SEOUL,
South Korea, May 30, 2023
/PRNewswire/ -- Magnachip Semiconductor Corporation (NYSE: MX)
("Magnachip" or the "Company") today announced that the Company is
separating its display and power businesses into separate entities,
following approval by its board of directors and strategic review
committee.
YJ Kim, Magnachip's chief executive officer commented, "This
strategic separation represents a significant milestone for
Magnachip and underscores the Company's commitment to unlocking
long-term value for our shareholders. The internal separation is
aimed at enhancing transparency, accountability and
flexibility in business. By establishing distinct entities, we
believe our investors will be able to better evaluate the financial
performance of each business and their respective contributions.
Furthermore, this strategic move will allow each entity to allocate
its resources, both financial and technical, more effectively to
the specific needs of its customers."
YJ Kim continued, "Magnachip remains dedicated to delivering
innovative solutions and exceptional customer experiences in both
the display and power sectors, and we are confident that this
separation will strengthen our ability to achieve these objectives
by enhancing each business's agility and focus."
The Company plans to effectuate the internal separation (the
"Internal Split-Off") by establishing a new subsidiary ("NewCo")
under Magnachip Semiconductor, Ltd. ("Magnachip Korea"), the
Company's operating subsidiary. As part of the transaction, all
assets and liabilities of the display business will be contributed
to NewCo in exchange for equity. Once the Internal Split-Off is
completed, Magnachip Korea and NewCo will both be separate
operating companies, with NewCo being a wholly owned subsidiary of
Magnachip Korea. The Company's Gumi fabrication facility will
remain with Magnachip Korea as an integral part of its power
business.
Post-separation, the board of directors of Magnachip will
continue to oversee both operating entities, ensuring cohesive
governance, while YJ Kim and the executive management team will
manage their business and operations. Each of Magnachip Korea and
NewCo will remain indirect wholly owned subsidiaries of Magnachip,
and the Internal Split-Off is not expected to have any material
impact on the Company's financial reporting or consolidated
financial statements.
The Internal Split-Off is expected to be completed in the fourth
quarter of 2023.
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 our expectations regarding the Internal
Split-Off benefits and the timing for its completion, and the
impact of market conditions associated with inflation and higher
interest rates, remaining effects from the COVID-19 pandemic,
geopolitical conflict between Russia and Ukraine, escalated trade tensions between the
U.S. and China and continuing
supply constraints on Magnachip's second quarter 2023 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 conflict
between Russia and Ukraine, and escalated 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 communications,
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.
CONTACT:
Yujia Zhai
The Blueshirt Group
Tel. (860) 214-0809
Yujia@blueshirtgroup.com
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SOURCE Magnachip Semiconductor Corporation