Financial Highlights

  • Q1 consolidated revenue was $49.1 million, within our guidance range of $46-51 million.
    • Q1 standard product business revenue was up 10.6% sequentially.
  • Q1 consolidated gross profit margin was 18.3%, within our guidance range of 17-20%.
    • Q1 standard product business gross profit margin was down 170 basis points sequentially, mostly due to lower Gumi fab utilization driven by the wind-down of Transitional Foundry Services.
  • Ended Q1 with $29.7 million in long-term borrowing and $171.6 million in cash.
  • Repurchased approximately $4.1 million or 0.6 million shares during the quarter.

 

Operational Highlights

  • Secured a new high-end smartphone OLED DDIC design for a top tier China smartphone OEM.
  • Secured a new EV automotive OLED DDIC design win for a leading European automaker.
  • Began operations of our new China entity called Magnachip Technology Company (MTC). Our China headquarters is now up and running.
  • Started initial ramp in Q1 for our first-generation OLED DDIC chip for China for the after-service market.
  • Captured our first medium voltage MOSFET automotive design-win for an electric cooling fan with a China-based SUV supplier, as well as an additional automotive power steering related win in Korea.
  • Began to see initial signs of inventory reductions in the distribution channel for our Power Analog Solutions products.

 

SEOUL, South Korea–(BUSINESS WIRE)–May 2, 2024– Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the first quarter 2024.

YJ Kim, Magnachip’s Chief Executive Officer, commented, “In Q1 we started the initial revenue ramp for OLED DDICs for the after-service market, and we were awarded two new designs targeted for a leading China smartphone OEM and also for a leading European EV maker. Our Power Analog Solutions (PAS) business revenue grew 12% sequentially driven by smartphones, e-motors, consumer appliances and server power applications, and we now are launching a slate of next-gen power products to help sustain our momentum. We also are encouraged that the power channel inventory showed signs of improvement in the first quarter.”

YJ continued, “Looking forward, we expect sequential revenue growth in Mixed-Signal Solutions (MSS) and PAS to continue in Q2 and we reiterate our prior full-year guidance for double digit growth in both MSS and PAS businesses.”

 

Q1 2024 Financial Highlights

In thousands of U.S. dollars, except share data

GAAP

Q1 2024

Q4 2023

Q/Q change

Q1 2023

Y/Y change

Consolidated Revenues

49,067

50,822

down

3.5

%

57,005

down

13.9

%

Standard Products Business

45,541

41,182

up

10.6

%

51,514

down

11.6

%

Mixed-Signal Solutions

9,006

8,558

up

5.2

%

12,807

down

29.7

%

Power Analog Solutions

36,535

32,624

up

12.0

%

38,707

down

5.6

%

Transitional Fab 3 foundry services(1)

3,526

9,640

down

63.4

%

5,491

down

35.8

%

Consolidated Gross Profit Margin

18.3

%

22.7

%

down

4.4

%pts

21.2

%

down

2.9

%pts

Standard Products Business

21.2

%

22.9

%

down

1.7

%pts

27.6

%

down

6.4

%pts

Mixed-Signal Solutions

44.6

%

41.3

%

up

3.3

%pts

30.2

%

up

14.4

%pts

Power Analog Solutions

15.4

%

18.1

%

down

2.7

%pts

26.7

%

down

11.3

%pts

Operating Loss

(13,459

)

(15,935

)

up

n/a

(21,818

)

up

n/a

Net Loss

(15,417

)

(6,040

)

down

n/a

(21,470

)

up

n/a

Basic Loss per Common Share

(0.40

)

(0.16

)

down

n/a

(0.49

)

up

n/a

Diluted Loss per Common Share

(0.40

)

(0.16

)

down

n/a

(0.49

)

up

n/a

In thousands of U.S. dollars, except share data

Non-GAAP(2)

Q1 2024

Q4 2023

Q/Q change

Q1 2023

Y/Y change

Adjusted Operating Loss

(12,559

)

(14,095

)

up

n/a

(12,249

)

down

n/a

Adjusted EBITDA

(8,441

)

(9,972

)

up

n/a

(7,873

)

down

n/a

Adjusted Net Loss

(10,884

)

(8,044

)

down

n/a

(10,367

)

down

n/a

Adjusted Loss per Common Share—Diluted

(0.28

)

(0.21

)

down

n/a

(0.24

)

down

n/a

___________

(1)

Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, we provided transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi, Korea, known as “Fab 3” (“Transitional Fab 3 Foundry Services”). The contractual obligation to provide the Transitional Fab 3 Foundry Services ended August 31, 2023, and we are winding down these foundry services and planning to convert portions of the idle capacity to PAS products beginning around the second half of 2024. Because these foundry services during the wind-down period are still provided to the same buyer by us using our Fab 3 based on mutually agreed terms and conditions, we will continue to report our revenue from providing these foundry services and related cost of sales within the Transitional Fab 3 Foundry Services line in our consolidated statement of operations until such wind down is completed. 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 MSS and PAS businesses.

(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 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.

 

Q2 and 2024 Financial Guidance

Beginning in Q1, the Company begins reporting results under its newly organized businesses: MSS (Mixed-Signal Solutions) and PAS (Power Analog Solutions). While actual results may vary, Magnachip currently expects the following:

 

For Q2 2024:

  • Consolidated revenue to be in the range of $49 to $54 million, including approximately $1.5 million of Transitional Foundry Services.
    • MSS revenue to be in the range of $9.5 to $11.5 million. This compares with MSS equivalent revenue of $9.0 million in Q1 2024 and $12.4 million in Q2 2023
    • PAS revenue to be in the range of $38 to $41 million. This compares with PAS equivalent revenue of $36.5 million in Q1 2024 and $39 million in Q2 2023.
  • Consolidated gross profit margin to be in the range of 17% to 19%.
    • MSS gross profit margin to be in the range of 30% to 33%. This compares with MSS equivalent gross profit margin of 44.6% in Q1 2024, which included non-recurring engineering revenue, and 36.4% in Q2 2023.
    • PAS gross profit margin to be in the range of 15% to 17%, primarily as a result of the impact of idle capacity from the expected decline in Transitional Foundry Services revenue. This compares with PAS equivalent gross profit margin of 15.4% in Q1 2024 and 23.1% in Q2 2023.

 

For the full-year 2024, we reiterate our prior guidance:

  • MSS revenue to grow double digits year-over-year as compared with MSS equivalent revenue of $44.4 million in 2023.
  • PAS revenue to grow double digits year-over-year as compared with PAS equivalent revenue of $151.3 million in 2023.
  • Consolidated revenue flat-to-up-slightly year-over-year as recovery in MSS and PAS is offset by the phase-out of Transitional Foundry Services.
  • Consolidated gross profit margin between 17% to 20%, primarily as a result of the impact of idle capacity expected from the phase-out of Transitional Foundry Services. This compares with the consolidated gross profit margin of 22.4% in 2023.

 

Q1 2024 Earnings Conference Call

Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Thursday, May 2, 2024, 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/BIffb31aff244f4ff99dae99731c4879bf

 

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 second quarter and full year 2024 revenue and gross profit margin expectations, future growth and revenue opportunities from new and existing products and customers, the timing and extent of future revenue contributions by our products and businesses, and the impact of market conditions associated with inflation and higher interest rates, geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China, on Magnachip’s second quarter and full year 2024 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 conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest; the geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China; 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 and impact demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely acceptance of our designs by customers; timely introduction of new products and technologies; our ability to ramp new products into volume production; industry-wide shifts in supply and demand for semiconductor products; overcapacity within the industry or at Magnachip; 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 that can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors; change to or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products; 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 March 8, 2024, 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 communication, Internet of Things (“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.

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share data)

(Unaudited)

Three Months Ended

March 31,

December 31,

March 31,

2024

2023

2023

Revenues:

Net sales – standard products business

$

45,541

$

41,182

$

51,514

Net sales – Transitional Fab 3 foundry services

3,526

9,640

5,491

Total revenues

49,067

50,822

57,005

Cost of sales:

Cost of sales – standard products business

35,888

31,754

37,312

Cost of sales – Transitional Fab 3 foundry services

4,211

7,541

7,599

Total cost of sales

40,099

39,295

44,911

Gross profit

8,968

11,527

12,094

Gross profit as a percentage of standard products business net sales

21.2

%

22.9

%

27.6

%

Gross profit as a percentage of total revenues

18.3

%

22.7

%

21.2

%

Operating expenses:

Selling, general and administrative expenses

11,264

12,079

12,165

Research and development expenses

11,163

15,383

13,298

Early termination charges

8,449

Total operating expenses

22,427

27,462

33,912

Operating loss

(13,459

)

(15,935

)

(21,818

)

Interest income

2,213

2,519

2,842

Interest expense

(238

)

(183

)

(256

)

Foreign currency gain (loss), net

(5,001

)

5,241

(3,430

)

Other income (expense), net

44

(42

)

(35

)

Loss before income tax expense

(16,441

)

(8,400

)

(22,697

)

Income tax benefit

(1,024

)

(2,360

)

(1,227

)

Net loss

$

(15,417

)

$

(6,040

)

$

(21,470

)

Basic loss per common share—

$

(0.40

)

$

(0.16

)

$

(0.49

)

Diluted loss per common share—

$

(0.40

)

$

(0.16

)

$

(0.49

)

Weighted average number of shares—

Basic

38,544,781

38,834,451

43,390,832

Diluted

38,544,781

38,834,451

43,390,832

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)

(Unaudited)

March 31,

2024

December 31,

2023

Assets

Current assets

Cash and cash equivalents

$

171,602

$

158,092

Accounts receivable, net

30,288

32,641

Inventories, net

31,479

32,733

Other receivables

5,041

4,295

Prepaid expenses

10,255

7,390

Hedge collateral

1,000

1,000

Other current assets

8,550

9,283

Total current assets

258,215

245,434

Property, plant and equipment, net

92,868

100,122

Operating lease right-of-use assets

4,538

4,639

Intangible assets, net

1,391

1,537

Long-term prepaid expenses

9,297

5,736

Deferred income taxes

47,669

50,836

Other non-current assets

12,186

12,187

Total assets

$

426,164

$

420,491

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

24,619

$

24,443

Other accounts payable

5,650

5,292

Accrued expenses

7,951

10,457

Accrued income taxes

1,622

1,496

Operating lease liabilities

1,884

1,914

Other current liabilities

3,158

3,286

Total current liabilities

44,884

46,888

Long-term borrowing

29,700

Accrued severance benefits, net

15,503

16,020

Non-current operating lease liabilities

2,808

2,897

Other non-current liabilities

11,384

10,088

Total liabilities

104,279

75,893

Commitments and contingencies

Stockholders’ equity

Common stock, $0.01 par value, 150,000,000 shares authorized, 57,008,573 shares issued and 38,263,642 outstanding at March 31, 2024 and 56,971,394 shares issued and 38,852,742 outstanding at December 31, 2023

569

569

Additional paid-in capital

274,156

273,256

Retained earnings

283,467

298,884

Treasury stock, 18,744,931 shares at March 31, 2024 and 18,118,652 shares at December 31, 2023, respectively

(217,607

)

(213,454

)

Accumulated other comprehensive loss

(18,700

)

(14,657

)

Total stockholders’ equity

321,885

344,598

Total liabilities and stockholders’ equity

$

426,164

$

420,491

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

Three Months Ended

March 31,

2024

March 31,

2023

Cash flows from operating activities

Net loss

$

(15,417

)

$

(21,470

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Depreciation and amortization

4,099

4,357

Provision for severance benefits

1,405

2,330

Loss on foreign currency, net

10,226

9,082

Provision for inventory reserves

(947

)

1,138

Stock-based compensation

900

1,120

Deferred income tax assets

1,313

(4

)

Other, net

263

241

Changes in operating assets and liabilities

Accounts receivable, net

1,401

2,973

Inventories

801

1,062

Other receivables

(385

)

2,376

Other current assets

331

596

Prepaid expenses

905

860

Accounts payable

563

1,904

Other accounts payable

(5,256

)

(1,424

)

Accrued expenses

(2,045

)

7,600

Accrued income taxes

167

(2,923

)

Other current liabilities

(387

)

(596

)

Other non-current liabilities

(624

)

(169

)

Payment of severance benefits

(884

)

(871

)

Other, net

(401

)

(306

)

Net cash provided by (used in) operating activities

(3,972

)

7,876

Cash flows from investing activities

Proceeds from settlement of hedge collateral

1,155

Payment of hedge collateral

(1,093

)

Purchase of property, plant and equipment

(668

)

(135

)

Payment for intellectual property registration

(60

)

(74

)

Collection of guarantee deposits

1,133

19

Payment of guarantee deposits

(1,874

)

(3,482

)

Other, net

1

Net cash used in investing activities

(1,468

)

(3,610

)

Cash flows from financing activities

Proceeds from long-term borrowing

30,059

Proceeds from exercise of stock options

9

Acquisition of treasury stock

(4,659

)

(12,264

)

Repayment of financing related to water treatment facility arrangement

(121

)

(126

)

Repayment of principal portion of finance lease liabilities

(35

)

(24

)

Net cash provided by (used in) financing activities

25,244

(12,405

)

Effect of exchange rates on cash and cash equivalents

(6,294

)

(5,253

)

Net increase (decrease) in cash and cash equivalents

13,510

(13,392

)

Cash and cash equivalents

Beginning of the period

158,092

225,477

End of the period

$

171,602

$

212,085

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF OPERATING LOSS TO ADJUSTED OPERATING LOSS

(In thousands of U.S. dollars)

(Unaudited)

Three Months Ended

 March 31,

December 31,

March 31,

2024

2023

2023

Operating loss

$

(13,459

)

$

(15,935

)

$

(21,818

)

Adjustments:

Equity-based compensation expense

900

1,840

1,120

Early termination charges

8,449

Adjusted Operating Loss

$

(12,559

)

$

(14,095

)

$

(12,249

)

We present Adjusted Operating Loss as a supplemental measure of our performance. We define Adjusted Operating Loss for the periods indicated as operating loss adjusted to exclude (i) Equity-based compensation expense and (ii) Early termination charges.

For the three months ended March 31, 2023, we recorded in our consolidated statement of operations $8,449 thousand of early termination charges in connection with the voluntary resignation program offered to the employees during the first quarter of 2023.

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND ADJUSTED NET LOSS

(In thousands of U.S. dollars, except share data)

(Unaudited)

Three Months Ended

March 31,

December 31,

March 31,

2024

2023

2023

Net loss

$

(15,417

)

$

(6,040

)

$

(21,470

)

Adjustments:

Interest income

(2,213

)

(2,519

)

(2,842

)

Interest expense

238

183

256

Income tax benefit

(1,024

)

(2,360

)

(1,227

)

Depreciation and amortization

4,099

4,101

4,357

EBITDA

(14,317

)

(6,635

)

(20,926

)

Equity-based compensation expense

900

1,840

1,120

Foreign currency loss (gain), net

5,001

(5,241

)

3,430

Derivative valuation loss (gain), net

(25

)

64

54

Early termination charges

8,449

Adjusted EBITDA

$

(8,441

)

$

(9,972

)

$

(7,873

)

Net loss

$

(15,417

)

$

(6,040

)

$

(21,470

)

Adjustments:

Equity-based compensation expense

900

1,840

1,120

Foreign currency loss (gain), net

5,001

(5,241

)

3,430

Derivative valuation loss (gain), net

(25

)

64

54

Early termination charges

8,449

Income tax effect on non-GAAP adjustments

(1,343

)

1,333

(1,950

)

Adjusted Net Loss

$

(10,884

)

$

(8,044

)

$

(10,367

)

Adjusted Net Loss per common share—

– Basic

$

(0.28

)

$

(0.21

)

$

(0.24

)

– Diluted

$

(0.28

)

$

(0.21

)

$

(0.24

)

Weighted average number of shares – basic

38,544,781

38,834,451

43,390,832

Weighted average number of shares – diluted

38,544,781

38,834,451

43,390,832

We present Adjusted EBITDA and Adjusted Net Loss 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 and (iv) Early termination charges. EBITDA for the periods indicated is defined as net loss before interest income, interest expense, income tax benefit and depreciation and amortization.

We prepare Adjusted Net Loss by adjusting net 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 Loss is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Loss for the periods as net loss, adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Early termination charges and (v) Income tax effect on non-GAAP adjustments.

For the three months ended March 31, 2023, we recorded in our consolidated statement of operations $8,449 thousand of early termination charges in connection with the voluntary resignation program offered to the employees during the first quarter of 2023.

 

Steven C. Pelayo, CFA
The Blueshirt Group
Tel. +1 (360) 808-5154
steven@blueshirtgroup.co

 

Source: Magnachip Semiconductor Corporation

SEOUL, South Korea–(BUSINESS WIRE)–Apr. 15, 2024– Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that it will report its financial results for the first quarter ended March 31, 2024, on Thursday, May 2, 2024, 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.

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/BIffb31aff244f4ff99dae99731c4879bf

A live and archived webcast of the conference call and a copy of the 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 communication, Internet of Things (“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.

Steven C. Pelayo, CFA
The Blueshirt Group
Tel. +1 (360) 808-5154
steven@blueshirtgroup.co

Source: Magnachip Semiconductor Corporation

SEOUL, South Korea–(BUSINESS WIRE)–Mar. 4, 2024– Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) today announced management’s participation in the 36th Annual ROTH Conference at The Ritz Carlton, Laguna Niguel in Dana Point on Monday, March 18th, and Tuesday, March 19th.

Mr. YJ Kim, Magnachip’s Chief Executive Officer, and Ms. Shinyoung Park, Magnachip’s Chief Financial Officer, will be available for one-on-one meetings with institutional investors during the conference. For more information about the conference or to request a one-on-one meeting, please contact a Roth sales representative.

 

About Magnachip Semiconductor Corporation

Magnachip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communication, Internet of Things (“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.

Steven C. Pelayo, CFA
The Blueshirt Group
Tel. +1 (360) 808-5154
steven@blueshirtgroup.co

Source: Magnachip Semiconductor Corporation

Announces successful design-wins with Smartphone Chinese OEMs

 

Financial Highlights

  • Q4 revenue of $50.8 million was near the low-end of our guidance range.
  • Q4 gross profit margin was 22.7%, near the low-end of our guidance range.
  • Ended Q4 with no debt and cash of $158.1 million.
  • Repurchased approximately $8.2 million of stock during the quarter.
  • Full-year revenue of $230.1 million decreased 31.9% YoY.
  • Full-year gross profit margin was 22.4%, down 760 bps YoY.

 

Operational Highlights

  • Secured 1st design-win and began initial shipment in Q4 for first generation OLED DDIC for after-service market.
  • Secured 2nd design-win following quarter close with leading Chinese smartphone OEM for spring launch.
  • Entered into strategic commercial partnership with Chinese watch solution provider to collaborate on OLED smartwatch display market.
  • Display and Power business separation and entity restructuring completed effective with the start of 2024; New businesses MSS (Mixed-Signal Solutions) and PAS (Power-Analog Solutions)*

 

SEOUL, South Korea–(BUSINESS WIRE)–Feb. 28, 2024– Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the fourth quarter and full-year 2023.

YJ Kim, Magnachip’s Chief Executive Officer commented, “As we reflect on the past year and look ahead, we’re shaping our future with the transformation of our business. First, we have shifted our Display business to be laser-focused on the burgeoning OLED market in China and our efforts there are already showing promising results. We now have two design-wins and a dedicated team on the ground to help build on this momentum. Additionally, we are working to optimize our Gumi Fab to transition from lower-margin Transitional Foundry Services to higher-margin Power products. Finally, we’ve restructured our company to streamline operations, enhance shareholder value and increase transparency for our investors with the completion of our legal separation of historical Display and Power businesses into MSS and PAS.”

YJ continued, “Looking ahead, for full year 2024, we currently expect double-digit revenue growth in both the newly organized MSS and PAS businesses. We currently expect total consolidated company revenue for full year 2024 to remain relatively flat to slightly up due to the phase-out of Transitional Foundry Services. We also anticipate PAS gross margin to be challenged during the transition period while we convert the Transitional Foundry Services capacity to Power capacity, but we are committed to navigating this period with a clear focus on long-term value creation for shareholders.”
____________
*MSS consists of historical Display and Power IC business, which is operated by Magnachip Mixed-Signal, Ltd., a limited liability company incorporated in Korea. PAS business is operated by Magnachip Semiconductor, Ltd., the existing limited liability company incorporated in Korea.

 

Q4 and 2023 Financial Highlights

In thousands of U.S. dollars, except share data

GAAP

Q4 2023

Q3 2023

Q/Q change

Q4 2022

Y/Y change

Revenues

Standard Products Business

Display Solutions

5,232

6,404

down

18.3

%

7,556

down

30.8

%

Power Solutions

35,950

45,215

down

20.5

%

46,271

down

22.3

%

Transitional Fab 3 foundry services(1)

9,640

9,626

up

0.1

%

7,163

up

34.6

%

Gross Profit Margin

22.7

%

23.6

%

down

0.9

%pts

26.4

%

down

3.7

%pts

Operating Loss

(15,935

)

(9,235

)

down

n/a

(10,117

)

down

n/a

Net Income (Loss)

(6,040

)

(5,165

)

down

n/a

2,971

down

n/a

Basic Earnings (Loss) per Common Share

(0.16

)

(0.13

)

down

n/a

0.07

down

n/a

Diluted Earnings (Loss) per Common Share

(0.16

)

(0.13

)

down

n/a

0.07

down

n/a

In thousands of U.S. dollars, except share data

Non-GAAP(2)

Q4 2023

Q3 2023

Q/Q change

Q4 2022

Y/Y change

Adjusted Operating Loss

(14,095

)

(7,064

)

down

n/a

(8,567

)

down

n/a

Adjusted EBITDA

(9,972

)

(2,735

)

down

n/a

(4,768

)

down

n/a

Adjusted Net Loss

(8,044

)

(1,591

)

down

n/a

(15,848

)

up

n/a

Adjusted Loss per Common Share—Diluted

(0.21

)

(0.04

)

down

n/a

(0.36

)

up

n/a

In thousands of U.S dollars, except share data

GAAP

2023

2022

Y/Y Change

Revenues

Standard Products Business

Display Solutions

32,134

71,432

down

55.0

%

Power Solutions

163,556

230,464

down

29.0

%

Transitional Fab 3 foundry services(1)

34,361

35,762

down

3.9

%

Gross Profit Margin

22.4

%

30.0

%

down

7.6

pts

Operating Loss

(57,644

)

(5,244

)

down

n/a

Net Loss

(36,622

)

(8,036

)

down

n/a

Basic Loss per Common Share

(0.89

)

(0.18

)

down

n/a

Diluted Loss per Common Share

(0.89

)

(0.18

)

down

n/a

In thousands of U.S dollars, except share data

Non-GAAP(2)

2023

2022

Y/Y Change

Adjusted Operating Income (Loss)

(41,170

)

4,091

down

n/a

Adjusted EBITDA

(24,174

)

19,517

down

n/a

Adjusted Net Income (Loss)

(22,474

)

8,752

down

n/a

Adjusted Earnings (Loss) per Common Share—Diluted

(0.55

)

0.19

down

n/a

___________

 

(1) Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, we provided transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi, Korea, known as “Fab 3” (“Transitional Fab 3 Foundry Services”). The contractual obligation to provide the Transitional Fab 3 Foundry Services ended August 31, 2023, and we are planning to wind down these foundry services and convert portions of the idle capacity to PAS products beginning around the second half of 2024. Because these foundry services during the wind-down period are still provided to the same buyer by us using our Fab 3 based on mutually agreed terms and conditions, we will continue to report our revenue from providing these foundry services and related cost of sales within the Transitional Fab 3 Foundry Services line in our consolidated statement of operations until such wind down is completed. 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 businesses.
(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.

 

Q1 and 2024 Financial Guidance

Beginning in Q1, the Company will begin reporting results under its newly organized businesses: MSS (Mixed-Signal Solutions) and PAS (Power-Analog Solutions). While actual results may vary, Magnachip currently expects the following:

 

For Q1 2024:

  • Consolidated revenue to be in the range of $46 to $51 million, including approximately $3 million of Transitional Foundry Services.
    • MSS revenue to be in the range of $8 to $10 million. This compares with MSS equivalent revenue of $8.6 million in Q4 2023.
    • PAS revenue to be in the range of $35 to $38 million. This compares with PAS equivalent revenue of $32.6 million in Q4 2023.
  • Consolidated gross profit margin to be in the range of 17% to 20%.
    • MSS gross profit margin to be in the range of 40% to 43%, which includes the positive impact of expected one-time non-recurring engineering revenue. This compares with MSS equivalent gross profit margin of 41.3% in Q4 2023, which also included one-time non-recurring engineering revenue.
    • PAS gross profit margin to be in the range of 15% to 18% due primarily to the expected decline in Transitional Foundry Services revenue. This compares with PAS equivalent gross profit margin of 18.0% in Q4 2023.

 

For the full-year 2024:

  • MSS revenue to grow double digits year-over-year as compared with MSS equivalent revenue of $44.4 million in 2023.
  • PAS revenue to grow double digits year-over-year as compared with PAS equivalent revenue of $151.3 million in 2023.
  • Consolidated revenue flat-to-up-slightly year-over-year as recovery in MSS and PAS is offset by the phase-out of Transitional Foundry Services.
  • Consolidated gross profit margin between 17% to 20% due to idle capacity expected from the phase-out of Transitional Foundry Services. This compares with the consolidated gross profit margin of 22.4% in 2023.

 

Q4 2023 Earnings Conference Call

Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, February 28, 2024, 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/BI736feb7bc081454c8d811cbbeb6b92dc

 

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 first quarter and full year 2024 revenue and gross profit margin expectations, future growth and revenue opportunities from new and existing products and customers, the timing and extent of future revenue contributions by our products and businesses, and the impact of market conditions associated with inflation and higher interest rates, remaining effects from the COVID-19 pandemic, geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China, on Magnachip’s first quarter and full year 2024 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 conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest; remaining effects from the COVID-19 pandemic, the geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, sustained military action and conflict in the Red Sea, and trade tensions between the U.S. and China; 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 and impact demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely acceptance of our designs by customers; timely introduction of new products and technologies; our ability to ramp new products into volume production; industry-wide shifts in supply and demand for semiconductor products; overcapacity within the industry or at Magnachip; 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 that can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors; change to or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, including the remaining effects of the COVID-19 pandemic; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products; 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 22, 2023, 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 communication, Internet of Things (“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.

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except share data)

(Unaudited)

Three Months Ended

Year Ended

December 31,
2023

September 30,
2023

December 31,
2022

December 31,
2023

December 31,
2022

Revenues:

Net sales – standard products business

$

41,182

$

51,619

$

53,827

$

195,690

$

301,896

Net sales – transitional Fab 3 foundry services

9,640

9,626

7,163

34,361

35,762

Total revenues

50,822

61,245

60,990

230,051

337,658

Cost of sales:

Cost of sales – standard products business

31,754

36,829

37,150

143,762

202,347

Cost of sales – transitional Fab 3 foundry services

7,541

9,935

7,742

34,649

34,047

Total cost of sales

39,295

46,764

44,892

178,411

236,394

Gross profit

11,527

14,481

16,098

51,640

101,264

Gross profit as a percentage of standard products business net sales

22.9

%

28.7

%

31.0

%

26.5

%

33.0

%

Gross profit as a percentage of total revenues

22.7

%

23.6

%

26.4

%

22.4

%

30.0

%

Operating expenses:

Selling, general and administrative expenses

12,079

12,089

12,562

48,470

50,872

Research and development expenses

15,383

11,627

13,653

51,563

52,338

Early termination and other charges, net

9,251

3,298

Total operating expenses

27,462

23,716

26,215

109,284

106,508

Operating loss

(15,935

)

(9,235

)

(10,117

)

(57,644

)

(5,244

)

Interest income

2,519

2,382

2,420

10,435

5,980

Interest expense

(183

)

(189

)

(269

)

(828

)

(1,157

)

Foreign currency gain (loss), net

5,241

(2,583

)

17,492

465

(3,019

)

Other income (loss), net

(42

)

87

(42

)

13

561

Loss before income tax expense (benefit)

(8,400

)

(9,538

)

9,484

(47,559

)

(2,879

)

Income tax expense (benefit)

(2,360

)

(4,373

)

6,513

(10,937

)

5,157

Net income (loss)

$

(6,040

)

$

(5,165

)

$

2,971

$

(36,622

)

$

(8,036

)

Basic earnings (loss) per common share—

$

(0.16

)

$

(0.13

)

$

0.07

$

(0.89

)

$

(0.18

)

Diluted earnings (loss) per common share—

$

(0.16

)

$

(0.13

)

$

0.07

$

(0.89

)

$

(0.18

)

Weighted average number of shares—

Basic

38,834,451

40,145,290

44,054,275

41,013,069

44,850,791

Diluted

38,834,451

40,145,290

44,731,683

41,013,069

44,850,791

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)

(Unaudited)

December 31,
2023

December 31,
2022

Assets

Current assets

Cash and cash equivalents

$

158,092

$

225,477

Accounts receivable, net

32,641

35,380

Inventories, net

32,733

39,883

Other receivables

4,295

7,847

Prepaid expenses

7,390

10,560

Hedge collateral

1,000

2,940

Other current assets

9,283

15,766

Total current assets

245,434

337,853

Property, plant and equipment, net

100,122

110,747

Operating lease right-of-use assets

4,639

5,265

Intangible assets, net

1,537

1,930

Long-term prepaid expenses

5,736

10,939

Deferred income taxes

50,836

38,324

Other non-current assets

12,187

11,587

Total assets

$

420,491

$

516,645

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

24,443

$

17,998

Other accounts payable

5,292

9,702

Accrued expenses

10,457

9,688

Accrued income taxes

1,496

3,154

Operating lease liabilities

1,914

1,397

Other current liabilities

3,286

5,306

Total current liabilities

46,888

47,245

Accrued severance benefits, net

16,020

23,121

Non-current operating lease liabilities

2,897

4,091

Other non-current liabilities

10,088

14,035

Total liabilities

75,893

88,492

Commitments and contingencies

Stockholders’ equity

Common stock, $0.01 par value, 150,000,000 shares authorized, 56,971,394 shares issued and 38,852,742 outstanding at December 31, 2023 and 56,432,449 shares issued and 43,824,575 outstanding at December 31, 2022

569

564

Additional paid-in capital

273,256

266,058

Retained earnings

298,884

335,506

Treasury stock, 18,118,652 shares at December 31, 2023 and 12,607,874 shares at December 31, 2022, respectively

(213,454

)

(161,422

)

Accumulated other comprehensive loss

(14,657

)

(12,553

)

Total stockholders’ equity

344,598

428,153

Total liabilities and stockholders’ equity

$

420,491

$

516,645

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

Three Months

Ended

Year Ended

December 31,
2023

December 31,
2023

December 31,
2022

Cash flows from operating activities

Net loss

$

(6,040

)

$

(36,622

)

$

(8,036

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities

Depreciation and amortization

4,101

16,684

15,000

Provision for severance benefits

(25

)

5,333

6,289

Loss (gain) on foreign currency, net

(11,159

)

3,373

19,729

Provision for inventory reserves

850

3,885

9,574

Stock-based compensation

1,840

7,223

6,037

Deferred income taxes

(13,493

)

(13,405

)

278

Other, net

165

757

664

Changes in operating assets and liabilities

Accounts receivable, net

8,318

1,909

10,276

Inventories

(1,265

)

2,370

(12,626

)

Other receivables

(1,146

)

3,847

18,146

Prepaid expenses

3,155

8,808

8,923

Other current assets

15,992

8,048

(13,073

)

Accounts payable

1,086

7,152

(16,325

)

Other accounts payable

(2,196

)

(8,934

)

(9,410

)

Accrued expenses

(126

)

493

(7,228

)

Accrued income taxes

1,445

(1,569

)

(8,400

)

Deferred revenue

782

85

(1,261

)

Other current liabilities

(65

)

(109

)

(645

)

Other non-current liabilities

41

(238

)

749

Contributions to severance insurance deposit accounts

(4,278

)

(5,101

)

(7,899

)

Payment of severance benefits

(799

)

(6,982

)

(6,012

)

Other, net

(3

)

(21

)

415

Net cash provided by (used in) operating activities

(2,820

)

(3,014

)

5,165

Cash flows from investing activities

Proceeds from settlement of hedge collateral

2,334

5,669

15,232

Payment of hedge collateral

(600

)

(3,754

)

(15,282

)

Proceeds from disposal of property, plant and equipment

550

Purchase of property, plant and equipment

(4,675

)

(6,955

)

(23,394

)

Payment for intellectual property registration

(33

)

(263

)

(390

)

Collection of guarantee deposits

4,984

737

Payment of guarantee deposits

(62

)

(7,338

)

(2,381

)

Net cash used in investing activities

(3,036

)

(7,657

)

(24,928

)

Cash flows from financing activities

Proceeds from exercise of stock options

27

1,786

Acquisition of treasury stock

(8,695

)

(51,782

)

(13,960

)

Repayment of financing related to water treatment facility arrangement

(122

)

(493

)

(500

)

Others

(22

)

(91

)

(70

)

Net cash used in financing activities

(8,839

)

(52,339

)

(12,744

)

Effect of exchange rates on cash and cash equivalents

6,143

(4,375

)

(21,563

)

Net decrease in cash and cash equivalents

(8,552

)

(67,385

)

(54,070

)

Cash and cash equivalents

Beginning of the period

166,644

225,477

279,547

End of the period

$

158,092

$

158,092

$

225,477

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF OPERATING LOSS TO ADJUSTED OPERATING INCOME (LOSS)

(In thousands of U.S. dollars)

(Unaudited)

Three Months Ended

Year Ended

December 31,
2023

September 30,
2023

December 31,
2022

December 31,
2023

December 31,
2022

Operating loss

$

(15,935

)

$

(9,235

)

$

(10,117

)

$

(57,644

)

$

(5,244

)

Adjustments:

Equity-based compensation expense

1,840

2,171

1,550

7,223

6,037

Early termination and other charges, net

9,251

3,298

Adjusted Operating Income (Loss)

$

(14,095

)

$

(7,064

)

$

(8,567

)

$

(41,170

)

$

4,091

 

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 loss adjusted to exclude (i) Equity-based compensation expense and (ii) Early termination and other charges, net.

For the year ended December 31, 2023, Early termination and other charges includes $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023 and $802 thousand of one-time employee incentives.

For the year ended December 31, 2022, Early termination and other charges, net includes $2,821 thousand of one-time employee incentives and professional service fees and expenses of $1,014 thousand, incurred in connection with certain strategic evaluations, both of which were offset in part by a $537 thousand gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi.

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)

(In thousands of U.S. dollars, except share data)

(Unaudited)

Three Months Ended

Year Ended

December 31,
2023

September 30,
2023

December 31,
2022

December 31,
2023

December 31,
2022

Net Income (Loss)

$

(6,040

)

$

(5,165

)

$

2,971

$

(36,622

)

$

(8,036

)

Adjustments:

Interest income

(2,519

)

(2,382

)

(2,420

)

(10,435

)

(5,980

)

Interest expense

183

189

269

828

1,157

Income tax expense (benefit)

(2,360

)

(4,373

)

6,513

(10,937

)

5,157

Depreciation and amortization

4,101

4,081

3,775

16,684

15,000

EBITDA

(6,635

)

(7,650

)

11,108

(40,482

)

7,298

Equity-based compensation expense

1,840

2,171

1,550

7,223

6,037

Foreign currency loss (gain), net

(5,241

)

2,583

(17,492

)

(465

)

3,019

Derivative valuation loss (gain), net

64

161

66

299

(135

)

Early termination and other charges, net

9,251

3,298

Adjusted EBITDA

$

(9,972

)

$

(2,735

)

$

(4,768

)

$

(24,174

)

$

19,517

Net Income (Loss)

$

(6,040

)

$

(5,165

)

$

2,971

$

(36,622

)

$

(8,036

)

Adjustments:

Equity-based compensation expense

1,840

2,171

1,550

7,223

6,037

Foreign currency loss (gain), net

(5,241

)

2,583

(17,492

)

(465

)

3,019

Derivative valuation loss (gain), net

64

161

66

299

(135

)

Early termination and other charges, net

9,251

3,298

Income tax effect on non-GAAP adjustments

1,333

(1,341

)

(2,943

)

(2,160

)

4,569

Adjusted Net Income (Loss)

$

(8,044

)

$

(1,591

)

$

(15,848

)

$

(22,474

)

$

8,752

Adjusted Net Income (Loss) per common share—

– Basic

$

(0.21

)

$

(0.04

)

$

(0.36

)

$

(0.55

)

$

0.20

– Diluted

$

(0.21

)

$

(0.04

)

$

(0.36

)

$

(0.55

)

$

0.19

Weighted average number of shares – basic

38,834,451

40,145,290

44,054,275

41,013,069

44,850,791

Weighted average number of shares – diluted

38,834,451

40,145,290

44,054,275

41,013,069

45,795,559

We present Adjusted EBITDA and Adjusted Net Income (Loss) 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 and (iv) Early termination and other charges, net. EBITDA for the periods indicated is defined as net income (loss) before interest income, interest expense, income tax expense (benefit) and depreciation and amortization.

We prepare Adjusted Net Income (Loss) 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 (Loss) is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Income (Loss) 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) Early termination and other charges, net and (v) Income tax effect on non-GAAP adjustments.

For the year ended December 31, 2023, Early termination and other charges includes $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023 and $802 thousand of one-time employee incentives.

For the year ended December 31, 2022, Early termination and other charges, net includes $2,821 thousand of one-time employee incentives and professional service fees and expenses of $1,014 thousand, incurred in connection with certain strategic evaluations, both of which were offset in part by a $537 thousand gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi.

 

Steven Pelayo
The Blueshirt Group
Tel. +1 (360) 808-5154
steven@blueshirtgroup.co

 

Source: Magnachip Semiconductor Corporation

SEOUL, South KoreaFeb. 7, 2024 /PRNewswire/ — Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that it will report its financial results for the fourth quarter ended December 31, 2023, on Wednesday, February 28, 2024, 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.

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/BI736feb7bc081454c8d811cbbeb6b92dc

A live and archived webcast of the conference call and a copy of the 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:

Steven Pelayo
The Blueshirt Group
Tel. +1 (360) 808-5154
steven@blueshirtgroup.co

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/magnachip-to-announce-fourth-quarter-2023-financial-results-on-february-28-2024-302045450.html

SOURCE Magnachip Semiconductor Corporation

SEOUL, South KoreaJan. 3, 2024 /PRNewswire/ — Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) today announced management’s participation in the 26th Annual Needham Growth Conference at the Lotte New York Palace Hotel in New York City on Wednesday, January 17th, and Thursday, January 18th.

Mr. YJ Kim, Magnachip’s Chief Executive Officer, and Ms. Shinyoung Park, Magnachip’s Chief Financial Officer, will be available for one-on-one meetings with institutional investors during the conference. For more information about the conference or to request a one-on-one meeting, please contact a Needham 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.

 

CONTACT:

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-participate-in-the-26th-annual-needham-growth-conference-302024420.html

SOURCE Magnachip Semiconductor Corporatio

  • Revenue of $61.2 million was in-line with guidance.
  • Gross profit margin of 23.6% increased 140 basis points from Q2, mainly driven by higher fab utilization.
  • GAAP diluted loss per share was $0.13.
  • Non-GAAP diluted loss per share was $0.04.
  • Completed $5.4 million of stock buybacks during Q3.
  • Ended Q3 with a solid balance sheet with $166.6 million cash and no debt.
  • The internal separation of our Display and Power businesses is expected to be completed and be effective on January 1st, 2024.

 

SEOUL, South KoreaNov. 2, 2023 /PRNewswire/ — Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the third quarter 2023.YJ Kim, Magnachip’s Chief Executive Officer commented, “Our Q3 results were in-line with our guidance. In our Display business, we have completed the qualification of two DDI chips at our new tier 1 panel maker and are going through the qualification process with two smartphone makers. We are now working on additional Driver ICs that cover broader segments of the smartphone market to include mass market smartphones in addition to the premium models. Despite near-term market challenges, our outlook for long-term growth remains positive. Our confidence is driven by our strong belief that our display products offer distinct competitive advantages that position us well for success in the rapidly growing OLED market in Asia.”

YJ continued, “In our Power business, our product portfolio is getting stronger as we continue to focus on rolling out next-generation power products to maintain our momentum of design-in/wins. Looking ahead, amid heightened global geopolitical and macroeconomic uncertainty, we expect demand to remain soft, driven by normal Q4 seasonality and inventory correction in industrial end markets.”

 

Q3 2023 Financial Highlights
In thousands of U.S. dollars, except share data
GAAP
Q3 2023 Q2 2023 Q/Q change Q3 2022 Y/Y change
Revenues
Standard Products Business
   Display Solutions 6,404 9,657 down 33.7 % 6,355 up 0.8 %
   Power Solutions 45,215 41,718 up 8.4 % 56,416 down 19.9 %
Transitional Fab 3 foundry services(1) 9,626 9,604 up 0.2 % 8,428 up 14.2 %
Gross Profit Margin 23.6 % 22.2 % up 1.4 %pts 24.2 % down 0.6 %pts
Operating Loss (9,235) (10,656) up n/a (10,008) up n/a
Net Loss (5,165) (3,947) down n/a (17,195) up n/a
Basic Loss per Common Share (0.13) (0.09) down n/a (0.38) up n/a
Diluted Loss per Common Share (0.13) (0.09) down n/a (0.38) up n/a
In thousands of U.S. dollars, except share data
Non-GAAP(2)
Q3 2023 Q2 2023 Q/Q change Q3 2022 Y/Y change
Adjusted Operating Loss (7,064) (7,762) up n/a (6,646) down n/a
Adjusted EBITDA (2,735) (3,594) up n/a (2,995) up n/a
Adjusted Net Income (Loss) (1,591) (2,472) up n/a 1,097 down n/a
Adjusted Earnings (Loss) per Common Share—Diluted (0.04) (0.06) up n/a 0.02 down n/a
___________
(1) Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, we provided transitional foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi, Korea, known as “Fab 3” (“Transitional Fab 3 Foundry Services”). The contractual obligation to provide the Transitional Fab 3 Foundry Services ended August 31, 2023, and we are planning to wind down these foundry services and convert portions of the idle capacity to Power Solutions standard products beginning around the second half of 2024. Because these foundry services during the wind-down period are still provided to the same buyer by us using our Fab 3 based on mutually agreed terms and conditions, we will continue to report our revenue from providing these foundry services and related cost of sales within the Transitional Fab 3 Foundry Services line in our consolidated statement of operations until such wind down is completed. 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 businesses.
(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 2023 Financial Guidance
Amid heightened global geopolitical and macroeconomic uncertainty, we expect Power demand to soften driven by normal Q4 seasonality and inventory correction in industrial end markets.

While actual results may vary, Magnachip currently expects the following for Q4 2023:

  • Revenue to be in the range of $50 million to $55 million, including approximately $8 million of Transitional Fab 3 Foundry Services.
  • Gross profit margin to be in the range of 22.5% to 24.5%.

 

Q3 2023 Earnings Conference Call
Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Thursday, November 2, 2023, 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/BI9578e24ef24a498a8d8ee6536b08edc6

 

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 2023 revenue and gross profit margin expectations, and the impact of market conditions associated with inflation and higher interest rates, remaining effects from the COVID-19 pandemic, geopolitical conflicts between Russia- Ukraine and between Israel-Hamas, escalated trade tensions between the U.S. and China and continuing supply constraints on Magnachip’s fourth quarter 2023 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 conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest; remaining effects from the COVID-19 pandemic, the geopolitical conflicts between Russia-Ukraine and between Israel-Hamas, and escalated trade tensions between the U.S. and China; 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 and impact demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely acceptance of our designs by customers; timely introduction of new products and technologies; our ability to ramp new products into volume production; industry-wide shifts in supply and demand for semiconductor products; overcapacity within the industry or at Magnachip; 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 that can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors; change to or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, including the remaining effects of the COVID-19 pandemic; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products; 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 22, 2023, 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,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Revenues:
Net sales – standard products business $         51,619 $         51,375 $         62,771 $       154,508 $       248,069
Net sales – transitional Fab 3 foundry services 9,626 9,604 8,428 24,721 28,599
Total revenues 61,245 60,979 71,199 179,229 276,668
Cost of sales:
Cost of sales – standard products business 36,829 37,867 45,497 112,008 165,197
Cost of sales – transitional Fab 3 foundry services 9,935 9,574 8,477 27,108 26,305
Total cost of sales 46,764 47,441 53,974 139,116 191,502
Gross profit 14,481 13,538 17,225 40,113 85,166
Gross profit as a percentage of standard products business net sales 28.7 % 26.3 % 27.5 % 27.5 % 33.4 %
Gross profit as a percentage of total revenues 23.6 % 22.2 % 24.2 % 22.4 % 30.8 %
Operating expenses:
Selling, general and administrative expenses 12,089 12,137 11,411 36,391 38,310
Research and development expenses 11,627 11,255 13,321 36,180 38,685
Early termination and other charges, net 802 2,501 9,251 3,298
Total operating expenses 23,716 24,194 27,233 81,822 80,293
Operating income (loss) (9,235) (10,656) (10,008) (41,709) 4,873
           Interest income 2,382 2,692 1,784 7,916 3,560
Interest expense (189) (200) (278) (645) (888)
Foreign currency gain (loss), net (2,583) 1,237 (12,809) (4,776) (20,511)
Other income, net 87 3 174 55 603
Loss before income tax expense (9,538) (6,924) (21,137) (39,159) (12,363)
Income tax benefit (4,373) (2,977) (3,942) (8,577) (1,356)
Net loss $           (5,165) $           (3,947) $         (17,195) $       (30,582) $         (11,007)
Basic loss per common share— $            (0.13) $            (0.09) $             (0.38) $           (0.73) $             (0.24)
Diluted loss per common share— $            (0.13) $            (0.09) $             (0.38) $           (0.73) $             (0.24)
Weighted average number of shares—
Basic 40,145,290 41,741,310 44,865,266 41,747,255 45,119,214
Diluted 40,145,290 41,741,310 44,865,266 41,747,255 45,119,214

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)

(Unaudited)

 September 30,

      2023

    December 31,

      2022

Assets
Current assets
Cash and cash equivalents $     166,644 $     225,477
Accounts receivable, net 41,119 35,380
Inventories, net 30,836 39,883
Other receivables 2,799 7,847
Prepaid expenses 9,095 10,560
Hedge collateral 2,680 2,940
Other current assets 24,572 15,766
Total current assets 277,745 337,853
Property, plant and equipment, net 96,141 110,747
Operating lease right-of-use assets 4,725 5,265
Intangible assets, net 1,583 1,930
Long-term prepaid expenses 6,124 10,939
Deferred income taxes 36,358 38,324
Other non-current assets 11,622 11,587
Total assets $     434,298 $      516,645
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $       23,446 $       17,998
Other accounts payable 8,025 9,702
Accrued expenses 9,668 9,688
Accrued income taxes 48 3,154
Operating lease liabilities 1,735 1,397
Other current liabilities 4,495 5,306
Total current liabilities 47,417 47,245
Accrued severance benefits, net 20,160 23,121
Non-current operating lease liabilities 3,167 4,091
Other non-current liabilities 9,862 14,035
Total liabilities 80,606 88,492
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value, 150,000,000 shares authorized, 56,655,377 shares issued and 39,667,995
outstanding at September 30, 2023 and 56,432,449 shares issued and 43,824,575 outstanding at
December 31, 2022
566 564
Additional paid-in capital 271,419 266,058
Retained earnings 304,924 335,506
Treasury stock, 16,987,382 shares at September 30, 2023 and 12,607,874 shares at December 31, 2022,
respectively
(204,645) (161,422)
Accumulated other comprehensive loss (18,572) (12,553)
Total stockholders’ equity 353,692 428,153
Total liabilities and stockholders’ equity $     434,298 $     516,645

 

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,
2023
September 30,
2023
September 30,
2022
Cash flows from operating activities
Net loss $      (5,165) $   (30,582) $     (11,007)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization 4,081 12,583 11,225
Provision for severance benefits 1,267 5,358 5,163
Loss on foreign currency, net 5,415 14,532 66,335
Provision for inventory reserves 1,914 3,035 7,730
Stock-based compensation 2,171 5,383 4,487
Other, net 230 680 631
Changes in operating assets and liabilities
Accounts receivable, net (6,067) (6,409) 7,805
Inventories (1,276) 3,635 (13,208)
Other receivables 586 4,993 17,115
Other current assets (2,686) (2,291) (14,117)
Accounts payable 3,186 6,066 (14,792)
Other accounts payable (250) (6,738) (6,215)
Accrued expenses (485) 619 5,866
Accrued income taxes (42) (3,014) (11,483)
Other current liabilities (270) (741) (1,583)
Other non-current liabilities (65) (279) 523
Payment of severance benefits (455) (6,183) (4,181)
Other, net (354) (841) (50)
Net cash provided by (used in) operating activities 1,735 (194) 50,244
Cash flows from investing activities
Proceeds from settlement of hedge collateral 3,335 2,805
Payment of hedge collateral (568) (3,154) (15,282)
Purchase of property, plant and equipment (762) (2,280) (11,812)
Payment for intellectual property registration (67) (230) (301)
Collection of guarantee deposits 3,539 4,984 242
Payment of guarantee deposits (369) (7,276) (2,075)
Other 550
Net cash provided by (used in) investing activities 1,773 (4,621) (25,873)
Cash flows from financing activities
Proceeds from exercise of stock options 27 1,786
Acquisition of treasury stock (6,247) (43,087) (5,065)
Repayment of financing related to water treatment facility arrangement (123) (371) (381)
Repayment of principal portion of finance lease liabilities (23) (69) (50)
Net cash used in financing activities (6,393) (43,500) (3,710)
Effect of exchange rates on cash and cash equivalents (3,425) (10,518) (49,377)
Net decrease in cash and cash equivalents (6,310 ) (58,833) (28,716)
Cash and cash equivalents
Beginning of the period 172,954 225,477 279,547
End of the period $   166,644 $   166,644 $     250,831

 

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,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Operating income (loss) $ (9,235) $ (10,656) $ (10,008) $ (41,709) $ 4,873
Adjustments:
Equity-based compensation expense 2,171 2,092 861 5,383 4,487
Early termination and other charges, net 802 2,501 9,251 3,298
Adjusted Operating Income (Loss) $ (7,064) $ (7,762) $ (6,646) $ (27,075) $ 12,658

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 and (ii) Early termination and other charges, net.

For the nine months ended September 30, 2023, we recorded in our consolidated statement of operations $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023. For the three months ended June 30, 2023 and nine months ended September 30, 2023, we recorded $802 thousand of one-time employee incentives, in each period.

For the three and nine months ended September 30, 2022, Early termination and other charges, net includes $2,821 thousand of one-time employee incentives, in each period, and professional service fees and expenses of $217 thousand and $1,014 thousand, respectively, incurred in connection with certain strategic evaluations, both of which were offset in part by a $537 thousand gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi.

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)

(In thousands of U.S. dollars, except share data)

(Unaudited)

Three Months Ended Nine Months Ended
September 30,
2023
June 30,
2023
September 30,
2022
September 30,
2023
September 30,
2022
Net loss $           (5,165) $         (3,947) $        (17,195) $       (30,582) $       (11,007)
Adjustments:
Interest income (2,382) (2,692) (1,784) (7,916) (3,560)
Interest expense 189 200 278 645 888
Income tax benefit (4,373) (2,977) (3,942) (8,577) (1,356)
Depreciation and amortization 4,081 4,145 3,623 12,583 11,225
EBITDA (7,650) (5,271) (19,020 ) (33,847) (3,810)
Equity-based compensation expense 2,171 2,092 861 5,383 4,487
Foreign currency loss (gain), net 2,583 (1,237) 12,809 4,776 20,511
Derivative valuation loss (gain), net 161 20 (146) 235 (201)
Early termination and other charges, net 802 2,501 9,251 3,298
Adjusted EBITDA $           (2,735) $         (3,594) $         (2,995) $      (14,202) $       24,285
Net loss $           (5,165) $        (3,947) $        (17,195) $      (30,582) $     (11,007)
Adjustments:
Equity-based compensation expense 2,171 2,092 861 5,383 4,487
Foreign currency loss (gain), net 2,583 (1,237) 12,809 4,776 20,511
Derivative valuation loss (gain), net 161 20 (146) 235 (201)
Early termination and other charges, net 802 2,501 9,251 3,298
Income tax effect on non-GAAP adjustments (1,341) (202) 2,267 (3,493) 7,512
Adjusted Net Income (Loss) $           (1,591) $         (2,472) $           1,097 $      (14,430) $     24,600
Adjusted Net Income (Loss) per common share—
– Basic $             (0.04) $           (0.06) $             0.02 $         (0.35) $           0.55
– Diluted $             (0.04) $           (0.06) $             0.02 $         (0.35) $           0.53
Weighted average number of shares – basic 40,145,290 41,741,310 44,865,266 41,747,255 45,119,214
Weighted average number of shares – diluted 40,145,290 41,741,310 45,747,255 41,747,255 46,134,231

We present Adjusted EBITDA and Adjusted Net Income (Loss) 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 and (iv) Early termination and other charges, net. EBITDA for the periods indicated is defined as net loss before interest income, interest expense, income tax benefit and depreciation and amortization.

We prepare Adjusted Net Income (Loss) by adjusting net 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 (Loss) is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Income (Loss) for the periods as net loss, adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Early termination and other charges, net and (v) Income tax effect on non-GAAP adjustments.

For the nine months ended September 30, 2023, we recorded in our consolidated statement of operations $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023. For the three months ended June 30, 2023 and nine months ended September 30, 2023, we recorded $802 thousand of one-time employee incentives, in each period.

For the three and nine months ended September 30, 2022, Early termination and other charges, net includes $2,821 thousand of one-time employee incentives, in each period, and professional service fees and expenses of $217 thousand and $1,014 thousand, respectively, incurred in connection with certain strategic evaluations, both of which were offset in part by a $537 thousand gain on sale of certain legacy equipment of the closed back-end line in our fabrication facility in Gumi.

 

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SOURCE Magnachip Semiconductor Corporation

SEOUL, South KoreaOct. 20, 2023 /PRNewswire/ — Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that it will report its financial results for the third quarter ended September 30, 2023, on Thursday, November 2, 2023, 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 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/BI9578e24ef24a498a8d8ee6536b08edc6

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

SEOUL, South KoreaSept. 6, 2023 /PRNewswire/ — Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) received a letter of resignation, dated September 5, 2023, from Mr. Mel Keating, a member of the board of directors of the Company (the “Board”), whose resignation was accepted by the Board and effective as of September 5, 2023.

Magnachip SemiconductorNow that the Company has announced its plan to separate its Display and Power operations into two distinct legal entities, Mr. Keating has decided that, after over 7 years of service as a member of the Board, during which time he led the Audit Committee and the Strategic Review Committee, and given other important and time consuming business obligations, it was the right time to conclude his service to the company.

Mr. Keating’s resignation is not due to any disagreement with the company over any of its financial reporting, operations, policies or practices.

 

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

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/magnachip-semiconductor-corporation-announces-resignation-of-mel-keating-as-a-member-of-the-board-of-directors-301918535.html

SOURCE Magnachip Semiconductor Corporation

Announces New $50 Million Stock Buyback Program

 

  • Revenue of $61.0 million was in-line with guidance (vs $60.5M mid-point) and was down 39.8% YoY and up 7% sequentially.
  • Gross profit margin was 22.2%, up 100 basis points from Q1. The sequential improvement was primarily driven by higher utilization at our Gumi Fab.
  • GAAP diluted loss per share was $0.09; Non-GAAP diluted loss per share was $0.06.
  • Completed $25.5 million of stock buyback during the quarter.
  • Ended the quarter with a strong balance sheet with $173 million cash and no debt.
  • Board of Directors authorized a new $50 million stock buyback program.

 

SEOUL, South KoreaAug. 7, 2023 /PRNewswire/ — Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the second quarter 2023.

 

YJ Kim, Magnachip’s chief executive officer commented, “Our year-over-year results continued to be impacted by macro challenges but I am pleased to see sequential improvement in our Power business driven by Industrial and Automotive applications. We also continued our strong pace of design-in and design win activities during the quarter. Looking forward, we expect to see further sequential growth in our Power business in Q3.”

YJ Kim continued, “In our Display business, we continue to collaborate closely with our new global panel customer. We are very optimistic about our long-term growth prospects, as our products offer compelling competitive advantages that will enable us to penetrate the rapidly expanding OLED market in Asia. Additionally, we are pleased to announce our Board of Directors’ authorization of a new $50 million stock buyback program as part of our commitment to enhance shareholder value.”

 

Q2 2023 Financial Highlights
In thousands of U.S. dollars, except share data
GAAP
Q2 2023 Q1 2023 Q/Q change Q2 2022 Y/Y change
Revenues
Standard Products Business
Display Solutions 9,657 10,841 down 10.9 % 28,336 down 65.9 %
Power Solutions 41,718 40,673 up 2.6 % 62,952 down 33.7 %
Transitional Fab 3 foundry services(1) 9,604 5,491 up 74.9 % 10,088 down 4.8 %
Gross Profit Margin 22.2 % 21.2 % up 1.0 %pts 28.6 % down 6.4 %pts
Operating Income (Loss) (10,656) (21,818) up n/a 2,002 down n/a
Net Income (Loss) (3,947) (21,470) up n/a (3,340) down n/a
Basic Loss per Common Share (0.09) (0.49) up n/a (0.07) down n/a
Diluted Loss per Common Share (0.09) (0.49) up n/a (0.07) down n/a
In thousands of U.S. dollars, except share data
Non-GAAP(2)
Q2 2023 Q1 2023 Q/Q change Q2 2022 Y/Y change
Adjusted Operating Income (Loss) (7,762) (12,249) up n/a 4,787 down n/a
Adjusted EBITDA (3,594) (7,873) up n/a 8,525 down n/a
Adjusted Net Income (Loss) (2,472) (10,367) up n/a 10,567 down n/a
Adjusted Earnings (Loss) per Common Share—Diluted (0.06) (0.24) up n/a 0.23 down n/a
___________
(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 businesses.
(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.

 

Financial Guidance
While actual results may vary, Magnachip currently expects the following for Q3 2023:

  • Revenue to be in the range of $59 million to $65 million, including about $8 million of Transitional Fab 3 Foundry Services.
  • Gross profit margin to be in the range of 22.5% to 24.5%.

 

Q2 2023 Earnings Conference Call
Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Monday, August 7, 2023, 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/BI115ecf6f0d5b4f12ae6130b5b7b40ff1

 

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 2023 revenue and gross profit margin expectations, and the impact of market conditions associated with inflation and higher interest rates, remaining effects from the COVID-19 pandemic, geopolitical conflict between Russia and Ukraine, escalated trade tensions between the U.S. and China and continuing supply constraints on Magnachip’s third quarter 2023 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 conditions, including those caused by or related to inflation, potential recessions or other deteriorations, economic instability or civil unrest; remaining effects from the COVID-19 pandemic, the geopolitical conflict between Russia and Ukraine, and escalated trade tensions between the U.S. and China; 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 and impact demand for our products from customers who are similarly affected by such capacity constraints or disruptions; the impact of competitive products and pricing; timely -acceptance of our designs by customers; timely introduction of new products and technologies; our ability to ramp new products into volume production; industry-wide shifts in supply and demand for semiconductor products; overcapacity within the industry or at Magnachip; 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 that can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors; change to or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues, including the remaining effects of the COVID-19 pandemic; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products; 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 22, 2023, 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,
2023
March 31,
2023
June 30,
2022
June 30,
2023
June 30,
2022
Revenues:
Net sales – standard products business $         51,375 $         51,514 $         91,288 $       102,889 $       185,298
Net sales – transitional Fab 3 foundry services 9,604 5,491 10,088 15,095 20,171
Total revenues 60,979 57,005 101,376 117,984 205,469
Cost of sales:
Cost of sales – standard products business 37,867 37,312 63,620 75,179 119,700
Cost of sales – transitional Fab 3 foundry services 9,574 7,599 8,811 17,173 17,828
Total cost of sales 47,441 44,911 72,431 92,352 137,528
Gross profit 13,538 12,094 28,945 25,632 67,941
Gross profit as a percentage of standard products business net sales 26.3 % 27.6 % 30.3 % 26.9 % 35.4 %
Gross profit as a percentage of total revenues 22.2 % 21.2 % 28.6 % 21.7 % 33.1 %
Operating expenses:
Selling, general and administrative expenses 12,137 12,165 12,736 24,302 26,899
Research and development expenses 11,255 13,298 13,410 24,553 25,364
Early termination and other charges 802 8,449 797 9,251 797
Total operating expenses 24,194 33,912 26,943 58,106 53,060
Operating income (loss) (10,656) (21,818) 2,002 (32,474) 14,881
           Interest income 2,692 2,842 1,061 5,534 1,776
Interest expense (200) (256) (499) (456) (610)
Foreign currency gain (loss), net 1,237 (3,430) (7,012) (2,193) (7,702)
Other income (loss), net 3 (35) 211 (32) 429
Income (loss) before income tax expense (6,924) (22,697) (4,237) (29,621) 8,774
Income tax expense (benefit) (2,977) (1,227) (897) (4,204) 2,586
Net income (loss) $           (3,947) $        (21,470) $          (3,340) $       (25,417) $           6,188
Basic earnings (loss) per common share— $            (0.09) (0.49) $            (0.07) $           (0.60) $             0.14
Diluted earnings (loss) per common share— $            (0.09) (0.49) $            (0.07) $           (0.60) $             0.13
Weighted average number of shares—
Basic 41,741,310 43,390,832 44,897,278 42,561,514 45,248,293
Diluted 41,741,310 43,390,832 44,897,278 42,561,514 46,329,559

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars, except share data)

(Unaudited)

      June 30,

      2023

    December 31,

      2022

Assets
Current assets
Cash and cash equivalents $     172,954 $     225,477
Accounts receivable, net 35,009 35,380
Inventories, net 32,337 39,883
Other receivables 3,498 7,847
Prepaid expenses 9,553 10,560
Hedge collateral 2,120 2,940
Other current assets 19,070 15,766
Total current assets 274,541 337,853
Property, plant and equipment, net 101,067 110,747
Operating lease right-of-use assets 5,224 5,265
Intangible assets, net 1,706 1,930
Long-term prepaid expenses 7,430 10,939
Deferred income taxes 37,141 38,324
Other non-current assets 16,626 11,587
Total assets $     443,735 $      516,645
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $       20,367 $       17,998
Other accounts payable 8,473 9,702
Accrued expenses 10,456 9,688
Accrued income taxes 91 3,154
Operating lease liabilities 1,745 1,397
Other current liabilities 4,506 5,306
Total current liabilities 45,638 47,245
Accrued severance benefits, net 20,123 23,121
Non-current operating lease liabilities 3,671 4,091
Other non-current liabilities 10,011 14,035
Total liabilities 79,443 88,492
Commitments and contingencies
Stockholders’ equity
Common stock, $0.01 par value, 150,000,000 shares authorized, 56,449,782 shares issued and 40,133,898
outstanding at June 30, 2023 and 56,432,449 shares issued and 43,824,575 outstanding at December 31,
2022
564 564
Additional paid-in capital 269,297 266,058
Retained earnings 310,089 335,506
Treasury stock, 16,315,884 shares at June 30, 2023 and 12,607,874 shares at December 31, 2022,
respectively
(199,248) (161,422)
Accumulated other comprehensive loss (16,410) (12,553)
Total stockholders’ equity 364,292 428,153
Total liabilities and stockholders’ equity $   443,735 $     516,645

 

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,
2023
June 30,
2023
June 30,
2022
Cash flows from operating activities
Net income (loss) $      (3,947) $   (25,417) $       6,188
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation and amortization 4,145 8,502 7,602
Provision for severance benefits 1,761 4,091 3,240
Loss on foreign currency, net 35 9,117 29,183
Provision for inventory reserves (17) 1,121 5,282
Stock-based compensation 2,092 3,212 3,626
Other, net 213 450 712
Changes in operating assets and liabilities
Accounts receivable, net (3,315) (342) (12,377)
Inventories 3,849 4,911 (5,486)
Other receivables 2,031 4,407 11,640
Other current assets (1,061) 395 (2,089)
Accounts payable 976 2,880 2,429
Other accounts payable (5,064) (6,488) (5,861)
Accrued expenses (6,496) 1,104 (2,709)
Accrued income taxes (49) (2,972) (11,513)
Other current liabilities 125 (471) (2,153)
Other non-current liabilities (45) (214) 570
Payment of severance benefits (4,857) (5,728) (2,934)
Other, net (181) (487) (385)
Net cash provided by (used in) operating activities (9,805) (1,929) 24,965
Cash flows from investing activities
Proceeds from settlement of hedge collateral 2,180 3,335 2,805
Payment of hedge collateral (1,493) (2,586) (6,844)
Purchase of property, plant and equipment (1,383) (1,518) (1,511)
Payment for intellectual property registration (89) (163) (153)
Payment of guarantee deposits (3,425) (6,907) (1,049)
Other, net 1,426 1,445 14
Net cash used in investing activities (2,784) (6,394 ) (6,738 )
Cash flows from financing activities
Proceeds from exercise of stock options 18 27 1,786
Acquisition of treasury stock (24,576) (36,840) (1,826)
Repayment of financing related to water treatment facility arrangement (122) (248) (261)
Repayment of principal portion of finance lease liabilities (22) (46) (32)
Net cash used in financing activities (24,702) (37,107) (333)
Effect of exchange rates on cash and cash equivalents (1,840) (7,093) (23,644)
Net decrease in cash and cash equivalents (39,131) (52,523) (5,750)
Cash and cash equivalents
Beginning of the period 212,085 225,477 279,547
End of the period $   172,954 $   172,954 $   273,797

 

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 Six Months Ended
June 30,
2023
March 31,
2023
June 30,
2022
June 30,
2023
June 30,
2022
Operating income (loss) $ (10,656) $ (21,818) $ 2,002 $ (32,474) $ 14,881
Adjustments:
Equity-based compensation expense 2,092 1,120 1,988 3,212 3,626
Early termination and other charges 802 8,449 797 9,251 797
Adjusted Operating Income (Loss) $ (7,762) $ (12,249) $ 4,787 $ (20,011) $ 19,304

 

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 and (ii) Early termination and other charges.

For the three months ended March 31, 2023, we recorded in our consolidated statement of operations $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023. For the three and six months ended June 30, 2023, we recorded $802 thousand of one-time employee incentives.

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.

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES

RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA AND ADJUSTED NET INCOME (LOSS)

(In thousands of U.S. dollars, except share data)

(Unaudited)

Three Months Ended Six Months Ended
June 30,
2023
March 31,
2023
June 30,
2022
June 30,
2023
June 30,
2022
Net income (loss) $           (3,947) $        (21,470) $         (3,340) $       (25,417) $        6,188
Adjustments:
Interest income (2,692) (2,842) (1,061) (5,534) (1,776 )
Interest expense 200 256 499 456 610
Income tax expense (benefit) (2,977) (1,227) (897) (4,204) 2,586
Depreciation and amortization 4,145 4,357 3,711 8,502 7,602
EBITDA (5,271) (20,926) (1,088) (26,197) 15,210
Equity-based compensation expense 2,092 1,120 1,988 3,212 3,626
Foreign currency loss (gain), net (1,237) 3,430 7,012 2,193 7,702
Derivative valuation loss (gain), net 20 54 (184) 74 (55 )
Early termination and other charges 802 8,449 797 9,251 797
Adjusted EBITDA $           (3,594) $        (7,873) $          8,525 $      (11,467) $       27,280
Net income (loss) $           (3,947) $       (21,470) $         (3,340) $      (25,417) $        6,188
Adjustments:
Equity-based compensation expense 2,092 1,120 1,988 3,212 3,626
Foreign currency loss (gain), net (1,237) 3,430 7,012 2,193 7,702
Derivative valuation loss (gain), net 20 54 (184) 74 (55 )
Early termination and other charges 802 8,449 797 9,251 797
Income tax effect on non-GAAP adjustments (202) (1,950) 4,294 (2,152) 5,245
Adjusted Net Income (Loss) $           (2,472) $      (10,367) $        10,567 $      (12,839) $     23,503
Adjusted Net Income (Loss) per common share—
– Basic $             (0.06) $          (0.24) $            0.24 $        (0.30) $          0.52
– Diluted $             (0.06) $          (0.24) $            0.23 $        (0.30) $          0.51
Weighted average number of shares – basic 41,741,310 43,390,832 44,897,278 42,561,514 45,248,293
Weighted average number of shares – diluted 41,741,310 43,390,832 45,937,515 42,561,514 46,329,559

 

We present Adjusted EBITDA and Adjusted Net Income (Loss) 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 and (iv) Early termination and other charges. EBITDA for the periods indicated is defined as net income (loss) before interest income, interest expense, income tax expense (benefit) and depreciation and amortization.

We prepare Adjusted Net Income (Loss) 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 (Loss) is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Net Income (Loss) 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) Early termination and other charges and (v) Income tax effect on non-GAAP adjustments.

For the three months ended March 31, 2023, we recorded in our consolidated statement of operations $8,449 thousand of termination related charges in connection with the voluntary resignation program that we offered to certain employees during the first quarter of 2023. For the three and six months ended June 30, 2023, we recorded $802 thousand of one-time employee incentives.

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.

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SOURCE Magnachip Semiconductor Corporation