Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Jun. 01, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MX | |
Entity Registrant Name | MAGNACHIP SEMICONDUCTOR Corp | |
Entity Central Index Key | 1325702 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,056,468 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets | ||
Cash and cash equivalents | $91,395 | $102,434 |
Accounts receivable, net | 71,848 | 72,957 |
Inventories, net | 76,422 | 75,334 |
Other receivables | 4,535 | 10,616 |
Prepaid expenses | 10,311 | 7,560 |
Current deferred income tax assets | 43 | 237 |
Other current assets | 7,224 | 6,898 |
Total current assets | 261,778 | 276,036 |
Property, plant and equipment, net | 216,486 | 223,766 |
Intangible assets, net | 2,422 | 2,451 |
Long-term prepaid expenses | 9,951 | 10,916 |
Deferred income tax assets | 281 | 415 |
Other non-current assets | 14,548 | 14,147 |
Total assets | 505,466 | 527,731 |
Current liabilities | ||
Accounts payable | 73,812 | 70,767 |
Other accounts payable | 8,195 | 10,986 |
Accrued expenses | 74,573 | 81,060 |
Other current liabilities | 4,616 | 6,460 |
Total current liabilities | 161,196 | 169,273 |
Long-term borrowings, net | 224,065 | 224,035 |
Accrued severance benefits, net | 144,491 | 139,289 |
Other non-current liabilities | 11,489 | 13,636 |
Total liabilities | 541,241 | 546,233 |
Commitments and Contingencies (Note 16) | ||
Stockholders' equity | ||
Common stock, $0.01 par value, 150,000,000 shares authorized, 40,635,233 shares issued and 34,056,468 outstanding at March 31, 2015 and December 31, 2014 | 406 | 406 |
Additional paid-in capital | 118,604 | 118,419 |
Accumulated deficit | -31,372 | -11,343 |
Treasury stock, 6,578,765 shares at March 31, 2015 and December 31, 2014 | -90,918 | -90,918 |
Accumulated other comprehensive loss | -32,495 | -35,066 |
Total stockholders' equity (deficit) | -35,775 | -18,502 |
Total liabilities and stockholders' equity | $505,466 | $527,731 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 40,635,233 | 40,635,233 |
Common stock, shares outstanding | 34,056,468 | 34,056,468 |
Treasury stock, shares | 6,578,765 | 6,578,765 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Net sales | $164,885 | $164,164 |
Cost of sales | 129,908 | 123,887 |
Gross profit | 34,977 | 40,277 |
Operating expenses | ||
Selling, general and administrative expenses | 25,030 | 25,027 |
Research and development expenses | 22,160 | 23,137 |
Total operating expenses | 47,190 | 48,164 |
Operating loss | -12,213 | -7,887 |
Interest expense, net | -4,063 | -4,070 |
Foreign currency loss, net | -3,176 | -9,406 |
Other income, net | 556 | 561 |
Loss before income taxes | -18,896 | -20,802 |
Income tax expenses | 1,133 | 803 |
Net loss | ($20,029) | ($21,605) |
Loss per common share- | ||
Basic | ($0.59) | ($0.63) |
Diluted | ($0.59) | ($0.63) |
Weighted average number of shares- | ||
Basic | 34,056,468 | 34,052,875 |
Diluted | 34,056,468 | 34,052,875 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||
Net loss | ($20,029) | ($21,605) |
Other comprehensive income | ||
Foreign currency translation adjustments | 3,056 | 6,619 |
Derivative adjustments | ||
Fair valuation of derivatives | -1,801 | |
Reclassification adjustment for loss (gain) on derivatives included in net loss | -485 | 3 |
Unrealized gain on investments | 276 | |
Net current-period other comprehensive income (loss) | 2,571 | 5,097 |
Total comprehensive loss | ($17,458) | ($16,508) |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholders' Equity (USD $) | Total | Common Stock Outstanding [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings (Accumulated deficit) [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Loss [Member] |
In Thousands, except Share data | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | |
Balance, beginning at Dec. 31, 2013 | $81,541 | $406 | $116,222 | $105,889 | ($90,918) | ($50,058) | |
Balance, Shares beginning at Dec. 31, 2013 | 34,048,366 | ||||||
Stock-based compensation | 617 | 617 | |||||
Exercise of stock options | 48 | 48 | |||||
Exercise of stock options, Shares | 6,795 | ||||||
Exercise of warrants | 19 | 19 | |||||
Exercise of warrants, Shares | 1,202 | ||||||
Other comprehensive income, net | 5,097 | 5,097 | |||||
Net loss | -21,605 | -21,605 | |||||
Balance, ending at Mar. 31, 2014 | 65,717 | 406 | 116,906 | 84,284 | -90,918 | -44,961 | |
Balance, Shares ending at Mar. 31, 2014 | 34,056,363 | ||||||
Balance, beginning at Dec. 31, 2014 | -18,502 | 406 | 118,419 | -11,343 | -90,918 | -35,066 | |
Balance, Shares beginning at Dec. 31, 2014 | 34,056,468 | 34,056,468 | |||||
Stock-based compensation | 185 | 185 | |||||
Other comprehensive income, net | 2,571 | 2,571 | |||||
Net loss | -20,029 | -20,029 | |||||
Balance, ending at Mar. 31, 2015 | ($35,775) | $406 | $118,604 | ($31,372) | ($90,918) | ($32,495) | |
Balance, Shares ending at Mar. 31, 2015 | 34,056,468 | 34,056,468 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities | ||
Net loss | ($20,029) | ($21,605) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 6,870 | 7,268 |
Provision for severance benefits | 7,260 | 4,034 |
Bad debt expenses (reversal of allowance) | -20 | 94 |
Amortization of debt issuance costs and original issue discount | 162 | 149 |
Loss on foreign currency, net | 4,179 | 11,007 |
Stock-based compensation | 185 | 617 |
Other | -222 | 367 |
Changes in operating assets and liabilities | ||
Accounts receivable | 133 | -28,094 |
Inventories, net | -1,701 | -10,028 |
Other receivables | 6,140 | 691 |
Other current assets | -1,653 | -806 |
Deferred tax assets | 324 | 366 |
Accounts payable | 5,902 | -837 |
Other accounts payable | -4,881 | -1,230 |
Accrued expenses | -7,626 | -3,273 |
Other current liabilities | -1,774 | -1,790 |
Other non-current liabilities | -220 | 548 |
Payment of severance benefits | -1,341 | -1,514 |
Other | -367 | -150 |
Net cash used in operating activities | -8,679 | -44,186 |
Cash flows from investing activities | ||
Purchase of plant, property and equipment | -557 | -6,259 |
Payment for intellectual property registration | -77 | -92 |
Payment of guarantee deposits | -411 | -289 |
Other | 15 | 7 |
Net cash used in investing activities | -1,030 | -6,633 |
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 67 | |
Net cash provided by financing activities | 67 | |
Effect of exchange rates on cash and cash equivalents | -1,330 | 1,914 |
Net decrease in cash and cash equivalents | -11,039 | -48,838 |
Cash and cash equivalents | ||
Beginning of the period | 102,434 | 153,606 |
End of the period | 91,395 | 104,768 |
Supplemental cash flow information | ||
Cash paid for interest | 7,683 | 7,340 |
Cash paid (refunded) for income taxes | 303 | -21 |
Non-cash investing activities | ||
Property, plant and equipment additions in other accounts payable | $785 | $1,271 |
Business_Basis_of_Presentation
Business, Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Business, Basis of Presentation and Significant Accounting Policies | 1. Business, Basis of Presentation and Significant Accounting Policies |
Business | |
MagnaChip Semiconductor Corporation (together with its subsidiaries, the “Company”) is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for consumer, computing, communication, industrial, automotive and Internet of Things (“IoT”) applications. The Company provides technology platforms for analog, mixed signal, power, high voltage, non-volatile memory and RF applications. The Company’s business is comprised of three key business lines: Display Solutions, Power Solutions and Semiconductor Manufacturing Services. The Company’s Display Solutions products provide flat panel display solutions to major suppliers of large and small flat panel display. The Company’s Power Solutions products include discrete and integrated circuit solutions for power management in consumer, communication and industrial applications. The Company’s Semiconductor Manufacturing Services provide specialty analog and mixed-signal foundry services mainly for fabless and Integrated Device Manufacturer (“IDM”) semiconductor companies that primarily serve the consumer, computing, communication, industrial, automotive and IoT applications. | |
Basis of Presentation | |
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). These interim consolidated financial statements include normal recurring adjustments and the elimination of all intercompany accounts and transactions which are, in the opinion of management, necessary to provide a fair statement of the Company’s financial condition and results of operations for the periods presented. These interim consolidated financial statements are presented in accordance with ASC 270, “Interim Reporting” (“ASC 270”) and, accordingly, do not include all of the information and note disclosures required by US GAAP for complete financial statements. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for a full year or for any other periods. | |
The December 31, 2014 balance sheet data was derived from the Company’s audited financial statements, but does not include all disclosures required by US GAAP. | |
Recent Accounting Pronouncements | |
In April 2015, the FASB issued Accounting Standards Update. 2015-03, “Interest—Imputation of Interest” (“ASU 2015-03”). ASU 2015-03 requires that debt issuance costs are presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Company is currently evaluating the impact of the adoption of ASU 2015-03 on its consolidated financial statements. | |
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, “Presentation of Financial Statements — Going Concern” (“ASU 2014-15”), which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity will be required to provide certain disclosures if conditions of events raise substantial doubt about the entity’s ability to continue as a going concern. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-15 on its consolidated financial statements. | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
Sales_of_Accounts_Receivable_a
Sales of Accounts Receivable and Receivable Discount Program | 3 Months Ended |
Mar. 31, 2015 | |
Receivables [Abstract] | |
Sales of Accounts Receivable and Receivable Discount Program | 2. Sales of Accounts Receivable and Receivable Discount Program |
The Company has entered into an agreement to sell selected trade accounts receivable to a financial institution from time to time since March 2012. After the sale, the Company does not retain any interest in the receivables and the applicable financial institution collects these accounts receivable directly from the customer. The proceeds from the sales of these accounts receivable totaled $25,485 thousand and $3,139 thousand for the three months ended March 31, 2015 and 2014, respectively, and these sales resulted in pre-tax losses of $22 thousand and $8 thousand for the three months ended March 31, 2015 and 2014, respectively, which are included in selling, general and administrative expenses in the consolidated statements of operations. Net proceeds of this accounts receivable sale program are recognized in the consolidated statements of cash flows as part of operating cash flows. | |
The Company uses receivable discount programs with certain customers. While these discount arrangements allow the Company to accelerate collection of customers’ receivables, there can be no assurance that these programs will continue in the future. |
Inventories
Inventories | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Inventories | 3. Inventories | ||||||||
Inventories as of March 31, 2015 and December 31, 2014 consist of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Finished goods | $ | 33,372 | $ | 40,404 | |||||
Semi-finished goods and work-in-process | 75,083 | 68,153 | |||||||
Raw materials | 8,119 | 7,520 | |||||||
Materials in-transit and other | 1,666 | 6,745 | |||||||
Less: inventory reserve | (41,818 | ) | (47,488 | ) | |||||
Inventories, net | $ | 76,422 | $ | 75,334 | |||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Beginning balance | $ | (47,488 | ) | $ | (72,400 | ) | |||
Change in reserve | (896 | ) | (2,788 | ) | |||||
Write off | 6,338 | 4,012 | |||||||
Translation adjustments | 228 | 911 | |||||||
Ending balance | $ | (41,818 | ) | $ | (70,265 | ) | |||
Inventory reserve represents the Company’s best estimate in value lost due to excessive inventory level, physical deterioration, obsolescence, changes in price levels, or other causes based on individual facts and circumstances. Inventory reserve relates to inventory items including finished goods, semi-finished goods and work-in-process. Write off of this reserve is recognized only when the related inventory has been disposed or scrapped. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property, Plant and Equipment | 4. Property, Plant and Equipment | ||||||||
Property, plant and equipment as of March 31, 2015 and December 31, 2014 comprise the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Buildings and related structures | $ | 70,662 | $ | 70,552 | |||||
Machinery and equipment | 267,733 | 269,031 | |||||||
Vehicles and others | 24,719 | 24,812 | |||||||
363,114 | 364,395 | ||||||||
Less: accumulated depreciation | (163,253 | ) | (157,341 | ) | |||||
Land | 16,625 | 16,712 | |||||||
Property, plant and equipment, net | $ | 216,486 | $ | 223,766 | |||||
Aggregate depreciation expenses totaled $6,789 thousand and $6,850 thousand for the three months ended March 31, 2015 and 2014, respectively. |
Intangible_Assets
Intangible Assets | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Intangible Assets | 5. Intangible Assets | ||||||||
Intangible assets as of March 31, 2015 and December 31, 2014 are as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Technology | $ | 19,580 | $ | 19,683 | |||||
Customer relationships | 28,120 | 28,269 | |||||||
Intellectual property assets | 8,350 | 8,359 | |||||||
Less: accumulated amortization | (53,628 | ) | (53,860 | ) | |||||
Intangible assets, net | $ | 2,422 | $ | 2,451 | |||||
Aggregate amortization expenses for intangible assets totaled $81 thousand and $418 thousand for the three months ended March 31, 2015 and 2014, respectively. |
Accrued_Expenses
Accrued Expenses | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Accrued Expenses | 6. Accrued Expenses | ||||||||
Accrued expenses as of March 31, 2015 and December 31, 2014 are as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Payroll, benefits and related taxes, excluding severance benefits | $ | 20,888 | $ | 18,654 | |||||
Withholding tax levied on intercompany interest income | 28,329 | 27,497 | |||||||
Interest on senior notes | 3,148 | 7,040 | |||||||
Settlement obligations | 7,264 | 8,976 | |||||||
Outside service fees | 7,064 | 10,640 | |||||||
Others | 7,880 | 8,253 | |||||||
Accrued expenses | $ | 74,573 | $ | 81,060 | |||||
Settlement obligations included in the table above relate to claims involving the Company’s products that may have caused a failure in the customer’s product. Although the Company does not agree with the claim, as its product met the customer’s specifications, the Company considered a number of factors and decided not to dispute the claim but make certain in-kind payments as demanded by the customer. These settlement obligations are accrued when they are deemed probable and can be reasonably estimated. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||
Derivative Financial Instruments | 7. Derivative Financial Instruments | ||||||||||||||||||||||||||||
The Company’s Korean subsidiary from time to time has entered into zero cost collar contracts to hedge the risk of changes in the functional-currency-equivalent cash flows attributable to currency rate changes on U.S. dollar denominated revenues. | |||||||||||||||||||||||||||||
The Company did not have any derivative contracts in effect as of March 31, 2015 and December 31, 2014. | |||||||||||||||||||||||||||||
The zero cost collar contracts qualify as cash flow hedges under ASC 815, “Derivatives and Hedging,” (“ASC 815”), since at both the inception of the contracts and on an ongoing basis, the hedging relationship was and is expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk during the term of the contracts. The Company is utilizing the “hypothetical derivative” method to measure the effectiveness by comparing the changes in value of the actual derivative versus the change in fair value of the “hypothetical derivative.” | |||||||||||||||||||||||||||||
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative, representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness, are recognized in current earnings. | |||||||||||||||||||||||||||||
The following table summarizes the impact of derivative instruments on the consolidated statement of operations for the three months ended March 31, 2015 and 2014: | |||||||||||||||||||||||||||||
Derivatives in ASC | Amount of Loss | Location of | Amount of Gain (Loss) | Location of Loss | Amount of Loss | ||||||||||||||||||||||||
815 Cash Flow Hedging | Recognized in | Gain (Loss) | Reclassified from AOCI into | Recognized in | Recognized in | ||||||||||||||||||||||||
Relationships | AOCI on | Reclassified from | Statement of | Statement of | Statement of | ||||||||||||||||||||||||
Derivatives | AOCI into | Operations | Operations on | Operations on Derivatives | |||||||||||||||||||||||||
(Effective Portion) | Statement of | (Effective Portion) | Derivative | (Ineffective Portion | |||||||||||||||||||||||||
Operations | (Ineffective | and Amount | |||||||||||||||||||||||||||
(Effective Portion) | Portion and | Excluded from | |||||||||||||||||||||||||||
Amount | Effectiveness Testing) | ||||||||||||||||||||||||||||
Excluded from | |||||||||||||||||||||||||||||
Effectiveness | |||||||||||||||||||||||||||||
Testing) | |||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||
March 31, | March 31, | March 31, | |||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Zero cost collars | $ | — | $ | (1,801 | ) | Net sales | $ | 485 | $ | (3 | ) | Other income, | $ | — | $ | (16 | ) | ||||||||||||
net | |||||||||||||||||||||||||||||
Total | $ | — | $ | (1,801 | ) | $ | 485 | $ | (3 | ) | $ | — | $ | (16 | ) | ||||||||||||||
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. Fair Value Measurements |
The Company did not have any assets measured at fair value on a recurring basis as of March 31, 2015 other than cash and cash equivalents, restricted cash, accounts receivable, other receivables, accounts payable, and other accounts payable, fair value of which approximate carrying values due to the short-term nature of these instruments. The fair value of assets and liabilities whose carrying value approximates fair value is determined using Level 2 inputs, with the exception of cash (Level 1). | |
As of March 31, 2015, the total carrying value and estimated fair value of the Company’s 6.625% Senior Notes due 2021 (the “2021 Notes”), which are not measured at fair value on a recurring basis, were $224,065 thousand and $157,500 thousand, respectively. The decrease in the fair value of the 2021 Notes was related to the deterioration of the Company’s credit rating in the first quarter of 2015. The estimated fair value is based on Level 2 inputs. |
LongTerm_Borrowings
Long-Term Borrowings | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Long-Term Borrowings | 9. Long-Term Borrowings | ||||||||
Long-term borrowings as of March 31, 2015 and December 31, 2014 are as follows: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
6.625% senior notes due July 2021 | $ | 225,000 | $ | 225,000 | |||||
Discount on senior notes | (935 | ) | (965 | ) | |||||
Long-term borrowings, net of unamortized discount | $ | 224,065 | $ | 224,035 | |||||
On July 18, 2013, the Company issued $225,000,000 aggregate principal amount of the 2021 Notes at a price of 99.5%. Interest on the 2021 Notes accrues at a rate of 6.625% per annum, payable semi-annually on January 15 and July 15 of each year, beginning on January 15, 2014. | |||||||||
In connection with the issuance of the 2021 Notes, the Company capitalized certain costs and fees, which are being amortized using the effective interest method over its respective term, 2013 to 2021. Amortization costs, which were included in interest expense in the accompanying statements of operations, amounted to $132 thousand for the three months ended March 31, 2015. The remaining capitalized costs as of March 31, 2015, which were included in other non-current assets in the consolidated balance sheet, were $4,188 thousand. | |||||||||
The Company used net proceeds from the issuance of the 2021 Notes of $218.8 million, which represents $225.0 million of principal amount net of $1.1 million of original issue discount and $5.1 million of debt issuance costs, together with cash on hand, to repay all of the Company’s 10.500% senior notes due April 2018, including applicable premium and accrued interest, and to pay related fees and expenses of the 2021 Notes offering. | |||||||||
In connection with the refinancing of the Company’s senior notes, the Company recognized $32.8 million of loss on early extinguishment of senior notes, which consisted of $23.8 million from the applicable premium, $5.3 million from write-off of debt issuance costs, $1.9 million from write-off of discounts and $1.8 million of interest incurred during the notice period. | |||||||||
The Company can optionally redeem all or a part of the 2021 Notes according to the following schedule: (i) at any time prior to July 15, 2016, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of 2021 Notes issued under that certain Indenture, dated as of July 18, 2013, by and between the Company and Wilmington Trust, National Association, as trustee (the “Trustee”), as supplemented by that certain First Supplemental Indenture, dated as of March 27, 2014 (collectively, the “Indenture”) at a redemption price equal to 106.625% of the principal amount of the 2021 Notes redeemed, plus accrued and unpaid interest and special interest, if any, to the date of redemption with the net proceeds of a qualified equity offering; (ii) at any time prior to July 15, 2017, the Company may on any one or more occasions redeem all or a part of the 2021 Notes at a redemption price equal to 100% of the principal amount of the notes redeemed, plus the applicable premium as of, and accrued and unpaid interest and special interest, if any, to the date of redemption; and (iii) on or after July 15, 2017, the Company may on any one or more occasions redeem all or a part of the 2021 Notes, at a redemption price equal to 103.313%, 101.656% and 100% of the principal amount of the notes redeemed in 2017, 2018 and 2019 and thereafter, respectively, plus accrued and unpaid interest and special interest, if any, on the notes redeemed, to the applicable date of redemption. | |||||||||
The Indenture contains covenants that limit ability of the Company and its restricted subsidiaries to: (i) declare or pay any dividend or make any payment or distribution on account of or purchase or redeem the Company’s capital stock or equity interests of the restricted subsidiaries; (ii) make any principal payment on, or redeem or repurchase, prior to any scheduled repayment or maturity, any subordinated indebtedness; (iii) make certain investments; (iv) incur additional indebtedness and issue certain types of capital stock; (v) create or incur any lien (except for permitted liens) that secures obligations under any indebtedness; (vi) merge with or into or sell all or substantially all of the Company’s assets to other companies; (vii) enter into certain types of transactions with affiliates; (viii) guarantee the payment of any indebtedness; (ix) enter into sale-leaseback transactions; (x) enter into agreements that would restrict the ability of the restricted subsidiaries to make distributions with respect to their equity to the Company or other restricted subsidiaries, to make loans to the Company or other restricted subsidiaries or to transfer assets to the Company or other restricted subsidiaries; and (xi) designate unrestricted subsidiaries. | |||||||||
These covenants are subject to a number of exceptions and qualifications. Certain of these restrictive covenants will terminate if the notes are rated investment grade at any time. | |||||||||
As disclosed in the Company’s Form 8-K filed on June 25, 2014, the Company received a notice of default on June 20, 2014 (the “10-K and Q1 10-Q Notice of Default”) from the Trustee under the Indenture. The 10-K and Q1 10-Q Notice of Default related to the failure by the Company, pursuant to Section 4.03 of the Indenture, to file with the SEC its Annual Report on Form 10-K for the fiscal year ended December 31, 2013 and its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014 (the “Initial Reporting Defaults”). The Company did not cure the Initial Reporting Defaults within the applicable 60-day grace period and the Initial Reporting Defaults ripened into Events of Default. The Company elected, as the sole and exclusive remedy for the Events of Default, to pay additional interest on the 2021 Notes at a rate equal to 0.25% per annum of the principal amount of the 2021 Notes (the “Additional Interest”) for a period of up to 180 days following the occurrence of the Events of Default (the “Additional Interest Period”). | |||||||||
On August 20, 2014, the Company received a notice of default related to its failure to file its Form 10-Q for the fiscal quarter ended June 30, 2014 (the “Q2 10-Q Notice of Default”), and on November 19, 2014, the Company received a notice of default related to its failure to file its Form 10-Q for the fiscal quarter ended September 30, 2014 (the “Q3 10-Q Notice of Default”). These defaults also ripened into Events of Default and on December 29, 2014 and January 15, 2015, respectively, the Company elected to extend the Additional Interest Period for up to 180 days following each additional Event of Default. | |||||||||
Upon the filing with the SEC of the 2013 Form 10-K and the Form 10-Qs for each of the fiscal quarters ended March 31, 2014, June 30, 2014 and September 31, 2014, the Company regained compliance with its reporting obligations under the Indenture and cured all identified covenant defaults in each of the 10-K and the Q1 10-Q Notice of Default, the Q2 10-Q Notice of Default, and the Q3 10-Q Notice of Default, and ceased accruing the Additional Interest on the 2021 Notes as of February 12, 2015. |
Accrued_Severance_Benefits
Accrued Severance Benefits | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Postemployment Benefits [Abstract] | |||||||||
Accrued Severance Benefits | 10. Accrued Severance Benefits | ||||||||
The majority of accrued severance benefits is for employees in the Company’s Korean subsidiary, MagnaChip Semiconductor, Ltd. Pursuant to the Employee Retirement Benefit Security Act of Korea, eligible employees and executive officers with one or more years of service are entitled to severance benefits upon the termination of their employment based on their length of service and rate of pay. As of March 31, 2015, 98% of employees of the Company were eligible for severance benefits. | |||||||||
Changes in accrued severance benefits are as follows: | |||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Beginning balance | $ | 140,405 | $ | 135,356 | |||||
Provisions | 7,260 | 4,034 | |||||||
Severance payments | (1,341 | ) | (1,514 | ) | |||||
Translation adjustments | (726 | ) | (1,700 | ) | |||||
145,598 | 136,176 | ||||||||
Less: Cumulative contributions to the National Pension Fund | (343 | ) | (375 | ) | |||||
Group severance insurance plan | (764 | ) | (788 | ) | |||||
Accrued severance benefits, net | $ | 144,491 | $ | 135,013 | |||||
The severance benefits funded through the Company’s National Pension Fund and group severance insurance plan will be used exclusively for payment of severance benefits to eligible employees. These amounts have been deducted from the accrued severance benefit balance. | |||||||||
The Company is liable to pay the following future benefits to its non-executive employees upon their normal retirement age: | |||||||||
Severance benefit | |||||||||
Remainder of 2015 | $ | 295 | |||||||
2016 | 1,166 | ||||||||
2017 | 1,713 | ||||||||
2018 | 2,903 | ||||||||
2019 | 2,278 | ||||||||
2020 | 3,121 | ||||||||
2021 – 2025 | 31,155 | ||||||||
The above amounts were determined based on the non-executive employees’ current salary rates and the number of service years that will be accumulated upon their retirement dates. These amounts do not include amounts that might be paid to non-executive employees that will cease working with the Company before their normal retirement ages. |
Foreign_Currency_Gain_Loss_Net
Foreign Currency Gain (Loss), Net | 3 Months Ended |
Mar. 31, 2015 | |
Foreign Currency [Abstract] | |
Foreign Currency Gain (Loss), Net | 11. Foreign Currency Gain (Loss), Net |
Net foreign currency gain or loss includes non-cash translation gain or loss associated with intercompany balances. A substantial portion of the Company’s net foreign currency gain or loss is non-cash translation gain or loss associated with intercompany long-term loans to the Company’s Korean subsidiary. The loans are denominated in U.S. dollars and are affected by changes in the exchange rate between the Korean won and the U.S. dollar. As of March 31, 2015, the outstanding intercompany loan balance including accrued interests between the Korean subsidiary and the Dutch subsidiary was $762 million. The Korean won to U.S. dollar exchange rates were 1,105.0:1 and 1,099.2:1 using the first base rate as of March 31, 2015 and December 31, 2014, respectively, as quoted by the Korea Exchange Bank. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes |
The Company files income tax returns in the U.S., Korea, Japan, Taiwan and various other jurisdictions. | |
The Company’s Korean subsidiary, MagnaChip Semiconductor, Ltd., is the principal operating entity within the consolidated Company. For the three months ended March 31, 2015 and 2014, no income tax expense for MagnaChip Semiconductor, Ltd. was recorded due to net operating loss carry-forwards available to offset taxable income and full allowance for deferred tax assets. | |
Income tax expense recorded for the three months ended March 31, 2015 and 2014 was $1,133 thousand and $803 thousand, respectively, primarily attributable to withholding taxes related to intercompany balances. |
Geographic_and_Segment_Informa
Geographic and Segment Information | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Geographic and Segment Information | 13. Geographic and Segment Information | ||||||||
As of March 31, 2015, the Company has one operating segment consisting of three business lines: Display Solutions, Power Solutions and Semiconductor Manufacturing Services. The Company’s chief operating decision maker is considered to be its Chief Executive Officer. The chief operating decision maker allocates resources and assesses performance of the business and other activities at the operating segment level. | |||||||||
The following is a summary of net sales by business line: | |||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Net Sales | |||||||||
Display Solutions | $ | 56,353 | $ | 40,379 | |||||
Semiconductor Manufacturing Services | 74,520 | 91,928 | |||||||
Power Solutions | 33,837 | 31,775 | |||||||
All other | 175 | 82 | |||||||
Total net sales | $ | 164,885 | $ | 164,164 | |||||
The following is a summary of net sales by region, based on the location of the customer: | |||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Korea | $ | 62,470 | $ | 67,013 | |||||
Asia Pacific (other than Korea) | 79,177 | 70,221 | |||||||
U.S.A. | 19,370 | 19,753 | |||||||
Europe | 3,653 | 6,893 | |||||||
Others | 215 | 284 | |||||||
Total | $ | 164,885 | $ | 164,164 | |||||
Net sales from the Company’s top ten largest customers accounted for 67% and 55% for the three months ended March 31, 2015 and 2014, respectively. | |||||||||
For the three months ended March 31, 2015, the Company had two customers that represented 15.4% and 13.8% of its net sales. | |||||||||
For the three months ended March 31, 2014, we had no customer which represented over 10% of the Company’s net sales. | |||||||||
96% of the Company’s property, plant and equipment are located in Korea as of March 31, 2015. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Equity [Abstract] | |||||||||||||||||
Accumulated Other Comprehensive Loss | 14. Accumulated Other Comprehensive Loss | ||||||||||||||||
Accumulated other comprehensive loss consists of the following as of March 31, 2015 and December 31, 2014, respectively: | |||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Foreign currency translation adjustments | $ | (32,495 | ) | $ | (35,551 | ) | |||||||||||
Derivative adjustments | — | 485 | |||||||||||||||
Total | $ | (32,495 | ) | $ | (35,066 | ) | |||||||||||
Changes in accumulated other comprehensive loss for the three months ended March 31, 2015 and 2014 is as follows: | |||||||||||||||||
Three Months Ended March 31, 2015 | Foreign | Derivative | Unrealized | Total | |||||||||||||
currency | adjustments | gain on | |||||||||||||||
translation | investments | ||||||||||||||||
adjustments | |||||||||||||||||
Beginning balance | $ | (35,551 | ) | $ | 485 | $ | — | $ | (35,066 | ) | |||||||
Other comprehensive income before reclassifications | 3,056 | — | — | 3,056 | |||||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | (485 | ) | — | (485 | ) | |||||||||||
Net current-period other comprehensive income (loss) | 3,056 | (485 | ) | — | 2,571 | ||||||||||||
Ending balance | $ | (32,495 | ) | $ | — | $ | — | $ | (32,495 | ) | |||||||
Three Months Ended March 31, 2014 | Foreign | Derivative | Unrealized | Total | |||||||||||||
currency | adjustments | gain on | |||||||||||||||
translation | investments | ||||||||||||||||
adjustments | |||||||||||||||||
Beginning balance | $ | (57,326 | ) | $ | 6,587 | $ | 681 | $ | (50,058 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 6,619 | (1,801 | ) | 276 | 5,094 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 3 | — | 3 | |||||||||||||
Net current-period other comprehensive income (loss) | 6,619 | (1,798 | ) | 276 | 5,097 | ||||||||||||
Ending balance | $ | (50,707 | ) | $ | (4,789 | ) | $ | 957 | $ | (44,961 | ) | ||||||
Loss_per_Share
Loss per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Loss per Share | 15. Loss per Share | ||||||||
The following table illustrates the computation of basic and diluted loss per common share: | |||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Net loss | $ | (20,029 | ) | $ | (21,605 | ) | |||
Weighted average common stock outstanding | |||||||||
Basic | 34,056,468 | 34,052,875 | |||||||
Diluted | 34,056,468 | 34,052,875 | |||||||
Loss per share | |||||||||
Basic | $ | (0.59 | ) | $ | (0.63 | ) | |||
Diluted | $ | (0.59 | ) | $ | (0.63 | ) | |||
The following outstanding instruments were excluded from the computation of diluted loss per share, as they have an anti-dilutive effect on the calculation: | |||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Options | 3,068,898 | 3,180,925 | |||||||
Warrants | — | 1,425,129 | |||||||
Rights Plan | |||||||||
On March 5, 2015, the Board of Directors of the Company, authorized and declared a dividend of one preferred stock purchase right (a “Right” and collectively, the “Rights”) for each share of the Company’s common stock, par value $0.01 per share, outstanding at the close of business on March 16, 2015. Each Right, once exercisable, will entitle the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock, par value $0.01 per share, at a purchase price of $24, subject to adjustment (the “Purchase Price”). The Rights are not presently exercisable and remain attached to the shares of common stock unless and until the occurrence of the earlier of the following (the “Distribution Date”): (i) the tenth day after the public announcement or disclosure by the Company or any person or group of affiliated or associated persons that any person or group of affiliated or associated persons has become an “Acquiring Person” by obtaining beneficial ownership of 10% (or 20% in the case of a “passive institutional investor,” which is defined generally as any person who has reported beneficial ownership of shares of common stock on Schedule 13G under the Securities Exchange Act of 1934) or more of the Company’s outstanding common stock, subject to certain exceptions; or (ii) the tenth business day (or such later date as the Company’s Board of Directors may designate before a person or group of affiliated or associated persons becomes an Acquiring Person) after the commencement of, or first public announcement of the intent of any person to commence, a tender or exchange offer by any person or group of affiliated or associated persons, which would, if consummated, result in such person or group becoming an Acquiring Person. The Board of Directors may redeem all of the Rights for $0.001 per Right at any time before any person or group of affiliated or associated persons becomes an Acquiring Person. In addition, at any time on or after any person or group of affiliated or associated persons becomes an Acquiring Person (but before any person or group of affiliated or associated persons becomes the owner of 50% or more of the Company’s outstanding common stock), the Board of Directors may exchange all or part of the Rights (other than the Rights beneficially owned by the Acquiring Person and certain affiliated persons) for shares of common stock at an exchange ratio of one share of common stock per Right. The Rights will expire at the close of business on March 5, 2016, unless redeemed or exchanged prior to that time. | |||||||||
If any person or group of affiliated or associated persons becomes an Acquiring Person, then, after the Distribution Date, each Right (other than Rights beneficially owned by the Acquiring Person and certain affiliated persons or transferees thereof) will entitle the holder to purchase, for the Purchase Price, a number of shares of common stock having a market value of twice the Purchase Price. Alternatively, if, after any person or group of affiliated or associated persons becomes an Acquiring Person, (1) the Company is involved in a merger or other business combination in which the Company is not the surviving corporation or its common stock is changed into or exchanged for other securities or assets; or (2) the Company or one or more of its subsidiaries sell or otherwise transfer assets or earning power aggregating more than 50% of the assets or earning power of the Company and its subsidiaries, taken as a whole, then each Right will entitle the holder to purchase, for the Purchase Price, a number of shares of common stock of the other party to such business combination or sale (or in certain circumstances, an affiliate) having a market value of twice the Purchase Price. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. Commitments and Contingencies |
Securities Class Action Complaints | |
On March 12, 2014, a purported class action was filed against the Company and certain of the Company’s now-former officers. On March 16, 2015, a second amended complaint in this same action was filed against the Company, certain of the Company’s current directors and former and now-former officers, and a shareholder of the Company on behalf of a putative class consisting of all persons other than the defendants who purchased or acquired the Company’s securities between February 1, 2012 and February 12, 2015. The second amended complaint asserts claims for (i) alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder by the Company and certain of the Company’s current directors and former and now-former officers, (ii) alleged violations of Section 20(a) of the Exchange Act by certain of the Company’s current directors and former and now-former officers, and (iii) alleged violations of Sections 20(a) and 20(A) of the Exchange Act by a shareholder. The action, Thomas et al., v. MagnaChip Semiconductor Corp., et al., No. 3:14-cv-1160, is pending in the Northern District of California. | |
On April 21, 2015, a related purported class action lawsuit was filed against the Company, certain of the Company’s current directors and former and now-former officers, a shareholder of the Company, and certain financial firms that acted as underwriters of the Company’s public stock offerings on behalf of a putative class consisting of all persons other than the defendants who purchased or acquired the Company’s securities between February 1, 2012 and February 12, 2015, including all purchasers of the Company’s common stock pursuant to or traceable to a shelf registration statement and prospectus issued in connection with the Company’s February 6, 2013 public stock offering. The complaint asserts claims for (i) alleged violations of Section 11 of the Securities Act by the Company, certain of the Company’s current directors and former and now-former officers, and certain financial firms that acted as underwriters of the Company’s public stock offerings, (ii) alleged violations of Section 12 of the Securities Act by the Company, certain of the Company’s former and now-former officers, a shareholder of the Company, and certain financial firms that acted as | |
underwriters of the Company’s public stock offerings, (iii) alleged violations of Section 15 of the Securities Act by the Company, certain of the Company’s former and now-former officers, and a shareholder of the Company, (iv) alleged violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder by the Company and certain of the Company’s former and now-former officers, (v) alleged violations of Section 20(a) of the Exchange Act by the Company, certain of the Company’s former and now-former officers, and a shareholder of the Company. The action, Okla. Police Pension & Retirement Sys. v. MagnaChip Semiconductor Corp., et al., No. 3:15-cv-01797, is pending in the Northern District of California. A motion to consolidate Okla. Police Pension & Retirement Sys. v. MagnaChip Semiconductor Corp., et al., No. 3:15-cv-01797 and Thomas et al., v. MagnaChip Semiconductor Corp., et al., No. 3:14-cv-1160 is also pending. At this time, the Company is unable to estimate any reasonably possible loss, or range of reasonably possible losses, with respect to the matters described above. | |
SEC Enforcement Staff Review | |
In March 2014, the Company voluntarily reported to the Securities and Exchange Commission (“SEC”) that the Audit Committee had determined that the Company incorrectly recognized revenue on certain transactions and as a result would restate its financial statements, and that the Audit Committee had commenced an independent investigation. Over the course of 2014 and in the first quarter of 2015, the Company voluntarily produced documents to the SEC regarding the various accounting issues identified during the independent investigation, and whether the Company’s hiring of an accountant from the Company’s independent registered public accounting firm impacted that accounting firm’s independence. On July 22, 2014, the Staff of the SEC’s Division of Enforcement obtained a Formal Order of Investigation. On March 12, 2015, the SEC issued a subpoena for documents to the Company in connection with its investigation. The Company has and will continue to fully cooperate with the SEC in this investigation. At this time, the Company is unable to estimate any reasonably possible loss, or range of reasonably possible losses, with respect to the matters described above. | |
Shareholder Derivative Complaints | |
A shareholder derivative action, styled Hemmingson et al. v. Elkins et al., Case No. 1-15-cv-278614, was filed in the Superior Court of the State of California in and for Santa Clara County on March 25, 2015, naming as defendants certain of the Company’s current directors and former and now-former officers, as well as a shareholder of the Company, and naming the Company as a nominal defendant. The complaint in this action asserts claims for (i) alleged breaches of fiduciary duty by certain of the Company’s current directors and former and now-former officers for purportedly knowingly failing to maintain adequate internal controls over its accounting and reporting functions and disseminating to shareholders certain alleged materially false and misleading statements, (ii) alleged breaches of fiduciary duty by certain of the Company’s current directors and a current shareholder of the Company for purported insider trading, and (iii) alleged unjust enrichment by a shareholder of the Company for purported insider trading. On May 13, 2015, the court so ordered a stipulation entered into by certain of the parties, agreeing to stay the litigation until Thomas et al., v. MagnaChip Semiconductor Corp., et al., No. 3:14-cv-1160 and Okla. Police Pension & Retirement Sys. v. MagnaChip Semiconductor Corp., et al., No. 3:15-cv-01797 are resolved, unless the stay is lifted earlier. | |
On June 1, 2015, a shareholder derivative action as styled as Bushansky v. Norby, et al., No. 1-15-cv-281289, was filed in the Superior Court of the State of California, Santa Clara County. The complaint names as defendants certain of the Company’s current directors and former officers, and a shareholder of the Company, with the Company being named as a nominal defendant. The complaint asserts claims for (i) alleged breaches of fiduciary duties by certain of the Company’s current directors and former officers for knowingly failing to maintain adequate internal controls over the Company’s accounting and reporting functions and disseminating to shareholders certain alleged materially false and misleading statements; and (ii) alleged aiding and abetting of such breaches of fiduciary duties by all defendants. At this time, the Company is unable to estimate any reasonably possible loss, or range of reasonably possible losses, with respect to the matters described above. | |
In addition, by letter dated May 28, 2015, a purported shareholder demanded to inspect certain of the Company’s books and records, pursuant to Section 220 of the General Corporation Law of the State of Delaware (8 Del. C. § 220). The demand’s stated purpose is to investigate alleged breaches of fiduciary duty by certain of the Company’s current and former directors, officers, and senior management and otherwise evaluate whether to initiate a derivative action on the Company’s behalf. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events |
Late Filings | |
On May 12, 2015, the Company filed a Notification of Late Filing on Form 12b-25 with the SEC disclosing that the Company would be unable to timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 with the SEC. | |
NYSE Action | |
On April 6, 2015, the Company filed a Current Report on Form 8-K with the SEC announcing that on April 1, 2015 the Company received from NYSE Regulation, Inc. (the “NYSE”) a notice of failure to satisfy a continued listing rule or standard and related monitoring. The notice informed the Company that, as a result of the failure to timely file its Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (the “2014 10-K”), the Company is subject to the procedures specified in Section 802.01E (SEC Annual Report Timely Filing Criteria) of the NYSE Listed Company Manual (“Section 802.01E”). Under the Section 802.01E procedures, the NYSE will monitor the status of the filing of the 2014 Form 10-K and related public disclosures for up to a six-month period from its due date. If the Company did not file the 2014 Form 10-K within six months from the filing due date, the NYSE may, in its sole discretion, allow the Company’s common stock to trade for up to an additional six months pending the filing of the 2014 Form 10-K prior to commencing suspension or delisting procedures, depending on the Company’s specific circumstances. On May 28, 2015, the Company filed the 2014 Form 10-K. The Company believes that this filing with the SEC satisfies the NYSE continued listing requirements. | |
2021 Notes indenture reporting covenant default | |
As disclosed in the Company’s Form 8-K filed on May 4, 2015, the Company received a notice of default on May 1, 2015 (the “10-K Notice of Default”) from the Trustee under the Indenture. The 10-K Notice of Default related to the failure by the Company, pursuant to Section 4.03 of the Indenture, to file with the SEC its Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The Company believes it has cured the default referenced in the 10-K Notice of Default within the applicable 60-day grace period under the Indenture by the filing of the 2014 10-K with the SEC on May 28, 2015. | |
Derivative contract | |
In May 2015, the Company and the counterparty, the Nomura Financial Investment (Korea) Co., Ltd., entered into derivative contracts of zero cost collars for the third and fourth quarters of the year ending December 31, 2015. The total notional amounts are $84 million. These derivative contracts were executed under the International Swaps and Derivatives Association (“ISDA”) agreement amended in the second quarter of the year 2015 with respect to deletion of the ratings decline provision. In connection with the contracts, the Company paid $5.0 million cash deposits to the counterparty in May 2015. | |
Reorganization | |
On May 28, 2015, organizational changes were announced about the Company’s plans to, effective immediately, (i) realign its businesses and organizational structure and (ii) streamline and consolidate certain business processes to achieve greater operating efficiencies. In furtherance of these objectives, the Company will manage its business and report its financial results in two operating segments: Semiconductor Manufacturing Services and Standard Products Group. These segments will be established based on how the Company’s business units will be managed prospectively and will have no effect on the Company’s historical consolidated results of operations. |
Business_Basis_of_Presentation1
Business, Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Business | Business |
MagnaChip Semiconductor Corporation (together with its subsidiaries, the “Company”) is a Korea-based designer and manufacturer of analog and mixed-signal semiconductor products for consumer, computing, communication, industrial, automotive and Internet of Things (“IoT”) applications. The Company provides technology platforms for analog, mixed signal, power, high voltage, non-volatile memory and RF applications. The Company’s business is comprised of three key business lines: Display Solutions, Power Solutions and Semiconductor Manufacturing Services. The Company’s Display Solutions products provide flat panel display solutions to major suppliers of large and small flat panel display. The Company’s Power Solutions products include discrete and integrated circuit solutions for power management in consumer, communication and industrial applications. The Company’s Semiconductor Manufacturing Services provide specialty analog and mixed-signal foundry services mainly for fabless and Integrated Device Manufacturer (“IDM”) semiconductor companies that primarily serve the consumer, computing, communication, industrial, automotive and IoT applications. | |
Basis of Presentation | Basis of Presentation |
The accompanying unaudited interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). These interim consolidated financial statements include normal recurring adjustments and the elimination of all intercompany accounts and transactions which are, in the opinion of management, necessary to provide a fair statement of the Company’s financial condition and results of operations for the periods presented. These interim consolidated financial statements are presented in accordance with ASC 270, “Interim Reporting” (“ASC 270”) and, accordingly, do not include all of the information and note disclosures required by US GAAP for complete financial statements. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for a full year or for any other periods. | |
The December 31, 2014 balance sheet data was derived from the Company’s audited financial statements, but does not include all disclosures required by US GAAP. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
In April 2015, the FASB issued Accounting Standards Update. 2015-03, “Interest—Imputation of Interest” (“ASU 2015-03”). ASU 2015-03 requires that debt issuance costs are presented in the balance sheet as a direct deduction from the carrying amount of debt liability, consistent with debt discounts or premiums. The recognition and measurement guidance for debt issuance costs would not be affected. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, including interim periods within that reporting period. The Company is currently evaluating the impact of the adoption of ASU 2015-03 on its consolidated financial statements. | |
In August 2014, the FASB issued Accounting Standards Update No. 2014-15, “Presentation of Financial Statements — Going Concern” (“ASU 2014-15”), which provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. ASU 2014-15 requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity will be required to provide certain disclosures if conditions of events raise substantial doubt about the entity’s ability to continue as a going concern. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-15 on its consolidated financial statements. | |
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”, and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early adoption is not permitted. The Company is currently evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
Inventories_Tables
Inventories (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Summary of Inventories | Inventories as of March 31, 2015 and December 31, 2014 consist of the following: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Finished goods | $ | 33,372 | $ | 40,404 | |||||
Semi-finished goods and work-in-process | 75,083 | 68,153 | |||||||
Raw materials | 8,119 | 7,520 | |||||||
Materials in-transit and other | 1,666 | 6,745 | |||||||
Less: inventory reserve | (41,818 | ) | (47,488 | ) | |||||
Inventories, net | $ | 76,422 | $ | 75,334 | |||||
Changes in Inventory Reserve | |||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Beginning balance | $ | (47,488 | ) | $ | (72,400 | ) | |||
Change in reserve | (896 | ) | (2,788 | ) | |||||
Write off | 6,338 | 4,012 | |||||||
Translation adjustments | 228 | 911 | |||||||
Ending balance | $ | (41,818 | ) | $ | (70,265 | ) | |||
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Summary of Property, Plant and Equipment | Property, plant and equipment as of March 31, 2015 and December 31, 2014 comprise the following: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Buildings and related structures | $ | 70,662 | $ | 70,552 | |||||
Machinery and equipment | 267,733 | 269,031 | |||||||
Vehicles and others | 24,719 | 24,812 | |||||||
363,114 | 364,395 | ||||||||
Less: accumulated depreciation | (163,253 | ) | (157,341 | ) | |||||
Land | 16,625 | 16,712 | |||||||
Property, plant and equipment, net | $ | 216,486 | $ | 223,766 | |||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||
Summary of Intangible Assets | Intangible assets as of March 31, 2015 and December 31, 2014 are as follows: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Technology | $ | 19,580 | $ | 19,683 | |||||
Customer relationships | 28,120 | 28,269 | |||||||
Intellectual property assets | 8,350 | 8,359 | |||||||
Less: accumulated amortization | (53,628 | ) | (53,860 | ) | |||||
Intangible assets, net | $ | 2,422 | $ | 2,451 | |||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Summary of Accrued Expenses | Accrued expenses as of March 31, 2015 and December 31, 2014 are as follows: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
Payroll, benefits and related taxes, excluding severance benefits | $ | 20,888 | $ | 18,654 | |||||
Withholding tax levied on intercompany interest income | 28,329 | 27,497 | |||||||
Interest on senior notes | 3,148 | 7,040 | |||||||
Settlement obligations | 7,264 | 8,976 | |||||||
Outside service fees | 7,064 | 10,640 | |||||||
Others | 7,880 | 8,253 | |||||||
Accrued expenses | $ | 74,573 | $ | 81,060 | |||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||
Impact of Derivative Instruments on Consolidated Statement of Operations | The following table summarizes the impact of derivative instruments on the consolidated statement of operations for the three months ended March 31, 2015 and 2014: | ||||||||||||||||||||||||||||
Derivatives in ASC | Amount of Loss | Location of | Amount of Gain (Loss) | Location of Loss | Amount of Loss | ||||||||||||||||||||||||
815 Cash Flow Hedging | Recognized in | Gain (Loss) | Reclassified from AOCI into | Recognized in | Recognized in | ||||||||||||||||||||||||
Relationships | AOCI on | Reclassified from | Statement of | Statement of | Statement of | ||||||||||||||||||||||||
Derivatives | AOCI into | Operations | Operations on | Operations on Derivatives | |||||||||||||||||||||||||
(Effective Portion) | Statement of | (Effective Portion) | Derivative | (Ineffective Portion | |||||||||||||||||||||||||
Operations | (Ineffective | and Amount | |||||||||||||||||||||||||||
(Effective Portion) | Portion and | Excluded from | |||||||||||||||||||||||||||
Amount | Effectiveness Testing) | ||||||||||||||||||||||||||||
Excluded from | |||||||||||||||||||||||||||||
Effectiveness | |||||||||||||||||||||||||||||
Testing) | |||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||
March 31, | March 31, | March 31, | |||||||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | ||||||||||||||||||||||||
Zero cost collars | $ | — | $ | (1,801 | ) | Net sales | $ | 485 | $ | (3 | ) | Other income, | $ | — | $ | (16 | ) | ||||||||||||
net | |||||||||||||||||||||||||||||
Total | $ | — | $ | (1,801 | ) | $ | 485 | $ | (3 | ) | $ | — | $ | (16 | ) | ||||||||||||||
LongTerm_Borrowings_Tables
Long-Term Borrowings (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Components of Long-Term Borrowings | Long-term borrowings as of March 31, 2015 and December 31, 2014 are as follows: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
6.625% senior notes due July 2021 | $ | 225,000 | $ | 225,000 | |||||
Discount on senior notes | (935 | ) | (965 | ) | |||||
Long-term borrowings, net of unamortized discount | $ | 224,065 | $ | 224,035 | |||||
Accrued_Severance_Benefits_Tab
Accrued Severance Benefits (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Postemployment Benefits [Abstract] | |||||||||
Changes in Accrued Severance Benefits | Changes in accrued severance benefits are as follows: | ||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Beginning balance | $ | 140,405 | $ | 135,356 | |||||
Provisions | 7,260 | 4,034 | |||||||
Severance payments | (1,341 | ) | (1,514 | ) | |||||
Translation adjustments | (726 | ) | (1,700 | ) | |||||
145,598 | 136,176 | ||||||||
Less: Cumulative contributions to the National Pension Fund | (343 | ) | (375 | ) | |||||
Group severance insurance plan | (764 | ) | (788 | ) | |||||
Accrued severance benefits, net | $ | 144,491 | $ | 135,013 | |||||
Future Benefits Payments to Employees | The Company is liable to pay the following future benefits to its non-executive employees upon their normal retirement age: | ||||||||
Severance benefit | |||||||||
Remainder of 2015 | $ | 295 | |||||||
2016 | 1,166 | ||||||||
2017 | 1,713 | ||||||||
2018 | 2,903 | ||||||||
2019 | 2,278 | ||||||||
2020 | 3,121 | ||||||||
2021 – 2025 | 31,155 |
Geographic_and_Segment_Informa1
Geographic and Segment Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Segment Reporting [Abstract] | |||||||||
Net Sales by Business Line | The following is a summary of net sales by business line: | ||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Net Sales | |||||||||
Display Solutions | $ | 56,353 | $ | 40,379 | |||||
Semiconductor Manufacturing Services | 74,520 | 91,928 | |||||||
Power Solutions | 33,837 | 31,775 | |||||||
All other | 175 | 82 | |||||||
Total net sales | $ | 164,885 | $ | 164,164 | |||||
Net Sales by Region, Based on Location of Customer | The following is a summary of net sales by region, based on the location of the customer: | ||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Korea | $ | 62,470 | $ | 67,013 | |||||
Asia Pacific (other than Korea) | 79,177 | 70,221 | |||||||
U.S.A. | 19,370 | 19,753 | |||||||
Europe | 3,653 | 6,893 | |||||||
Others | 215 | 284 | |||||||
Total | $ | 164,885 | $ | 164,164 | |||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Equity [Abstract] | |||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss consists of the following as of March 31, 2015 and December 31, 2014, respectively: | ||||||||||||||||
March 31, | December 31, | ||||||||||||||||
2015 | 2014 | ||||||||||||||||
Foreign currency translation adjustments | $ | (32,495 | ) | $ | (35,551 | ) | |||||||||||
Derivative adjustments | — | 485 | |||||||||||||||
Total | $ | (32,495 | ) | $ | (35,066 | ) | |||||||||||
Changes in Accumulated Other Comprehensive Loss | Changes in accumulated other comprehensive loss for the three months ended March 31, 2015 and 2014 is as follows: | ||||||||||||||||
Three Months Ended March 31, 2015 | Foreign | Derivative | Unrealized | Total | |||||||||||||
currency | adjustments | gain on | |||||||||||||||
translation | investments | ||||||||||||||||
adjustments | |||||||||||||||||
Beginning balance | $ | (35,551 | ) | $ | 485 | $ | — | $ | (35,066 | ) | |||||||
Other comprehensive income before reclassifications | 3,056 | — | — | 3,056 | |||||||||||||
Amounts reclassified from accumulated other comprehensive loss | — | (485 | ) | — | (485 | ) | |||||||||||
Net current-period other comprehensive income (loss) | 3,056 | (485 | ) | — | 2,571 | ||||||||||||
Ending balance | $ | (32,495 | ) | $ | — | $ | — | $ | (32,495 | ) | |||||||
Three Months Ended March 31, 2014 | Foreign | Derivative | Unrealized | Total | |||||||||||||
currency | adjustments | gain on | |||||||||||||||
translation | investments | ||||||||||||||||
adjustments | |||||||||||||||||
Beginning balance | $ | (57,326 | ) | $ | 6,587 | $ | 681 | $ | (50,058 | ) | |||||||
Other comprehensive income (loss) before reclassifications | 6,619 | (1,801 | ) | 276 | 5,094 | ||||||||||||
Amounts reclassified from accumulated other comprehensive income | — | 3 | — | 3 | |||||||||||||
Net current-period other comprehensive income (loss) | 6,619 | (1,798 | ) | 276 | 5,097 | ||||||||||||
Ending balance | $ | (50,707 | ) | $ | (4,789 | ) | $ | 957 | $ | (44,961 | ) | ||||||
Loss_per_Share_Tables
Loss per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Table Illustrating Computation of Basic and Diluted Loss Per Common Share | The following table illustrates the computation of basic and diluted loss per common share: | ||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Net loss | $ | (20,029 | ) | $ | (21,605 | ) | |||
Weighted average common stock outstanding | |||||||||
Basic | 34,056,468 | 34,052,875 | |||||||
Diluted | 34,056,468 | 34,052,875 | |||||||
Loss per share | |||||||||
Basic | $ | (0.59 | ) | $ | (0.63 | ) | |||
Diluted | $ | (0.59 | ) | $ | (0.63 | ) | |||
Table Showing Outstanding Options and Warrants Excluded from Computation of Diluted Loss Per Share | The following outstanding instruments were excluded from the computation of diluted loss per share, as they have an anti-dilutive effect on the calculation: | ||||||||
Three Months Ended | |||||||||
March 31, | March 31, | ||||||||
2015 | 2014 | ||||||||
Options | 3,068,898 | 3,180,925 | |||||||
Warrants | — | 1,425,129 |
Business_Basis_of_Presentation2
Business, Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2015 | |
Business_Lines | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of business lines | 3 |
Sales_of_Accounts_Receivable_a1
Sales of Accounts Receivable and Receivable Discount Program - Additional Information (Detail) (Trade Accounts Receivable [Member], USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Proceeds from sale of accounts receivable | $25,485 | $3,139 |
Selling, general and administrative expenses [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Pre-tax losses on accounts receivable | $22 | $8 |
Inventories_Summary_of_Invento
Inventories - Summary of Inventories (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||||
Inventory Disclosure [Abstract] | ||||
Finished goods | $33,372 | $40,404 | ||
Semi-finished goods and work-in-process | 75,083 | 68,153 | ||
Raw materials | 8,119 | 7,520 | ||
Materials in-transit and other | 1,666 | 6,745 | ||
Less: inventory reserve | -41,818 | -47,488 | -70,265 | -72,400 |
Inventories, net | $76,422 | $75,334 |
Inventories_Changes_in_Invento
Inventories - Changes in Inventory Reserve (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Inventory Disclosure [Abstract] | ||
Beginning balance | ($47,488) | ($72,400) |
Change in reserve | -896 | -2,788 |
Write off | 6,338 | 4,012 |
Translation adjustments | 228 | 911 |
Ending balance | ($41,818) | ($70,265) |
Property_Plant_and_Equipment_S
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $363,114 | $364,395 |
Less: accumulated depreciation | -163,253 | -157,341 |
Land | 16,625 | 16,712 |
Property, plant and equipment, net | 216,486 | 223,766 |
Buildings and related structures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 70,662 | 70,552 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 267,733 | 269,031 |
Vehicles and others [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $24,719 | $24,812 |
Property_Plant_and_Equipment_A
Property, Plant and Equipment - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Property, Plant and Equipment [Abstract] | ||
Depreciation expenses | $6,789 | $6,850 |
Intangible_Assets_Summary_of_I
Intangible Assets - Summary of Intangible Assets (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | ($53,628) | ($53,860) |
Intangible assets, net | 2,422 | 2,451 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 19,580 | 19,683 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 28,120 | 28,269 |
Intellectual property assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $8,350 | $8,359 |
Intangible_Assets_Additional_I
Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expenses for intangible assets | $81 | $418 |
Accrued_Expenses_Summary_of_Ac
Accrued Expenses - Summary of Accrued Expenses (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Payroll, benefits and related taxes, excluding severance benefits | $20,888 | $18,654 |
Withholding tax levied on intercompany interest income | 28,329 | 27,497 |
Interest on senior notes | 3,148 | 7,040 |
Settlement obligations | 7,264 | 8,976 |
Outside service fees | 7,064 | 10,640 |
Others | 7,880 | 8,253 |
Accrued expenses | $74,573 | $81,060 |
Derivative_Financial_Instrumen2
Derivative Financial Instruments - Additional Information (Detail) | Mar. 31, 2015 | Dec. 31, 2014 |
Contracts | Contracts | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Number of derivative contracts | 0 | 0 |
Derivative_Financial_Instrumen3
Derivative Financial Instruments - Impact of Derivative Instruments on Consolidated Statement of Operations (Detail) (Derivatives in ASC 815 Cash Flow Hedging Relationships [Member], USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Derivative [Line Items] | ||
Amount of Loss Recognized in AOCI on Derivatives (Effective Portion) | ($1,801) | |
Other income, net [Member] | ||
Derivative [Line Items] | ||
Amount of Loss Recognized in Statement of Operations on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | -16 | |
Net sales [Member] | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) Reclassified from AOCI into Statement of Operations (Effective Portion) | 485 | -3 |
Zero cost collars [Member] | ||
Derivative [Line Items] | ||
Amount of Loss Recognized in AOCI on Derivatives (Effective Portion) | -1,801 | |
Zero cost collars [Member] | Other income, net [Member] | ||
Derivative [Line Items] | ||
Amount of Loss Recognized in Statement of Operations on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing) | -16 | |
Zero cost collars [Member] | Net sales [Member] | ||
Derivative [Line Items] | ||
Amount of Gain (Loss) Reclassified from AOCI into Statement of Operations (Effective Portion) | $485 | ($3) |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 18, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Jul. 18, 2013 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying amount of senior notes | $224,065,000 | 224,035,000 | ||
Other Asset Class [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Assets fair value on recurring basis | 0 | |||
6.625% senior notes due 2021 [Member] | Senior notes [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Interest rate | 6.63% | 6.63% | 6.63% | 6.63% |
Due date | 15-Jul-21 | 15-Jul-21 | 15-Jul-21 | |
Carrying amount of senior notes | 224,065,000 | |||
Estimated fair value of senior notes | $157,500,000 |
LongTerm_Borrowings_Components
Long-Term Borrowings - Components of Long-Term Borrowings (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Jul. 18, 2013 |
In Thousands, unless otherwise specified | |||
Debt Instrument [Line Items] | |||
Long-term borrowings, net of unamortized discount | $224,065 | $224,035 | |
Senior notes [Member] | 6.625% senior notes due 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Long-term borrowings | 225,000 | 225,000 | |
Discount on senior notes | -935 | -965 | -1,100 |
Long-term borrowings, net of unamortized discount | $224,065 |
LongTerm_Borrowings_Components1
Long-Term Borrowings - Components of Long-Term Borrowings (Parenthetical) (Detail) (6.625% senior notes due 2021 [Member], Senior notes [Member]) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 18, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Jul. 18, 2013 | |
6.625% senior notes due 2021 [Member] | Senior notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 6.63% | 6.63% | 6.63% | 6.63% |
Due date | 15-Jul-21 | 15-Jul-21 | 15-Jul-21 |
LongTerm_Borrowings_Additional
Long-Term Borrowings - Additional Information (Detail) (Senior notes [Member], USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 18, 2013 | Mar. 31, 2015 | Dec. 31, 2014 | Jul. 18, 2013 | |
6.625% senior notes due 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $225,000,000 | $225,000,000 | ||
Interest rate | 6.63% | 6.63% | 6.63% | 6.63% |
Due date | 15-Jul-21 | 15-Jul-21 | 15-Jul-21 | |
Aggregate principal amount of senior notes pricing | 99.50% | |||
Proceeds from issuance of senior notes | 218,800,000 | |||
Original debt issue discount | 1,100,000 | 935,000 | 965,000 | 1,100,000 |
Debt issuance costs paid | 5,100,000 | |||
Loss on early extinguishment of senior notes | -32,800,000 | |||
Repurchase premium on senior notes | 23,800,000 | |||
Write-off of discounts, senior notes | 1,900,000 | |||
Write-off of debt issuance costs | 5,300,000 | |||
Interest incurred during the period | 1,800,000 | |||
Percentage of redeem aggregate principal amount of Notes issued | 35.00% | |||
Redemption price plus accrued, unpaid interest and special interest to the date of redemption | 106.63% | |||
Redemption price | 100.00% | |||
Debt instrument, covenant terms | The Company did not cure the Initial Reporting Defaults within the applicable 60-day grace period and the Initial Reporting Defaults ripened into Events of Default. | |||
Interest rate additional to base rate | 0.25% | |||
6.625% senior notes due 2021 [Member] | Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt acceleration period | 180 days | |||
6.625% senior notes due 2021 [Member] | 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price plus accrued, unpaid interest and special interest to the date of redemption | 103.31% | |||
6.625% senior notes due 2021 [Member] | 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price plus accrued, unpaid interest and special interest to the date of redemption | 101.66% | |||
6.625% senior notes due 2021 [Member] | 2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price plus accrued, unpaid interest and special interest to the date of redemption | 100.00% | |||
6.625% senior notes due 2021 [Member] | Interest Expense [Member] | ||||
Debt Instrument [Line Items] | ||||
Amortization costs | 132,000 | |||
6.625% senior notes due 2021 [Member] | Other non-current assets [Member] | ||||
Debt Instrument [Line Items] | ||||
Remaining capitalized costs | $4,188,000 | |||
10.500% senior notes due 2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 10.50% | |||
Due date | 15-Apr-18 |
Accrued_Severance_Benefits_Add
Accrued Severance Benefits - Additional Information (Detail) | Mar. 31, 2015 |
Compensation and Retirement Disclosure [Abstract] | |
Percentage of employees eligible for severance benefits | 98.00% |
Accrued_Severance_Benefits_Cha
Accrued Severance Benefits - Changes in Accrued Severance Benefits (Detail) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Postemployment Benefits [Abstract] | |||
Beginning balance | $140,405 | $135,356 | |
Provisions | 7,260 | 4,034 | |
Severance payments | -1,341 | -1,514 | |
Translation adjustments | -726 | -1,700 | |
Ending balance | 145,598 | 136,176 | |
Less: Cumulative contributions to the National Pension Fund | -343 | -375 | |
Group severance insurance plan | -764 | -788 | |
Accrued severance benefits, net | $144,491 | $135,013 | $139,289 |
Accrued_Severance_Benefits_Fut
Accrued Severance Benefits - Future Benefits Payments to Employees (Detail) (USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Compensation and Retirement Disclosure [Abstract] | |
Remainder of 2015 | $295 |
2016 | 1,166 |
2017 | 1,713 |
2018 | 2,903 |
2019 | 2,278 |
2020 | 3,121 |
2021 - 2025 | $31,155 |
Foreign_Currency_Gain_Loss_Net1
Foreign Currency Gain (Loss), Net - Additional Information (Detail) | Mar. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
In Millions, unless otherwise specified | USD ($) | KRW | KRW |
Foreign Currency Transaction [Abstract] | |||
Exchange rates using first base rate | 1,105 | 1,099.20 | |
Intercompany loan balance | $762 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Tax Contingency [Line Items] | ||
Income tax expenses | $1,133,000 | $803,000 |
MagnaChip Semiconductor, Ltd. [Member] | ||
Income Tax Contingency [Line Items] | ||
Income tax expenses | $0 | $0 |
Geographic_and_Segment_Informa2
Geographic and Segment Information - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Customer | Customer | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Number of operating segments | 1 | |
Number of business lines | 3 | |
Customer Concentration Risk [Member] | Net Sales [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage | 10.00% | |
Number of customers | 2 | 0 |
Customer Concentration Risk [Member] | Net Sales [Member] | Top Ten Customers [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage | 67.00% | 55.00% |
Number of customers | 10 | 10 |
Customer Concentration Risk [Member] | Net Sales [Member] | Customer One [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage | 15.40% | |
Customer Concentration Risk [Member] | Net Sales [Member] | Customer Two [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage | 13.80% | |
Geographic Concentration Risk [Member] | Property, Plant and Equipment [Member] | Korea [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Concentration risk, percentage | 96.00% |
Geographic_and_Segment_Informa3
Geographic and Segment Information - Net Sales by Business Line (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Net Sales | ||
Total net sales | $164,885 | $164,164 |
Display Solutions [Member] | ||
Net Sales | ||
Total net sales | 56,353 | 40,379 |
Semiconductor Manufacturing Services [Member] | ||
Net Sales | ||
Total net sales | 74,520 | 91,928 |
Power Solutions [Member] | ||
Net Sales | ||
Total net sales | 33,837 | 31,775 |
All Other [Member] | ||
Net Sales | ||
Total net sales | $175 | $82 |
Geographic_and_Segment_Informa4
Geographic and Segment Information - Net Sales by Region, Based on Location of Customer (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | $164,885 | $164,164 |
Korea [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 62,470 | 67,013 |
Asia Pacific (other than Korea) [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 79,177 | 70,221 |
U.S.A. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 19,370 | 19,753 |
Europe [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | 3,653 | 6,893 |
Others [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total net sales | $215 | $284 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss - Schedule of Accumulated Other Comprehensive Loss (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||||
Equity [Abstract] | ||||
Foreign currency translation adjustments | ($32,495) | ($35,551) | ||
Derivative adjustments | 485 | |||
Total | ($32,495) | ($35,066) | ($44,961) | ($50,058) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss - Changes in Accumulated Other Comprehensive Loss (Detail) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | ($35,066) | ($50,058) |
Other comprehensive income (loss) before reclassifications | 3,056 | 5,094 |
Amounts reclassified from accumulated other comprehensive loss (income) | -485 | 3 |
Net current-period other comprehensive income (loss) | 2,571 | 5,097 |
Ending balance | -32,495 | -44,961 |
Foreign currency translation adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | -35,551 | -57,326 |
Other comprehensive income (loss) before reclassifications | 3,056 | 6,619 |
Net current-period other comprehensive income (loss) | 3,056 | 6,619 |
Ending balance | -32,495 | -50,707 |
Derivative adjustments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 485 | 6,587 |
Other comprehensive income (loss) before reclassifications | -1,801 | |
Amounts reclassified from accumulated other comprehensive loss (income) | -485 | 3 |
Net current-period other comprehensive income (loss) | -485 | -1,798 |
Ending balance | -4,789 | |
Unrealized gain on investments [Member] | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Beginning balance | 681 | |
Other comprehensive income (loss) before reclassifications | 276 | |
Net current-period other comprehensive income (loss) | 276 | |
Ending balance | $957 |
Loss_per_Share_Table_Illustrat
Loss per Share - Table Illustrating Computation of Basic and Diluted Loss Per Common Share (Detail) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Earnings Per Share [Abstract] | ||
Net loss | ($20,029) | ($21,605) |
Weighted average common stock outstanding | ||
Basic | 34,056,468 | 34,052,875 |
Diluted | 34,056,468 | 34,052,875 |
Loss per share | ||
Basic | ($0.59) | ($0.63) |
Diluted | ($0.59) | ($0.63) |
Loss_per_Share_Table_Showing_O
Loss per Share - Table Showing Outstanding Options and Warrants Excluded from Computation of Diluted Loss Per Share (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Outstanding units and warrants excluded from computation of diluted loss per share/unit | 3,068,898 | 3,180,925 |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Outstanding units and warrants excluded from computation of diluted loss per share/unit | 1,425,129 |
Loss_per_Share_Additional_Info
Loss per Share - Additional Information (Detail) (USD $) | 0 Months Ended | |||
Mar. 05, 2015 | Mar. 31, 2015 | Mar. 05, 2015 | Dec. 31, 2014 | |
Class of Stock [Line Items] | ||||
Common stock, par value | $0.01 | $0.01 | $0.01 | $0.01 |
Beneficial ownership percentage | 10.00% | 10.00% | ||
Common stock dividend description | A dividend of one preferred stock purchase right (a "Right" and collectively, the "Rights") for each share of the Company's common stock | |||
Date on which rights expire | 5-Mar-16 | |||
Percentage of ownership in outstanding common stock | 50.00% | |||
Minimum [Member] | ||||
Class of Stock [Line Items] | ||||
Percentage of assets or earnings power sold | 50.00% | |||
Passive Institutional Investor [Member] | ||||
Class of Stock [Line Items] | ||||
Beneficial ownership percentage | 20.00% | 20.00% | ||
Board of Directors [Member] | ||||
Class of Stock [Line Items] | ||||
Redemption price per right | $0.00 | |||
Series A Junior Participating Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Preferred stock, par value | $0.01 | $0.01 | ||
Purchase price of preferred Stock | $24 | $24 | ||
Number of shares entitle to purchase on each right, once exercisable description | Each Right, once exercisable, will entitle the registered holder to purchase from the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 3 Months Ended | 0 Months Ended | 1 Months Ended |
Mar. 31, 2015 | 28-May-15 | 31-May-15 | |
Segments | Segments | ||
Subsequent Event [Line Items] | |||
Number of operating segments | 1 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Number of operating segments | 2 | ||
Subsequent Event [Member] | Zero cost collars [Member] | |||
Subsequent Event [Line Items] | |||
Derivative counterparty | Nomura Financial Investment (Korea) Co., Ltd. | ||
Derivative notional amount | $84,000,000 | ||
Deposit paid to counterparty | $5,000,000 | ||
6.625% senior notes due 2021 [Member] | Senior notes [Member] | |||
Subsequent Event [Line Items] | |||
Debt instrument, covenant terms | The Company did not cure the Initial Reporting Defaults within the applicable 60-day grace period and the Initial Reporting Defaults ripened into Events of Default. | ||
6.625% senior notes due 2021 [Member] | Senior notes [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Debt instrument, covenant terms | The Company believes it has cured the default referenced in the 10-K Notice of Default within the applicable 60-day grace period under the Indenture by the filing of the 2014 10-K with the SEC on May 28, 2015. |