Magnachip Semiconductor Stock

Magnachip Semiconductor Corporation operates as a designer and manufacturer of analog and mixed-signal semiconductor platform solutions for communications, Internet of Things (IoT) applications, consumer, computing, industrial and automotive applications. The company has a portfolio of approximately 1,100 registered patents and pending applications and extensive engineering and manufacturing process expertise.

The company’s standard products business includes its Display Solutions and Power Solutions business lines. The company’s Display Solutions products provide panel display solutions to major suppliers of large and small rigid and flexible panel displays, and a wide range of applications, including smartphones, TVs, automotive and IT applications such as monitors, notebook PCs, tablet PCs, as well as AR/VRs. The company’s Power Solutions products include discrete and integrated circuit solutions for power management in communications, consumer, computing, servers, automotive, and industrial applications.

The company’s wide variety of analog and mixed-signal semiconductor products allow it to address multiple high-growth end markets and rapidly develop and introduce new products in response to market demands. The company’s design center and substantial manufacturing operations in Korea place it at the core of the global electronics device supply chain. Certain of the company’s OLED products are produced using external 12-inch foundries.

The company has a long history of supplying and collaborating on product and technology development with leading innovators in the consumer electronics market. As a result, the company has been able to strengthen its technology and develop products that are in high demand by its customers and end consumers. The company sold approximately 400 distinct products in the year ended December 31, 2022, with a substantial portion of its revenues derived from a concentrated number of customers.

The company’s business is largely driven by innovation in the consumer electronics markets and the growing adoption by consumers of worldwide of electronic devices for use in their daily lives. The consumer electronics market is large and growing rapidly, largely due to consumers increasingly accessing a wide variety of rich media content, such as high definition audio and video, mobile devices, televisions and games on advanced consumer electronic devices. Electronics manufacturers are continuously implementing advanced technologies in new generations of electronic devices using analog and mixed-signal semiconductor components, such as display drivers that enable display of high resolution images, encoding and decoding devices that allow playback of high definition audio and video, and power semiconductors that increase power efficiency, thereby improving heat dissipation and extending battery life.

Products

The company’s Display Solutions line of products provide flat panel display solutions to major suppliers of large and small flat panel displays. These products include source and gate drivers and timing controllers that cover a wide range of flat panel displays used in mobile communications, automotives, entertainment devices, notebook PCs, monitors and liquid crystal display (LCD), organic light emitting diodes (OLED) and Micro light emitting diode (Micro LED) televisions. The company’s Display Solutions products support the industry’s most advanced display technologies, such as OLEDs, and low temperature polysilicon thin film transistor (LTPS TFT), as well as high-volume display technologies such as amorphous silicon thin film transistors (a-Si TFTs). Since 2007, the company has designed and manufactured OLED display driver integrated circuit (IC) products. Our current portfolio of OLED solutions address a wide range of resolutions ranging from HD (High Definition) to WQHD (Wide Quadruple High Definition) for wide range of applications, including smartphones, TVs, automotive and IT applications, such as monitors, notebook PCs, tablet PCs, as well as AR/VRs.

The company expanded its business and market opportunity by establishing its Power Solutions product line in late 2007. The company has introduced a number of power management semiconductor products, including discrete and integrated circuit solutions for power management in high-volume consumer applications. These products include metal oxide semiconductor field effect transistors (MOSFETs), insulated-gate bipolar transistors (IGBTs), AC-DC/DC-DC converters, LED drivers, regulators and power management integrated circuits (PMICs) for a range of devices, including televisions, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, other consumer electronics, automotive, and industrial applications, such as power suppliers, e-bikes, photovoltaic inverters, LED lighting and motor drives.

Strategy

The key elements of the company’s strategy are to increase business with existing customers; and broaden its customer base.

Technology

The company continuously strengthens its advanced analog and mixed-signal semiconductor technology platform by developing innovative technologies and integrated circuit building blocks that enhance the functionality of electronics devices through brighter, thinner displays, enhanced image quality, smaller form factor and longer battery life.

The company’s display technology portfolio includes building blocks for display drivers and timing controllers, processor and interface technologies, as well as sophisticated production techniques, such as chip-on-glass (COG), chip-on-film (COF) and chip-on-plastic (COP) for rigid and flexible OLED displays. The company’s advanced display drivers incorporate Oxide, Low-Temperature Polycrystalline Oxide (LTPO) OLED panel technologies that enable the highest resolution displays. Furthermore, the company is developing a broad intellectual property portfolio to improve the quality and the power efficiency of displays, including the development of its high speed interface, high quality image enhancement display data compression and optical compensation technology for OLED displays.

Expertise in ultra-high voltage (UHV), high voltage and deep trench BCDMOS process technologies, low power analog and mixed-signal design capabilities and packaging know-how are key requirements in the power management market. The company is leveraging its capabilities in these areas with products, such as AC-DC/DC-DC converters, LED drivers, regulators, power management integrated circuits (PMICs), power MOSFETs and IGBTs. The company’s system-level understanding of applications, such as LCD televisions, smartphones, computing, and servers, automotive, and industrial applications will allow it to more quickly develop and customize power management solutions for its customers in these markets.

Products by Business Line

The company’s broad portfolio of products addresses multiple high-growth, consumer-focused end markets. A key component of its product strategy is to supply multiple related product offerings to each of the end markets that it serves.

Display Solutions

Display Driver Characteristics. Display drivers deliver defined analog voltages and currents that activate pixels to exhibit images on displays. The following key characteristics determine display driver performance and end-market application:

Resolution and Number of Channels: Resolution determines the level of detail displayed within an image and is defined by the number of pixels per line multiplied by the number of lines on a display. For large displays, higher resolution typically requires more display drivers for each panel. Mobile displays, conversely, are typically single chip solutions designed to deliver a specific resolution. The company covers resolutions ranging from VGA (640 x 480) to UHD (3840 x 2160).

Color Depth: Color depth is the number of colors that can be displayed on a panel. For example, for TFT-LCD panels, 262 thousand colors are supported by 6-bit source drivers; 16 million colors are supported by 8-bit source drivers; and 1 billion colors are supported by 10-bit source drivers.

Operational Voltage. Display drivers are characterized by input and output voltages. Source drivers typically operate at input voltages from 1.62 to 3.6 volts and output voltages between 9 and 18 volts. Gate drivers typically operate at input voltages from 1.62 to 3.6 volts and output voltages from 30 to 45 volts. Lower input voltage results in lower power consumption and electromagnetic interference (EMI).

Gamma Curve: The relationship between the light passing through a pixel and the voltage applied to the pixel by the source driver is referred to as the gamma curve. The gamma curve of the source driver can correct some imperfections in picture quality in a process generally known as gamma correction. Some advanced display drivers feature up to three independent gamma curves to facilitate this correction.

Driver Interface: Driver interface refers to the connection between the timing controller and the display drivers. Display drivers increasingly require higher bandwidth interface technology to address the larger data transfer rate necessary for higher definition images. The principal types of interface technologies are embedded clock point to point interface (EPI), mini-low voltage differential signaling (m-LVDS), unified standard interface (USI) and mobile industry processor interface (MIPI).

Package Type: The assembly of display drivers typically uses COF, COG and COP package types.

Large Display Solutions: The company provides display solutions for a wide range of flat panel display sizes used in LCD TVs, OLED TVs, Micro LED TVs, as well as IT applications such as monitors, notebook PCs, tablet PCs, automotives and public information displays.

The company’s large display solutions include source and gate drivers and timing controllers with a variety of interfaces, voltages, frequencies and packages to meet customers’ needs. These products include advanced technologies, such as high channel count, with products in mass production to provide up to 1,542 channels. The company’s large display solutions are designed to allow customers to cost-effectively meet the increasing demand for high resolution displays. The company has focused extensively on reducing the die size of its large display drivers and other solutions products to reduce costs without having to migrate to smaller geometries. For example, the company has implemented several solutions to reduce die size in large display drivers, such as optimizing design schemes and design rules and applying specific technologies that it has developed internally. The company focuses on growing display segments such as OLED TVs and automotive. The company introduced a number of new display driver ICs for OLED TV and automotive.

Mobile Display Solutions: The company’s mobile display solutions incorporate the industry’s most advanced display technologies, such as OLED and LTPS, as well as high-volume technologies, such as a-Si TFT. The company’s mobile display products offer specialized capabilities, including high speed serial interfaces, such as mobile display digital interface (MDDI), MIPI, reduced swing differential signaling interface (RSDS) and logic-based OTP memory. The company focuses extensively on reducing the die size of its mobile display drivers and other solutions products to reduce costs. For example, the company has implemented several solutions to reduce die size in mobile display drivers, such as optimizing design schemes and design rules and applying specific technologies that it has developed internally. Further, the company is building a distinctive intellectual property portfolio that allows it to provide features that reduce power consumption, such as CABC and ACL. This intellectual property portfolio will also support its power management product development initiatives, as it leverages its system level understanding of power efficiency. The company’s OLED driver ICs can support various configurations, such as high resolution from FHD+(2,880x1,284) to QHD+(3,360x1,440), wide aspect ratio from 16:9 to 21:9 and rigid and flexible OLED displays. In the transition to, and adoption of, 5G, fast responses and high frame rates, such as 90Hz, 120Hz and 144Hz are becoming essential product offerings. To meet this new and evolving demand, the company has developed and mass produced its OLED display driver IC, which supports 90Hz/120Hz/144Hz high frame rates.

Power Solutions

The company develops, manufactures and markets power management solutions for a wide range of end-market customers. The products include MOSFETs, IGBTs, AC-DC/DC-DC converters, LED drivers, regulators, power management integrated circuits (PMICs) for a range of devices, including LCD, LED, and UHD televisions, digital signage, smartphones, mobile phones, wearable devices, desktop PCs, notebooks, tablet PCs, other consumer electronics, consumer appliances, automotive, and industrial applications such as power suppliers, e-bikes, photovoltaic inverters, LED lighting and motor drives.

MOSFETs: MOSFETs include low-voltage from 12V to 30V, medium-voltage from 40V to 200V, high-voltage planar MOSFETs, 200V through 650V, and super junction MOSFETs, 500V through 900V.

MOSFETs are used in applications to switch, shape or transfer electricity under varying power requirements. The key application segments are smartphones, mobile phones, wearable devices, LCD, LED, and UHD televisions, desktop PCs, notebooks, tablet PCs, servers, lighting and power supplies for consumer electronics automotive (electric vehicles) and industrial equipment. MOSFETs allow electronics manufacturers to achieve specific design goals of high efficiency and low standby power consumption. For example, computing solutions focus on delivering efficient controllers and MOSFETs for power management in VCORE, DDR and chipsets for audio, video and graphics processing systems.

IGBTs: The company’s IGBTs include 650V to 1200V field stop trench IGBTs. IGBTs are used in automotive and high power industrial applications, such as UPSs, power supplies, motor drives, solar inverters, welding machines and consumer appliances.

AC-DC/DC-DC Converters: The company offers AC-DC/DC-DC converters targeting mobile applications and high power applications like LCD, LED, and UHD televisions, notebooks, smartphones, mobile phones, set-top boxes and display modules. The company expects its AC-DC/DC-DC converters will meet customer’s green power requirements by featuring wide input voltage ranges, high efficiency and small size.

LED Drivers: LED backlighting drivers serve the fast-growing LCD and LED panel backlighting market for LCD and LED televisions, LCD monitors, digital signage, notebooks, smartphones and tablet PCs. The company’s products are designed to provide high efficiency and wide input voltage range, as well as pulse width modulation (PWM) dimming for accurate white LED dimming control. LED lighting drivers have a wide input voltage range applicable to incandescent bulb and fluorescent lamp replacement.

Regulators: The company also provides analog regulators for mobile, computing and consumer applications. The company’s products are designed for high efficiency and low power consumption in mobile applications.

SSD PMICs: The company also provides solid state drive power management integrated circuits (SSD PMICs) for the computing segment. The company’s product is designed for high frequency switching, high efficiency and pulse frequency modulation (PFM) function to reduce power consumption in low load converters.

Logic PMICs: The company also provides logic power management integrated circuits (PMICs) for organic light-emitting diode (OLED) display panel. The company’s PMICs provide optimized power to source driver, gate driver and timing controller (T-CON) of OLED display panel with multi-channel power block (boost converter, buck converter, Op-Amps and positive/negative LDOs.)

The company’s power management solutions enable customers to increase system stability and improve heat dissipation and energy use, resulting in cost savings for its customers and consumers, as well as environmental benefits. The company’s in-house process technology capabilities and eight-inch wafer production lines increase efficiency and contribute to the competitiveness of its products.

Sales and Marketing

The company focuses its sales and marketing strategy on continuing to grow and leverage its existing relationships with leading consumer electronics OEMs, while expanding into industrial and automotive end markets. The company’s close collaboration with customers allows it to align its product and technology development with its customers’ existing and future needs. Because its customers often service multiple end markets, the company’s product sales teams are organized by customers within the major geographies. This facilitates the sale of products that address multiple end-market applications to each of the company’s customers.

The company sells its products through a direct sales force and a network of authorized agents and distributors. The company has strategically located its sales and technical support offices near its customers. The company’s direct sales force consists primarily of representatives co-located with its design center in Korea, as well as its local sales and support offices and sales liaisons in Japan, Greater China, Taiwan and Europe. The company has a network of agents and distributors in the U.S., Europe and the Asia Pacific region.

Customers

The company sells its Display Solutions and Power Solutions products to consumer, computing, communication, automotive and industrial electronics OEMs, original design manufacturers and electronics manufacturing services companies, as well as subsystem designers. The company’s arrangements with and reliance on key customers, particularly customers for its display products, may make it less practicable to pursue certain opportunities with other potential new and existing customers.

Intellectual Property

As of December 31, 2022, the company’s portfolio of intellectual property assets included approximately 961 registered patents and 144 pending patent applications. Because the company files patents in multiple jurisdictions, it additionally has approximately 528 registered patents and 92 pending applications that relate to identical technical claims in its base patent portfolio.

Research and Development Expenses

The company’s research and development expenses were $52.3 million for the year ended December 31, 2022.

Environmental

Since 2015, the company’s Korean subsidiary has been subject to a new set of greenhouse gas emissions regulation, the Korean Emissions Trading Scheme (K-ETS), under the Act on Allocation and Trading of Greenhouse Gas Emission Allowances. Under K-ETS, the company’s Korean subsidiary was allocated a certain amount of emissions allowance in accordance with the National Allocation Plan prepared by the Korean government and is required to meet its allocated target by either reducing the emission or purchasing the allowances from other participants in the emission trading market.

Another example is the newly reinforced regulations on chemicals under Chemicals Control Act and K-REACH, which came into effect on January 1, 2015. Under these laws, the company’s Korean subsidiary is required to comply with various requirements to report, evaluate, manage and ensure the safe usage of the chemicals used in its facilities.

History

MagnaChip Semiconductor Corporation was incorporated in 2003.