UPDATED. 2020-11-27 18:56 (금)
MagnaChip to focus on display, power solutions
MagnaChip to focus on display, power solutions
  • JY HAN
  • 승인 2020.04.02 07:28
  • 댓글 0
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Signs to sell off foundry biz, fab 4

 

MagnaChip plans to focus on display and power solutions now that it has signed off to sell its foundry business and Fab 4 manufacturing facility located in North Chungcheong Province in a deal valued at about $435 million.

On Mar. 31, MagnaChip said it inked the contract with a consortium led by private equity firms Alchemist Capital Partners Korea and Credian Partners. The group agreed to make the purchase for around $345 million in cash and the assumption of about $90 million statutory severance liabilities involving employees who will be transferred with the businesses.

The consortium includes SK Hynix and Korean Federation of Community Credit Cooperatives. “This was a great opportunity for us to take part with minimum risk,” said one SK hynix official. The SK affiliate’s foundry business – SK Hynix System IC – is currently expanding in Wuxi of China.

Via the sale, MagnaChip is expected to shift its main focus on display and power solutions, which currently post combined revenues of around USD 500 million to take business operations to the next level, according to MagnaChip CEO Kim Young-joon in a statement.

MagnaChip CEO Kim Young-joon
MagnaChip CEO Kim Young-joon

MagnaChip had been previously divided into foundry, display and power solutions. Up until 2014, the foundry business took up more than half of the chipmaker’s revenues. But this began to change in 2015, with the foundry business accounting for 39%, followed by display solutions with 39% and power solutions 22%, which showed a 111% increase in sales over the past four years.

Next to Samsung’s System LSI Business, MagnaChip is the world’s largest maker of OLED DDI. Industry watchers remain upbeat about future outlooks as well, citing world-leading smartphone makers such as Samsung Electronics, Apple and Huawei that have been switching to OLED panels from LCD.

Market research firms say that the smartphone OLED display market will grow an annual 14% on average over the next four years.

MagnaChip said it will continue running its 200mm Fab 3 facility in Gumi to churn out power solution and non-OLED display products. Annual capacity at the Gumi plant will be increased to 50,000 wafers from the current 30,000, as MagnaChip seeks to gradually turn towards high-end products for EVs and self-driving cars.

 

The Elec is South Korea’s No. 1 tech news platform.
 


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