Magnachip has announced that it will shut down its display business by the end of the second quarter of 2025. This decision follows a review by the company’s Board of Directors, who had previously explored strategic options for the Display segment. But it seems as if, after months of discussions with interested parties, the company was unable to reach an agreement with any potential buyers of the division. As a result, Magnachip has started notifying customers who will be affected by its exit from the market. The liquidation process is expected to reduce the company’s annualized operating expenses by 30% to 35%, excluding equity compensation charges.
The shutdown will include the liquidation of Magnachip Mixed-Signal. (MMS), the wholly owned subsidiary that operates the display business. The power IC business, which was previously part of MMS, will be retained and will now operate alongside the power discrete business within Magnachip Semiconductor (Magnachip Korea), another wholly owned subsidiary. Power IC and Power discrete will continue operations going forward. A small team will remain in place to provide limited support for customers related to end-of-life (EOL) display products. Although the company is moving ahead with the shutdown, it will continue to evaluate opportunities to monetize any remaining display assets.
The company aims to reach break-even on adjusted EBITDA from continuing operations by the end of 2025, achieve positive adjusted operating income in 2026, and generate positive adjusted free cash flow in 2027. These goals are part of what the company is calling its “3-3-3 strategy,” which targets $300 million in annual revenue with a 30% gross profit margin within three years. In 2024, Magnachip’s power discrete and power IC businesses generated $185 million in revenue, a 13% increase over 2023. The company expects mid-to-high-single-digit revenue growth in 2025.
