Magnachip announced that its Board of Directors has unanimously approved a plan to shut down the Company’s Display business by the end of the second quarter of 2025. This decision follows a thorough review and the Company's previous announcement to explore all strategic options for the Display business.
Magnachip will now focus exclusively on its Power discrete and Power IC businesses to drive profitable growth and maximize shareholder value. The Company will classify the Display business as discontinued operations when it reports Q1 results in May. Despite several months of discussions with interested parties, the Company was unable to consummate a transaction that met the Board's criteria for the best interests of the Company and its stockholders.
The shutdown will include the liquidation of Magnachip Mixed-Signal, Ltd., the subsidiary operating the Display business. The Power IC business, previously part of MMS, will now operate alongside the Power discrete business within Magnachip Semiconductor The Company will maintain a small team to support customers with “end of life” products and will continue to evaluate opportunities to monetize Display assets.
“It was an extremely difficult decision to shut down our Display business, considering our valued customers and employees,” said YJ Kim, CEO of Magnachip. “However, our priority is to ensure Magnachip’s long-term success by achieving consistent profitability and earnings growth to maximize shareholder value. Our strategic pivot to focus exclusively on Power discrete and Power IC businesses is designed to position the Company for a return to profitability.”
Magnachip aims to achieve a quarterly Adjusted EBITDA break-even from continuing operations by the end of this year, with targets for positive adjusted operating income in 2026 and positive adjusted free cash flow in 2027. The Company’s 3-3-3 strategy aims for a $300 million annual revenue run-rate with a 30% gross profit margin target within three years. In 2024, Magnachip’s Power discrete and Power IC businesses generated $185 million in revenue, up 13% from 2023, with expected mid-to-high-single digit revenue growth in 2025.
Camillo Martino, Chairman of the Board, commented, “The Board’s unanimous decision to shut down the Display business reflects our commitment to focus on the revenue growth and profit potential of the Power discrete and Power IC businesses. These actions are intended to restore the Company to profitability and enhance shareholder value.”
The liquidation process is expected to result in a 30% to 35% reduction in annualized operating expenditures (excluding equity compensation charges) compared to 2024. The Company will provide limited support for remaining customer obligations, including the sale of EOL Display products through Magnachip Korea.
