SEOUL, South Korea and SAN JOSE, Calif., Nov. 6, 2017 /PRNewswire/ — MagnaChip Semiconductor Corporation (“MagnaChip”) (NYSE: MX), a designer and manufacturer of analog and mixed-signal semiconductor products, announced today it now offers a 0.35 micron 700V Ultra-High Voltage process technology (UHV) that reduces mask counts, manufacturing time and cost for power-related AC-DC products. This UHV process technology offers 700V nLDMOS, 700V JFET, and 5.5V CMOS devices that are suitable for manufacturing AC-DC converter ICs and LED driver ICs.

The demand for AC-powered products in home appliances continues to increase, creating the need for highly efficient and cost-competitive AC-DC converter ICs, AC-DC chargers and LED driver ICs. MagnaChip’s 0.35 micron 700V UHV process technology is a suitable match to manufacture these types of power-related products.

MagnaChip provides various types of UHV technology to meet the diverse demands of the customers. HP35ULB700, the newly developed UHV process, eliminates five photolithography steps through process simplification compared with MagnaChip’s previous generation of UHV technology, making it possible to reduce manufacturing cost and to accelerate the time to market. Among the devices offered in HP35ULB700 are 700V low Ron nLDMOS, 500V nLDMOS, 700V JFET, 5.5V CMOS, BJT, 700V resistor, BP cap, and MIM and fuse. All these devices enable the integrated solution of AC-DC converter ICs and LED driver ICs. The 700V low Ron nLDMOS devices offer improved specific-on-resistance of 150 mohm·cm2. In addition, the devices enable various design schemes, including the possibility to separate or connect the source and the bulk in nLDMOS.

YJ Kim, MagnaChip’s Chief Executive Officer, commented, “Our 0.35 micron 700V UHV technology provides our foundry customers with a high-performance, highly efficient manufacturing process for AC-DC converter ICs and LED driver ICs for various LED lighting applications.” Mr. Kim added, “To meet the diverse customer requirements, MagnaChip will continue to develop new UHV technologies such as customer-specific UHV processes with additional option devices.”

About MagnaChip Semiconductor

MagnaChip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, industrial and automotive applications. The Company’s Standard Products Group and Foundry Services Group provide a broad range of standard products and manufacturing services to customers worldwide. MagnaChip, with over 30 years of operating history, owns a portfolio of approximately 3,300 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:

In the United States:
Bruce Entin
Entin Consulting
Tel. +1-408-625-1262
Investor.relations@magnachip.com

In Korea:
Chankeun Park
Director of Public Relations
Tel. +82-2-6903-3195
chankeun.park@magnachip.com

Magnachip Reports Third Quarter 2017 Financial Results

Q3 News Summary
– Revenue of $176.7 million at the higher end of guidance range despite power outage in August
– 28.5% gross profit margin at highest level in more than 4 years
– Foundry gross profit margin increases to 30.3%; fab utilization remains above 90%
– Power Standard Products revenue of $39.0 million at highest level since Q4 2013
– OLED Display Driver IC business resumed growth; OLED revenue increased 15.6% sequentially

SEOUL, South Korea and SAN JOSE, Calif., Nov. 1, 2017 /PRNewswire/ — MagnaChip Semiconductor Corporation, (NYSE: MX), today announced revenue for the third quarter of $176.7 million, gross profit margin of 28.5%, net income of $5.6 million and Adjusted EBITDA of $24.7 million or 14.0% of revenue. Gross profit margin and Adjusted EBITDA both were at the highest quarterly levels in more than four years.

CEO Commentary: “Revenue in the third quarter came in at the higher end of the previous guidance range despite a power outage in August that temporarily halted production at our larger fab and caused wafers-in-process to be scrapped,” said YJ Kim, Chief Executive Officer. “We recovered from that incident in a timely manner, and our standard product business lines recorded double digit-sequential revenue growth in the third quarter. Foundry revenue was generally flattish quarter over quarter, but gross profit margin for the Foundry business increased 1.6 percentage points to 30.3%. The Company continued to benefit from an improving product mix and a strong product pipeline.”

On OLED: “We had forecasted earlier in the year that our OLED business would likely bottom in the second quarter of 2017 and resume revenue growth in the third quarter. I’m pleased to report that revenue from OLED display driver ICs increased 15.6% sequentially in the third quarter. Based on our current visibility and insight about multiple new smartphone introductions, we currently anticipate that we have the potential to generate OLED revenue that will exceed 50% growth or clearly exceed $100 million in 2018.”

CFO Commentary: “Our improved financial results demonstrate the success of business strategies and initiatives we’ve implemented, and reflect the decisive steps we’ve taken to reduce our cost structure, streamline operations and strengthen the balance sheet,” said Jonathan Kim, Chief Financial Officer. “We remain fully committed to focus on the overall profitability of MagnaChip and to invest in future initiatives to fuel profitable revenue growth.”

Third Quarter Financial Highlights

Total Revenue
Total revenue for the third quarter of 2017 was $176.7 million, down 8.1% from the third quarter a year ago, and up 6.0% as compared to $166.7 million for the second quarter of 2017. Total revenue in the third quarter was at the higher end of our previous guidance range of $172-178 million.

Segment Revenue
Foundry revenue in the third quarter was $80.4 million, up 8.9% year-over year and down 1.4% from $81.5 million in the prior quarter. Standard Products Group revenue in the third quarter was $96.2 million, down 18.7% year-over- year, and an increase of 13.1% sequentially, which primarily reflected changes in the mobile OLED business in both periods.

Total Gross Profit
Total gross profit in the third quarter of 2017 was $50.3 million or 28.5% million as compared with gross profit of $39.1 million or 20.4% in the third quarter of 2016 and $46.7 million or 28.0% gross profit margin for the second quarter of 2017. Gross profit margin in the third quarter was at the highest level in more than four years and primarily reflected improved product mix, reduction in manufacturing headcount and high fab utilization.

Segment Gross Profit Margin
Foundry Services Group gross profit margin was 30.3% in the third quarter of 2017 as compared with 23.5% in the third quarter of 2016 and 28.7% in the second quarter of 2017. The Standard Products Group gross profit margin was 26.9% in the third quarter of 2017 as compared with 18.3% in the third quarter of 2016 and 27.2% in the second quarter of 2017.

Net Income, Adjusted Net Income, Adjusted EBITDA
Net income, on a GAAP basis, for the third quarter was $5.6 million or $0.16 per basic share and $0.15 per diluted share, as compared with net income of $29.9 million or $0.86 per basic share and $0.85 per diluted share in the third quarter of 2016, and compared with a net loss of $8.1 million or $0.24 per basic share in the second quarter of 2017.

Adjusted Net Income, a non-GAAP financial measure, for the third quarter of 2017, totaled $11.4 million or $0.33 per basic share and $0.28 per diluted share, as compared with Adjusted Net Loss of $1.3 million or $0.04 per basic share in the third quarter of 2016, and compared with Adjusted Net Income of $7.8 million or $0.23 per basic share and $0.21 per diluted share in the second quarter of 2017.

Adjusted EBITDA, a non-GAAP financial measure, in the third quarter was $24.7 million or 14.0% of revenue, as compared with Adjusted EBITDA of $10.0 million or 5.2% of revenue in the third quarter of 2016, and compared with Adjusted EBITDA of $20.3 million or 12.2% of revenue in the second quarter of 2017.

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 MagnaChip’s 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 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.

Cash and cash equivalents totaled $128.4 million at the end of the third quarter, a decrease of $3.1 million from $131.5 million at the end of the second quarter of 2017.

The following table sets forth information relating to our operating segments:

Third Quarter and Recent Company Highlights
MagnaChip:

• Was selected as the foundry partner by ELAN Microelectronics to manufacture the world’s first fingerprint sensor IC-based smartcards.
The smartcard will be manufactured utilizing MagnaChip’s 0.35um mixed-signal thick IMD manufacturing process.
• Had its 6V slim mixed signal process qualified for various consumer-related applications such as home audio systems, cameras and
electronic chargers.
• Developed 150fs RonCoff in 0.13um RFSOI technology.
• Hosted the second Foundry Technology Symposium in Hsinchu, Taiwan. More than 120 fabless, IDMs and other semiconductor
companies attended.

Fourth Quarter Business Outlook

For the fourth quarter of 2017, MagnaChip anticipates:

• Revenue to be in the range of $171million to $177 million, flattish or down sequentially 0.6% at the mid-point of the projected range,
due to typical seasonal factors. The guidance for the fourth quarter compares with revenue of $176.7 million in the third quarter of 2017
and $180.5 million in the fourth quarter of 2016.
• Gross profit margin to be in the range of 27% to 29%, despite an increase in silicon wafer prices, as compared to 28.5% in the third
quarter of 2017, and 25.5% in the fourth quarter of 2016.

Third Quarter Conference Call
MagnaChip will hold a conference call on Nov. 1 at 5 p.m. EDT to discuss the third quarter 2017 financial results. The conference call will be webcast live and is also available by dialing toll-free at 1-844-536-5472. International call-in participants can dial at 1-614-999-9318. The conference ID number is 98596895. Participants are encouraged to initiate their calls at least 10 minutes in advance of the 5 p.m. EDT start time to ensure a timely connection. The webcast and earnings release will be accessible at www.magnachip.com.
A replay of the conference call will be available the same day and will run for 72 hours. The replay dial-in numbers are 1-404-537-3406 or toll-free at 1-855-859-2056. The access code is 98596895.

About MagnaChip Semiconductor Corporation
MagnaChip is a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, IoT, consumer, industrial and automotive applications. The Company’s Standard Products Group and Foundry Services Group provide a broad range of standard products and manufacturing services to customers worldwide. MagnaChip, with over 30 years of operating history, owns a portfolio of approximately 3,300 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.

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 statements about our future operating and financial performance, including fourth quarter 2017 revenue and gross profit expectations. 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 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’s filings with the SEC, including our Form 10-K filed on February 21, 2017 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.

CONTACTS:

In the United States:
Bruce Entin
Investor Relations
Tel. +1-408-625-1262
Investor.relations@magnachip.com

In Korea:
Chankeun Park
Director, Public Relations
Tel. +82-43-718-2100
chankeun.park@magnachip.com