Magnachip Reports First Quarter 2011 Financial Results

MagnaChip Reports First Quarter 2011 Financial Results

· Revenue of $188 Million up Sequentially and Year-over-Year
· Power Solutions Revenue Grew 126% over Q1 2010
· Net Income $22 Million or $0.57 per diluted share

SEOUL, South Korea and CUPERTINO, Calif., April 27, 2011 — MagnaChip Semiconductor Corporation (NYSE: MX) today announced financial results for the first quarter ended March 31, 2011.Revenue for the first quarter of 2011 was $187.9 million, a 4.7% increase compared to $179.5 million for the first quarter of 2010, and a 0.6% increase compared to $186.8 million for the fourth quarter of 2010.Gross profit was $56.5 million or 30.1%, as a percent of revenue, for the first quarter of 2011. This compares to gross profit of $49.4 million or 27.5% for the first quarter of 2010 and $60.4 million or 32.3% for the fourth quarter of 2010.“I am very pleased with our performance in what is typically a seasonally down quarter for MagnaChip and the industry,” said Sang Park, MagnaChip’s Chairman and Chief Executive Officer. “Our Power Solutions business segment grew 11 percent sequentially and more than doubled over the same period last year. Our foundry business was down less than expected for this seasonally weaker quarter and our Display Solutions segment was up for the quarter. All indications point to 2011 being another solid year for growth in revenue and margin expansion for MagnaChip.”Net income, on a GAAP basis, for the first quarter of 2011 totaled $22.5 million or $0.57 per diluted share. This compares to net income of $31.1 million or $0.81 per diluted share for the first quarter of 2010 and net income of $12.3 million or $0.31 per diluted share for the fourth quarter of 2010.

Adjusted net income, a non-GAAP measurement, for the first quarter of 2011 totaled $15.7 million or $0.40 per diluted share compared to $19.9 million or $0.52 per diluted share for the first quarter of 2010 and $17.4 million or $0.44 per diluted share for the fourth quarter of 2010.

Management believes that non-GAAP financial measures, when viewed in conjunction with GAAP results, can provide a more meaningful understanding of the factors and trends affecting MagnaChip Semiconductor Corporation’s business and operations. However, such non-GAAP financial measures have limitations and should not be considered as a substitute for net income or as a better indicator of our operating performance than measures that are presented in accordance with GAAP.

Combined cash balances (cash and cash equivalents plus short-term investments) totaled $194.2 million at the end of the first quarter of 2011, an increase of $22.0 million from the end of the prior quarter. Cash provided from operations totaled approximately $19.2 million for the first quarter of 2011.

Revenue by Segment

In thousands of US dollars

March 31, 2011 Three Months Ended
December 31, 2010
March 31, 2010
   Semiconductor
Manufacturing Services
$ 92,266 $ 97,261 $ 93,201
   Display Solutions  $ 74,464 $ 70,581 $ 76,730
   Power Solutions $ 20,412 $ 18,398 $ 9,034
   Other $ 779 $ 532 $ 520
   Total Revenue $ 187,921 $ 186,772 $ 179,485

First Quarter and Recent Company Highlights

Successfully completed our initial public offering and listing on the New York Stock Exchange on March 11, 2011.
Signed a wafer foundry agreement with a major US provider of microcontroller and touch solutions.
Launched a US-based power solutions design center in Cupertino, California, to expand our technology offerings.
Introduced a cost-competitive copper wire bonding solution for foundry customers.

Business Outlook

For the second quarter of 2011, the company expects:
Revenue to increase 5% to 9% on a sequential basis.
Gross profit, as a percent of revenue, to increase 1.5% to 3.0% quarter-over-quarter.

Non-GAAP Metrics

Adjusted EBITDA excludes charges related to depreciation and amortization, interest expense, income tax expense (benefit), restructuring and impairment activities, inventory step-up, equity-based compensation, foreign currency (gain) loss, derivative valuation (gain) loss and special expense for the IPO employee incentive payment. Adjusted net income (loss) excludes charges related to restructuring and impairment, inventory step-up, equity-based compensation, amortization of intangible assets associated with continuing operations, foreign currency (gain) loss, derivative valuation (gain) loss and special expense for the IPO employee incentive payment. A reconciliation of GAAP results to non-GAAP results is included following the financial statements below.

About MagnaChip Semiconductor Corporation

Headquartered in South Korea, MagnaChip Semiconductor Corporation is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high-volume consumer applications. MagnaChip Semiconductor believes it has one of the broadest and deepest ranges of analog and mixed-signal semiconductor platforms in the industry, supported by its 30-year operating history, a large portfolio of registered and pending patents, and extensive engineering and manufacturing process expertise. For more information, please visit www.magnachip.com. Information on or accessible through, MagnaChip Semiconductor’s website is not a part of, and is not incorporated into, this release.

Safe Harbor for Forward-Looking Statements

Information in this release regarding MagnaChip Semiconductor Corporation’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 statements about our ability to capitalize on improving market dynamics and future operating and financial performance including second quarter 2011 revenue and gross profit. All forward-looking statements included in this release are based upon information available to MagnaChip Semiconductor 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 general economic conditions, the impact of competitive products and pricing, timely design acceptance by our customers, timely introduction of new products and technologies, ability to ramp new products into volume production, industry wide shifts in supply and demand for semiconductor products, industry and/or company overcapacity, effective and cost efficient utilization of manufacturing capacity, financial stability in foreign markets and the impact of foreign exchange rates, unanticipated costs and expenses or the inability to identify expenses which can be eliminated, compliance with U.S. and international trade and export laws and regulations by us and our distributors, and other risks detailed from time to time in MagnaChip Semiconductor Corporation’s filings with the SEC, including our Form 10-K filed on March 18, 2011 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 Semiconductor Corporation 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.

SEOUL, South Korea and CUPERTINO, Calif., April 6, 2011 — On Thursday, April 7, 2011, executives of MagnaChip Semiconductor Corporation (NYSE: MX) will visit the New York Stock Exchange to celebrate the recent completion of its initial public offering and first day of NYSE trading. To mark this special occasion, Sang Park, Chairman and Chief Executive Officer, will ring the Opening Bell at 9:30 a.m. EDT. “It is an honor to ring the Opening Bell and represent our many employees around the world who are responsible for MagnaChip’s success,” said Sang Park. “We are proud to be listed on the New York Stock Exchange along with many of the world’s top publicly-traded companies.”

About MagnaChip Semiconductor Corporation

Headquartered in South Korea, MagnaChip Semiconductor is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high volume consumer applications. MagnaChip Semiconductor believes it has one of the broadest and deepest range of analog and mixed-signal semiconductor platforms in the industry, supported by its 30-year operating history, large portfolio of registered and pending patents and extensive engineering and manufacturing process expertise. For more information, please visit www.magnachip.com.

CONTACTS:

In the United States:
Robert Pursel
Director of Investor Relations
Tel. +1-408-625-1262
robert.pursel@magnachip.com

In Korea:
Chankeun Park
Senior Manager, Public Relations
Tel. +82-3-6903-3195
chankeun.park@magnachip.com

SEOUL, South Korea and CUPERTINO, Calif., April 5, 2011 — MagnaChip Semiconductor Corporation (“MagnaChip Semiconductor”) (NYSE: MX) will hold a conference call Wednesday, April 27, 2011 at 3 p.m. PDT to discuss the Company’s first quarter 2011 financial results. Participating in the call will be Sang Park, MagnaChip Chairman and CEO and Margaret Sakai, Executive Vice President and CFO. The earnings release will be issued after the market closes that day.

The conference call will be webcast live and is also available by dialing 1-866-776-2061 in the U.S. or 1-706-679-0298 for all other locations. The conference ID number is 57757395 and participants are encouraged to initiate their calls at least 10 minutes in advance of the 3 p.m. PDT start time to ensure a timely connection. The webcast and earnings release will be accessible at investors.magnachip.com.

A replay of the conference call will be available the same day and will run for 72 hours. The replay access numbers are 1-800-642-1687 and 1-706-645-9291. The access code is 57757395.

About MagnaChip Semiconductor

Headquartered in South Korea, MagnaChip Semiconductor is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high volume consumer applications. MagnaChip Semiconductor believes it has one of the broadest and deepest range of analog and mixed-signal semiconductor platforms in the industry, supported by its 30-year operating history, large portfolio of registered and pending patents and extensive engineering and manufacturing process expertise. For more information, please visit www.magnachip.com.

SEOUL, South Korea, April 4, 2011 — MagnaChip Semiconductor Corporation (“MagnaChip Semiconductor”) (NYSE: MX) a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products, today announced that it now offers cost competitive and state of the art copper wire bonding technology for the specialized needs of foundry customers.

Copper bonding employs copper wires instead of gold for interconnection and has become one of the most preferred methods to reduce overall package cost for semiconductor applications as the price of gold continues to rise.

Copper wire offers significant advantages over gold wire. First, copper is three to five times less costly than gold. Substituting gold with copper can achieve a packaging cost savings of about 20% to 30%. Copper wire is about 30% more conductive than gold, making it a superior electrical conductor. Copper also has about 25% higher thermal conductivity. In addition, because of copper’s lower tendency to form intermetallic compounds, copper bonds can offer higher reliability at elevated temperatures than gold bonds.

One of the major challenges of copper wire bonding has been the significant mechanical stress imposed on bonding pads, which often resulted in damage to silicon wafers in the form of cracks beneath the pads. To resolve this issue, MagnaChip worked with the major packaging companies, including Amkor, to develop and qualify an enhanced silicon bonding process.

TJ Lee, Senior Vice President and General Manager, Corporate Engineering, commented, “We are very pleased to announce the offering of our cost competitive copper wire bonding solutions to meet the increasing demand for a gold wire alternative. Foundry customers can now migrate to MagnaChip’s copper wire bonding technology and recognize a direct 20% to 30% cost savings. It is our goal to provide innovative and cost-effective manufacturing solutions for our customers.”

About MagnaChip Semiconductor

Headquartered in South Korea, MagnaChip Semiconductor is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for high volume consumer applications. MagnaChip Semiconductor believes it has one of the broadest and deepest range of analog and mixed-signal semiconductor platforms in the industry, supported by its 30-year operating history, large portfolio of registered and pending patents and extensive engineering and manufacturing process expertise.