Magnachip plans to split display, power businesses

Magnachip plans to split display, power businesses

Business news |
By Peter Clarke

Magnachip Semiconductor Corp. (Seoul, South Korea) has said it is splitting its display and power businesses into separate entities.

Although the company’s CEO said Magnachip remains committed to make chips for displays the split would enhance the possibility of a sale (see Magnachip sees collapse in OLED driver buisness). The company is not averse to selling off parts of itself. It sold off one wafer fab and its foundry business in 2020 for approximately $450 million.

Now the company plans to create two subsidiaries – Microchip Korea to contain the power semiconductor business – with all the assets and liabilities of its display business in a subsidiary called NewCo in exchange for equity. The wafer fab at Gumi is an integral part of the power semiconductor business and will remain with Magnachip Korea.

Magnachip Korea and NewCo will remain indirect wholly-owned subsidiaries of Magnachip Semiconductor Corp. with the split expected to complete in 4Q23.

“The internal separation is aimed at enhancing transparency, accountability and flexibility in business,” said YJ Kim, CEO of Magnachip, in a statement. “By establishing distinct entities, we believe our investors will be able to better evaluate the financial performance of each business and their respective contributions.”

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.”

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Magnachip in play with last-minute rival bid

SK Hynix mulls buying MagnaChip fab, foundry business

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