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

 Three Months Ended
 March 31, 2011  December 31, 2010  March 31, 2010
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 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.

파운드리 고객사에 구리 와이어 본딩(Copper Wire Bonding) 기술 제공

– 기존 금 와이어의 대체재로 20~30% 패키징비용 절감 효과-


아날로그 및 혼성신호 반도체 전문기업인 매그나칩반도체(NYSE:MX)는 위탁생산(파운드리) 고객들의 제조비용 절감 니즈를 충족시키기 위해 구리 와이어 본딩 기술 (Copper Wire Bonding Technology)을 제공한다고 밝혔다.

구리 와이어 본딩이란 구리선을 이용해 반도체 소자와 패키지 본체를 연결하는 제조공정을 말한다. 지금까지는 와이어 소재로 금을 주로 사용해 왔으나, 금값 상승에 따른 비용 절감을 위해 금을 대체할 신규 와이어 재료 찾기에 업계의 관심이 쏠려 있었다.

구리 가격은 금 가격의 1/4 정도에 불과해, 구리를 사용할 경우 제품 패키징 비용을 20~30% 줄일 수 있는 잇점이 있다. 또한, 구리는 재료적 특성으로 인해 금에 비해 전기 전도성과 열 전도성이 각각 30%, 25% 가량 높고, 금속간 화합물 형성이 적어 고온에서도 신뢰성이 높은 장점을 가지고 있다.

그 동안 구리 와이어 본딩의 단점으로 지적되어 온 본딩 패드에 가해지는 압력 및 이로 인한 웨이퍼 손상 문제는 앰코 테크놀러지(Amkor Technology) 등 주요 패키징 업체와의 긴밀한 기술협력을 통해 완전히 해결함으로써 보다 개선된 구리 와이어 본딩 기술을 선보이게 됐다.

매그나칩 이태종 전무는 “금 와이어 대체재를 찾던 고객들에게 가격 경쟁력 높은 구리 와이어 본딩 솔루션을 제공하게 됐다”며, “매그나칩과 손잡을 경우 구리 와이어 본딩 기술을 통해 20~30% 비용절감을 통한 윈-윈 협력관계 구축이 가능하다”고 말했다.