produced in infected areas, as well as reduced consumer and business spending affecting demand for Magnachip’s products due to government and private sector mandatory business closures, travel restrictions or the like to prevent the spread of disease; and other risks detailed from time to time in Magnachip’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including our Form 10-K filed on February 23, 2022 and subsequent registration statements, amendments or other reports that we may file from time to time with the SEC and/or make available on our website. Magnachip assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise.

 

About Magnachip Semiconductor
Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACT:
Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Yujia@blueshirtgroup.com

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30,
2022		 June 30,
2022		 September 30,
2021		 September 30,
2022		 September 30,
2021
Revenues:
Net sales – standard products business $         62,771 $         91,288 $         117,415 $       248,069 $       333,589
Net sales – transitional Fab 3 foundry services 8,428 10,088 9,585 28,599 30,306
Total revenues 71,199 101,376 127,000 276,668 363,895
Cost of sales:
Cost of sales – standard products business 45,497 63,620 71,641 165,197 221,297
Cost of sales – transitional Fab 3 foundry services 8,477 8,811 8,772 26,305 27,659
Total cost of sales 53,974 72,431 80,413 191,502 248,956
Gross profit 17,225 28,945 46,587 85,166 114,939
Gross profit as a percentage of standard products business net sales 27.5 % 30.3 % 39.0 % 33.4 % 33.7 %
Gross profit as a percentage of total revenues 24.2 % 28.6 % 36.7 % 30.8 % 31.6 %
Operating expenses:
Selling, general and administrative expenses 11,411 12,736 12,550 38,310 39,185
Research and development expenses 13,321 13,410 12,270 38,685 39,015
Merger-related costs — — 1,552 — 13,842
Other charges, net 2,501 797 214 3,298 3,360
Total operating expenses 27,233 26,943 26,586 80,293 95,402
Operating income (loss) (10,008) 2,002 20,001 4,873 19,537
Interest expense (278) (499 ) (113) (888) (1,239)
Foreign currency loss, net (12,809) (7,012 ) (7,579) (20,511) (12,000 )
Other income, net 1,958 1,272 1,608 4,163 2,839
Income (loss) before income tax expense (21,137) (4,237 ) 13,917 (12,363) 9,137
Income tax expense (benefit) (3,942) (897 ) 3,149 (1,356) 6,040
Net income (loss) $         (17,195) $          (3,340 ) $         10,768 $         (11,007) $           3,097
 

Basic earnings (loss) per common share—

 $             (0.38) $            (0.07 ) $             0.23 $             (0.24) $             0.07
Diluted earnings (loss) per common share— $             (0.38) $            (0.07 ) $             0.23 $             (0.24) $             0.07
Weighted average number of shares—
Basic 44,865,266 44,897,278 46,449,234 45,119,214 44,377,250
Diluted 44,865,266 44,897,278 47,808,457 45,119,214 45,811,792

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
(Unaudited)
September 30,
2022		 December 31,
2021
(In thousands of U.S. dollars, except share data)
Assets
Current assets
Cash and cash equivalents $                 250,831 $                   279,547
Accounts receivable, net 36,759 50,954
Inventories, net 37,298 39,370
Other receivables 8,248 25,895
Prepaid expenses 10,322 7,675
Hedge collateral 15,370 3,060
Other current assets 20,208 2,619
Total current assets 379,036 409,120
Property, plant and equipment, net 94,411 107,882
Operating lease right-of-use assets 4,928 4,275
Intangible assets, net 1,770 2,377
Long-term prepaid expenses 11,382 8,243
Deferred income taxes 34,299 41,095
Other non-current assets 10,382 10,662
Total assets $                 536,208 $                   583,654
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $                   26,545 $                     37,593
Other accounts payable 14,809 6,289
Accrued expenses 15,800 20,071
Accrued income taxes — 11,823
Operating lease liabilities 1,324 2,323
Other current liabilities 15,881 7,382
Total current liabilities 74,359 85,481
Accrued severance benefits, net 28,036 33,064
Non-current operating lease liabilities 3,811 1,952
Other non-current liabilities 16,787 10,395
Total liabilities 122,993 130,892
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value, 150,000,000 shares authorized, 56,234,774 shares issued and 44,579,075 outstanding at September 30, 2022 and 55,905,320 shares issued and 45,659,304 outstanding at December 31, 2021 562 559
Additional paid-in capital 264,510 241,197
Retained earnings 332,535 343,542
Treasury stock, 11,655,699 shares at September 30, 2022 and 10,246,016 shares at December 31, 2021, respectively (152,161) (130,306 )
Accumulated other comprehensive loss (32,231) (2,230 )
Total stockholders’ equity 413,215 452,762
Total liabilities and stockholders’ equity $                 536,208 $                   583,654

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(Unaudited)
Three Months
Ended		 Nine Months
Ended
September 30,
2022		 September 30,
2022		 September 30,
2021
Cash flows from operating activities
Net income (loss) $    (17,195) $     (11,007) $       3,097
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization 3,623 11,225 10,576
Provision for severance benefits 1,923 5,163 5,514
Amortization of debt issuance costs and original issue discount — — 261
Loss on foreign currency, net 37,152 66,335 32,607
Provision for inventory reserves 2,448 7,730 1,484
Stock-based compensation 861 4,487 6,056
Other, net (81) 631 442
Changes in operating assets and liabilities
Accounts receivable, net 20,182 7,805 6,696
Inventories (7,722) (13,208) (4,561)
Other receivables 5,475 17,115 (5,287)
Other current assets (12,028) (14,117) 7,933
Accounts payable (17,221) (14,792) (16,192)
Other accounts payable (354) (6,215) (3,729)
Accrued expenses 8,575 5,866 (1,641 )
Accrued income taxes 30 (11,483) (8,308)
Other current liabilities 570 (1,583) 555
Other non-current liabilities (47) 523 (666 )
Payment of severance benefits (1,247) (4,181) (4,772)
Other, net 335 (50) (49 )
Net cash provided by operating activities 25,279 50,244 30,016
Cash flows from investing activities
Proceeds from settlement of hedge collateral — 2,805 3,995
Payment of hedge collateral (8,438) (15,282) (2,744 )
Purchase of property, plant and equipment (10,301) (11,812) (13,368)
Payment for intellectual property registration (148) (301) (455)
Collection of guarantee deposits — — 3,192
Payment of guarantee deposits (1,026) (2,075) (4,960 )
Other, net 778 792 (103)
Net cash used in investing activities (19,135) (25,873) (14,443 )
Cash flows from financing activities
Proceeds from exercise of stock options — 1,786 3,920
Acquisition of treasury stock (3,239) (5,065) (1,653 )
Repayment of financing related to water treatment facility arrangement (120) (381) (427 )
Repayment of principal portion of finance lease liabilities (18) (50) (49)
Net cash provided by (used in) financing activities (3,377) (3,710) 1,791
Effect of exchange rates on cash and cash equivalents (25,733) (49,377) (21,003)
Net decrease in cash and cash equivalents (22,966) (28,716) (3,639 )
Cash and cash equivalents
Beginning of the period 273,797 279,547 279,940
End of the period $   250,831 $     250,831 $   276,301

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS)
(In thousands of U.S. dollars)
(Unaudited)
Three Months Ended Nine Months Ended
September 30,
2022		 June 30,
2022		 September 30,
2021		 September 30,
2022		 September 30,
2021
Operating income (loss) $ (10,008) $ 2,002 $ 20,001 $ 4,873 $ 19,537
Adjustments:
Equity-based compensation expense 861 1,988 2,005 4,487 6,056
Inventory reserve related to Huawei — — (1,081) — (1,081)
Merger-related costs — — 1,552 — 13,842
Other charges, net 2,501 797 214 3,298 3,360
Adjusted Operating Income (Loss) $ (6,646) $ 4,787 $ 22,691 $ 12,658 $ 41,714

We present Adjusted Operating Income (Loss) as a supplemental measure of our performance. We define Adjusted Operating Income (Loss) for the periods indicated as operating income (loss) adjusted to exclude (i) Equity-based compensation expense (ii) Inventory reserve related to Huawei (iii) Merger-related costs and (iv) Other charges, net. For the three and nine months ended September 30, 2022, Other charges, net includes $2.8 million of one-time employee incentives, in each period, and professional service fees and expenses of $0.2 million and $1.0 million, respectively, incurred in connection with certain strategic evaluations, both of which were offset in part by a $0.5 million gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi. For the three and nine months ended September 30, 2021, Other charges, net includes professional service fees and expenses of $0.2 million and $3.4 million, respectively, incurred in connection with the regulatory requests.

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA AND ADJUSTED NET INCOME
(In thousands of U.S. dollars, except share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30,
2022		 June 30,
2022		 September 30,
2021		 September 30,
2022		 September30,
2021
Net income (loss) $        (17,195 ) $         (3,340 ) $            10,768 $     (11,007) $         3,097
Adjustments:
Interest income, net (1,506 ) (562 ) (439) (2,672 ) (512)
Income tax expense (benefit) (3,942) (897 ) 3,149 (1,356) 6,040
Depreciation and amortization 3,623 3,711 3,578 11,225 10,576
EBITDA (19,020 ) (1,088 ) 17,056 (3,810) 19,201
Equity-based compensation expense 861 1,988 2,005 4,487 6,056
Foreign currency loss, net 12,809 7,012 7,579 20,511 12,000
Derivative valuation gain, net (146) (184 ) (237) (201) (94)
Inventory reserve related to Huawei — — (1,081) — (1,081)
Merger-related costs — — 1,552 — 13,842
Other charges, net 2,501 797 (513) 3,298 2,633
Adjusted EBITDA $           (2,995) $          8,525 $           26,361 $       24,285 $          52,557
Net income (loss) $         (17,195) $         (3,340 ) $           10,768 $       (11,007) $            3,097
Adjustments:
Equity-based compensation expense 861 1,988 2,005 4,487 6,056
Foreign currency loss, net 12,809 7,012 7,579 20,511 12,000
Derivative valuation gain, net (146 ) (184 ) (237) (201 ) (94)
Inventory reserve related to Huawei — — (1,081) — (1,081)
Merger-related costs — — 1,552 — 13,842
Other charges, net 2,501 797 (513) 3,298 2,633
Income tax effect on non-GAAP adjustments 2,267 4,294 — 7,512 —
Adjusted Net Income $             1,097 $         10,567 $         20,073 $       24,600 $        36,453
Adjusted Net Income per common share—
– Basic $              0.02 $             0.24 $             0.43 $           0.55 $              0.54
– Diluted $             0.02 $             0.23 $             0.42 $           0.53 $              0.53
Weighted average number of shares – basic 44,865,266 44,897,278 46,449,234 45,119,214 44,377,250
Weighted average number of shares – diluted 45,747,255 45,937,515 47,808,457 46,134,231 47,718,578

We present Adjusted EBITDA and Adjusted Net Income as supplemental measures of our performance. We define Adjusted EBITDA for the periods indicated as EBITDA (as defined below), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss, net, (iii) Derivative valuation gain, net, (iv) Inventory reserve related to Huawei, (v) Merger-related costs and (vi) Other charges, net. EBITDA for the periods indicated is defined as net income (loss) before interest income, net, income tax expense (benefit) and depreciation and amortization.

We prepare Adjusted Net Income by adjusting net income (loss) to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Net Income is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Income for the periods as net income (loss), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss, net, (iii) Derivative valuation gain, net, (iv) Inventory reserve related to Huawei, (v) Merger-related costs, (vi) Other charges, net and (vii) Income tax effect on non-GAAP adjustments.

For the three and nine months ended September 30, 2022, Other charges, net includes $2.8 million of one-time employee incentives, in each period, and professional service fees and expenses of $0.2 million and $1.0 million, respectively, incurred in connection with certain strategic evaluations, both of which were offset in part by a $0.5 million gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi. For the three and nine months ended September 30, 2021, Other charges, net includes professional service fees and expenses of $0.2 million and $3.4 million, respectively, incurred in connection with the regulatory requests, both of which were offset in part by a $0.7 million legal settlement gain related to certain expenses incurred in prior periods in connection with our legacy Fab 4 (which was sold during the year ended December 31, 2020) and awarded in the third quarter of 2021.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/magnachip-reports-results-for-third-quarter-2022-301665747.html

SOURCE Magnachip Semiconductor Corporation

Investors

Magnachip to Announce Third Quarter 2022 Financial Results on November 2

SEOUL, South Korea, Oct. 19, 2022 /PRNewswire/ — Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that it will report its financial results for the third quarter ended September 30, 2022, on Wednesday, November 2, 2022, after the market closes. The Company will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET to discuss its financial results.

Magnachip logo

In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this event including the dial-in numbers, a PIN number, and an e-mail with detailed instructions to join the conference call.

Online registration: https://register.vevent.com/register/BIccd8bcc64c4a4092bc5e11273a22e8f2

A live and archived webcast of the conference call and a copy of earnings release will be accessible from the ‘Investors’ section of the company’s website at www.magnachip.com.

About Magnachip Semiconductor Corporation

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

CONTACTS:

Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Yujia@blueshirtgroup.com

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/magnachip-to-announce-third-quarter-2022-financial-results-on-november-2-301653137.html

SOURCE Magnachip Semiconductor Corporation

Investors

Magnachip Announces Expanded Stock Repurchase Program

SEOUL, South Korea, Sept. 12, 2022 /PRNewswire/ — Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced that the Board of Directors has authorized an expansion of the Company’s previously announced stock repurchase program from $75 million to $87.5 million of the Company’s common stock. The Company has already repurchased shares worth $37.5 million under the program.

(PRNewsfoto/Magnachip Semiconductor)

The remaining $50.0 million of the expanded $87.5 million program will be repurchased in the open market or through privately negotiated transactions. In connection with the repurchase program, the Company has established a stock trading plan in accordance with Rule 10b5-1 under the Securities Exchange Act of 1934.

The timing of stock repurchases and the number of shares of common stock to be repurchased will depend upon prevailing market conditions and other factors.

 

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to the safe harbor created thereby. Statements that are not historical or current facts, including statements about beliefs and expectations, are forward-looking statements. These forward-looking statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “will be,” “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe(s),” “intend,” “predict,” “potential,” “future,” “strategy,” “opportunity” and similar words or phrases or the negatives of these words or phrases. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including, but not limited to: the impact of changes in macroeconomic and/or general economic conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest the COVID 19 pandemic or the emergence of various variants of the virus or other outbreaks of disease, and governmental lock-downs or other measures implemented in response thereto, and the Russia-Ukraine conflict; manufacturing capacity constraints or supply chain disruptions that may impact our ability to deliver our products or affect the price of components, which may lead to an increase in our costs, as well as impacting demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely design acceptance by our customers; timely introduction of new products and technologies; ability to ramp new products into volume production; industry wide shifts in supply and demand for semiconductor products; industry and/or company overcapacity or supply constraints; effective and cost efficient utilization of manufacturing capacity; financial stability in foreign markets and the impact of foreign exchange rates; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors, including those related to the Russia-Ukraine conflict; change or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, including the COVID-19 pandemic or the emergence of various variants of the virus; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products, including uncertainties regarding the impacts of the COVID-19 pandemic or the emergence of various variants of the virus that may result in factory closures, reduced workforces, scarcity of raw materials and goods produced in infected areas, as well as reduced consumer and business spending affecting demand for Magnachip’s products due to government and private sector mandatory business closures, travel restrictions or the like to prevent the spread of disease; and other risks and uncertainties and the factors identified under “Risk Factors” in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, and updated in subsequent reports filed by the Company with the U.S. Securities and Exchange Commission and/or make available on our website. These reports are available at www.magnachip.com or www.sec.gov. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update them in light of new information or future events.

 

About Magnachip Semiconductor
Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACT:
Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Yujia@blueshirtgroup.com

 

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SOURCE Magnachip Semiconductor Corporation

Power Solutions

Magnachip Unveils Third-Generation 200V MV MOSFETs

– 3 new 200V MV MOSFETs will help the company grow its global market share in the LEV motor controller and industrial power supply sectors

 

SEOUL, South Korea, September 6, 2022 – Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that the company has introduced its third- generation 200V Medium Voltage (MV) Metal-Oxide-Semiconductor Field-Effect Transistors (MOSFETs) for Light Electric Vehicles (LEV) motor controllers and industrial power supplies.

Magnachip introduces third- generation 200V MV MOSFETs
Magnachip introduces third- generation 200V MV MOSFETs

 

To maximize energy efficiency in power devices, Magnachip’s new 200V MOSFETs incorporate third-generation trench MOSFET technology. The capacitance was reduced by 50% compared to the previous generation 100V MV MOSFET and the enhanced design of the core cell and termination helps lower RDS(on)* and total gate charge** to achieve a high figure of merit.

In addition, these third-generation MOSFETs are available in surface mount device TO-Leadless Package (TOLL), M2PAK and TO-220 of a through-hole type respectively to reduce product size and enhance heat dissipation. Furthermore, the energy efficiency of these MOSFETs is greatly increased by fast switching and high power density. Coupled with a guaranteed operating junction temperature from -55°C up to 175°C and a high level of avalanche ruggedness, these MOSFETs are well-suited for LEV motor controllers and industrial power supplies requiring high efficiency and stable power supply.

Omdia, a global market research firm, estimates that the annual growth rates of the automotive and industrial sectors of the global silicon power MOSFET market will be 11.5% and 9.6% respectively from 2020 to 2025. In particular, LEV markets are expanding quickly alongside efforts to accelerate decarbonisation and demand for efficient and affordable vehicles.

“The development of advanced applications in the automotive and industrial sectors is driving the need for high-performance MV MOSFETs,” said YJ Kim, CEO of Magnachip. “Magnachip will continue to upgrade its MV MOSFET product line, ranging from 40V to 200V, which will enable our customers to strengthen their product competitiveness.”

 

Magnachip's 200V MV MOSFETs are well-suited for LEV motor controllers and industrial power supplies
Magnachip’s 200V MV MOSFETs are well-suited for LEV motor controllers and industrial power supplies

 

*RDS(on): On resistance, the resistance value between the drain and the source of MOSFETs during on-state operation

**Total gate charge (Qg): the amount of charge required to be injected into the gate electrode to turn ON (drive) the MOSFET

 

Product features

  • low RDS(on) and switching loss
  • great heat dissipation performance
  • guaranteed operating junction temperature from -55°C up to 175°C
  • a wide range of application, such as LEVs, battery management systems and switch mode power supplies

 

Related Link

Power Solutions > MV MOSFETs > 200V

 

About Magnachip Semiconductor

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACTS:

United States (Investor Relations):
Yujia Zhai
The Bueshirt Group
Tel. +1-860-214-0809
Investor.relations@maganachip.com		 USA media / industry analysts:
Mike Newsom
LouVan Communications, Inc.
Tel. +1-617-803-5385
mike@louvanpr.com		 Korea / Asia media:
Min A KIM
Senior manager of Public Relations
Tel. +82-2-6903-3211
pr@maganachip.com

 

In the Media

Cision PR Newswire: news distribution, targeting and monitoring home     Magnachip Unveils Third-Generation 200V MV MOSFETs

     Magnachip Unveils Third-Generation 200V MV MOSFETs

                                            

Investors

Magnachip Reports Results for Second Quarter 2022 and Reaffirms Previously-Announced Stock Buyback Program

  • Revenue of $101.4 million was down 2.6% sequentially and down 11.0% year-over-year (YoY). The YoY decrease was mainly due to severe supply shortages for 28nm 12″ OLED wafers, partially offset by an 11.1% YoY increase in Power solutions business revenue.
  • Gross profit margin was 28.6%, down 890 basis points from Q1 and down 120 basis points from Q2 a year ago. The sequential decrease was primarily the result of: 1) the prior quarter benefiting 200 basis points from a one-time timing mismatch of lower cost 12″ wafers, 2) lower demand for China smartphones resulting in an inventory reserve of approximately $4.7 million related to 12″ display products, 3) higher foundry cost relating to 12″ wafers and 4) unfavorable product mix.
  • GAAP diluted loss per share was $0.07.
  • Non-GAAP diluted earnings per share (EPS) was $0.23.

 

SEOUL, South Korea, Aug. 8, 2022 /PRNewswire/ — Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the second quarter of 2022.

Commenting on the results for the second quarter of 2022, YJ Kim, Magnachip’s chief executive officer stated, “In the second quarter of 2022, we reported revenue of $101.4 million and non-GAAP diluted EPS of $0.23 despite an increasingly challenging macroeconomic environment. Similar to last quarter, our OLED revenue continued to be impacted by severe supply shortages for 28nm 12-inch wafers and our Power solutions business continued its positive momentum of double-digit YoY growth.”

YJ Kim continued, “Looking ahead, we are facing several challenges in the 2nd half of 2022 that will further impact our near-term results before we expect recovery in 2023. First, lower allocation of 28nm wafers impacted timing of design wins. Second, our new customer ramp schedule will be delayed due to product feature changes. And third, we are seeing a slowdown of the smartphone market. However, we have successfully sampled the full working chip to our new OLED customer, and we expect to get better wafer allocations starting at the end of 2022. We are confident that we will begin to see a recovery of our OLED business in 2023. Accordingly, our Board of Directors has reaffirmed the remaining $37.5 million stock repurchase program that we announced previously. We have also activated the Strategic Review Committee to assist the Board in reviewing, considering, exploring and evaluating strategic alternatives that may be available to the Company to maximize shareholder value while we focus on executing our OLED recovery plan in 2023 and continuing our success in the Power solutions business.”

 

Stock Repurchase Program and Strategic Review Committee

The Company’s Board of Directors reaffirmed the remaining $37.5 million stock repurchase program that was announced previously. Magnachip believes that this stock repurchase program and continuing to drive its OLED business recovery plan combined with the continued momentum of its Power solutions business, the Company is well positioned to drive significant accretion and value for shareholders over the coming years.

Magnachip also announced today that the Board of Directors has activated the Strategic Review Committee to assist the Board in reviewing, considering, exploring and evaluating strategic alternatives that may be available to the Company to maximize shareholder value. The committee’s mandate is to review the Company’s capital allocation plans and actively explore potential strategic and transactional opportunities, including, but not limited to, joint ventures, strategic partnerships and M&A possibilities that may arise in the future, and make recommendations to the Board regarding those matters, as appropriate. The Strategic Review Committee includes directors Melvin Keating, Ilbok Lee, Camillo Martino and Gary Tanner.

 

Q2 2022 Financial Highlights
In thousands of U.S. dollars, except share data
GAAP
Q2 2022 Q1 2022 Q/Q change Q2 2021 Y/Y change
Revenues
Standard Products Business
Display Solutions 28,336 29,185 down 2.9 % 46,601 down 39.2 %
Power Solutions 62,952 64,825 down 2.9 % 56,667 up 11.1 %
Transitional Fab 3 foundry services(1) 10,088 10,083 up 0.0 % 10,608 down 4.9 %
Gross Profit Margin 28.6 % 37.5 % down 8.9 %pts 29.8 % down 1.2 %pts
Operating Income(2) 2,002 12,879 down 84.5 % 1,627 up 23.0 %
Net Income (Loss) (3,340) 9,528 down n/a (198) down n/a
Basic Earnings (Loss) per Common Share (0.07) 0.21 down n/a (0.00) down n/a
Diluted Earnings (Loss) per Common Share (0.07) 0.20 down n/a (0.00) down n/a
In thousands of U.S. dollars, except share data
Non-GAAP(3)
Q2 2022 Q1 2022 Q/Q change Q2 2021 Y/Y change
Adjusted Operating Income 4,787 14,517 down 67.0 % 9,052 down 47.1 %
Adjusted EBITDA 8,525 18,755 down 54.5 % 12,692 down 32.8 %
Adjusted Net Income 10,567 12,936 down 18.3 % 7,034 up 50.2 %
Adjusted Earnings per Common Share—Diluted 0.23 0.28 down 17.9 % 0.15 up 53.3 %
___________
(1) Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, and for a period of up to three years, we will provide transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi (“Transitional Fab 3 Foundry Services”). Management believes that disclosing revenue of Transitional Fab 3 Foundry Services separately from the standard products business allows investors to better understand the results of our core standard products display solutions and power solutions business lines.
(2) In Q2 2022, operating income of $2.0 million included professional service fees and expenses of $0.8 million incurred in connection with certain strategic evaluations. In Q2 2021, operating income of $1.6 million included professional service fees and expenses of $2.5 million incurred in connection with the contemplated merger transaction and non-recurring professional service fees and expenses of $2.6 million incurred in connection with the regulatory requests.
(3) Management believes that non-GAAP financial measures, when viewed in conjunction with GAAP results, can provide a meaningful understanding of the factors and trends affecting our business and operations and assist in evaluating our core operating performance. However, such non-GAAP financial measures have limitations and should not be considered as a substitute for net income (loss) or as a better indicator of our operating performance than measures that are presented in accordance with GAAP. A reconciliation of GAAP results to non-GAAP results is included in this press release.

 

Q3 2022 Financial Guidance

The Company’s near-term outlook is being challenged by further OLED wafer shortages, pushout of initial mass production ramp of our new OLED customer outside of Korea, weakening demand in consumer end markets on growing recession fears and cost increases, including labor, due to inflationary pressures.  While actual results may vary, looking into the next quarter, Magnachip currently expects:

  • Revenue to be in the range of $70 million to $75 million, including about $9 million of Transitional Fab 3 Foundry Services.
  • Gross profit margin to be in the range of 26.5% to 28.5%.

 

Q2 2022 Earnings Conference Call

Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Monday, August 8, 2022, to discuss its financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this event including the dial-in numbers, a PIN number, and an e-mail with detailed instructions to join the conference call. A live and archived webcast of the conference call and a copy of earnings release will be accessible from the ‘Investors’ section of the Company’s website at www.magnachip.com.

 

Online registration: https://register.vevent.com/register/BI726a270135494c57a56defb9ec4da9d0

 

Safe Harbor for Forward-Looking Statements

Information in this release regarding Magnachip’s forecasts, business outlook, expectations and beliefs are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include expectations about estimated historical or future operating results and financial performance, outlook and business plans, including third quarter 2022 revenue and gross profit margin expectations, and the impact of market conditions associated with inflation and rising interest rates, the COVID-19 pandemic or the emergence of various variants of the virus, geopolitical conflict between Russia and Ukraine, and escalated trade tensions and supply constraints on Magnachip’s third quarter 2022 and future operating results. All forward-looking statements included in this release are based upon information available to Magnachip as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include, among others: the impact of changes in macroeconomic and/or general economic conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest the COVID-19 pandemic or the emergence of various variants of the virus or other outbreaks of disease, and governmental lock-downs or other measures implemented in response thereto, and the Russia-Ukraine conflict; manufacturing capacity constraints or supply chain disruptions that may impact our ability to deliver our products or affect the price of components, which may lead to an increase in our costs, as well as impacting demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely design acceptance by our customers; timely introduction of new products and technologies; ability to ramp new products into volume production; industry wide shifts in supply and demand for semiconductor products; industry and/or company overcapacity; effective and cost efficient utilization of manufacturing capacity; financial stability in foreign markets and the impact of foreign exchange rates; unanticipated costs and expenses or the inability to identify expenses which can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors, including those related to the Russia-Ukraine conflict; change or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, including the COVID-19 pandemic or the emergence of various variants of the virus; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products, including uncertainties regarding the impacts of the COVID-19 pandemic or the emergence of various variants of the virus that may result in factory closures, reduced workforces, scarcity of raw materials and goods produced in infected areas, as well as reduced consumer and business spending affecting demand for Magnachip’s products due to government and private sector mandatory business closures, travel restrictions or the like to prevent the spread of disease; and other risks detailed from time to time in Magnachip’s filings with the U.S. Securities and Exchange Commission (the “SEC”), including our Form 10-K filed on February 23, 2022 and subsequent registration statements, amendments or other reports that we may file from time to time with the SEC and/or make available on our website. Magnachip assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise.

 

About Magnachip Semiconductor

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACT:
Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Yujia@blueshirtgroup.com

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
Revenues:
Net sales – standard products business $         91,288 $         94,010 $       103,268 $       185,298 $       216,174
Net sales – transitional Fab 3 foundry services 10,088 10,083 10,608 20,171 20,721
Total revenues 101,376 104,093 113,876 205,469 236,895
Cost of sales:
Cost of sales – standard products business 63,620 56,080 70,409 119,700 149,656
Cost of sales – transitional Fab 3 foundry services 8,811 9,017 9,497 17,828 18,887
Total cost of sales 72,431 65,097 79,906 137,528 168,543
Gross profit 28,945 38,996 33,970 67,941 68,352
Gross profit as a percentage of standard products business net sales 30.3 % 40.3 % 31.8 % 35.4 % 30.8 %
Gross profit as a percentage of total revenues 28.6 % 37.5 % 29.8 % 33.1 % 28.9 %
Operating expenses:
Selling, general and administrative expenses 12,736 14,163 14,001 26,899 26,635
Research and development expenses 13,410 11,954 13,322 25,364 26,745
Merger-related costs — — 2,459 — 12,290
Other charges 797 — 2,561 797 3,146
Total operating expenses 26,943 26,117 32,343 53,060 68,816
Operating income (loss) 2,002 12,879 1,627 14,881 (464 )
Interest expense (499) (111) (85) (610 ) (1,126 )
Foreign currency gain (loss), net (7,012) (690) 250 (7,702 ) (4,421 )
Other income, net 1,272 933 611 2,205 1,231
Income (loss) before income tax expense (4,237) 13,011 2,403 8,774 (4,780 )
Income tax expense (benefit) (897) 3,483 2,601 2,586 2,891
Net income (loss) $          (3,340) $           9,528 $             (198) $           6,188 $          (7,671 )
Basic earnings (loss) per common share— $            (0.07) 0.21 $            (0.00) $             0.14 $            (0.18 )
Diluted earnings (loss) per common share— $            (0.07) 0.20 $            (0.00) $             0.13 $            (0.18 )
Weighted average number of shares—
Basic 44,897,278 45,603,208 46,322,027 45,248,293 43,324,088
Diluted 44,897,278 46,693,294 46,322,027 46,329,559 43,324,088

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
(Unaudited)
June 30,
2022		 December 31,
2021
(In thousands of U.S. dollars, except share data)
Assets
Current assets
Cash and cash equivalents $                 273,797 $                   279,547
Accounts receivable, net 59,817 50,954
Inventories, net 36,168 39,370
Other receivables 14,094 25,895
Prepaid expenses 10,783 7,675
Hedge collateral 6,990 3,060
Other current assets 8,361 2,619
Total current assets 410,010 409,120
Property, plant and equipment, net 96,832 107,882
Operating lease right-of-use assets 3,322 4,275
Intangible assets, net 1,979 2,377
Long-term prepaid expenses 14,953 8,243
Deferred income taxes 37,825 41,095
Other non-current assets 10,804 10,662
Total assets $                 575,725 $                   583,654
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $                   38,143 $                     37,593
Other accounts payable 14,835 6,289
Accrued expenses 15,426 20,071
Accrued income taxes — 11,823
Operating lease liabilities 1,838 2,323
Other current liabilities 8,562 7,382
Total current liabilities 78,804 85,481
Accrued severance benefits, net 30,466 33,064
Non-current operating lease liabilities 1,485 1,952
Other non-current liabilities 16,823 10,395
Total liabilities 127,578 130,892
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value, 150,000,000 shares authorized, 56,234,774 shares issued and 44,903,718 outstanding at June 30, 2022 and 55,905,320 shares issued and 45,659,304 outstanding at December 31, 2021 562 559
Additional paid-in capital 263,698 241,197
Retained earnings 349,730 343,542
Treasury stock, 11,331,056 shares at June 30, 2022 and 10,246,016 shares at December 31, 2021, respectively (148,523) (130,306)
Accumulated other comprehensive loss (17,320) (2,230)
Total stockholders’ equity 448,147 452,762
Total liabilities and stockholders’ equity $                 575,725 $                   583,654

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
(Unaudited)
Three Months
Ended		 Six Months
Ended
June 30,
2022		 June 30,
2022		 June 30,
2021
Cash flows from operating activities
Net income (loss) $     (3,340) $       6,188 $     (7,671)
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization 3,711 7,602 6,998
Provision for severance benefits 1,570 3,240 3,507
Amortization of debt issuance costs and original issue discount — — 261
Loss on foreign currency, net 22,803 29,183 13,353
Provision for inventory reserves 5,137 5,282 3,346
Stock-based compensation 1,988 3,626 4,051
Other, net 551 712 266
Changes in operating assets and liabilities
Accounts receivable, net (11,164) (12,377) 5,098
Inventories (6,942) (5,486) (7,170)
Other receivables 10,973 11,640 (4,841)
Other current assets 4,740 (2,089) 8,623
Accounts payable 1,891 2,429 1,040
Other accounts payable (5,159) (5,861) (674)
Accrued expenses (2,896) (2,709) (2,298)
Accrued income taxes (9,167) (11,513) (10,249)
Other current liabilities (1,442) (2,153) (102)
Other non-current liabilities 643 570 (274)
Payment of severance benefits (1,545) (2,934) (2,836)
Other, net (207) (385) (62)
Net cash provided by operating activities 12,145 24,965 10,366
Cash flows from investing activities
Proceeds from settlement of hedge collateral 976 2,805 972
Payment of hedge collateral (3,953) (6,844) (585)
Purchase of property, plant and equipment (567) (1,511) (4,866)
Payment for intellectual property registration (94) (153) (288)
Collection of guarantee deposits — — 307
Payment of guarantee deposits (970) (1,049) (4,960)
Other, net 12 14 (130)
Net cash used in investing activities (4,596) (6,738) (9,550)
Cash flows from financing activities
Proceeds from exercise of stock options 5 1,786 2,549
Acquisition of treasury stock (996) (1,826) (1,653)
Repayment of financing related to water treatment facility arrangement (127) (261) (288)
Repayment of principal portion of finance lease liabilities (16) (32) (33)
Net cash provided by (used in) financing activities (1,134) (333) 575
Effect of exchange rates on cash and cash equivalents (17,539) (23,644) (9,451)
Net decrease in cash and cash equivalents (11,124) (5,750) (8,060)
Cash and cash equivalents
Beginning of the period 284,921 279,547 279,940
End of the period $   273,797 $   273,797 $   271,880

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME
(In thousands of U.S. dollars)
(Unaudited)
Three Months Ended Six Months Ended
June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
Operating income (loss) $ 2,002 $ 12,879 $ 1,627 $ 14,881 $ (464)
Adjustments:
Equity-based compensation expense 1,988 1,638 2,405 3,626 4,051
Merger-related costs — — 2,459 — 12,290
Other charges 797 — 2,561 797 3,146
Adjusted Operating Income $ 4,787 $ 14,517 $ 9,052 $ 19,304 $ 19,023

 

We present Adjusted Operating Income as a supplemental measure of our performance. We define Adjusted Operating Income for the periods indicated as operating income (loss) adjusted to exclude (i) Equity-based compensation expense (ii) Merger-related costs and (iii) Other charges.

For the three and six months ended June 30, 2021, we recorded $2,459 thousand and $12,290 thousand, respectively, of professional service fees and expenses incurred in connection with the contemplated merger transaction.

For the three and six months ended June 30, 2022, we recorded $797 thousand of professional service fees and expenses incurred in connection with certain strategic evaluations. For the three and six months ended June 30, 2021, we recorded $2,561 thousand and $3,146 thousand, respectively, of non-recurring professional service fees and expenses incurred in connection with the regulatory requests.

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA AND ADJUSTED NET INCOME
(In thousands of U.S. dollars, except share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30,
2022		 March 31,
2022		 June 30,
2021		 June 30,
2022		 June 30,
2021
Net income (loss) $          (3,340) $           9,528 $             (198) $         6,188 $        (7,671)
Adjustments:
Interest income, net (562) (604) (493) (1,166) (73)
Income tax expense (benefit) (897) 3,483 2,601 2,586 2,891
Depreciation and amortization 3,711 3,891 3,550 7,602 6,998
EBITDA (1,088) 16,298 5,460 15,210 2,145
Equity-based compensation expense 1,988 1,638 2,405 3,626 4,051
Foreign currency loss (gain), net 7,012 690 (250) 7,702 4,421
Derivative valuation loss (gain), net (184) 129 57 (55) 143
Merger-related costs — — 2,459 — 12,290
Other charges 797 — 2,561 797 3,146
Adjusted EBITDA $           8,525 $         18,755 $         12,692 $       27,280 $       26,196
Net income (loss) $          (3,340) $           9,528 $             (198) $         6,188 $        (7,671)
Adjustments:
Equity-based compensation expense 1,988 1,638 2,405 3,626 4,051
Foreign currency loss (gain), net 7,012 690 (250) 7,702 4,421
Derivative valuation loss (gain), net (184) 129 57 (55) 143
Merger-related costs — — 2,459 — 12,290
Other charges 797 — 2,561 797 3,146
Income tax effect on non-GAAP adjustments 4,294 951 — 5,245 —
Adjusted Net Income $         10,567 $         12,936 $           7,034 $       23,503 $     16,380
Adjusted Net Income per common share—
– Basic $             0.24 $             0.28 $             0.15 $           0.52 $           0.38
– Diluted $             0.23 $             0.28 $             0.15 $           0.51 $           0.36
Weighted average number of shares – basic 44,897,278 45,603,208 46,322,027 45,248,293 43,324,088
Weighted average number of shares – diluted 45,937,515 46,693,294 47,846,217 46,329,559 47,685,875

 

We present Adjusted EBITDA and Adjusted Net Income as supplemental measures of our performance. We define Adjusted EBITDA for the periods indicated as EBITDA (as defined below), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Merger-related costs and (v) Other charges. EBITDA for the periods indicated is defined as net income (loss) before interest income, net, income tax expense (benefit) and depreciation and amortization.

We prepare Adjusted Net Income by adjusting net income (loss) to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Net Income is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Income for the periods as net income (loss), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Merger-related costs, (v) Other charges and (vi) Income tax effect on non-GAAP adjustments.

For the three and six months ended June 30, 2021, we recorded $2,459 thousand and $12,290 thousand, respectively, of professional service fees and expenses incurred in connection with the contemplated merger transaction.

For the three and six months ended June 30, 2022, we recorded $797 thousand of professional service fees and expenses incurred in connection with certain strategic evaluations. For the three and six months ended June 30, 2021, we recorded $2,561 thousand and $3,146 thousand, respectively, of non-recurring professional service fees and expenses incurred in connection with the regulatory requests.

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SOURCE Magnachip Semiconductor Corporation

Investors

Magnachip to Participate in Oppenheimer 25th Annual Technology, Internet & Communications Conference

SEOUL, South Korea, July 27, 2022 /PRNewswire/ — Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that its management will participate at the Oppenheimer 25th Annual Technology, Internet & Communications Conference virtually between August 9 and August 10, 2022.

(PRNewsfoto/Magnachip Semiconductor)

Mr. YJ Kim, Magnachip’s chief executive officer, and Ms. Shinyoung Park, Magnachip’s chief financial officer, will be available for one-on-one and small group meetings with institutional investors during the conference. For more information about the conference or to request a one-on-one meeting, please contact an Oppenheimer sales representative.

 

About Magnachip Semiconductor Corporation

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACTS:
Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Yujia@blueshirtgroup.com

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SOURCE Magnachip Semiconductor Corporation

Investors

Magnachip to Announce Second Quarter 2022 Financial Results on August 8

SEOUL, South Korea, July 25, 2022 /PRNewswire/ — Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that it will report its financial results for the second quarter ended June 30, 2022, on Monday, August 8, 2022, after the market closes. The Company will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET to discuss its financial results.

(PRNewsfoto/Magnachip Semiconductor)In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this event including the dial-in numbers, a PIN number, and an e-mail with detailed instructions to join the conference call.

Online registration: https://register.vevent.com/register/BI726a270135494c57a56defb9ec4da9d0

A live and archived webcast of the conference call and a copy of earnings release will be accessible from the ‘Investors’ section of the company’s website at www.magnachip.com.

About Magnachip Semiconductor Corporation

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACTS:

Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Yujia@blueshirtgroup.com

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SOURCE Magnachip Semiconductor Corporation

Power Solutions

Magnachip Introduces a New 24V MOSFET for Wireless Earphone Batteries

– New product features strong protection for battery circuits and will help the company grow its global market share of products for battery-powered electronic devices

 

SEOUL, South Korea, July 18, 2022 – Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that the company has unveiled a new 24V Metal-Oxide-Semiconductor Field-Effect Transistor (MOSFET) for wireless earphone batteries.

The new 24V MOSFET addresses the goal of battery designers for long battery life after a quick charge by reducing conduction loss. The core cell density of this new product has been increased by 30% as compared to the previous version, while the design of the core cell, termination and source pads has been enhanced in order to reduce the *RDS(on) by 24%.

As a result, the conduction loss is significantly reduced while charging and discharging and the overall efficiency for protecting battery circuits is improved. In addition, this 24V MOSFET features Electrostatic Discharge (ESD) protection to suppress abnormal voltages of more than 5V and can withstand a maximum of 2kV of ESD for strong circuit protection. With these features, the 24V MOSFET can help extend the service life of earphone batteries.

Omdia, a global market research firm, estimates that the wireless earphone market will grow 15.1% annually from 2020 to 2026. This new 24V MOSFET is now in mass production and is being supplied for premium earphone batteries used by global earphone manufacturers.

“Magnachip has developed this 24V MOSFET with outstanding performance after releasing three types of low-voltage MOSFETs that were designed to meet the rigorous demands of smartphone batteries,” said YJ Kim, CEO of Magnachip. “Once again, we have demonstrated technology leadership with this new product and we look forward to expanding our family of products for battery-powered devices in the near future by introducing 24V MOSFETs for VR glasses and wearable devices.”

 

* RDS(on): On resistance, the resistance value between the drain and the source of MOSFETs during on-state operation

 

Related Link

Power Solutions > MXT MOSFETs > 24V

 

About Magnachip Semiconductor

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,100 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACTS:

United States (Investor Relations):
Yujia Zhai
The Bueshirt Group
Tel. +1-860-214-0809
Investor.relations@maganachip.com		 USA media / industry analysts:
Mike Newsom
LouVan Communications, Inc.
Tel. +1-617-803-5385
mike@louvanpr.com		 Korea / Asia media:
Min A KIM
Senior manager of Public Relations
Tel. +82-2-6903-5223
pr@maganachip.com

 

In the Media

Cision PR Newswire: news distribution, targeting and monitoring home     Magnachip Introduces a New 24V MOSFET for Wireless Earphone Batteries

 

Power Solutions

Magnachip Unveils a New 650V IGBT for Solar Inverters

– Company intends to grow its market share in the global solar energy market with the release of this new IGBT

 

SEOUL, South Korea, June 17, 2022 – Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that the company has unveiled a new 650V insulated-gate bipolar transistor (IGBT) for solar inverters.

 

Magnachip unveils a new 650V IGBT specialized for solar inverters
Magnachip unveils a new 650V IGBT specialized for solar inverters

 

As environmental impacts from climate change are becoming more severe, the use of renewable energy like solar power continues to expand globally to reduce carbon emissions. Omdia, a global market research firm, estimates that the global market for IGBTs in the renewable energy sector will grow 15% annually from 2022 to 2025. In March 2022, Magnachip developed a new 650V IGBT built with advanced “field stop trench technology” for fast switching speed and high breakdown voltages and the company will begin mass production of it this month.

The current density of this new 650V IGBT was improved by 30% compared to the prior generation by adopting the latest technology. This IGBT is also designed to provide a minimum short-circuit withstand time of 5µs and it is optimized for parallel switching because of its positive temperature coefficient. The parallel switching of this IGBT will increase the load current and thus the maximum output power.

In addition, the 650V IGBT features anti-parallel diodes for fast switching and low switching loss, while guaranteeing a maximum operating junction temperature of 175°C. Based on standards issued by the Joint Electron Device Engineering Council (JEDEC), this new IGBT can be widely used for applications requiring strict power level and high efficiency, such as solar boost inverters and converters, uninterruptible power supplies and universal power inverters.

“Magnachip’s first IGBT was introduced in 2013, and since then, we have been committed to developing high-efficiency products for a variety of markets, while strengthening our presence around the world,” said YJ Kim, CEO of Magnachip. “With this new product, we are expanding our efforts to deliver high-performance products for the eco-friendly renewable energy market.”

 

Magnachip’s IGBT products for the solar energy market

Model VCES [V] IC [A] TC=100℃ Package
MBQ75T65P 650V 75A TO-247
MBQ40T120Q 1200V 40A TO-247

 

Related Link

Power Solutions – IGBT Chip for Standard Module

 

About Magnachip Semiconductor

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,150 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACTS:

United States (Investor Relations):
Yujia Zhai
The Bueshirt Group
Tel. +1-860-214-0809
Investor.relations@maganachip.com		 USA media / industry analysts:
Mike Newsom
LouVan Communications, Inc.
Tel. +1-617-803-5385
mike@louvanpr.com		 Korea / Asia media:
Min A KIM
Senior manager of Public Relations
Tel. +82-2-6903-5223
pr@maganachip.com

 

In the Media

Cision PR Newswire: news distribution, targeting and monitoring home     Magnachip Unveils a New 650V IGBT for Solar Inverters

    Magnachip Unveils a New 650V IGBT for Solar Inverters

Display Solutions

Magnachip Surpasses 730 Million Units in Cumulative Shipments of OLED DDICs

SEOUL, South Korea, May 5, 2022 — Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that the company has surpassed 730 million units in cumulative shipments of organic light-emitting diode display driver integrated circuits (OLED DDICs) as of the end of the first quarter 2022.

Magnachip surpasses 730 million units in cumulative shipments of OLED DDICs
Magnachip surpasses 730 million units in cumulative shipments of OLED DDICs

 

Magnachip began OLED DDIC development in 2003 and commenced mass production of its first product in 2007. With 19 years of research and development history and a successful commercial track record, Magnachip has recently expanded its business area into new markets such as premium smartphones with foldable displays, automotive displays and high-end OLED TVs. As major smartphone, automotive and TV brands are using more OLED panels for their displays, the OLED DDIC market is expected to grow rapidly.

According to Omdia, a global market research firm, global OLED display panel shipments for smartphones and TVs will double from 2021 to 2028, while the shipments for automotive displays will grow 10 times in the same period. In total, global shipments of OLED display panels will increase from 804 million units in 2021 to 1.2 billion units in 2028, according to the market research firm.

“Congratulations to the entire Magnachip team for this impressive achievement, especially amid an ongoing foundry capacity shortage. Our success is based on the many years of technological innovation in our extensive OLED DDIC product portfolio,” said YJ Kim, CEO of Magnachip. “Looking forward, we will further solidify our technological and market leadership with high-performance DDIC products that will accommodate changing design requirements and empower technological transformation.”

 

Related Link

Display Solutions – Overview

 

About Magnachip Semiconductor

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, computing, industrial and automotive applications. The Company provides a broad range of standard products to customers worldwide. Magnachip, with more than 40 years of operating history, owns a portfolio of approximately 1,150 registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through Magnachip’s website is not a part of, and is not incorporated into, this release.

 

CONTACTS:

 

United States (Investor Relations):
Yujia Zhai
The Blueshirt Group
Tel. +1-860-214-0809
investor.relations@maganachip.com

  

United States (Investor Relations):
So-Yeon Jeong
Jeong Consulting
Tel. +1-408-712-6151
investor.relations@maganachip.com
 

USA media / industry analysts:
Mike Newsom
LouVan Communications, Inc.
Tel. +1-617-803-5385
mike@louvanpr.com

  

Korea / Asia media:
Min A KIM
Senior manager of Public Relations
Tel. +82-2-6903-5223
pr@maganachip.com

 

In the media

Cision PR Newswire: news distribution, targeting and monitoring home     Magnachip Surpasses 730 Million Units in Cumulative Shipments of OLED DDICs