Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 31, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MX | |
Entity Registrant Name | MAGNACHIP SEMICONDUCTOR Corp | |
Entity Central Index Key | 1,325,702 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 34,568,942 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 68,510 | $ 102,434 |
Accounts receivable, net | 57,885 | 72,957 |
Inventories, net | 58,180 | 75,334 |
Other receivables | 3,274 | 10,616 |
Prepaid expenses | 10,957 | 7,560 |
Current deferred income tax assets | 36 | 237 |
Hedge collateral | 6,000 | |
Other current assets | 8,265 | 6,898 |
Total current assets | 213,107 | 276,036 |
Property, plant and equipment, net | 189,362 | 223,766 |
Intangible assets, net | 2,516 | 2,451 |
Long-term prepaid expenses | 13,255 | 10,916 |
Deferred income tax assets | 246 | 415 |
Other non-current assets | 11,905 | 14,147 |
Total assets | 430,391 | 527,731 |
Current liabilities | ||
Accounts payable | 48,939 | 70,767 |
Other accounts payable | 8,418 | 10,986 |
Accrued expenses | 68,598 | 81,060 |
Other current liabilities | 6,843 | 6,460 |
Total current liabilities | 132,798 | 169,273 |
Long-term borrowings, net | 224,125 | 224,035 |
Accrued severance benefits, net | 133,955 | 139,289 |
Other non-current liabilities | 12,362 | 13,636 |
Total liabilities | $ 503,240 | $ 546,233 |
Commitments and Contingencies (Note 16) | ||
Stockholders' equity | ||
Common stock, $0.01 par value, 150,000,000 shares authorized, 41,147,307 shares issued and 34,568,542 outstanding at September 30, 2015 and 40,635,233 shares issued and 34,056,468 outstanding at December 31, 2014 | $ 411 | $ 406 |
Additional paid-in capital | 124,218 | 118,419 |
Accumulated deficit | (119,064) | (11,343) |
Treasury stock, 6,578,765 shares at September 30, 2015 and December 31, 2014 | (90,918) | (90,918) |
Accumulated other comprehensive income (loss) | 12,504 | (35,066) |
Total stockholders' equity (deficit) | (72,849) | (18,502) |
Total liabilities and stockholders' equity | $ 430,391 | $ 527,731 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 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 | 41,147,307 | 40,635,233 |
Common stock, shares outstanding | 34,568,542 | 34,056,468 |
Treasury stock, shares | 6,578,765 | 6,578,765 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Net sales | $ 154,382 | $ 194,332 | $ 481,282 | $ 530,566 |
Cost of sales | 119,683 | 151,702 | 376,320 | 412,202 |
Gross profit | 34,699 | 42,630 | 104,962 | 118,364 |
Operating expenses | ||||
Selling, general and administrative expenses | 22,107 | 38,690 | 75,725 | 94,463 |
Research and development expenses | 20,450 | 23,422 | 64,541 | 70,618 |
Total operating expenses | 42,557 | 62,112 | 140,266 | 165,081 |
Operating loss | (7,858) | (19,482) | (35,304) | (46,717) |
Interest expense | (4,075) | (4,197) | (12,187) | (12,581) |
Foreign currency gain (loss), net | (44,139) | (23,508) | (59,611) | 5,510 |
Other income, net | 256 | 691 | 1,162 | 2,156 |
Loss before income taxes | (55,816) | (46,496) | (105,940) | (51,632) |
Income tax expenses | 1,250 | 311 | 1,781 | 1,770 |
Net loss | $ (57,066) | $ (46,807) | $ (107,721) | $ (53,402) |
Loss per common share- | ||||
Basic | $ (1.65) | $ (1.37) | $ (3.14) | $ (1.57) |
Diluted | $ (1.65) | $ (1.37) | $ (3.14) | $ (1.57) |
Weighted average number of shares- | ||||
Basic | 34,664,246 | 34,056,359 | 34,273,265 | 34,055,210 |
Diluted | 34,664,246 | 34,056,359 | 34,273,265 | 34,055,210 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (57,066) | $ (46,807) | $ (107,721) | $ (53,402) |
Other comprehensive income (loss) | ||||
Foreign currency translation adjustments | 37,583 | 16,874 | 50,762 | (2,462) |
Derivative adjustments | ||||
Fair valuation of derivatives | (2,869) | (3,319) | (4,286) | 2,882 |
Reclassification adjustment for loss (gain) on derivatives included in net loss | 1,579 | (3,048) | 1,094 | (5,692) |
Investment adjustments | ||||
Unrealized gain on investments | 1,201 | |||
Reclassification adjustment for gain on investments included in net income | (1,882) | |||
Total other comprehensive income (loss) | 36,293 | 10,507 | 47,570 | (5,953) |
Total comprehensive loss | $ (20,773) | $ (36,300) | $ (60,151) | $ (59,355) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock Outstanding [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Treasury Stock [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
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 | 1,665 | 1,665 | |||||
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 (loss), net | (5,953) | (5,953) | |||||
Net loss | (53,402) | (53,402) | |||||
Balance, ending at Sep. 30, 2014 | 23,918 | 406 | 117,954 | 52,487 | (90,918) | (56,011) | |
Balance, Shares ending at Sep. 30, 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 | $ 2,370 | 2,370 | |||||
Exercise of stock options | 3,434 | 5 | 3,429 | ||||
Exercise of stock options, Shares | 512,074 | ||||||
Other comprehensive income (loss), net | 47,570 | 47,570 | |||||
Net loss | (107,721) | (107,721) | |||||
Balance, ending at Sep. 30, 2015 | $ (72,849) | $ 411 | $ 124,218 | $ (119,064) | $ (90,918) | $ 12,504 | |
Balance, Shares ending at Sep. 30, 2015 | 34,568,542 | 34,568,542 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (107,721) | $ (53,402) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 20,066 | 22,846 |
Provision for severance benefits | 14,173 | 14,775 |
Bad debt expenses (reversal of allowance) | (21) | 3,755 |
Amortization of debt issuance costs and original issue discount | 491 | 457 |
Loss (gain) on foreign currency, net | 65,730 | (4,077) |
Gain on disposal of investments | (1,524) | |
Stock-based compensation | 2,370 | 1,665 |
Other | (331) | 951 |
Changes in operating assets and liabilities | ||
Accounts receivable | 8,672 | (206) |
Inventories, net | 11,302 | (1,199) |
Other receivables | 7,115 | 353 |
Other current assets | 669 | 4,835 |
Deferred tax assets | 367 | 835 |
Accounts payable | (18,894) | (964) |
Other accounts payable | (10,199) | (7,265) |
Accrued expenses | (32,731) | 12,678 |
Other current liabilities | (1,922) | (201) |
Other non-current liabilities | 190 | 65 |
Payment of severance benefits | (7,905) | (4,712) |
Other | 141 | 19 |
Net cash used in operating activities | (48,438) | (10,316) |
Cash flows from investing activities | ||
Proceeds from settlement of hedge collateral | 10,841 | |
Payment of hedge collateral | (17,182) | |
Proceeds from disposal of investments | 2,003 | |
Proceeds from disposal of plant, property and equipment | 1,698 | |
Purchase of plant, property and equipment | (4,250) | (15,613) |
Payment for intellectual property registration | (550) | (778) |
Collection of guarantee deposits | 123 | |
Payment of guarantee deposits | (670) | (338) |
Other | 179 | 45 |
Net cash used in investing activities | (9,811) | (14,681) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 3,434 | 67 |
Net cash provided by financing activities | 3,434 | 67 |
Effect of exchange rates on cash and cash equivalents | 20,891 | (3,466) |
Net decrease in cash and cash equivalents | (33,924) | (28,396) |
Cash and cash equivalents | ||
Beginning of the period | 102,434 | 153,606 |
End of the period | 68,510 | 125,210 |
Supplemental cash flow information | ||
Cash paid for interest | 15,181 | 14,812 |
Cash paid for income taxes | 438 | 743 |
Non-cash investing activities | ||
Property, plant and equipment additions in other accounts payable | $ 196 | $ 396 |
Business, Basis of Presentation
Business, Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 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 Radio Frequency (“RF”) applications. The Company’s business is comprised of two operating segments: Foundry Services Group and Standard Products Group. The Company’s Foundry Services Group provides 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. The Company’s Standard Products Group is comprised of two business lines: Display Solutions and Power Solutions. The Company’s Display Solutions products provide flat panel display solutions to major suppliers of large and small flat panel displays. The Company’s Power Solutions products include discrete and integrated circuit solutions for power management in consumer, communication and industrial 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 Accounting Standards Codification 270, “Interim Reporting” 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. The segment disclosures reflect the Company’s new operating segments. See Note 13, Geographic and Segment Information, for a more detailed discussion and explanation of the change. Recent Accounting Pronouncements In July 2015, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update No. 2015-11, “Simplifying the Measurement of Inventory” (“ASU 2015-11”). Under this ASU, inventory will be measured at the lower of cost and net realizable value, and options that currently exist for market value will be eliminated. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2015-11 on its consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update No. 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. As of September 30, 2015, the Company had $3,919 thousand of unamortized debt issuance costs included in other non-current assets in the consolidated balance sheet, which will be reclassified as a deduction from the carrying amount of the related long-term borrowing upon adoption of ASU 2015-03. 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 (the “Original Effective Date”), including interim periods within that reporting period, and can be adopted either retrospectively to each prior period presented or as a cumulative-effect adjustment as of the date of adoption, with early application permitted as of the Original Effective Date. In August 2015, the FASB issued ASU 2015-14 “Deferral of the Effective Date,” which defers the required adoption date of ASU 2014-09 by one year. As a result of the deferred effective date, ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted but not before the original effective date as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company has not yet selected a transition method and is currently evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
Sales of Accounts Receivable an
Sales of Accounts Receivable and Receivable Discount Program | 9 Months Ended |
Sep. 30, 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 $49,138 thousand and $12,832 thousand for the nine months ended September 30, 2015 and 2014, respectively, and these sales resulted in pre-tax losses of $88 thousand and $39 thousand for the nine months ended September 30, 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 | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventories as of September 30, 2015 and December 31, 2014 consist of the following: September 30, December 31, Finished goods $ 23,745 $ 40,404 Semi-finished goods and work-in-process 46,886 68,153 Raw materials 7,820 7,520 Materials in-transit and other 1,369 6,745 Less: inventory reserve (21,640 ) (47,488 ) Inventories, net $ 58,180 $ 75,334 Three Months Nine Months Three Months Nine Months September 30, 2015 September 30, 2014 Beginning balance $ (31,361 ) $ (47,488 ) $ (65,670 ) $ (72,400 ) Change in reserve 3,863 (1,780 ) 389 (3,033 ) Write off 4,050 25,010 8,008 20,746 Translation adjustments 1,808 2,618 2,125 (461 ) Ending balance $ (21,640 ) $ (21,640 ) $ (55,148 ) $ (55,148 ) 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 | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 4. Property, Plant and Equipment Property, plant and equipment as of September 30, 2015 and December 31, 2014 comprise the following: September 30, December 31, Buildings and related structures $ 64,884 $ 70,552 Machinery and equipment 249,700 269,031 Vehicles and others 23,580 24,812 338,164 364,395 Less: accumulated depreciation (163,235 ) (157,341 ) Land 14,433 16,712 Property, plant and equipment, net $ 189,362 $ 223,766 Aggregate depreciation expenses totaled $6,308 thousand and 7,372 thousand for the three months ended September 30, 2015 and 2014, respectively, and $19,810 thousand and $21,533 thousand for the nine months ended September 30, 2015 and 2014, respectively. |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 5. Intangible Assets Intangible assets as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, Technology $ 18,113 $ 19,683 Customer relationships 26,013 28,269 Intellectual property assets 8,135 8,359 Less: accumulated amortization (49,745 ) (53,860 ) Intangible assets, net $ 2,516 $ 2,451 Aggregate amortization expenses for intangible assets totaled $91 thousand and $452 thousand for the three months ended September 30, 2015 and 2014, respectively, and $256 thousand and $1,313 thousand for the nine months ended September 30, 2015 and 2014, respectively. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 6. Accrued Expenses Accrued expenses as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, Payroll, benefits and related taxes, excluding severance benefits $ 19,992 $ 18,654 Withholding tax levied on intercompany interest income 30,167 27,497 Interest on senior notes 3,104 7,040 Settlement obligations 668 8,976 Outside service fees 5,826 10,640 Others 8,841 8,253 Accrued expenses $ 68,598 $ 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 customers’ products. Although the Company does not agree with the claims, as its products met the customers’ specifications, the Company considered a number of factors and decided not to dispute the claims but make certain in-kind payments as demanded by the customers. These settlement obligations are accrued when they are deemed probable and can be reasonably estimated. As of September 30, 2015, the settlement obligation relating to one of the claims was fully released under the term of the agreement with the customer. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 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. Details of derivative contracts as of September 30, 2015 are as follows: Date of transaction Type of derivative Total notional amount Month of settlement September 30, 2015 Zero cost collar $ 30,000 January to March 2016 September 30, 2015 Zero cost collar $ 30,000 April to June 2016 The Company did not have any derivative contracts in effect as of December 31, 2014. The zero cost collar contracts qualify as cash flow hedges under ASC 815, “ Derivatives and Hedging The fair values of the Company’s outstanding zero cost collar contracts recorded as liabilities as of September 30, 2015 and December 31, 2014 are as follows: Derivatives designated as hedging instruments: September 30, December 31, Liability Derivatives: Zero cost collars Other current liabilities $ 636 $ — Offsetting of derivative liabilities as of September 30, 2015 is as follows: As of September 30, 2015 Gross amounts of Gross amounts Net amounts of Gross amounts not offset Net amount Financial Cash Liability Derivatives: Zero cost collars $ 636 $ — $ 636 $ — $ — $ 636 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 hedge ineffectiveness, 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 September 30, 2015 and 2014: Derivatives in ASC 815 Cash Flow Amount of Loss Location of Amount of Gain Location of Loss Amount of Loss Three Months Ended Three Months Ended Three Months Ended 2015 2014 2015 2014 2015 2014 Zero cost collars $ (2,869 ) $ (3,319 ) Net sales $ (1,579 ) $ 3,048 Other income, net $ (271 ) $ (9 ) Total $ (2,869 ) $ (3,319 ) $ (1,579 ) $ 3,048 $ (271 ) $ (9 ) The following table summarizes the impact of derivative instruments on the consolidated statement of operations for the nine months ended September 30, 2015 and 2014: Derivatives in ASC 815 Cash Flow Amount of Gain Location of Amount of Gain (Loss) Location of Loss Amount of Loss Nine Months Ended Nine Months Ended Nine Months Ended 2015 2014 2015 2014 2015 2014 Zero cost collars $ (4,286 ) $ 2,882 Net sales $ (1,094 ) $ 5,692 Other income, net $ (577 ) $ (61 ) Total $ (4,286 ) $ 2,882 $ (1,094 ) $ 5,692 $ (577 ) $ (61 ) As of September 30, 2015, the amount expected to be reclassified from accumulated other comprehensive income into loss within the next twelve months is $2,707 thousand. On September 18, 2015, the Company and the counterparty, Nomura Financial Investment (Korea) Co., Ltd. (“NFIK”), mutually agreed to terminate the zero cost collar contracts for the third and fourth quarters of the year ending December 31, 2015. In connection with this termination, the Company paid $2,800 thousand for settlement to NFIK. The Company set aside $6.0 million cash deposits to NFIK to the zero cost collar contracts outstanding as of September 30, 2015. The Company is required to deposit cash collateral with NFIK for any exposure in excess of $0.5 million and no cash collateral was required as of September 30, 2015. The Company recorded the cash deposits of $6.0 million as hedge collateral in the consolidated balance sheet as of September 30, 2015. These outstanding zero cost collar contracts are subject to termination if the sum of qualified and unrestricted cash and cash equivalents held by the Company is less than $30 million on the last day of a fiscal quarter. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. Fair Value Measurements The Company’s financial liabilities measured at fair value on a recurring basis as of September 30, 2015, and the basis for that measurement is as follows: Carrying Value Fair Value Quoted Prices in Significant Significant Liabilities: Derivative liabilities (other current liabilities) $ 636 $ 636 $ — $ 636 $ — The Company did not have any assets measured at fair value on a recurring basis as of September 30, 2015 other than cash and cash equivalents, accounts receivable, other receivables, hedge collateral, 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 September 30, 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 $224,125 thousand and $174,490 thousand, respectively. The decrease in the fair value of the 2021 Notes from December 31, 2014 to September 30, 2015 was related to the revision of the Company’s credit rating in the second quarter of 2015. The estimated fair value is based on Level 2 inputs. |
Long-Term Borrowings
Long-Term Borrowings | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Long-Term Borrowings | 9. Long-Term Borrowings Long-term borrowings as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, 6.625% senior notes due July 2021 $ 225,000 $ 225,000 Discount on senior notes (875 ) (965 ) Long-term borrowings, net of unamortized discount $ 224,125 $ 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 $137 thousand and $402 thousand for the three and nine months ended September 30, 2015, respectively. The remaining capitalized costs as of September 30, 2015, which were included in other non-current assets in the consolidated balance sheet, were $3,919 thousand. 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. |
Accrued Severance Benefits
Accrued Severance Benefits | 9 Months Ended |
Sep. 30, 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. 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 September 30, 2015, 98% of employees of the Company were eligible for severance benefits. Changes in accrued severance benefits are as follows: Three Months Ended Nine Ended Three Nine September 30, 2015 September 30, 2014 Beginning balance $ 144,800 $ 140,405 $ 146,923 $ 135,356 Provisions 2,296 14,173 5,349 14,775 Severance payments (3,674 ) (7,905 ) (1,222 ) (4,712 ) Translation adjustments (8,466 ) (11,717 ) (5,144 ) 487 134,956 134,956 145,906 145,906 Less: Cumulative contributions to the National Pension Fund (310 ) (310 ) (372 ) (372 ) Group severance insurance plan (691 ) (691 ) (795 ) (795 ) Accrued severance benefits, net $ 133,955 $ 133,955 $ 144,739 $ 144,739 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 $ 271 2016 956 2017 1,572 2018 2,690 2019 2,088 2020 2,510 2021 – 2025 27,838 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), N
Foreign Currency Gain (Loss), Net | 9 Months Ended |
Sep. 30, 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 September 30, 2015, the outstanding intercompany loan balance including accrued interests between the Korean subsidiary and the Dutch subsidiary was $758 million. The Korean won to U.S. dollar exchange rates were 1,194.5:1 and 1,099.2:1 using the first base rate as of September 30, 2015 and December 31, 2014, respectively, as quoted by the Korea Exchange Bank. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 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 is the principal operating entity within the consolidated Company. For the three and nine months ended September 30, 2015 and 2014, no income tax expense or benefit for the Korean subsidiary was recorded due to net loss, 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 September 30, 2015 and 2014 was $1,250 thousand and $311 thousand, respectively, primarily attributable to interest on intercompany balances, which was offset in part by the benefits from net operating loss carry-back at the parent company and a domestic subsidiary for the three months ended September 30, 2014. Income tax expense recorded for the nine months ended September 30, 2015 and 2014 was $1,781 thousand and $1,770 thousand, respectively, primarily attributable to interest on intercompany balances, which was offset in part by the benefits from the lapse of statute of limitations on unrecognized tax benefits for the nine months ended September 30, 2015 and benefits from net operating loss carry-back at the parent company and a domestic subsidiary for the nine months ended September 30, 2014. |
Geographic and Segment Informat
Geographic and Segment Information | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Geographic and Segment Information | 13. Geographic and Segment Information The Company had previously reported its results of operations under one operating segment. During the second quarter of 2015, organizational changes were made to (i) realign the Company’s businesses and organizational structure and (ii) streamline and consolidate certain business processes to achieve greater operating efficiencies. In furtherance of these objectives, the Company combined its business lines of Display Solutions and Power Solutions into a new segment called Standard Products Group. Beginning in the second quarter of 2015, the Company reports its financial results in two operating segments: Semiconductor Manufacturing Services and Standard Products Group. The Company’s chief operating decision maker is its Chief Executive Officer who allocates resources and assesses performance of the business and other activities based on gross profit. The two newly established operating segments will be managed prospectively and all prior period amounts related to the segment change have been retrospectively reclassified to conform to the new presentation. During the third quarter of 2015, the Company changed the name of its Semiconductor Manufacturing Services segment to Foundry Services Group. The Company believes that this new name provides greater clarity on the identity of this segment. There is no change to the composition of this reportable segment from what the Company previously reported for the Semiconductor Manufacturing Service segment. The following sets forth information relating to the operating segments: Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Net Sales Foundry Services Group $ 71,471 $ 99,333 $ 224,953 $ 281,600 Standard Products Group Display Solutions 48,314 58,700 153,585 144,406 Power Solutions 34,406 36,088 102,238 104,138 Total Standard Products Group 82,720 94,788 255,823 248,544 All other 191 211 506 422 Total net sales $ 154,382 $ 194,332 $ 481,282 $ 530,566 Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Gross Profit Foundry Services Group $ 18,681 $ 19,386 $ 51,241 $ 60,109 Standard Products Group 15,827 23,033 53,216 57,833 All other 191 211 505 422 Total gross profit $ 34,699 $ 42,630 $ 104,962 $ 118,364 The following is a summary of net sales by region, based on the location of the customer: Three Months Ended September 30, 2015 September 30, 2014 Korea $ 56,097 $ 84,763 Asia Pacific (other than Korea) 84,236 80,123 U.S.A. 6,096 25,079 Europe 7,407 3,829 Others 546 538 Total $ 154,382 $ 194,332 Nine Months Ended September 30, 2015 September 30, 2014 Korea $ 180,322 $ 219,096 Asia Pacific (other than Korea) 238,995 224,681 U.S.A. 45,776 69,428 Europe 14,768 16,323 Others 1,421 1,038 Total $ 481,282 $ 530,566 Net sales from the Company’s top ten largest customers accounted for 61% and 66% for the three months ended September 30, 2015 and 2014, respectively, and 64% and 60% for the nine months ended September 30, 2015 and 2014, respectively. For the three months ended September 30, 2015, the Company had two customers that represented 14.7% and 10.1% of its net sales, respectively, and for the nine months ended September 30, 2015, the Company had two customers that represented 15.0% and 10.9% of its net sales, respectively. For the three months ended September 30, 2014, the Company had three customers which represented 13.9%, 10.7% and 10.2% of the Company’s net sales, respectively, and for the nine months ended September 30, 2014, the Company had one customer which represented 11.2% of its net sales. 96% of the Company’s property, plant and equipment are located in Korea as of September 30, 2015. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | 14. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) consists of the following as of September 30, 2015 and December 31, 2014, respectively: September 30, 2015 December 31, 2014 Foreign currency translation adjustments $ 15,211 $ (35,551 ) Derivative adjustments (2,707 ) 485 Total $ 12,504 $ (35,066 ) Changes in accumulated other comprehensive income (loss) for the three months ended September 30, 2015 and 2014 are as follows: Three Months Ended September 30, 2015 Foreign currency adjustments Derivative adjustments Unrealized gain on investments Total Beginning balance $ (22,372 ) $ (1,417 ) $ — $ (23,789 ) Other comprehensive income (loss) before reclassifications 37,583 (2,869 ) — 34,714 Amounts reclassified from accumulated other comprehensive income — 1,579 — 1,579 Net current-period other comprehensive income (loss) 37,583 (1,290 ) — 36,293 Ending balance $ 15,211 $ (2,707 ) $ — $ 12,504 Three Months Ended September 30, 2014 Foreign Derivative adjustments Unrealized gain on investments Total Beginning balance $ (76,662 ) $ 10,144 $ — $ (66,518 ) Other comprehensive income (loss) before reclassifications 16,874 (3,319 ) — 13,555 Amounts reclassified from accumulated other comprehensive income — (3,048 ) — (3,048 ) Net current-period other comprehensive income (loss) 16,874 (6,367 ) — 10,507 Ending balance $ (59,788 ) $ 3,777 $ — $ (56,011 ) Changes in accumulated other comprehensive income (loss) for the nine months ended September 30, 2015 and 2014 are as follows: Nine Months Ended September 30, 2015 Foreign Derivative Unrealized Total Beginning balance $ (35,551 ) $ 485 $ — $ (35,066 ) Other comprehensive income (loss) before reclassifications 50,762 (4,286 ) — 46,476 Amounts reclassified from accumulated other comprehensive income — 1,094 — 1,094 Net current-period other comprehensive income (loss) 50,762 (3,192 ) — 47,570 Ending balance $ 15,211 $ (2,707 ) $ — $ 12,504 Nine Months Ended September 30, 2014 Foreign Derivative Unrealized Total Beginning balance $ (57,326 ) $ 6,587 $ 681 $ (50,058 ) Other comprehensive income (loss) before reclassifications (2,462 ) 2,882 1,201 1,621 Amounts reclassified from accumulated other comprehensive income — (5,692 ) (1,882 ) (7,574 ) Net current-period other comprehensive loss (2,462 ) (2,810 ) (681 ) (5,953 ) Ending balance $ (59,788 ) $ 3,777 $ — $ (56,011 ) |
Loss per Share
Loss per Share | 9 Months Ended |
Sep. 30, 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 September 30, 2015 September 30, 2014 Net loss $ (57,066 ) $ (46,807 ) Weighted average common stock outstanding Basic 34,664,246 34,056,359 Diluted 34,664,246 34,056,359 Loss per share Basic $ (1.65 ) $ (1.37 ) Diluted $ (1.65 ) $ (1.37 ) Nine Months Ended September 30, 2015 September 30, 2014 Net loss $ (107,721 ) $ (53,402 ) Weighted average common stock outstanding Basic 34,273,265 34,055,210 Diluted 34,273,265 34,055,210 Loss per share Basic $ (3.14 ) $ (1.57 ) Diluted $ (3.14 ) $ (1.57 ) 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 Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Options 3,257,028 3,178,645 3,257,028 3,178,645 Warrants — 1,425,129 — 1,425,129 Restricted Stock Units 135,370 — 135,370 — 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 (“the Exchange Act”)) 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, (i) 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 (ii) the Company or one or more of its subsidiaries sells or otherwise transfers 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 | 9 Months Ended |
Sep. 30, 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 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 June 15, 2015, these two class action lawsuits were consolidated. On June 26, 2015, an amended complaint was filed in the consolidated action, against the Company, certain of the Company’s current directors and 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 and a putative subclass consisting of 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 consolidated amended complaint asserts claims on behalf of the putative class 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 officers, (ii) alleged violations of Section 20(a) of the Exchange Act by certain of the Company’s current directors and former officers, and (iii) alleged violations of Sections 20(a) and 20(A) of the Exchange Act by a shareholder. The consolidated amended complaint also asserts claims on behalf of the subclass for (i) alleged violations of Section 11 of the Securities Act of 1933 (the “Securities Act”) by the Company, certain of the Company’s current directors and 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 current directors and 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 officers, and a shareholder of the Company. On July 27, 2015, the Company and certain defendants filed motions to dismiss the consolidated action, Thomas et al., v. MagnaChip Semiconductor Corp., et al. SEC Enforcement Staff Review In March 2014, the Company voluntarily reported to the SEC that the Company’s Audit Committee (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 the Independent Investigation. Over the course of 2014 and the first two quarters 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 will continue to 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. Thomas et al., v. MagnaChip Semiconductor Corp., et al. Okla. Police Pension & Retirement Sys. v. MagnaChip Semiconductor Corp., et al. On June 1, 2015, a shareholder derivative action as styled as Bushansky v. Norby, et al. Thomas et al., v. MagnaChip Semiconductor Corp., et al. 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. 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. |
Business, Basis of Presentati24
Business, Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 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 Radio Frequency (“RF”) applications. The Company’s business is comprised of two operating segments: Foundry Services Group and Standard Products Group. The Company’s Foundry Services Group provides 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. The Company’s Standard Products Group is comprised of two business lines: Display Solutions and Power Solutions. The Company’s Display Solutions products provide flat panel display solutions to major suppliers of large and small flat panel displays. The Company’s Power Solutions products include discrete and integrated circuit solutions for power management in consumer, communication and industrial 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 Accounting Standards Codification 270, “Interim Reporting” 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. The segment disclosures reflect the Company’s new operating segments. See Note 13, Geographic and Segment Information, for a more detailed discussion and explanation of the change. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In July 2015, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update No. 2015-11, “Simplifying the Measurement of Inventory” (“ASU 2015-11”). Under this ASU, inventory will be measured at the lower of cost and net realizable value, and options that currently exist for market value will be eliminated. Net realizable value is defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. No other changes were made to the current guidance on inventory measurement. ASU 2015-11 is effective for interim and annual periods beginning after December 15, 2016, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2015-11 on its consolidated financial statements. In April 2015, the FASB issued Accounting Standards Update No. 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. As of September 30, 2015, the Company had $3,919 thousand of unamortized debt issuance costs included in other non-current assets in the consolidated balance sheet, which will be reclassified as a deduction from the carrying amount of the related long-term borrowing upon adoption of ASU 2015-03. 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 (the “Original Effective Date”), including interim periods within that reporting period, and can be adopted either retrospectively to each prior period presented or as a cumulative-effect adjustment as of the date of adoption, with early application permitted as of the Original Effective Date. In August 2015, the FASB issued ASU 2015-14 “Deferral of the Effective Date,” which defers the required adoption date of ASU 2014-09 by one year. As a result of the deferred effective date, ASU 2014-09 will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted but not before the original effective date as of annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. The Company has not yet selected a transition method and is currently evaluating the impact of the adoption of ASU 2014-09 on its consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories as of September 30, 2015 and December 31, 2014 consist of the following: September 30, December 31, Finished goods $ 23,745 $ 40,404 Semi-finished goods and work-in-process 46,886 68,153 Raw materials 7,820 7,520 Materials in-transit and other 1,369 6,745 Less: inventory reserve (21,640 ) (47,488 ) Inventories, net $ 58,180 $ 75,334 |
Changes in Inventory Reserve | Three Months Nine Months Three Months Nine Months September 30, 2015 September 30, 2014 Beginning balance $ (31,361 ) $ (47,488 ) $ (65,670 ) $ (72,400 ) Change in reserve 3,863 (1,780 ) 389 (3,033 ) Write off 4,050 25,010 8,008 20,746 Translation adjustments 1,808 2,618 2,125 (461 ) Ending balance $ (21,640 ) $ (21,640 ) $ (55,148 ) $ (55,148 ) |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, plant and equipment as of September 30, 2015 and December 31, 2014 comprise the following: September 30, December 31, Buildings and related structures $ 64,884 $ 70,552 Machinery and equipment 249,700 269,031 Vehicles and others 23,580 24,812 338,164 364,395 Less: accumulated depreciation (163,235 ) (157,341 ) Land 14,433 16,712 Property, plant and equipment, net $ 189,362 $ 223,766 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Intangible Assets | Intangible assets as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, Technology $ 18,113 $ 19,683 Customer relationships 26,013 28,269 Intellectual property assets 8,135 8,359 Less: accumulated amortization (49,745 ) (53,860 ) Intangible assets, net $ 2,516 $ 2,451 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses | Accrued expenses as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, Payroll, benefits and related taxes, excluding severance benefits $ 19,992 $ 18,654 Withholding tax levied on intercompany interest income 30,167 27,497 Interest on senior notes 3,104 7,040 Settlement obligations 668 8,976 Outside service fees 5,826 10,640 Others 8,841 8,253 Accrued expenses $ 68,598 $ 81,060 |
Derivative Financial Instrume29
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Details of Derivative Contracts | Details of derivative contracts as of September 30, 2015 are as follows: Date of transaction Type of derivative Total notional amount Month of settlement September 30, 2015 Zero cost collar $ 30,000 January to March 2016 September 30, 2015 Zero cost collar $ 30,000 April to June 2016 |
Fair Values of Outstanding Zero Cost Collar Recorded as Liabilities | The fair values of the Company’s outstanding zero cost collar contracts recorded as liabilities as of September 30, 2015 and December 31, 2014 are as follows: Derivatives designated as hedging instruments: September 30, December 31, Liability Derivatives: Zero cost collars Other current liabilities $ 636 $ — |
Offsetting of Derivative Liabilities | Offsetting of derivative liabilities as of September 30, 2015 is as follows: As of September 30, 2015 Gross amounts of Gross amounts Net amounts of Gross amounts not offset Net amount Financial Cash Liability Derivatives: Zero cost collars $ 636 $ — $ 636 $ — $ — $ 636 |
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 September 30, 2015 and 2014: Derivatives in ASC 815 Cash Flow Amount of Loss Location of Amount of Gain Location of Loss Amount of Loss Three Months Ended Three Months Ended Three Months Ended 2015 2014 2015 2014 2015 2014 Zero cost collars $ (2,869 ) $ (3,319 ) Net sales $ (1,579 ) $ 3,048 Other income, net $ (271 ) $ (9 ) Total $ (2,869 ) $ (3,319 ) $ (1,579 ) $ 3,048 $ (271 ) $ (9 ) The following table summarizes the impact of derivative instruments on the consolidated statement of operations for the nine months ended September 30, 2015 and 2014: Derivatives in ASC 815 Cash Flow Amount of Gain Location of Amount of Gain (Loss) Location of Loss Amount of Loss Nine Months Ended Nine Months Ended Nine Months Ended 2015 2014 2015 2014 2015 2014 Zero cost collars $ (4,286 ) $ 2,882 Net sales $ (1,094 ) $ 5,692 Other income, net $ (577 ) $ (61 ) Total $ (4,286 ) $ 2,882 $ (1,094 ) $ 5,692 $ (577 ) $ (61 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial Liabilities Measured at Fair Value on Recurring Basis | The Company’s financial liabilities measured at fair value on a recurring basis as of September 30, 2015, and the basis for that measurement is as follows: Carrying Value Fair Value Quoted Prices in Significant Significant Liabilities: Derivative liabilities (other current liabilities) $ 636 $ 636 $ — $ 636 $ — |
Long-Term Borrowings (Tables)
Long-Term Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Components of Long-Term Borrowings | Long-term borrowings as of September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, 6.625% senior notes due July 2021 $ 225,000 $ 225,000 Discount on senior notes (875 ) (965 ) Long-term borrowings, net of unamortized discount $ 224,125 $ 224,035 |
Accrued Severance Benefits (Tab
Accrued Severance Benefits (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Postemployment Benefits [Abstract] | |
Changes in Accrued Severance Benefits | Changes in accrued severance benefits are as follows: Three Months Ended Nine Ended Three Nine September 30, 2015 September 30, 2014 Beginning balance $ 144,800 $ 140,405 $ 146,923 $ 135,356 Provisions 2,296 14,173 5,349 14,775 Severance payments (3,674 ) (7,905 ) (1,222 ) (4,712 ) Translation adjustments (8,466 ) (11,717 ) (5,144 ) 487 134,956 134,956 145,906 145,906 Less: Cumulative contributions to the National Pension Fund (310 ) (310 ) (372 ) (372 ) Group severance insurance plan (691 ) (691 ) (795 ) (795 ) Accrued severance benefits, net $ 133,955 $ 133,955 $ 144,739 $ 144,739 |
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 $ 271 2016 956 2017 1,572 2018 2,690 2019 2,088 2020 2,510 2021 – 2025 27,838 |
Geographic and Segment Inform33
Geographic and Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | The following sets forth information relating to the operating segments: Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Net Sales Foundry Services Group $ 71,471 $ 99,333 $ 224,953 $ 281,600 Standard Products Group Display Solutions 48,314 58,700 153,585 144,406 Power Solutions 34,406 36,088 102,238 104,138 Total Standard Products Group 82,720 94,788 255,823 248,544 All other 191 211 506 422 Total net sales $ 154,382 $ 194,332 $ 481,282 $ 530,566 Three Months Ended Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Gross Profit Foundry Services Group $ 18,681 $ 19,386 $ 51,241 $ 60,109 Standard Products Group 15,827 23,033 53,216 57,833 All other 191 211 505 422 Total gross profit $ 34,699 $ 42,630 $ 104,962 $ 118,364 |
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 September 30, 2015 September 30, 2014 Korea $ 56,097 $ 84,763 Asia Pacific (other than Korea) 84,236 80,123 U.S.A. 6,096 25,079 Europe 7,407 3,829 Others 546 538 Total $ 154,382 $ 194,332 Nine Months Ended September 30, 2015 September 30, 2014 Korea $ 180,322 $ 219,096 Asia Pacific (other than Korea) 238,995 224,681 U.S.A. 45,776 69,428 Europe 14,768 16,323 Others 1,421 1,038 Total $ 481,282 $ 530,566 |
Accumulated Other Comprehensi34
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) consists of the following as of September 30, 2015 and December 31, 2014, respectively: September 30, 2015 December 31, 2014 Foreign currency translation adjustments $ 15,211 $ (35,551 ) Derivative adjustments (2,707 ) 485 Total $ 12,504 $ (35,066 ) |
Changes in Accumulated Other Comprehensive Income (Loss) | Changes in accumulated other comprehensive income (loss) for the three months ended September 30, 2015 and 2014 are as follows: Three Months Ended September 30, 2015 Foreign currency adjustments Derivative adjustments Unrealized gain on investments Total Beginning balance $ (22,372 ) $ (1,417 ) $ — $ (23,789 ) Other comprehensive income (loss) before reclassifications 37,583 (2,869 ) — 34,714 Amounts reclassified from accumulated other comprehensive income — 1,579 — 1,579 Net current-period other comprehensive income (loss) 37,583 (1,290 ) — 36,293 Ending balance $ 15,211 $ (2,707 ) $ — $ 12,504 Three Months Ended September 30, 2014 Foreign Derivative adjustments Unrealized gain on investments Total Beginning balance $ (76,662 ) $ 10,144 $ — $ (66,518 ) Other comprehensive income (loss) before reclassifications 16,874 (3,319 ) — 13,555 Amounts reclassified from accumulated other comprehensive income — (3,048 ) — (3,048 ) Net current-period other comprehensive income (loss) 16,874 (6,367 ) — 10,507 Ending balance $ (59,788 ) $ 3,777 $ — $ (56,011 ) Changes in accumulated other comprehensive income (loss) for the nine months ended September 30, 2015 and 2014 are as follows: Nine Months Ended September 30, 2015 Foreign Derivative Unrealized Total Beginning balance $ (35,551 ) $ 485 $ — $ (35,066 ) Other comprehensive income (loss) before reclassifications 50,762 (4,286 ) — 46,476 Amounts reclassified from accumulated other comprehensive income — 1,094 — 1,094 Net current-period other comprehensive income (loss) 50,762 (3,192 ) — 47,570 Ending balance $ 15,211 $ (2,707 ) $ — $ 12,504 Nine Months Ended September 30, 2014 Foreign Derivative Unrealized Total Beginning balance $ (57,326 ) $ 6,587 $ 681 $ (50,058 ) Other comprehensive income (loss) before reclassifications (2,462 ) 2,882 1,201 1,621 Amounts reclassified from accumulated other comprehensive income — (5,692 ) (1,882 ) (7,574 ) Net current-period other comprehensive loss (2,462 ) (2,810 ) (681 ) (5,953 ) Ending balance $ (59,788 ) $ 3,777 $ — $ (56,011 ) |
Loss per Share (Tables)
Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of 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 September 30, 2015 September 30, 2014 Net loss $ (57,066 ) $ (46,807 ) Weighted average common stock outstanding Basic 34,664,246 34,056,359 Diluted 34,664,246 34,056,359 Loss per share Basic $ (1.65 ) $ (1.37 ) Diluted $ (1.65 ) $ (1.37 ) Nine Months Ended September 30, 2015 September 30, 2014 Net loss $ (107,721 ) $ (53,402 ) Weighted average common stock outstanding Basic 34,273,265 34,055,210 Diluted 34,273,265 34,055,210 Loss per share Basic $ (3.14 ) $ (1.57 ) Diluted $ (3.14 ) $ (1.57 ) |
Schedule of Antidilutive Securities Excluded from the Computation of Loss Per Common 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 Nine Months Ended September 30, 2015 September 30, 2014 September 30, 2015 September 30, 2014 Options 3,257,028 3,178,645 3,257,028 3,178,645 Warrants — 1,425,129 — 1,425,129 Restricted Stock Units 135,370 — 135,370 — |
Business, Basis of Presentati36
Business, Basis of Presentation and Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 30, 2015Segments | Sep. 30, 2015USD ($)SegmentsBusiness_Lines | |
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Number of operating segments | Segments | 2 | 2 |
Accounting Standards Update No. 2015-03 [Member] | ||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Unamortized debt issuance costs included in other non-current assets reclassified as deduction from long-term borrowing | $ 3,919 | |
Standard Products Group [Member] | ||
Basis Of Presentation And Summary Of Significant Accounting Policies [Line Items] | ||
Number of business lines | Business_Lines | 2 |
Sales of Accounts Receivable 37
Sales of Accounts Receivable and Receivable Discount Program - Additional Information (Detail) - Trade Accounts Receivable [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Proceeds from sale of accounts receivable | $ 49,138 | $ 12,832 |
Selling, general and administrative expenses [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Pre-tax losses on accounts receivable | $ 88 | $ 39 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Abstract] | ||||||
Finished goods | $ 23,745 | $ 40,404 | ||||
Semi-finished goods and work-in-process | 46,886 | 68,153 | ||||
Raw materials | 7,820 | 7,520 | ||||
Materials in-transit and other | 1,369 | 6,745 | ||||
Less: inventory reserve | (21,640) | $ (31,361) | (47,488) | $ (55,148) | $ (65,670) | $ (72,400) |
Inventories, net | $ 58,180 | $ 75,334 |
Inventories - Changes in Invent
Inventories - Changes in Inventory Reserve (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Inventory Disclosure [Abstract] | ||||
Beginning balance | $ (31,361) | $ (65,670) | $ (47,488) | $ (72,400) |
Change in reserve | 3,863 | 389 | (1,780) | (3,033) |
Write off | 4,050 | 8,008 | 25,010 | 20,746 |
Translation adjustments | 1,808 | 2,125 | 2,618 | (461) |
Ending balance | $ (21,640) | $ (55,148) | $ (21,640) | $ (55,148) |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 338,164 | $ 364,395 |
Less: accumulated depreciation | (163,235) | (157,341) |
Property, plant and equipment, net | 189,362 | 223,766 |
Buildings and related structures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 64,884 | 70,552 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 249,700 | 269,031 |
Vehicles and others [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 23,580 | 24,812 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, net | $ 14,433 | $ 16,712 |
Property, Plant and Equipment41
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expenses | $ 6,308 | $ 7,372 | $ 19,810 | $ 21,533 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Finite-Lived Intangible Assets [Line Items] | ||
Less: accumulated amortization | $ (49,745) | $ (53,860) |
Intangible assets, net | 2,516 | 2,451 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 18,113 | 19,683 |
Customer relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 26,013 | 28,269 |
Intellectual property assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 8,135 | $ 8,359 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization expenses for intangible assets | $ 91 | $ 452 | $ 256 | $ 1,313 |
Accrued Expenses - Summary of A
Accrued Expenses - Summary of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Payroll, benefits and related taxes, excluding severance benefits | $ 19,992 | $ 18,654 |
Withholding tax levied on intercompany interest income | 30,167 | 27,497 |
Interest on senior notes | 3,104 | 7,040 |
Settlement obligations | 668 | 8,976 |
Outside service fees | 5,826 | 10,640 |
Others | 8,841 | 8,253 |
Accrued expenses | $ 68,598 | $ 81,060 |
Derivative Financial Instrume45
Derivative Financial Instruments - Details of Derivative Contracts (Detail) | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Zero cost collar one [Member] | |
Derivative [Line Items] | |
Date of transaction | Sep. 30, 2015 |
Type of derivative | Zero cost collar |
Total notional amount | $ 30,000,000 |
Month of settlement | January to March 2016 |
Zero cost collar two [Member] | |
Derivative [Line Items] | |
Date of transaction | Sep. 30, 2015 |
Type of derivative | Zero cost collar |
Total notional amount | $ 30,000,000 |
Month of settlement | April to June 2016 |
Derivative Financial Instrume46
Derivative Financial Instruments - Additional Information (Detail) | Sep. 18, 2015USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2014Contracts |
Derivative [Line Items] | |||
Number of derivative contracts | Contracts | 0 | ||
Estimated amount reclassified from accumulated other comprehensive income into earnings, period | 12 months | ||
Estimated amount reclassified from accumulated other comprehensive income into earnings | $ 2,707,000 | ||
Hedge collateral | 6,000,000 | ||
Zero cost collars [Member] | Nomura Financial Investment (Korea) Co., Ltd. [Member] | |||
Derivative [Line Items] | |||
Gain (loss) on contract termination, settlement payment | $ (2,800,000) | ||
Deposit with counterparty | 6,000,000 | ||
Threshold amount of cash collateral | 500,000 | ||
Cash collateral for credit exposure in derivatives | 0 | ||
Hedge collateral | 6,000,000 | ||
Termination provisions for cash and cash equivalents | $ 30,000,000 |
Derivative Financial Instrume47
Derivative Financial Instruments - Fair Values of Outstanding Zero Cost Collar Recorded as Liabilities (Detail) - Zero cost collars [Member] $ in Thousands | Sep. 30, 2015USD ($) |
Liability Derivatives: | |
Derivatives designated as hedging instruments, Liability | $ 636 |
Other current liabilities [Member] | |
Liability Derivatives: | |
Derivatives designated as hedging instruments, Liability | $ 636 |
Derivative Financial Instrume48
Derivative Financial Instruments - Offsetting of Derivative Liabilities (Detail) - Zero cost collars [Member] $ in Thousands | Sep. 30, 2015USD ($) |
Derivative [Line Items] | |
Liability Derivatives, Gross amounts of recognized liabilities | $ 636 |
Liability Derivatives, Gross amounts offset in the balance sheets | 0 |
Liability Derivatives, Net amounts of liabilities presented in the balance sheets | 636 |
Liability Derivatives, Gross amounts not offset in the balance sheets, Financial instruments | 0 |
Liability Derivatives, Gross amounts not offset in the balance sheets, Cash collateral pledged | 0 |
Liability Derivatives, Net amount after master netting | $ 636 |
Derivative Financial Instrume49
Derivative Financial Instruments - Impact of Derivative Instruments on Consolidated Statement of Operations (Detail) - Derivatives in ASC 815 Cash Flow Hedging Relationships [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) | $ (2,869) | $ (3,319) | $ (4,286) | $ 2,882 |
Other income, net [Member] | ||||
Derivative [Line Items] | ||||
Amount of Loss Recognized in Statement of Operations on Derivatives (Ineffective Portion) | (271) | (9) | (577) | (61) |
Net sales [Member] | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) Reclassified from AOCI into Statement of Operations (Effective Portion) | (1,579) | 3,048 | (1,094) | 5,692 |
Zero cost collars [Member] | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion) | (2,869) | (3,319) | (4,286) | 2,882 |
Zero cost collars [Member] | Other income, net [Member] | ||||
Derivative [Line Items] | ||||
Amount of Loss Recognized in Statement of Operations on Derivatives (Ineffective Portion) | (271) | (9) | (577) | (61) |
Zero cost collars [Member] | Net sales [Member] | ||||
Derivative [Line Items] | ||||
Amount of Gain (Loss) Reclassified from AOCI into Statement of Operations (Effective Portion) | $ (1,579) | $ 3,048 | $ (1,094) | $ 5,692 |
Fair Value Measurements - Finan
Fair Value Measurements - Financial Liabilities Measured at Fair Value on Recurring Basis (Detail) - Other current liabilities [Member] - Liabilities measured at fair value on recurring basis [Member] $ in Thousands | Sep. 30, 2015USD ($) |
Carrying Value [Member] | |
Liabilities: | |
Derivative liabilities | $ 636 |
Fair Value Measurement [Member] | |
Liabilities: | |
Derivative liabilities | 636 |
Significant Other Observable Inputs (Level 2) [Member] | |
Liabilities: | |
Derivative liabilities | $ 636 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Jul. 18, 2013 | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying amount of senior notes | $ 224,125,000 | $ 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 | 6.625% | 6.625% | 6.625% |
Due date | Jul. 15, 2021 | Jul. 15, 2021 | Jul. 15, 2021 |
Carrying amount of senior notes | $ 224,125,000 | $ 224,035,000 | |
Estimated fair value of senior notes | $ 174,490,000 |
Long-Term Borrowings - Componen
Long-Term Borrowings - Components of Long-Term Borrowings (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Long-term borrowings, net of unamortized discount | $ 224,125 | $ 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 | (875) | (965) |
Long-term borrowings, net of unamortized discount | $ 224,125 | $ 224,035 |
Long-Term Borrowings - Compon53
Long-Term Borrowings - Components of Long-Term Borrowings (Parenthetical) (Detail) - 6.625% senior notes due 2021 [Member] - Senior notes [Member] | Jul. 18, 2013 | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||
Interest rate | 6.625% | 6.625% | 6.625% |
Due date | Jul. 15, 2021 | Jul. 15, 2021 | Jul. 15, 2021 |
Long-Term Borrowings - Addition
Long-Term Borrowings - Additional Information (Detail) - 6.625% senior notes due 2021 [Member] - Senior notes [Member] - USD ($) | Jul. 18, 2013 | Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||
Aggregate principal amount | $ 225,000,000 | |||
Interest rate | 6.625% | 6.625% | 6.625% | 6.625% |
Due date | Jul. 15, 2021 | Jul. 15, 2021 | Jul. 15, 2021 | |
Aggregate principal amount of senior notes pricing | 99.50% | |||
Percentage of redeem aggregate principal amount of Notes issued | 35.00% | 35.00% | ||
Redemption price plus accrued, unpaid interest and special interest to the date of redemption | 106.625% | |||
Redemption price | 100.00% | |||
2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price plus accrued, unpaid interest and special interest to the date of redemption | 103.313% | |||
2018 [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price plus accrued, unpaid interest and special interest to the date of redemption | 101.656% | |||
2019 [Member] | ||||
Debt Instrument [Line Items] | ||||
Redemption price plus accrued, unpaid interest and special interest to the date of redemption | 100.00% | |||
Interest Expense [Member] | ||||
Debt Instrument [Line Items] | ||||
Amortization costs | $ 137,000 | $ 402,000 | ||
Other non-current assets [Member] | ||||
Debt Instrument [Line Items] | ||||
Remaining capitalized costs | $ 3,919,000 | $ 3,919,000 |
Accrued Severance Benefits - Ad
Accrued Severance Benefits - Additional Information (Detail) | Sep. 30, 2015 |
Compensation and Retirement Disclosure [Abstract] | |
Percentage of employees eligible for severance benefits | 98.00% |
Accrued Severance Benefits - Ch
Accrued Severance Benefits - Changes in Accrued Severance Benefits (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Postemployment Benefits [Abstract] | |||||
Beginning balance | $ 144,800 | $ 146,923 | $ 140,405 | $ 135,356 | |
Provisions | 2,296 | 5,349 | 14,173 | 14,775 | |
Severance payments | (3,674) | (1,222) | (7,905) | (4,712) | |
Translation adjustments | (8,466) | (5,144) | (11,717) | 487 | |
Ending balance | 134,956 | 145,906 | 134,956 | 145,906 | |
Less: Cumulative contributions to the National Pension Fund | (310) | (372) | (310) | (372) | |
Group severance insurance plan | (691) | (795) | (691) | (795) | |
Accrued severance benefits, net | $ 133,955 | $ 144,739 | $ 133,955 | $ 144,739 | $ 139,289 |
Accrued Severance Benefits - Fu
Accrued Severance Benefits - Future Benefits Payments to Employees (Detail) $ in Thousands | Sep. 30, 2015USD ($) |
Compensation and Retirement Disclosure [Abstract] | |
Remainder of 2015 | $ 271 |
2,016 | 956 |
2,017 | 1,572 |
2,018 | 2,690 |
2,019 | 2,088 |
2,020 | 2,510 |
2021 - 2025 | $ 27,838 |
Foreign Currency Gain (Loss),58
Foreign Currency Gain (Loss), Net - Additional Information (Detail) $ in Millions | Sep. 30, 2015USD ($)₩ / $ | Dec. 31, 2014₩ / $ |
Foreign Currency Transaction [Abstract] | ||
Exchange rates using first base rate | ₩ / $ | 1,194.5 | 1,099.2 |
Intercompany loan balance | $ 758 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Contingency [Line Items] | ||||
Income tax expenses (benefits) | $ 1,250,000 | $ 311,000 | $ 1,781,000 | $ 1,770,000 |
Korean Subsidiary [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Income tax expenses (benefits) | $ 0 | $ 0 | $ 0 | $ 0 |
Geographic and Segment Inform60
Geographic and Segment Information - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015Customer | Jun. 30, 2015Segments | Mar. 31, 2015Segments | Sep. 30, 2014Customer | Sep. 30, 2015CustomerSegments | Sep. 30, 2014Customer | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Number of operating segments | Segments | 2 | 2 | ||||
As Previously Reported [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Number of operating segments | Segments | 1 | |||||
Customer Concentration Risk [Member] | Net Sales [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk, percentage | 11.20% | |||||
Number of customers greater than ten percent threshold | 2 | 3 | 2 | 1 | ||
Customer Concentration Risk [Member] | Net Sales [Member] | Top Ten Customers [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk, percentage | 61.00% | 66.00% | 64.00% | 60.00% | ||
Number of customers | 10 | 10 | 10 | 10 | ||
Customer Concentration Risk [Member] | Net Sales [Member] | Top Customer One [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk, percentage | 14.70% | 13.90% | 15.00% | |||
Customer Concentration Risk [Member] | Net Sales [Member] | Top Customer Two [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk, percentage | 10.10% | 10.70% | 10.90% | |||
Customer Concentration Risk [Member] | Net Sales [Member] | Top Customer Three [Member] | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Concentration risk, percentage | 10.20% | |||||
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 Inform61
Geographic and Segment Information - Schedule of Operating Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Total net sales | $ 154,382 | $ 194,332 | $ 481,282 | $ 530,566 |
Total gross profit | 34,699 | 42,630 | 104,962 | 118,364 |
Operating Segments [Member] | Foundry Services Group [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 71,471 | 99,333 | 224,953 | 281,600 |
Total gross profit | 18,681 | 19,386 | 51,241 | 60,109 |
Operating Segments [Member] | Standard Products Group [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 82,720 | 94,788 | 255,823 | 248,544 |
Total gross profit | 15,827 | 23,033 | 53,216 | 57,833 |
Operating Segments [Member] | Standard Products Group [Member] | Display Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 48,314 | 58,700 | 153,585 | 144,406 |
Operating Segments [Member] | Standard Products Group [Member] | Power Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 34,406 | 36,088 | 102,238 | 104,138 |
Other Non Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total net sales | 191 | 211 | 506 | 422 |
Total gross profit | $ 191 | $ 211 | $ 505 | $ 422 |
Geographic and Segment Inform62
Geographic and Segment Information - Net Sales by Region, Based on Location of Customer (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | $ 154,382 | $ 194,332 | $ 481,282 | $ 530,566 |
Korea [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 56,097 | 84,763 | 180,322 | 219,096 |
Asia Pacific (other than Korea) [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 84,236 | 80,123 | 238,995 | 224,681 |
U.S.A. [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 6,096 | 25,079 | 45,776 | 69,428 |
Europe [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | 7,407 | 3,829 | 14,768 | 16,323 |
Others [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total net sales | $ 546 | $ 538 | $ 1,421 | $ 1,038 |
Accumulated Other Comprehensi63
Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Equity [Abstract] | ||||||
Foreign currency translation adjustments | $ 15,211 | $ (35,551) | ||||
Derivative adjustments | (2,707) | 485 | ||||
Total | $ 12,504 | $ (23,789) | $ (35,066) | $ (56,011) | $ (66,518) | $ (50,058) |
Accumulated Other Comprehensi64
Accumulated Other Comprehensive Income (Loss) - Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | $ (23,789) | $ (66,518) | $ (35,066) | $ (50,058) |
Other comprehensive income (loss) before reclassifications | 34,714 | 13,555 | 46,476 | 1,621 |
Amounts reclassified from accumulated other comprehensive income | 1,579 | (3,048) | 1,094 | (7,574) |
Total other comprehensive income (loss) | 36,293 | 10,507 | 47,570 | (5,953) |
Ending balance | 12,504 | (56,011) | 12,504 | (56,011) |
Foreign currency translation adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (22,372) | (76,662) | (35,551) | (57,326) |
Other comprehensive income (loss) before reclassifications | 37,583 | 16,874 | 50,762 | (2,462) |
Total other comprehensive income (loss) | 37,583 | 16,874 | 50,762 | (2,462) |
Ending balance | 15,211 | (59,788) | 15,211 | (59,788) |
Derivative adjustments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | (1,417) | 10,144 | 485 | 6,587 |
Other comprehensive income (loss) before reclassifications | (2,869) | (3,319) | (4,286) | 2,882 |
Amounts reclassified from accumulated other comprehensive income | 1,579 | (3,048) | 1,094 | (5,692) |
Total other comprehensive income (loss) | (1,290) | (6,367) | (3,192) | (2,810) |
Ending balance | $ (2,707) | 3,777 | $ (2,707) | 3,777 |
Unrealized gain on investments [Member] | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Beginning balance | 681 | |||
Other comprehensive income (loss) before reclassifications | 1,201 | |||
Amounts reclassified from accumulated other comprehensive income | (1,882) | |||
Total other comprehensive income (loss) | (681) | |||
Ending balance | $ 0 | $ 0 |
Loss per Share - Schedule of Co
Loss per Share - Schedule of Computation of Basic and Diluted Loss Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (57,066) | $ (46,807) | $ (107,721) | $ (53,402) |
Weighted average common stock outstanding | ||||
Basic | 34,664,246 | 34,056,359 | 34,273,265 | 34,055,210 |
Diluted | 34,664,246 | 34,056,359 | 34,273,265 | 34,055,210 |
Loss per share | ||||
Basic | $ (1.65) | $ (1.37) | $ (3.14) | $ (1.57) |
Diluted | $ (1.65) | $ (1.37) | $ (3.14) | $ (1.57) |
Loss per Share - Schedule of An
Loss per Share - Schedule of Antidilutive Securities Excluded from the Computation of Loss Per Common Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 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 | 3,257,028 | 3,178,645 | 3,257,028 | 3,178,645 |
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 | 1,425,129 | ||
Restricted Stock Units [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 | 135,370 | 135,370 |
Loss per Share - Additional Inf
Loss per Share - Additional Information (Detail) - $ / shares | Mar. 05, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Class of Stock [Line Items] | |||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 |
Beneficial ownership percentage of acquiring person | 10.00% | ||
Beneficial ownership percentage of passive institutional investor | 20.00% | ||
Date on which rights expire | Mar. 5, 2016 | ||
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% | ||
Series A Junior Participating Preferred Stock [Member] | |||
Class of Stock [Line Items] | |||
Preferred stock, par value | $ 0.01 | ||
Purchase price of preferred Stock | 24 | ||
Board of Directors [Member] | |||
Class of Stock [Line Items] | |||
Redemption price per right | $ 0.001 |