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1. Company Snapshot

1.a. Company Description

Magnachip Semiconductor Corporation, together with its subsidiaries, designs, manufactures, and supplies analog and mixed-signal semiconductor platform solutions for communications, the Internet of Things, consumer, industrial, and automotive applications.It provides display solutions, including source and gate drivers, and timing controllers that cover a range of flat panel displays used in mobile communications, automotive, entertainment devices, notebook PCs, monitors and liquid crystal displays, and micro light-emitting diode (LED) televisions.The company also offers metal oxide semiconductor field-effect transistors, insulated-gate bipolar transistors, AC-DC converters, DC-DC converters, LED drivers, regulators, and power management integrated circuits for a range of devices comprising televisions, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, and other consumer electronics, as well as for power suppliers, e-bike, photovoltaic inverter, LED lighting, motor drive, and home appliances; and organic light-emitting diode display driver integrated circuits for OLED TVs. It serves consumer, computing, and industrial electronics original equipment manufacturers, original design manufacturers, and electronics manufacturing services companies, as well as subsystem designers in Korea, the Asia Pacific, the United States, Europe, and internationally.


The company sells its products through a direct sales force, as well as through a network of agents and distributors.Magnachip Semiconductor Corporation was incorporated in 2004 and is based in Luxembourg, Luxembourg.

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1.b. Last Insights on MX

Magnachip Semiconductor Corporation's upcoming fourth quarter 2024 financial results announcement on March 12, 2025, is expected to be a positive driver. The company's decision to host a sell-side analyst briefing the same day suggests confidence in its performance, potentially indicating a strong earnings report. This could lead to a positive reaction from investors, as the company's financial results are likely to be a key catalyst for its stock.

1.c. Company Highlights

2. Magnachip's Q3 Results: A Mixed Bag

Magnachip Semiconductor Corporation reported Q3 revenue of $45.9 million, at the midpoint of the guidance range, and gross profit margin of 18.6%, at the low end of the guidance range. The company's EPS came in at -$0.01, beating estimates of -$0.08. Despite the revenue meeting expectations, the gross margin was impacted by pricing pressure on legacy products, particularly in China, and lower fab utilization. The non-GAAP adjusted operating loss was $7.4 million, and adjusted EBITDA was negative $4 million.

Publication Date: Nov -29

📋 Highlights
  • Q3 Revenue & Margin Performance:: Revenue hit $45.9M at midpoint guidance, but gross margin fell to 18.6% (low end), pressured by pricing issues in China and low fab utilization.
  • Communications Segment Growth:: Revenue surged 34% sequentially and 95% YoY, highlighting resilience despite broader challenges.
  • New Product Development:: Launched 30 new products in H1 2025 and plans at least 20 more in Q4 to bolster competitiveness and margin growth.
  • CapEx Reduction & Cash Position:: Cut Gumi fab upgrade CapEx by over 50% to $30-35M, ending Q3 with $108M cash and targeting mid-$90M by year-end.
  • Q4 Guidance & Margin Pressure:: Forecasts $38.5-42.5M revenue (-11.9% QoQ) and 8-10% gross margin, dented by a $2.5M incentive program for channel inventory reduction.

Segment Performance

The Communications segment saw a significant increase in revenue, growing 34% sequentially and 95% year-over-year. This growth was a bright spot in an otherwise challenging quarter. The company's new-generation product development is underway, with 30 new products released in the first 9 months of 2025, and at least 20 more expected in Q4.

Operational Efficiencies

The company has taken steps to reduce costs, with SG&A and R&D expenses increasing due to new product development, but the company expects to achieve annual OpEx savings of approximately $2.5 million beginning in Q4 2025. The company has also reduced its CapEx for the Gumi fab by over 50% to $30-35 million. The total CapEx for 2025 is expected to be $29-30 million.

Cash Position and Guidance

The company ended Q3 with cash of $108 million and expects to spend approximately $6 million in Q4 2025 on CapEx. For Q4 2025, consolidated revenue is expected to be $38.5-42.5 million, down 11.9% sequentially and 17.1% year-over-year. The company expects its Q4 cash balance to be impacted by cash outflows from CapEx and voluntary resignation program payments. The company targets a cash balance of mid-$90 million at the end of 2025.

Valuation

With a P/S Ratio of 0.47 and EV/EBITDA of -1.04, the market is pricing in significant challenges for the company. The current valuation multiples suggest that the market has low expectations for the company's future performance. Analysts estimate next year's revenue growth at -3.5%, indicating a continued challenging environment.

Outlook

The company's efforts to reposition its product portfolio, rightsize its OpEx structure, conserve cash, increase transparency, and explore strategic alternatives are expected to drive long-term recovery and success. The new incentive program will have a negative impact on Q4 gross margin, but the company expects Q1 2026 revenue to grow sequentially by double digits.

3. NewsRoom

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Aviso Financial Inc. Has $2.22 Million Stake in Methanex Corporation $MEOH

Nov -25

Source: defenseworld.net

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Magnachip Semiconductor Corporation (MX) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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Magnachip to Expand Its Industrial IGBT Business Based on Advanced Traction Inverter IGBT Technology Jointly Developed in Strategic Partnership with Hyundai Mobis

Nov -03

Source: businesswire.com

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Magnachip Reports Results for Third Quarter 2025

Nov -03

Source: businesswire.com

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Will These 4 Semiconductor Stocks Beat Forecasts in Q3 Earnings?

Oct -31

Source: zacks.com

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Methanex Corporation (MX:CA) Q3 2025 Earnings Call Transcript

Oct -30

Source: seekingalpha.com

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Magnachip Launches 650V Super Junction TOLL Package Products with Integrated Kelvin Source

Oct -29

Source: businesswire.com

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Semi Stocks ADI and MX Grow Despite Tariffs and Geopolitics

Sep -05

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (12.57%)

6. Segments

Power Solutions

Expected Growth: 12%

Magnachip's Power Solutions segment growth is driven by increasing demand for premium power management ICs in high-growth markets such as 5G, IoT, and automotive. The company's focus on high-voltage and low-voltage technologies, as well as its design wins with top-tier customers, contribute to its 12% growth rate.

Foundry Services

Expected Growth: 13%

Magnachip's Foundry Services segment growth is driven by increasing demand for specialty analog and power management semiconductors, particularly in the automotive, industrial, and IoT markets. The company's advanced manufacturing capabilities, strong customer relationships, and strategic partnerships also contribute to its growth.

Display Solutions

Expected Growth: 15%

The 15% growth of Display Solutions from Magnachip Semiconductor Corporation is driven by increasing demand for high-resolution displays, adoption of OLED technology, and rising sales of smartphones and TVs. Additionally, the company's focus on innovative display driver ICs, strategic partnerships, and expanding presence in emerging markets contribute to its growth momentum.

7. Detailed Products

Display Solutions

Magnachip Semiconductor Corporation offers a wide range of display driver ICs, including source drivers, gate drivers, and timing controllers for various display applications such as smartphones, TVs, and automotive displays.

Power Management

Magnachip provides a variety of power management ICs, including voltage regulators, power switches, and battery management ICs for applications such as smartphones, laptops, and servers.

Semiconductor Foundry Services

Magnachip offers a comprehensive foundry service, providing customers with a wide range of process technologies, including analog, mixed-signal, and power management.

Standard Products

Magnachip's standard products include a broad range of analog and mixed-signal ICs, such as audio codecs, data converters, and power management ICs.

8. Magnachip Semiconductor Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Magnachip Semiconductor Corporation is medium due to the availability of alternative semiconductor products from other companies.

Bargaining Power Of Customers

The bargaining power of customers for Magnachip Semiconductor Corporation is low due to the company's strong relationships with its customers and the lack of buyer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Magnachip Semiconductor Corporation is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Magnachip Semiconductor Corporation is high due to the relatively low barriers to entry in the semiconductor industry and the presence of new entrants in the market.

Intensity Of Rivalry

The intensity of rivalry for Magnachip Semiconductor Corporation is high due to the presence of several established players in the market and the high level of competition.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.42%
Debt Cost 7.78%
Equity Weight 98.58%
Equity Cost 7.78%
WACC 7.78%
Leverage 1.44%

11. Quality Control: Magnachip Semiconductor Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Navitas Semi

A-Score: 4.3/10

Value: 6.2

Growth: 6.4

Quality: 3.8

Yield: 0.0

Momentum: 9.5

Volatility: 0.0

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Seco

A-Score: 3.9/10

Value: 4.3

Growth: 4.9

Quality: 2.8

Yield: 0.0

Momentum: 9.5

Volatility: 2.0

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Alphawave IP

A-Score: 3.6/10

Value: 4.6

Growth: 5.1

Quality: 1.6

Yield: 0.0

Momentum: 9.5

Volatility: 1.0

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SEALSQ

A-Score: 3.5/10

Value: 6.2

Growth: 1.3

Quality: 3.4

Yield: 0.0

Momentum: 10.0

Volatility: 0.0

1-Year Total Return ->

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Magnachip Semiconductor

A-Score: 2.7/10

Value: 9.8

Growth: 1.2

Quality: 2.9

Yield: 0.0

Momentum: 1.0

Volatility: 1.0

1-Year Total Return ->

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IQE

A-Score: 2.3/10

Value: 9.6

Growth: 1.2

Quality: 1.7

Yield: 0.0

Momentum: 0.5

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.99$

Current Price

2.99$

Potential

-0.00%

Expected Cash-Flows