Magnachip to drop display business, goes all-in on power
Magnachip Semiconductor plans to transition into a pure-play power semiconductor company, a move aimed at boosting revenue growth, improving profitability, and increasing shareholder value. The company is now exploring strategic options for its display business, which could include a sale, merger, joint venture, licensing agreement, or even a complete wind-down.
The shift means that when Magnachip reports its first-quarter results in May, its display business will be classified as discontinued operations. The plan is to complete this process and exit the display business by the end of the second quarter this year.
CEO YJ Kim acknowledged the challenges of the decision, particularly regarding employees and customers, but emphasised the company’s long-term financial goals.
“By focusing on the Power business, we have a goal to achieve quarterly Adjusted EBITDA break-even by the end of Q4 2025 from continuing operations, followed by positive adjusted operating income in 2026, and positive adjusted free cash flow in 2027,” the CEO states in a press release.
Unlike the display segment, which is heavily tied to the smartphone market, Magnachip’s power business serves a broader range of industries with longer product cycles and more stable growth patterns. In 2024, the company’s power discrete and power IC divisions generated USD 185 million in revenue, reflecting a 13% increase from the previous year. For 2025, Magnachip forecasts mid-to-high single-digit revenue growth.
To support its new direction, the South Korean company plans to invest between USD 65 million and USD 70 million over the next three years to upgrade and optimise its Gumi manufacturing facility.
