Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

Earnings call: Magnachip reports Q1 revenue decline, remains optimistic

EditorEmilio Ghigini
Published 05/03/2024, 06:26 AM
© Reuters.
MX
-

Magnachip Semiconductor Corporation (NYSE: MX), in its Q1 earnings call on March 31, 2024, disclosed a revenue of $49.1 million, marking a 13.9% year-over-year decrease and a 3.5% sequential drop.

The company's consolidated gross profit margin also fell to 18.3%, influenced by the wind-down of Transitional Foundry Services. Despite the downturns, Magnachip remains positive about the future, particularly in its Power Application Specific (PAS) business and its strategy in China.

Key Takeaways

  • Q1 revenue stood at $49.1 million, a decline from the previous year.
  • Consolidated gross profit margin decreased to 18.3%.
  • Standard Product business revenue increased by 10.6% sequentially.
  • The company anticipates revenue growth in the MSS and PAS segments for the full year 2024.
  • Magnachip maintains a strong focus on the Chinese market, expecting benefits from China's home appliance subsidy.

Company Outlook

  • Q2 '24 consolidated revenue projected between $49 to $54 million.
  • Full-year 2024 revenue expected to be flat or slightly up compared to 2023.
  • Anticipated double-digit year-over-year growth in MSS and PAS revenue.
  • Projected consolidated gross profit margin for 2024 between 17% to 20%.

Bearish Highlights

  • Operating loss reported at $13.5 million for Q1.
  • PAS gross profit margin in Q1 was 15.4%, below the forecasted range.

Bullish Highlights

  • MSS business revenue up by 5.2% and PAS business revenue up by 12% sequentially.
  • Margin expansion attributed to non-recurring engineering revenue and strong after-service market sales.
  • Positive impact expected from China's home appliance subsidy, which could benefit the PAS segment.

Misses

  • Revenue and gross profit margin both fell compared to previous periods.
  • Q1 PAS gross profit margin did not meet the anticipated guidance range.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Q&A Highlights

  • Young-Joon Kim highlighted the QHD product's potential for high revenue by year-end.
  • Inventory correction in the industrial segment completed, with growth expected in various segments in Q2 and Q3.
  • The company has secured a contract with a top three Chinese smartphone maker.
  • Entry into the server power supply market, specifically targeting the rapidly growing AI segment.
  • Establishment of Magnachip Technology China (MTC) to enhance service to Chinese customers.

Despite facing a challenging quarter, Magnachip Semiconductor Corporation is steering its focus towards growth opportunities, particularly in the Chinese market.

The company's strategic moves, including the penetration into the high-end smartphone market and the server power supply industry, are set to position it favorably in the upcoming quarters.

InvestingPro Insights

Magnachip Semiconductor Corporation's recent Q1 earnings report highlighted some challenges, but when looking at the broader financial picture through InvestingPro's lens, there are additional dimensions to consider. With a market cap of $188.64 million and a Price / Book multiple of 0.55 as of the last twelve months ending Q4 2023, the company is trading at a low valuation compared to its book value. This could suggest that the stock is undervalued, presenting a potential opportunity for investors seeking assets below their intrinsic value.

InvestingPro Tips reveal that Magnachip holds more cash than debt on its balance sheet and that its liquid assets exceed short-term obligations, indicating a strong liquidity position. These factors are crucial for the company's financial health, especially in the face of a revenue decline of 31.87% over the last twelve months. Additionally, it's worth noting that analysts have revised their earnings expectations downwards for the upcoming period, which may have already been reflected in the stock's price, as it is trading near its 52-week low.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

For investors interested in a deeper dive into Magnachip's financials and future prospects, InvestingPro offers 11 more tips on their platform. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a wealth of data-driven insights to inform their investment decisions.

Full transcript - MagnaChip Semiconductor Corp (NYSE:MX) Q1 2024:

Operator: Good day, and thank you for standing by. Welcome to the First Quarter 2024 Magnachip Semiconductor Corporation Earnings Conference Call. [Operator Instructions] Please be advised, today's conference is being recorded. I'd now like to turn the conference over to your speaker today, Steven Pelayo. Please go ahead.

Steven Pelayo: Thank you. Hello everyone. Thank you for joining us to discuss Magnachip's financial results for the first quarter ended March 31, 2024. The first quarter earnings release that was issued today after the market close can be found on the Company's Investor Relations website. The webcast replay of today's call will be archived on our website shortly afterwards. Joining me today are YJ Kim, Magnachip's Chief Executive Officer; and Shinyoung Park, our Chief Financial Officer. YJ will discuss the Company's recent operating performance and business overview, and Shinyoung will review financial results for the quarter and provide guidance for the second quarter. There will be a Q&A session following the prepared remarks. During the course of this conference call, we may make forward-looking statements about Magnachip's business outlook and expectations. Our forward-looking statements, and all other statements that are not historical facts, reflect our beliefs and predictions as of today and therefore are subject to risks and uncertainties as described in the Safe Harbor statement found in our SEC filings. Such statements are based upon information available to the Company as of the date hereof and are subject to change for future developments. Except as required by law, the Company does not undertake any obligation to update these statements. During the call we also will discuss non-GAAP financial measures. Then on-GAAP measures are not prepared in accordance with generally accepted accounting principles but are intended as supplemental measures of Magnachip's operating performance that may be useful to investors. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in our first quarter earnings release in the Investor Relations section of our website. With that, I now will turn the call over to YJ Kim. YJ?

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Young-Joon Kim: Hello everyone, and thank you for joining us today and welcome to Magnachip's Q1 earnings call. Our overall Q1 results were in-line with our guidance. Q1 revenue was$49.1 million, down 13.9% year-over-year and down 3.5% sequentially. Consolidated gross profit margin was 18.3%, down 2.9 percentage points year-over-year and 4.4 percentage points sequentially, mostly due to the wind-down of the Transitional Foundry Services. Excluding Transitional Foundry Services, revenue in our Standard Product business, which is comprised of MSS and PAS businesses, was up 10.6%sequentially, while gross margin was 21.2%, down 1.7 percentage points sequentially. The decline in gross margin was mostly due to lower Gumi fab utilization driven by the wind-down of Transitional Foundry Services, which also impacts PAS margins because they share the fab. Despite typical Chinese New Year seasonality, the solid sequential revenue growth of our Standard Products business in Q1 suggests overall market conditions are improving with the inventory correction possibly nearing an end for some verticals. In particular, we saw improvement in the inventory channel for our PAS business. We also saw better-than-expected demand from our design for the after-service OLED display market, and benefited from increased demand in our automotive display business. The PAS business strength was primarily from smartphones, e-motors, consumer appliances and server power applications. Now, let me provide more detailed comments for each of our Standard Products business lines: Beginning with MSS. Q1 revenue was in-line with our guidance at $9.0 million, down 29.7% year-over-year, and up 5.2% sequentially. As mentioned before, the quarter-over-quarter revenue growth was due to increased demand from automotive LCD and OLED products. Overall, we continue to collaborate with several OLED panel makers and smartphone OEMs targeting the China market. While third party market researcher Omdia predicts only slight growth in the global smartphone market in 2024, the top five China brands are forecasted to enjoy more than 18% growth in OLED smartphone shipments. As a reminder, we have DDIC designs and customer engagements underway that span the entire smartphone market spectrum from the mass market-tier to the premium-tier segments, as well as other display markets such as automotive. We had an additional two new OLED designs this quarter that we will discuss in more detail later. More specifically, during the quarter, our Display IC business had a new design-in of ahigh-end OLED smartphone for a top tier Chinese smartphone vendor. This design-in is based on our QHD+ OLED DDIC that we sampled in Q1 2024. This chip provides the latest 8 Transistor LTPO panel feature support and is produced in 28-nanometer. We expect this design to go into production by the end of the year. We also started the initial ramp in Q1 for our first-generation OLED DDIC chip for China that we taped out in 2022 for the after-service market. We are now working to expand this segment with other China panel makers. As mentioned previously, we received a pilot production PO as a second source supplier from a leading Chinese smartphone OEM. We expect revenue to begin in the second half of the year. Moreover, we also have been chosen to work with them on their fall 2024 model with our new next-generation chip, that we taped-out and expect to sample in Q2. Finally, we taped-out in Q1 and expect to sample in Q2 our first smartwatch OLED DDIC. We are excited about this partnership with a smartwatch solution provider in China as it showcases our strategy to expand into new, high-growth adjacent markets. With regard to our automotive DDIC business, we saw strength in the first quarter that will likely continue in Q2. Notably, we had a new OLED design win in EV that has commenced production in Q2 targeted for a leading European automaker. Our Power IC business is now included in MSS. We saw sequential strength from LED TVs during Q1 and expect business to broaden to include multiple notebooks and tablet models in Q2. We continue to secure new design wins with a major Korea customer. Moving on to PAS: Q1 revenue was $36.5 million, down 5.6% year-over-year, and up 12% quarter-over-quarter. The sequential increase was due primarily to increased demand for medium voltage MOSFET for industrial e-motor markets in China, consumer appliances, and server power. The results are in line with our earlier expectation for a gradual recovery in our Power business during the first half of 2024, and are further supported by initial signs of inventory reductions in the distribution channel for our PAS products. More specifically, we saw strength in the high-speed e-motor market for scooters and motorcycles where we benefit from an approximate doubling of the bill of materials content compared to a traditional e-bike. We believe our power solutions for e-motors are now outperforming our competition. We are seeing steady demand in low voltage MOSFETS due to contribution from new high-end smartphone models as well as increased demand in mid-range smartphones. Further, the PAS design pipeline looks solid for the next generation of smartphones coming in late 2024 and into 2025. We saw a sequential uptick in demand for our SuperJunction MOSFETs and obtained a 600V design win in the PC Power and power supply market. We also had an IGBT design win at 650V from a major Korean appliance company. Lastly, within automotive power, we had our first medium voltage MOSFET design win for an electric cooling fan with a China-based SUV supplier, as well as an additional power steering related win in Korea. We have a strong product pipeline for power in 2024 and they are on track, these products expect to contribute revenue by end of the year. The new 650V IGBT finished the qualification and expect to begin commercial sample this month. 6th Gen IGBT and SuperJunction samples will begin in Q2, 8th generation LV MOSFET sample is ready and 8th generation MV MOSFET samples are ready in this second quarter '24. In summary, PAS saw strong sequential growth in Q1. With the addition of new products and streamlined channel inventory, we are optimistic for the growth trajectory in 2024. In MSS, we are executing our China focused strategy and making steady inroads with top tier panel makers and major smartphone OEMs. I'll come back to wrap up the call after Shinyoung gives you more details of our financial performance in the first quarter and provide Q2 guidance. Shinyoung?

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Shinyoung Park: Thank you YJ, and welcome everyone on the call. Let's start with key financial metrics for Q1.Total revenue in Q1 was $49.1 million, which came slightly above the midpoint of our guidance range of $46 to 51 million. This was down 13.9% year-over-year and down 3.5% sequentially. Revenue from MSS business was $9 million, at the mid-point of our guidance range of $8 to 10 million. This was down 29.7% year- over-year, but up 5.2% sequentially. PAS business revenue was $36.5 million, and at the mid-point of our guidance range of $35 to 38 million. This was down 5.6% year-over-year, but up 12% sequentially. Revenue from Transitional Foundry Services declined to $3.5 million as we continue to wind down this service over the next couple of quarters as we've explained previously. Consolidated gross profit margin in Q1 was 18.3%, within our guidance range of 17% to 20%, but down from 21.2% year-over-year and down from 22.7% sequentially. MSS gross profit margin in Q1 was 44.6%, above the upper end of the guidance range of 40% to 43%, up from 30.2% in Q1 '23, and up from 41.3% in Q4 '23. The margin expansion was primarily due to non-recurring engineering revenue and higher-than-expected revenue from our first generation DDIC, for the after-service market. The volatility of MSS gross profit margin is also due to the smaller relative size of its revenue. PAS gross profit margin in Q1 was 15.4%, below the mid-point of the guidance range of 15% to 18%, down from 26.7% in Q1 '23 and down from 18.1% in Q4 '23. This year-over-year and sequential decline was mainly due to a lower Gumi fab utilization rate from the winddown of Transitional Foundry Services and unfavorable product mix. Turning now to operating expenses. Q1 SG&A was $11.3 million, as compared to $12.1 million in Q4 2023 and $12.2 million in Q1 last year. The sequential and year-over-year decline in SG&A was primarily attributable to our cost reduction efforts with respect to certain one-time employee-related benefits. Q1 R&D was $11.2 million, as compared to $15.4 million in Q4 2023and $13.3 million in Q1 last year. As a reminder, R&D expense in Q4 last year included higher mask set costs due to the timing of product development. Stock compensation charges included in operating expenses were $0.9 million in Q1 compared to $1.7 million in Q4 and $1.1 million in Q1 last year.Q1 operating loss was $13.5 million. This compares to an operating loss of $15.9 million in Q4 and operating loss of $21.8 million in Q1 2023. On a non-GAAP basis, Q1 adjusted operating loss was $12.6 million, compared to adjusted operating loss of $14.1 million in Q4 and $12.2 million in Q1 last year. Net loss in Q1 was $15.4 million as compared with a net loss of $6 million in Q4 and a net loss of $21.5 million in Q1 last year. Q1 adjusted EBITDA was negative $8.4 million. This compares to a negative $10 million in Q4 and negative $7.9 million in Q1 last year. Our GAAP diluted loss per share in Q1 was $0.40, as compared with diluted loss per share of $0.16 in Q4 and diluted loss per share of $0.49 in Q1 last year. Our non-GAAP diluted loss per share in Q1 was $0.28. This compares with diluted loss per share of $0.21 in Q4 and $0.24 in Q1 last year. Our weighted average diluted shares outstanding for the quarter were 38.5 million shares. Under our $50 million stock buyback program authorized in July 2023, we repurchased, in Q1 2024, approximately 0.6 million shares or $4.1 million, leaving about $32.3 million remaining authorization at the end of March 31, 2024. Moving to the balance sheet. We ended Q1 with cash of $171.6 million, which includes approximately$29.7 million in long-term borrowing, up from $158.1 million at the end of Q4 2023. We added the long-term borrowing in March this year in order to opportunistically take advantage of favorable financing terms while exploring strategic options, including share buy backs and strategic investments, to enhance shareholder value. This loan bears a variable interest rate and the initial interest rate was 4.86% per annum, and matures on March 26, 2027. We pledged our Gumi properties as collateral. Please refer to the Form 8-K filed on March 29, 2024 for further details. Net accounts receivable at the end of the quarter totaled $30.3 million, which represents a decrease of 7.2% from Q4 2023. Our days sales outstanding for Q1 was 56 days and compares to 59 days in Q4. Our average days in inventory for Q1 was 71 days and compares to 77 days in Q4. Inventories, net at the end of the quarter totaled $31.5 million, and $32.7 million in Q4 2023. Lastly, Q1 CapEx was $0.7 million. For the full year 2024, we anticipate to spend $10 to $12 million, primarily for our PAS business and Gumi fab. This includes approximately $3 to 4 million of one-time CapEx for our newly established operating entity in China. Now moving to our second quarter and full-year 2024 guidance. While actual results may vary, for Q2 2024, Magnachip currently expects consolidated revenue to be in the range of $49 to $54 million, including approximately $1.5 million of Transitional Foundry Services. MSS revenue to be in the range of $9.5 to $11.5 million. This compares with MSS equivalent revenue of $9 million in Q1 2024 and $12.4 million in Q2 2023. PAS revenue to be in the range of $38 to $41 million. This compares with PAS equivalent revenue of $36.5 million in Q1 2024 and $39 million in Q2 2023. Consolidated gross profit margin to be in the range of 17% to 19%. MSS gross profit margin to be in the range of 30% to 33%. This compares with MSS equivalent gross profit margin of 44.6% in Q1 2024, which included non-recurring engineering revenue, and 36.4% in Q2 2023. PAS gross profit margin to be in the range of 15% to 17%, primarily as a result of the impact of idle capacity from the expected decline in Transitional Foundry Services revenue. This compares with PAS equivalent gross profit margin of 15.4% in Q1 2024 and 23.1% in Q2 2023. For the full-year 2024, we reiterate our prior guidance. MSS revenue to grow double digits year-over-year as compared with MSS equivalent revenue of $44.4 million in 2023. PAS revenue to grow double digits year-over-year as compared with PAS equivalent revenue of $151.3 million in 2023. Consolidated revenue flat-to-up-slightly year-over-year as recovery in MSS and PAS is offset by the phase-out of Transitional Foundry Services. Consolidated gross profit margin between 17% to 20%, primarily as a result of the impact of idle capacity expected from the phase-out of Transitional Foundry Services. This compares with the consolidated gross profit margin of 22.4% in 2023. Thank you and now I will turn the call back over to YJ for his final remarks. YJ?

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Young-Joon Kim: As we noted in our previous earnings call, we are undergoing a substantial transformation in our business over the next couple of years. One, we have shifted the priorities in our Display business to be laser focused primarily on China business expansion. We have now begun operations at our new Chinese entity Magnachip Technology Company, MTC with our China headquarters now up and running, and we expect to significantly expand our China operations in 2024. We are strengthening strategic relationships with panel customers, OEMs and suppliers. I am encouraged with the progress thus far. Two, Q1 is the first period in which our financial results reflect the operating performance under the new MSS and PAS structure. The separation of those businesses streamlines our go-to-market strategy, strengthens the potential for increased shareholder value via strategic investments, and also improves transparency for investors. Three, we are working very hard to fill idle fab capacity in our Gumi fab caused by the winding down of Transitional Foundry Services. Our current Power products are experiencing an increase in demand, and we are launching a new slate of higher-margin products throughout the year. I look forward to sharing updates on our progress on future earnings calls. Now, I will turn the call back to Steven. Steven?

Steven Pelayo: Thank you. That concludes our prepared remarks section of the call today. Operator, you may now open up the call for questions.

Operator: Thank you. [Operator Instructions] Our first question comes from Quinn Bolton with Needham. Your line is open.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Quinn Bolton: Hi, guys. Can you hear me?

Young-Joon Kim: We can, but it is breaking up.

Quinn Bolton: Okay. Hopefully this comes through. I guess I wanted to ask, YJ, the biggest - you've introduced a number of new products in the MSS segment over the last 12 to 24 months, and it sounds like a lot of those are slotted to start to go into production towards the end of this year and into early 2025. And I guess as you look at the number of new products, could you kind of just rank order, which do you think are going to be the biggest contributors to growth, in the second half in the MSS segment?

Young-Joon Kim: Okay. Very good, Quinn. Thank you. So the initial business ramp right now started with first-generation product we take down in 2022. That's the after-service market. And then we announced the win with our second-generation product with one of the key Chinese phone makers that expect to go to revenue in second half. And today we take that - and it's going to sample the third-generation product, and that one will also go into production towards the fall, or end of the year. And then, we will have another product that will hit the market that takes out and sample this in the next quarter. So in terms of the volume products, it's going to be the second-generation product that, we talked about that we want that will go production in second half. And then the chip that we will sample this quarter in the second quarter, that will be aligned with the fall model. And those two will be the high-volume model. And then additionally, we also said we sample QHD+ high-end model, and that will also drive a decent revenue starting end of the year. So and then there's a smartwatch that we take that will sample. So those are the products that will drive the revenue. And I think, the high-end and the second-generation and the first-third-generation, have a good potential towards the end of the year.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Quinn Bolton: Okay guys. So it sounds like just to summarize the second generation where you already win in the Chinese smartphone maker going to production in the second half and then the third generation product, which you expect to start ramp perhaps a little latter in the fall. But before - and those are the two sort of highest volume runners as you see it today?

Young-Joon Kim: Yes. And then I would say because the QHD is a high-end, even the volume may be a little lower, but the higher ASP, so that we sample, that will also hit towards the end of the year. That will have a probably decent revenue as well.

Quinn Bolton: Got it. Okay. Perfect. And then just kind of looking at the PAS segment, you commented that you're starting to see some signs of inventory clearance, you know, kind of wondering, how much longer do you think inventory is going to be a headwind? Do you think it sort of continues into the second half of the calendar year? Do you think we'll be mostly through it by the end of the second quarter? Just any update on kind of where you think, we are on inventory clearance? And I guess a related question, as you get better line of sight into inventory and the channel. Do you have any sense, where do you think consumption is today of your product versus, what you're shipping, which I imagine you're still shipping below and consumption? Thank you.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Young-Joon Kim: Yes, thank you, Quinn. So, we sell about the, I would say about 80% in Asian region, and then 20% in the Europe and U.S. And for the industrial market and automotive tend to be very big portion for other power makers. They tend to be maybe 78%, but for us, industrial automotive is like 35%, 40%. And so for us, the consumer communication and computing already, went through the inventory correction a year and a half. So in the first quarter, our Industrial segment actually grew, over the fourth quarter. And even this quarter, we expect the Industrial to grow. On the consumer, we grew in Q1, and then we expect flattish and computing. We grew and expect flattish in Q2. Communication was slightly down in Q1, but we expect strong growth in Q2. So for us, the inventory correction in Industrial segment for us seems to have gone away - so already adjusted. And the usually second half, the Q3, Q4 is a strong quarter, a season for us, given that we have more consumer communication and Computing segment, which tend to be cyclical. So we are guiding up in the Q2, and then we see strong Q3. So that's how we see based on today's indicators.

Quinn Bolton: One last quick, just clarification. I think you said it was consumer and comps where you had sort of a flatter outlook in the second quarter. Is that just more what you would call seasonality or they're other factors, slowing in demand, that are leading to a flatter outlook for those two segments?

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Young-Joon Kim: I think it's also really aligning with some of the consumer or computing communication models. So I think it's - I wouldn't say it's really come to seasonality, but it's also model alignment and so forth. So, I think it goes up and down for us. So, I don't think it's a pure seasonality. The Q2 is a seasonality overall, is better for us, yes.

Quinn Bolton: Got it. Okay. Thank you.

Young-Joon Kim: Yes.

Operator: One moment for our next question. Our next question comes from Andrew Northcutt with Oppenheimer. Your line is open.

Andrew Northcutt: Hi, guys. This is Andrew Northcutt from Martin. Thanks for taking the question. You touched upon it a little bit, but can you talk a little bit about how much exposure the PAS segment has to the consumer home appliance market? And how do you think China's recently announced home appliance trade in subsidy will impact the business? Thank you.

Young-Joon Kim: Could you repeat the subsidy on consumer appliance by whom by China?

Andrew Northcutt: Yes, by China.

Young-Joon Kim: Okay. So, mostly the consumer, it's mostly in Korea at the moment. We do some in consumer in China. We do more of the industry like e-bikes and communications and cell phone in China. But I think that will also - if they are doing that, I think that will also help us out, because China definitely is about 45%, 40% to 45% of revenue for us in PAS.

Andrew Northcutt: Perfect. Thank you.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Operator: One moment for our next question. Our next question comes from Suji Desilva with ROTH MKM.

Suji Desilva: Hi, YJ. Hi, Shinyoung. So, YJ, the China smartphone wins, can you talk about whether those are premium model or mainstream or across the platform, trying to understand what the initial ramp can look like for those wins?

Young-Joon Kim: Yes. The one that we announced the new win, it's a really high end. It's a QHD+. The QHD+, as you know, is higher than the WXGA, which is a resolution of iPhone. So, it's higher than that. So, we see that segment growing starting this year. So, we are preparing more solution around there. And this is the first one that we are going there, with a new model, and that's for the top three Chinese smartphone maker.

Suji Desilva: Okay. Great. Okay. And then you talked about in the Power segment, you talked about server opportunity. Can you talk about whether that's early or that's starting to ramp and what the kind of opportunity is, whether it's AI type servers, or just some color there as to what the opportunities that seems like it's newer to you in the competitive landscape there perhaps would be interesting to know as well?

Young-Joon Kim: Yes. Yes. So, we are starting the server powers. So, we got qualified and start shipping. And we do hear that the AI portion of servers are the fastest growing within the server segment. So, we look forward to see whether we get more subsequent design in the AI servers in the future, but it's - for the server power supply.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Suji Desilva: Server power supply. We have one last quick question. The formation of the MTC, the China organization, their entity, just wondering what the implications of that are from an MX perspective. And sort of running the business and your thoughts as what that maybe allows you to do, and that you maybe couldn't in the past. Any thoughts that could be helpful?

Young-Joon Kim: Yes. So, the creation of MTC is to address the Chinese customer well with the local presence. I think given the sensitivity there politically, I think it's good to have a local company focused on Chinese suppliers. So and then have an independent operation to service and support and grow opportunity with independent operation. So, that's the idea and that's been very welcomed by the Chinese customers.

Suji Desilva: Okay. All right. Thanks, YJ.

Young-Joon Kim: Thank you.

Operator: And I'm not showing any further questions at this time. I'd like to turn the call back over to Steven for any closing remarks.

Steven Pelayo: Great. Thank you. This concludes our Q1 earnings conference call. Please look for details of our future events on Magnachip Investor Relations website. Thank you and take care.

Operator: Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.