“Even after selling Magnachip’s shares, there will not be any change to the company’s management rights and technology protection. The company plans to invest $300 million (340 billion KRW) in the South Korean R&D center for the next five years.”
CEO Kim Young-joon of Magnachip Semiconductor emphasized that the company’s management rights and the company’s policy on development of core technologies would not change even after selling the company’s shares to a global private equity fund called Wise Road Capital for $1.4 billion.
Magnachip Semiconductor is a company that specializes in DDI (display driver IC) and power semiconductor for OLED panels.
The industry was placed in a state of confusion in March regarding a news that the company would sell its shares to Wise Road Capital. The company supplies DDIs to major South Korean display panel manufacturers such as Samsung Display, and the industry was concerned that Wise Road Capital, which is a Chinese private equity fund, purchasing Magnachip Semiconductor’s shares would lead to possible leakage of OLED panel technologies and related chip technologies.
However, CEO Kim Young-joon talked about various bases why the company would be able to protect its management rights and domestic OLED DDI technologies even after selling shares to Wise Road Capital.
First, CEO Kim explained that Magnachip has only secured Wise Road Capital as the optimal financial investor that would prepare a foundation for more growth for the company and that Wise Road Capital would not participate in the company’s management at all.
He emphasized that Wise Road Capital is purely an investment company. Wise Road Capital promised Magnachip that it would be able to maintain its production facilities and IPs (intellectual property) and corporate structure, management team, and employment process.
“Wise Road Capital has made investments in seven companies in Singapore, Switzerland, Netherland, and China so far and it has not intervened with their research institutes and production facilities at all.” said CEO Kim. “Furthermore, a joint venture called JLQ that Wise Road Capital has invested in also includes shares from Qualcomm.”
CEO Kim also said that there is no possibility of technology leakage to China as Wise Road Capital is a private equity fund that has gathered capitals from different countries. He explained that his company publicly stated through the United States Securities and Exchange Commission that the transaction is going to be done as part of a ‘global fund’.
He said that there would not be any change to existing transactions with domestic and foreign customers as a result. He said that he has been getting positive feedbacks regarding the transaction from many of the company’s customers and that the transaction will not have much change to the company’s volume.
CEO Kim said that the capital that the company has secured will be focused on facilities in South Korea and manpower.
He plans to announce a five-year investment plan soon and invest and spend about $1.8 billion (2 trillion KRW) until 2025.
Specifically, the company plans to invest $300 million (340 billion KRW) in building R&D facilities and securing research personnel and $82 million (93 billion KRW) in its Gumi plant, which makes power semiconductors, after it invested $34 million (38 billion KRW) in the plant last year.
Particularly, the company plans to accelerate mass-production of automotive power semiconductors that it has been working on for the past seven years. It is also looking into increasing the amount of five-year investment to $97 million (110 billion KRW) if its power semiconductor business continues to grow at a positive rate.
The company’s union also has a positive response towards these plans set by the company. Lim Sang-taek, who is the chairman of the union, said that these plans will be great help in employment stability, labor conditions, investment expansion, and vitalization of local economy and that the union would continue to cooperate with the company for its growth.
CEO Kim said that his goal is to turn his company into a global semiconductor company and that he would expand the company’s business towards Asian markets and advanced countries such as Europe and the United States.
Staff Reporter Kang, Hyeryung | kang@etnews.com