Magnachip Semiconductor has officially requested SK Hynix to "acquire the company."
Magnachip is a semiconductor company that branched off from Hynix Semiconductor in 2004. Magnachip was formerly the part of LG Semiconductors that was absorbed into Hyundai Electronics (formerly Hynix Semiconductor) at the time of the semiconductor 'Big Deal.' Once the Magnachip acquisition is accepted, SK Hynix will re-acquire its old family member after 15 years.
However, whether the deal will be reached is unclear. SK Hynix is interested in Magnachip land and buildings in the Cheongju business site, but it is said that it feels burdensome to give up the employees.
According to industry sources on the 10th, Magnachip Semiconductor recently offered an official takeover to SK Hynix. MagnaChip formalized the sales of its foundry business and manufacturing plant earlier this year. SK Hynix, which received a proposal from Magnachip Semiconductor, requested basic company data. It is expected that discussions will be held at a later date. An SK Hynix official said, "We can review various measures to strengthen business competitiveness, however, this issue has not been confirmed."
The subjects of Magnachip's proposed sale are a part of MagnaChip's assets, including Foundry Services Group (FSG) and its production plants in Cheongju. Last year, Magnachip FSG's revenues were about 350 billion won.
SK Hynix is interested in the Magnachip’s buildings and land in Cheongju. Equipment is obsolete, but a supplementary investment can expand the production capacity for 200mm foundries. Currently, the production capacity of 200mm foundries continues to be in short supply worldwide.
As demand for electric power semiconductors has been growing and vehicle semiconductor production is expected to expand, some people in SK Hynix say that the capacity should be increased. In particular, if the company moves its 200mm foundry equipment from M8 to China without additional production capacity, there is a possibility that the production of existing fabless customers will be disrupted. It is argued that SK Hynix should take over Magnachip.
However, SK Hynix is reportedly hesitant about succeeding the workforce of Magnachip. Currently, the number of people working at Magnachip Semiconductor in Cheongju is estimated to be between 1,500 and 1,600. Also, there are many senior managers.
An industry official said, "I know there was a discussion with SK Hynix regarding MagnaChip acquisition last year, the barrier of employee succession could not be overcome. It is said that Magnachip proposed to SK Hynix and other companies. Thus, we should wait for longer to see whether this deal will go through or not.”