SEOUL, South Korea–(BUSINESS WIRE)–Oct. 9, 2024– Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that it will report its financial results for the third quarter ended September 30, 2024, on Wednesday, October 30, 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/BId4ac9a385dd74e4f813c5964a3ac6546

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 1,050 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

Financial Highlights

  • Q2 consolidated revenue was $53.2 million, above the mid-point of guidance range of $49-54 million.
    • Q2 standard product business revenue was up 11.6% sequentially.
  • Q2 consolidated gross profit margin was 21.8%, above the upper end of guidance range of 17-19%.
    • Q2 standard product business gross profit margin was 23.1%, up nearly two percentage points sequentially.
  • Ended Q2 with cash of $132.5 million; and also have an additional short-term financial investment of $30 million.
  • Repurchased approximately 0.5 million shares for aggregate purchase price of $2.3 million during the quarter.

 

Operational Highlights

  • Held formal opening ceremony in China for newly formed subsidiary, Magnachip Technology Company, Ltd. (MTC).
  • Secured a purchase commitment for OLED driver targeted for a premium smartphone OEM; mass production and revenue currently expected to begin by year-end.
  • Delivered samples of our next-generation OLED driver to a panel supplier for a leading Chinese smartphone OEM’s winter 2024 model, now in the final design validation phase.
  • Taped out a new OLED driver designed with next-generation IP including sub-pixel rendering (SPR), refined color enhancement, color filter, brightness uniformity control and more than 20% reduction in power consumption than previous generation.
  • Sampled our first OLED smartwatch DDIC in Q2 following a Q1 tape-out, demonstrating our expansion into new, adjacent markets.
  • Power IC revenue increased sequentially, driven primarily by demand for LCD TVs and OLED IT monitors.
  • Sequential revenue growth in PAS segment was driven by industrial, communication and consumer applications. Automotive rebounded with new design wins in Japan and China.
  • Launched new 75A/1200V IGBT for a design opportunity in solar applications; expected to begin mass production in the second half of the year.

 

SEOUL, South Korea–(BUSINESS WIRE)–Jul. 31, 2024– Magnachip Semiconductor Corporation (NYSE: MX) (“Magnachip” or the “Company”) today announced financial results for the second quarter 2024.

YJ Kim, Magnachip’s CEO, commented, “Our Q2 revenue was above the mid-point of guidance and gross margin was better than expected. Revenue in our Standard Products Business, which is comprised of our MSS and PAS businesses, increased sequentially by double digits in Q2. We benefited from a recovery in our Power business, increased demand for OLED drivers for China smartphones and European autos, and an upturn in Power IC demand for OLED IT panels and LED TVs.”

YJ Kim added, “Looking ahead, we currently expect Standard Product Business revenue will increase sequentially once again in Q3, driven by leaner distribution channels in Power, as well as seasonality, and an increase in OLED and Power IC businesses.”

 

Q2 2024 Financial Highlights

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

GAAP

Q2 2024

Q1 2024

Q/Q change

Q2 2023

Y/Y change

Consolidated Revenues

53,171

49,067

up

8.4

%

60,979

down

12.8

%

Standard Products Business

50,835

45,541

up

11.6

%

51,375

down

1.1

%

Mixed-Signal Solutions

11,595

9,006

up

28.7

%

12,357

down

6.2

%

Power Analog Solutions

39,240

36,535

up

7.4

%

39,018

up

0.6

%

Transitional Fab 3 foundry services(1)

2,336

3,526

down

33.7

%

9,604

down

75.7

%

Consolidated Gross Profit Margin

21.8

%

18.3

%

up

3.5

%pts

22.2

%

down

0.4

%pts

Standard Products Business

23.1

%

21.2

%

up

1.9

%pts

26.3

%

down

3.2

%pts

Mixed-Signal Solutions

34.6

%

44.6

%

down

10.0

%pts

36.4

%

down

1.8

%pts

Power Analog Solutions

19.7

%

15.4

%

up

4.3

%pts

23.1

%

down

3.4

%pts

Operating Loss

(12,824

)

(13,459

)

up

n/a

(10,656

)

down

n/a

Net Loss

(12,997

)

(15,417

)

up

n/a

(3,947

)

down

n/a

Basic Loss per Common Share

(0.34

)

(0.40

)

up

n/a

(0.09

)

down

n/a

Diluted Loss per Common Share

(0.34

)

(0.40

)

up

n/a

(0.09

)

down

n/a

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

Non-GAAP(2)

Q2 2024

Q1 2024

Q/Q change

Q2 2023

Y/Y change

Adjusted Operating Loss

(11,608

)

(12,559

)

up

n/a

(7,762

)

down

n/a

Adjusted EBITDA

(7,569

)

(8,441

)

up

n/a

(3,594

)

down

n/a

Adjusted Net Loss

(8,134

)

(10,884

)

up

n/a

(2,472

)

down

n/a

Adjusted Loss per Common Share—Diluted

(0.21

)

(0.28

)

up

n/a

(0.06

)

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.

 

Q3 and Full-year 2024 Financial Guidance

Beginning in Q1, the Company began 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 Q3 2024:

  • Consolidated revenue to be in the range of $61.5 to $66.5 million, including approximately $1.5 million of Transitional Foundry Services.
    • MSS revenue to be in the range of $14.5 to $16.5 million, up 33.7% sequentially and 46.2% year-over-year at the mid-point. This compares with MSS equivalent revenue of $11.6 million in Q2 2024 and $10.6 million in Q3 2023.
    • PAS revenue to be in the range of $45.5 to $48.5 million, up 19.8% sequentially and 14.6% year-over-year at the mid-point. This compares with PAS equivalent revenue of $39.2 million in Q2 2024 and $41.0 million in Q3 2023.
  • Consolidated gross profit margin to be in the range of 22.5% to 24.5%.
    • MSS gross profit margin to be in the range of 36.5% to 39.5%. This compares with MSS equivalent gross profit margin of 34.6% in Q2 2024 and 28.8% in Q3 2023.
    • PAS gross profit margin to be in the range of 18.5% to 20.5%. This compares with PAS equivalent gross profit margin of 19.7% in Q2 2024 and 28.6% in Q3 2023.

 

For the full-year 2024, we currently expect:

  • MSS revenue to grow double digits year-over-year as compared with MSS equivalent revenue of $44.4 million in 2023, consistent with what we communicated at the beginning of the year.
  • PAS revenue to grow double digits year-over-year as compared with PAS equivalent revenue of $151.3 million in 2023, consistent with what we communicated at the beginning of the year.
  • Transitional Foundry Services revenue will decline in 2024, as expected. We expect this revenue to phase out by the end of the year.
  • Consolidated revenue flattish-to-slightly down, compared to prior expectation of flat-to-up-slightly year-over-year.
  • Consolidated gross profit margin between 19% to 22%, above our prior expectation of 17% to 20%. This compares with the consolidated gross profit margin of 22.4% in 2023.

 

Q2 2024 Earnings Conference Call

Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, July 31, 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/BId7d466aa72124a439fec483c2b65d307

 

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 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 third 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 1,050 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

Six Months Ended

June 30,
2024

March 31,
2024

June 30,
2023

June 30,
2024

June 30,
2023

Revenues:

Net sales – standard products business

$

50,835

$

45,541

$

51,375

$

96,376

$

102,889

Net sales – transitional Fab 3 foundry services

2,336

3,526

9,604

5,862

15,095

Total revenues

53,171

49,067

60,979

102,238

117,984

Cost of sales:

Cost of sales – standard products business

39,113

35,888

37,867

75,001

75,179

Cost of sales – transitional Fab 3 foundry services

2,457

4,211

9,574

6,668

17,173

Total cost of sales

41,570

40,099

47,441

81,669

92,352

Gross profit

11,601

8,968

13,538

20,569

25,632

Gross profit as a percentage of standard products business net sales

23.1

%

21.2

%

26.3

%

22.2

%

26.9

%

Gross profit as a percentage of total revenues

21.8

%

18.3

%

22.2

%

20.1

%

21.7

%

Operating expenses:

Selling, general and administrative expenses

11,734

11,264

12,137

22,998

24,302

Research and development expenses

12,691

11,163

11,255

23,854

24,553

Early termination and other charges

802

9,251

Total operating expenses

24,425

22,427

24,194

46,852

58,106

Operating loss

(12,824

)

(13,459

)

(10,656

)

(26,283

)

(32,474

)

Interest income

2,228

2,213

2,692

4,441

5,534

Interest expense

(554

)

(238

)

(200

)

(792

)

(456

)

Foreign currency gain (loss), net

(3,557

)

(5,001

)

1,237

(8,558

)

(2,193

)

Other income (loss), net

108

44

3

152

(32

)

Loss before income tax benefit

(14,599

)

(16,441

)

(6,924

)

(31,040

)

(29,621

)

Income tax benefit

(1,602

)

(1,024

)

(2,977

)

(2,626

)

(4,204

)

Net loss

$

(12,997

)

$

(15,417

)

$

(3,947

)

$

(28,414

)

$

(25,417

)

Basic loss per common share—

$

(0.34

)

(0.40

)

$

(0.09

)

$

(0.74

)

$

(0.60

)

Diluted loss per common share—

$

(0.34

)

(0.40

)

$

(0.09

)

$

(0.74

)

$

(0.60

)

Weighted average number of shares—

Basic

38,174,920

38,544,781

41,741,310

38,359,851

42,561,514

Diluted

38,174,920

38,544,781

41,741,310

38,359,851

42,561,514

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share data)
(Unaudited)

June 30,

2024

December 31,

2023

Assets

Current assets

Cash and cash equivalents

$

132,467

$

158,092

Short-term financial instruments

30,000

Accounts receivable, net

31,175

32,641

Inventories, net

34,783

32,733

Other receivables

3,977

4,295

Prepaid expenses

8,548

7,390

Hedge collateral

1,600

1,000

Other current assets

11,653

9,283

Total current assets

254,203

245,434

Property, plant and equipment, net

88,330

100,122

Operating lease right-of-use assets

4,181

4,639

Intangible assets, net

1,320

1,537

Long-term prepaid expenses

8,085

5,736

Deferred income taxes

44,578

50,836

Other non-current assets

11,998

12,187

Total assets

$

412,695

$

420,491

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable

$

25,575

$

24,443

Other accounts payable

8,383

5,292

Accrued expenses

9,199

10,457

Accrued income taxes

1,422

1,496

Operating lease liabilities

1,805

1,914

Other current liabilities

4,168

3,286

Total current liabilities

50,552

46,888

Long-term borrowing

28,794

Accrued severance benefits, net

15,759

16,020

Non-current operating lease liabilities

2,514

2,897

Other non-current liabilities

9,228

10,088

Total liabilities

106,847

75,893

Commitments and contingencies

Stockholders’ equity

Common stock, $0.01 par value, 150,000,000 shares authorized, 57,015,569 shares issued and 37,799,482 outstanding at June 30, 2024 and 56,971,394 shares issued and 38,852,742 outstanding at December 31, 2023

569

569

Additional paid-in capital

275,329

273,256

Retained earnings

270,470

298,884

Treasury stock, 19,216,087 shares at June 30, 2024 and 18,118,652 shares at December 31, 2023, respectively

(219,949

)

(213,454

)

Accumulated other comprehensive loss

(20,571

)

(14,657

)

Total stockholders’ equity

305,848

344,598

Total liabilities and stockholders’ equity

$

412,695

$

420,491

 

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,
2024

June 30,
2024

June 30,
2023

Cash flows from operating activities

Net loss

$

(12,997

)

$

(28,414

)

$

(25,417

)

Adjustments to reconcile net loss to net cash provided by operating activities

Depreciation and amortization

4,016

8,115

8,502

Provision for severance benefits

1,565

2,970

4,091

Loss on foreign currency, net

6,622

16,848

9,117

Provision for inventory reserves

(77

)

(1,024

)

1,121

Stock-based compensation

1,216

2,116

3,212

Deferred income tax assets

1.845

3,158

27

Other, net

163

426

423

Changes in operating assets and liabilities

Accounts receivable, net

(1,636

)

(235

)

(342

)

Inventories

(4,250

)

(3,449

)

4,911

Other receivables

986

601

4,407

Prepaid expenses

2,922

3,827

4,073

Other current assets

(3,262

)

(2,931

)

(3,678

)

Accounts payable

1,381

1,944

2,880

Other accounts payable

(1,420

)

(6,676

)

(6,488

)

Accrued expenses

1,618

(427

)

1,104

Accrued income taxes

(184

)

(17

)

(2,972

)

Other current liabilities

840

453

(471

)

Other non-current liabilities

378

(246

)

(214

)

Payment of severance benefits

(478

)

(1,362

)

(5,728

)

Other, net

(360

)

(761

)

(487

)

Net cash used in operating activities

(1,112

)

(5,084

)

(1,929

)

Cash flows from investing activities

Proceeds from settlement of hedge collateral

3,335

Payment of hedge collateral

(612

)

(612

)

(2,586

)

Purchase of property, plant and equipment

(898

)

(1,566

)

(1,518

)

Payment for intellectual property registration

(118

)

(178

)

(163

)

Collection of guarantee deposits

5

1,138

1,445

Payment of guarantee deposits

(36

)

(1,910

)

(6,907

)

Increase in short-term financial instruments

(30,000

)

(30,000

)

Other, net

(1

)

0

Net cash used in investing activities

(31,660

)

(33,128

)

(6,394

)

Cash flows from financing activities

Proceeds from long-term borrowings

30,059

Proceeds from exercise of stock options

27

Acquisition of treasury stock

(2,200

)

(6,859

)

(36,840

)

Repayment of financing related to water treatment facility arrangement

(117

)

(238

)

(248

)

Repayment of principal portion of finance lease liabilities

(34

)

(69

)

(46

)

Net cash provided by (used in) financing activities

(2,351

)

22,893

(37,107

)

Effect of exchange rates on cash and cash equivalents

(4,012

)

(10,306

)

(7,093

)

Net decrease in cash and cash equivalents

(39,135

)

(25,625

)

(52,523

)

Cash and cash equivalents

Beginning of the period

171,602

158,092

225,477

End of the period

$

132,467

$

132,467

$

172,954

 

MAGNACHIP SEMICONDUCTOR CORPORATION AND SUBSIDIARIES
RECONCILIATION OF OPERATING LOSS TO ADJUSTED OPERATING LOSS
(In thousands of U.S. dollars)
(Unaudited)

Three Months Ended

Six Months Ended

June 30,
2024

March 31,
2024

June 30,
2023

June 30,
2024

June 30,
2023

Operating loss

$

(12,824

)

$

(13,459

)

$

(10,656

)

$

(26,283

)

$

(32,474

)

Adjustments:

Equity-based compensation expense

1,216

900

2,092

2,116

3,212

Early termination and other charges

802

9,251

Adjusted Operating Income Loss

$

(11,608

)

$

(12,559

)

$

(7,762

)

$

(24,167

)

$

(20,011

)

 

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 and other charges.

For the six months ended June 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 and six months ended June 30, 2023, we recorded $802 thousand of one-time employee incentives.

 

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

Six Months Ended

June 30,
2024

March 31,
2024

June 30,
2023

June 30,
2024

June 30,
2023

Net loss

$

(12,997

)

$

(15,417

)

$

(3,947

)

$

(28,414

)

$

(25,417

)

Adjustments:

Interest income

(2,228

)

(2,213

)

(2,692

)

(4,441

)

(5,534

)

Interest expense

554

238

200

792

456

Income tax benefit

(1,602

)

(1,024

)

(2,977

)

(2,626

)

(4,204

)

Depreciation and amortization

4,016

4,099

4,145

8,115

8,502

EBITDA

(12,257

)

(14,317

)

(5,271

)

(26,574

)

(26,197

)

Equity-based compensation expense

1,216

900

2,092

2,116

3,212

Foreign currency loss (gain), net

3,557

5,001

(1,237

)

8,558

2,193

Derivative valuation loss (gain), net

(85

)

(25

)

20

(110

)

74

Early termination and other charges

802

9,251

Adjusted EBITDA

$

(7,569

)

$

(8,441

)

$

(3,594

)

$

(16,010

)

$

(11,467

)

Net loss

$

(12,997

)

$

(15,417

)

$

(3,947

)

$

(28,414

)

$

(25,417

)

Adjustments:

Equity-based compensation expense

1,216

900

2,092

2,116

3,212

Foreign currency loss (gain), net

3,557

5,001

(1,237

)

8,558

2,193

Derivative valuation loss (gain), net

(85

)

(25

)

20

(110

)

74

Early termination and other charges

802

9,251

Income tax effect on non-GAAP adjustments

175

(1,343

)

(202

)

(1,168

)

(2,152

)

Adjusted Net Loss

$

(8,134

)

$

(10,884

)

$

(2,472

)

$

(19,018

)

$

(12,839

)

Adjusted Net Loss per common share—

– Basic

$

(0.21

)

$

(0.28

)

$

(0.06

)

$

(0.50

)

$

(0.30

)

– Diluted

$

(0.21

)

$

(0.28

)

$

(0.06

)

$

(0.50

)

$

(0.30

)

Weighted average number of shares – basic

38,174,920

38,544,781

41,741,310

38,359,851

42,561,514

Weighted average number of shares – diluted

38,174,920

38,544,781

41,741,310

38,359,851

42,561,514

 

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 and other 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 and other charges and (v) Income tax effect on non-GAAP adjustments.

For the six months ended June 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 and six months ended June 30, 2023, we recorded $802 thousand of one-time employee incentives.

 

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

 

Source: Magnachip Semiconductor Corporation

SEOUL, South Korea, July 30, 2024 – Magnachip Semiconductor Corporation (“Magnachip” or “Company”) (NYSE: MX) announced the release of its 8th-generation 1)MXT LV MOSFET (Metal Oxide Semiconductor Field Effect Transistor) for smartphone battery protection circuits.

Magnachip has introduced its proprietary Super-Short Channel FET II (SSCFET® II) technology for the first time in the Company’s new 12V Dual N-channel MOSFET (MDWC12D024PERH). SSCFET® II is Magnachip’s latest design technology that significantly reduces the channel length, thereby lowering the 2)RSS(on).

Compared to the previous generation product of the same size, the RSS(on) of this product is reduced by approximately 22%. This reduction decreases power loss, shortens smartphone charging times, and lowers the internal temperature of smartphones by about 12% in fast charging mode.

With global smartphone manufacturers enhancing AI capabilities in smartphones, the importance of MOSFET products is growing. Magnachip’s new 12V MXT LV MOSFET features high power efficiency and is optimized for a wide range of battery protection applications in premium smartphones, particularly on-device AI smartphones.

According to market research firm Omdia, shipments of on-device AI smartphones are expected to grow at an average annual rate of 50% from 2024 to 2028, reaching 606 million units in 2028.

“Following the development of Super-Short Channel FET I technology and the successful product rollout early last year, Magnachip has now introduced an upgraded Super-Short Channel FET II technology,” said YJ Kim, CEO of Magnachip. “We plan to continue developing innovative high-density cell trench technology and launch advanced power solutions targeting smartphones, smartwatches and earphones throughout the second half of this year.”

 

 

 


1)MXT LV MOSFET (Magnachip eXtreme Trench Low Voltage MOSFET): Magnachip’s cutting-edge product portfolio of 12~40V trench MOSFETs.

2)RSS(on): On resistance, the resistance value between sources of two protected MOSFETs during operation (ON).

 

 

Magnachip's new 12V MXT LV MOSFET is optimized for a wide range of battery protection applications in premium smartphones, particularly on-device AI smartphones

 

 

Related Links

Power Solutions > MXT MOSFETs > 12V

 

Related Articles

Magnachip Expands Its 7th-Generation MXT LV MOSFET Line-Up for Battery Protection Circuits of Mobile Devices

 

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.

 

CONTACTS:

United States (Investor Relations):
Steven C. Pelayo, CFA
The Bueshirt Group
Tel. +1(360) 808-5154
steven@blueshirtgroup.co
USA media / industry analysts:
Mike Newsom
LouVan Communications, Inc.
Tel. +1-617-803-5385
mike@louvanpr.com
Korea / Asia media:
Min A KIM
Senior manager of Public Relations
Tel. +82-2-6903-3211
pr@maganachip.com

 

In the Media

Business Wire Logo - Navy - JPEG   Magnachip Unveils Its First 8th-Generation MXT LV MOSFET Designed with Super-Short Channel FET II

– The Company provides optimized solutions for the solar energy market with its diverse IGBT and 1)MXT MV MOSFET products

Magnachip’s solar energy power product lineup_en

 

SEOUL, South Korea, July 29, 2024 – Magnachip Semiconductor Corporation (“Magnachip” or “Company”) (NYSE: MX) announced today the completion of the development of its 1200V 75A Insulated Gate Bipolar Transistor (IGBT) in a TO-247PLUS package, designed for solar inverters. The Company plans to start mass production in October this year.

Magnachip entered the solar inverter market in 2020 by introducing the 1200V 40A IGBT (MBQ40T120QFS) and began offering the 650V 75A IGBT (MBQ75T65PEH) in 2022. Now, the Company unveils its latest 1200V 75A IGBT (MBQA75T120RFS), featuring its cutting-edge design technology and processes.

This new product, packaged in a TO-247PLUS with a wide heat spreader, improves heat dissipation as compared to the TO-247 package. Additionally, it enhances power efficiency by reducing conduction loss by over 14% compared to its previous generation. This improvement ensures stable operation even in overload conditions, thereby enhancing system reliability.

Moreover, this new IGBT product provides application design flexibility, as its performance can replace that of two 40A IGBTs. Another notable feature is the incorporation of a fast recovery anti-parallel diode, which quickly removes residual current to reduce switching losses and guarantees a maximum operating junction temperature of 175°C. Designed in accordance with the standards of the Joint Electron Device Engineering Council (JEDEC), this product is suitable for a wide range of applications requiring strict power ratings and high efficiency, including solar inverters, converters, uninterruptible power supply systems, and general-purpose inverters.

According to market research firm Omdia, the discrete IGBT and silicon-based MOSFET sectors in the renewable energy market are expected to grow at a compound annual growth rate of 15% from 2024 to 2028.

“With this new product launch, Magnachip’s solar energy power product lineup has been further strengthened and now boasts high-performance IGBTs and MXT MV MOSFETs that satisfy the technical requirements of applications in the solar energy market,” said YJ Kim, CEO of Magnachip. “We will continue to supply innovative power solutions targeting renewable energy applications and capitalize on growth opportunities within the industry.”

 

 

 


1)MXT MV MOSFET (Magnachip eXtreme Trench Medium Voltage MOSFET): Magnachip’s cutting-edge product portfolio of 40~200V trench MOSFETs.

2)RDS(ON)the resistance between the drain and the source of MOSFETs during on-state operation.

 

 

 

Related Links

Power Solutions > Discrete IGBTs

 

Related Articles

Magnachip Unveils a New 650V IGBT for Solar Inverters

Magnachip Unveils New 8th-Generation 150V MXT MV MOSFETs

 

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.

 

CONTACTS:

United States (Investor Relations):
Steven C. Pelayo, CFA
The Bueshirt Group
Tel. +1(360) 808-5154
steven@blueshirtgroup.co
USA media / industry analysts:
Mike Newsom
LouVan Communications, Inc.
Tel. +1-617-803-5385
mike@louvanpr.com
Korea / Asia media:
Min A KIM
Senior manager of Public Relations
Tel. +82-2-6903-3211
pr@maganachip.com

 

In the Media

Business Wire Logo - Navy - JPEG   Magnachip Expands Solar Energy Power Product Lineup with the Release of 1200V IGBT in TO-247PLUS Package

SEOUL, South Korea–(BUSINESS WIRE)–Jul. 10, 2024– Magnachip Semiconductor Corporation (“Magnachip”) (NYSE: MX) announced today that it will report its financial results for the second quarter ended June 30, 2024, on Wednesday, July 31, 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/BId7d466aa72124a439fec483c2b65d307

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 1,050 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

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

– Magnachip’s automotive MOSFET and IGBT product families have garnered design wins from a number of major global automakers

– The newly launched 40V MXT MV MOSFET is well-suited for motor control systems of vehicles

 

SEOUL, South Korea, April 30, 2024 – Magnachip Semiconductor Corporation (“Magnachip” or “Company”) (NYSE: MX) announced today the release of its new 40V MXT MV MOSFET1. With this latest addition, the Company now offers 13 MOSFET and IGBT products for a wide range of automotive applications (see the tables below).

As the automotive industry adopts advanced technologies such as autonomous driving and enhanced infotainment systems, the demand for high-efficiency power solutions increases. According to Omdia, a global market research firm, the automotive power discrete market is projected to grow 14% annually from 2024 to 2027.

Magnachip entered the automotive sector in April 2022 with its first 40V MOSFET and has since broadened its product offerings by releasing 30V, -40V (P-channel MOSFET2), 60V, and 250V MOSFETs for vehicles. In September 2023, the Company introduced 650V and 1200V IGBTs for positive temperature coefficient heaters and e-compressors for automotive. In the last two years, Magnachip’s power products have been integrated into vehicles of major automotive manufacturers in the United States, Korea, Japan and China.

Leveraging its technological capabilities, Magnachip now unveils this 40V MXT MV MOSFET (AMDD040N055RH) in the Decawatt Package (DPAK). The new MOSFET offers exceptional versatility for various automotive applications, such as motor control systems or power seat modules and electric stability control systems for reverse battery protection.

“Magnachip is committed to supplying premium products that meet the evolving demands of the automotive sector,” said YJ Kim, CEO of Magnachip. “Our technical innovation, coupled with a steady supply and a comprehensive range of product offerings, will strengthen our foothold in the automotive industry and broaden our global market presence.”

 

Magnachip’s Automotive Solutions_en

 

 


1 MXT MV MOSFET (Magnachip eXtreme Trench Medium Voltage MOSFET): Magnachip’s cutting-edge product portfolio of 40~200V trench MOSFETs

2 P-channel MOSFET: A P-channel MOSFET requires the gate voltage to be lower than the source to turn on, in contrast to an N-channel MOSFET. Therefore, the drain-source voltage is generally expressed as a negative value (ex. -40V).

 

Magnachip’s automotive MOSFET product family_en

 

Magnachip’s automotive IGBT product family_en

 

Related Links

Please find further details and datasheet about Magnachip’s Automotive Solutions at https://www.magnachip.com/automotive-solutions.

 

Related Articles

Magnachip Commences Full-Scale Mass Production of New 30V MXT LV MOSFET for Electric Power Steering Systems

Magnachip Targets Electric Vehicle Market with New 1200V and 650V IGBTs Featuring Advanced Field Stop Trench Technology   

 

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.

 

CONTACTS:

United States (Investor Relations):
Steven C. Pelayo, CFA
The Bueshirt Group
Tel. +1(360) 808-5154
steven@blueshirtgroup.co
USA media / industry analysts:
Mike Newsom
LouVan Communications, Inc.
Tel. +1-617-803-5385
mike@louvanpr.com
Korea / Asia media:
Min A KIM
Senior manager of Public Relations
Tel. +82-2-6903-3211
pr@maganachip.com

 

In the Media

Business Wire Logo - Navy - JPEGMagnachip Boosts Its Extensive Automotive Product Lineup With the Release of a New 40V MXT MV MOSFET

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

)