Magna Chip Semiconductor Is on the Verge of Breaking Apart

Magna Chip Semiconductor is pushing for divestiture and its target is one of South Korean fabless business, Synaptics from the U.S., and SMIC from China. If Magna Chip Semiconductor, which is current under a state of impaired capital, it will be broken apart after 13 years from being separated from Hynix Semiconductor (currently SK Hynix) in 2014. Foreign speculative capital that bought Magna Chip has been operating this company based on short-term profit instead of long-term point of view. There are many voices that speculative capitals going after technology firms cannot be neglected.

According to related industry on the 3rd, Magna Chip Semiconductor has recently decided to sell its business sectors to one of South Korea’s listed fabless business, Synaptics from the U.S., and SMIC from China and is discussing with them about selling price, method, timing and others. South Korean fabless business, Synaptics, and SMIC have decided to purchase assets of power semiconductor, display driver IC, and foundry business respectively. There is a business that is currently doing an actual inspection, and the whole sales will be completed if there are not any serious flaws.

Photo Image

Magna Chip Semiconductor has been supplying OLED display driver ICs to Samsung. Synaptics was able to secure capability in OLED driver IC by buying off Japan’s Renesas SP in 2014. If the whole process is accomplished, Synaptics will be able to strengthen capabilities in TDDI (Touch-and-Display Driver Integration) that combines touch-chip and display driver IC.

SMIC has also been seeking a business to buy to strengthen its production capability of 8-inch semiconductor that it is lacking. Magna Chip stopped operating its 6-inch fabless that was worn out at the end of last year and currently has a 8-inch wafer production line in Cheongju and Gumi. Total production capability is 136,000 sheets per month based on commitment of wafers.

South Korea’s fabless business, which will purchase power semiconductor business, will also be able to diversify its business portfolio.

Major history of Magna Chip Semiconductor

10/2004: separated from Hynix and bought off by CVD

6/2009: applied for bankruptcy protection at a court in the U.S.

9/2009: bought off Avenue Capital and ended bankruptcy protection

3/2011: directly listed on NYSE

2/2015: was involved in a controversy regarding accounting fraud and rewrote financial statement

8/2015: started working on selling its business

Staff Reporter Han, Juyeop | powerusr@etnews.com