Magnachip Reports Results for First Quarter 2023

SEOUL, South Korea, May 3, 2023 — (PRNewswire) — Magnachip Semiconductor Corporation (NYSE: MX) ("Magnachip" or the "Company") today announced financial results for the first quarter 2023.

YJ Kim, Magnachip's chief executive officer commented, "Our Q1 results continued to be affected by last year's OLED wafer shortages that impacted second half design-wins and the ongoing smartphone inventory correction in our Display business and weak consumer demand in our Power business. Despite the challenging environment, we remained focused on execution during the quarter. In our Display business, we successfully delivered our second OLED DDIC project sample ahead of schedule to a large non-Korean panel customer and remain on track for second half smartphone launches. We also completed the tape-out for a high-end smartphone project with a large Korean panel customer, with mass production on schedule near the end of this year. In our Power business, we continued our record pace of design-in and -win activities, driven by momentum in industrial, automotive and computing applications. Looking ahead, the macro environment remains uncertain. However, we believe we are bumping along the bottom for the Display business and we have hit the bottom in Q1 for our Power business."

YJ Kim continued, "Overall, we expect our financial results to remain soft in the near term, but we believe both Display and Power are poised for a recovery in the second half of this year based on our current customer feedback."

Q1 2023 Financial Highlights




In thousands of U.S. dollars, except share data




GAAP





Q1 2023


Q4 2022


Q/Q change


Q1 2022


Y/Y change

Revenues


























Standard Products Business

























Display Solutions


10,841




7,556




up




43.5

%



29,185




down

62.9

%

Power Solutions


40,673




46,271




down




12.1

%



64,825




down

37.3

%

Transitional Fab 3 foundry services (1)


5,491




7,163




down




23.3

%



10,083




down

45.5

%

Gross Profit Margin


21.2

%



26.4

%



down




5.2

%pts 



37.5

%



down

16.3

%pts 

Operating Income (Loss)


(21,818




(10,117)




down




n/a




12,879




down

n/a


Net Income (Loss)


(21,470




2,971




down




n/a




9,528




down

n/a


Basic Earnings (Loss) per Common Share


(0.49




0.07




down




n/a




0.21




down

n/a


Diluted Earnings (Loss) per Common Share


(0.49




0.07




down




n/a




0.20




down

n/a







In thousands of U.S. dollars, except share data



Non-GAAP (2)





Q1 2023



Q4 2022


Q/Q change


Q1 2022


Y/Y change


Adjusted Operating Income (Loss)


(12,249





(8,567)




down




n/a




14,517




down


n/a


Adjusted EBITDA


(7,873





(4,768)




down




n/a




18,755




down

n/a


Adjusted Net Income (Loss)


(10,367





(15,848)




up




n/a




12,936




down

n/a


Adjusted Earnings (Loss) per Common Share—Diluted


(0.24





(0.36)




up




n/a




0.28




down

n/a


__________________

(1)

Following the consummation of the sale of the Foundry Services Group business and Fab 4 in Q3 2020, and for a period of up to three years, we will provide transitional
foundry services to the buyer for foundry products manufactured in our fabrication facility located in Gumi ("Transitional Fab 3 Foundry Services"). Management believes
that disclosing revenue of Transitional Fab 3 Foundry Services separately from the standard products business allows investors to better understand the results of our core
standard products display solutions and power solutions businesses.

(2)

Management believes that non-GAAP financial measures, when viewed in conjunction with GAAP results, can provide a meaningful understanding of the factors and trends
affecting our business and operations and assist in evaluating our core operating performance. However, such non-GAAP financial measures have limitations and should not
be considered as a substitute for net income (loss) or as a better indicator of our operating performance than measures that are presented in accordance with GAAP. A
reconciliation of GAAP results to non-GAAP results is included in this press release.


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