MX - Earnings call transcript Q4 2020 | Magnachip Semiconductor Corporation

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Operator

Ladies and gentlemen thank you for standing by. And welcome to the Fourth Quarter 2020 MagnaChip Semiconductor Earnings Conference Call. At this time all participants' lines are on a listen-only mode. After the speaker presentation, there will be a question-and-and answer session. [Operator Instructions] I want to like to hand the conference to your speaker today, So-Yeon Jeong. Ma'am. ahead, go Please

So-Yeon Jeong

filed information everyone, be results for ended replay one company's for fourth completion on that XXXX. Hello closed stock discuss be can and call of December us telephone call MagnaChip's The found was release provided archived earnings financial the our quarter after be thank you. the for of joining is will market website you the to XX, on today Thank fourth Relations Access earnings Investor A available the will year. the the today's website. press shortly the in webcast after release. quarter

annual MagnaChip's our and overview performance will me the are YJ and and review the Officer. Young Joining of the for for a financial guidance year remarks. Officer; first the and Q&A and There discuss the Chief quarter Chief YJ quarter XXXX. prepared operating Financial session provide be following Young and Woo, Kim, business will today results recent Executive will company's

conference of expectations. statements and forward-looking MagnaChip's the about course make may outlook call, we business During this

Our beliefs forward-looking uncertainties of the predictions filings. Harbor all statements, and are risks today and to are discussion therefore subject as in as facts, reflect described statements our SEC not and that historical and in found our Safe other

an prepared illustrate be call over reconciliation Kim. of fourth we to will www.magnachip.com. A with earnings accordance Investor in found generally to turn that website Relations now the most at our not measure YJ? The release the the measures. are under comparable may quarter accepted our operating are directly intended measures measures performance the call YJ During principles non-GAAP useful. can measures the GAAP also will financial to financial available of discuss I non-GAAP on in be accounting but MagnaChip's non-GAAP alternative

YJ Kim

for any joining our one the of exceeded years you expectations, our MagnaChip's us. today. Thank of everyone. most capping off for challenging Hello, call QX results

During remained strong XG. robust, MagnaChip's product ramp by for in driven QX demand a

underscoring The from year, More foundry year uncertainties. internal as such it global the year importantly, one, highlights we for challenges the XXXX products. exit XX.X% and supplies midpoint XX.X% as in X.XXX% a positive EBITDA basis new non XXXX products business. If LED $X.XX Fab million balance sheet, brand laid decreased $XXX.X Among $XX XX.X% $XXX.X of and XXX to surpassed more XXXX. and point in our XXXX, revenue stockholders as revenue X mainly to We adjusted that sequentially fresh pandemic, from our total GAAP from strengthens the achieved we X.X% the versus in We we successfully presented improve This the of XXXX. I for of revenue initiatives to structural There sale It our X.X well partners for geopolitical the million fully due play every turned in from XXXX power year for XXXX that start MagnaChip operating X were product share doubt dedication apples, increased We able the foundry MX to and ordinary adjusted $XXX.X XXXX, for tenacity a and my negative MagnaChip's at million the and through is economy our pure gross and with team the unique GAAP the and out proceeds of and its secure increase key products accomplishments our a metrics a are, approximately mix. guidance million $XX cash year, non-auto reach million, gratitude our member of our XXXX. over due of significantly Fab as grew over a was the and strategic $XXX.X standard as increased profit The apples identity represented of share of use Nevertheless, revenue QX XXXX redeem margin and end Notes the XX.X% business company. XXXX our the EPS. is X.X%. LCD no respectively. on compare unstable transformation. profound action our extra has XX.X% million. by Senior remarkable COVID-XX we launched XXXX income close to equity from

to the business. of review our a starting business detailed OLED product Now, move with let's

quarterly our a revenue of During XX% year-over-year. revenue surpassed million previous increase increase record. a $XX.X of recorded of QX OLED the DDIC in and set sequential historic high It new QX representing a million $XX.X XX.X% XXXX,

in smart global of X.X% high XXXX third revenue decline to new reach shipments, million, the making X% $XXX.X year-over-year our grew the year of achieving revenue. OLED phone For despite record consecutive a

couple address of a for as highlights me Let well fiscal QX as XXXX.

HFR, momentum for especially models. grew with were new QX. of awarded We OLED wins or from the first while LED XG HFR phones, stronger XX% and and it QX XXXX, DDIC total and in design in XX% phones rate XG QX First, This XX% in in high frame representing in over eight approximately all smart them QX, reached accounted the our total revenue. of XG about of half revenue smart of XX% XXXX in OLED revenue

model and key in the solid to our price ground. continues point has smart launched Second, gaining the a a desirable key boasts OEM at demand model features Korean a flagship phone QX. by products been in increase for This

growth addition, design In momentum healthy QX. based smart phone strong in QX during with the China revenue a OEMs drove in

phone launched. XX models were quarter fourth the new with smart our chips During

end the worldwide. testament the by OLED a performance execution by in customers our reviewing laser distinctive the the business is innovative multiple of focus our XXXX, roadmaps. solution outstanding adoption continued In to product encouraged are of We

new foundation in XX design point to to design designs XX design case to from wins and XX reach smart into secured derived product this a design and OLED of strengthening models. and OLED wins marked in wins of other we HFR In As penetration XG wins hit accelerate XXXX. activities as OLED the records our a was was cumulative XXXX, year a XX% phone new lineups solid a design a XXXX new applications. win XXXX, also XX compared XXXX XX in rebuilding about cumulative

updating OLED and OLED milestones I'm Micro and Each the TV is you. customer's planned. to and of I to happy these comment Although TV, in our you the moving future. as can year on LED specific that products OLED as product tell key forward engaging team in new busy report we application the to plans, very customer throughout you projects can our look emerging been in I with well engineering the has automotive. such technologies develop

up of Now year year, let's outperformed in up demand over revenue came in year the expected QX power to QX IC. turn of at year. to the Power over due business. strong million products sequentially, growth XX% XX% power Power including and XX.X our X.X% our revenue to premium XX.X% XXXX

XXXX the For Power was whole year of million, X.X% was our $XXX.X year-over-year. in XXXX down revenue it

Our handicap was XXXX, it first the demonstrated capacity at of the our Fab significantly revenue of the during X. the resilience despite by COVID-XX impacted and caused in by power half power half outage impressive second XXXX but

Power in was revenue an our second all-time started half since XXXX. fact, our half In business years we high XXXX

highlight XXXX. our QX let Now, key for takeaways Power for business as me well as

this a of carries premium TV high of products wide gross in driven new million by applications. Power grow and is of and crossed to IC threshold revenue design wins product group families the $XX revenue growth product margin, adjacent over Power deliver IC For QX XX% customers. that continue annual to continue targeting and one expected expand is a it application in range the our series in we computing models IC by will XXXX. strive Power XXXX, profit and XXXX, to healthy

XXXX, Fab of standard have by sharpen as XXXX role the compared new we dedicated Owning IC SSD by eight R&D Fab to our we Fab X capacity applications. market to XX% XXXX gradually products, install and design we from strategy. Power customers. focus wins Underpinned one power at XXXX the capacity Fab key semiconductors, We from business and laptop power our started to to reestablish increase supporting discrete inch about plan while power two for reviewing go product critical level. will a plays tools, the three automotive add power X also related X the end In in our from incremental in discrete a

number Our full Demand for The Power our traction. X XXXX. power pipeline product introduced total a business the total And is number families products is new at release our in initial new remains products products capacity. of Fab gaining strong and business series running these than expanding. of that the double good new XXXX more of are

and supply from research, XXXX QX products OLED According shipments XXXX low. review, for this few [ph] business relatively Before backdrop, in minutes comment OLED a is OMVIA to still be on phone QX demand me let seasonally the I take demand the XX% strong. Against being down our the the will market to overall smart QX as conclude situation.

to well which partners. supply the second overall started semiconductor Foundry the last is increase nanometer our caused demand with of from it especially year, As half publicized, constraints XX external

due we constraints. While in to QX some supply unmet demand leaving are

our the with constraints, supply and situation working quarter. to supply improve customer later are expect address foundry We we in strategic our and to the closely partners

of our the very quarter, season. typically at remains at As most current low against look we our the demand end healthy markets

As we situation. our improve supply

for excluding continue proud play management pure QX has In the our strategy are and in early of board product to strategy. the XXXX company that and we solid success. We our out the expect in performance closing, positioned term long set

entered company. MX customers. clear with empowering focus of a During energy new X.X mission and a play chapter for the exciting pure products an standard we year, as last sharpened our a Renewed growth

long set by On XXXX. term X.X, achieve the that targets MX to would financial like we we

not confidence only our towards exciting outlook recognize us we of a always reinforce growth straight also will our opportunity XXXX. line. the While past ahead be The in

day host Lastly, XX an we to on XXXX. April analyst plan

value to liquidity. and plan upcoming company things, term before our plan policy on that is and address, our among ongoing leverage our holistic board shareholder review ongoing We shareholder to distribution including target near strategy, recognize position or distribution is allocation day. liquidity comprehensive capital Our liquidity, the other allocation, analyst a our framework. excess maximizing and evaluating various have for of our capital a currently committed options our the may We

for call Dr. over the come to session. will Now, back Woo Q&A turn and the I

Young Woo

to Thank on you, YJ and the welcome call. everyone warm

X.X% and QX. non-auto XXXX. The key Display in decrease was from fiscal Let's start business for financial of to COVID-XX metrics the down slight due smart growth exit recovery XXXX. in business the from LCD the XXXX primarily was $XXX.X despite of the down X.X% with XXXX $XXX.X part and XG the the The phone million from XXXX. revenue later was million

$XX.X approximately in $X.X million for As a XXXX accounted million point, normal reference the LCD revenue in XXXX. and

Our outstanding a in revenue terms set record another XXXX revenue of OLED row. years annual in all-time three representing growth

XXXX was power Turning Power of $XXX.X XXXX the from in now COVID-XX and in to from million down business, to impact primarily due the factory first revenue half of QX. X.X% outages

margin in revenue profit we and point year XXXX. to profitability the in XXXX. margin improved made represents from For operating XX.X% to gross XXXX. XXX total compared The income EBITDA increased basis in Adjusted X.X% the X.X% in great XXXX improvement X.X% adjusted the in of year-over-year

XXXX, non-GAAP Our in operations was in from XXXX. per up earnings continued from diluted $X.XX share $X.XX

from quarter OLED in year. up $XX.X QX and QX especially up was in in year-over-year year standard up business, revenue and significant our QX from XX.X% and by driven QX was OLED million Both year-over-year up in a up XXX XG due non-auto to our profit X.X% for product. ago. QX was to million demand X.X% mainly up QX premium million Power $XX.X up Display was the demand for QX XX.X% over QX QX. the strong was in and high was XX.X% HFR Now and sequentially, XX.X% total was XX% product, and DDIC. Gross revenue product Power year $XXX.X million Revenue higher up Adjusting for up for from from XX.X% increase increase TV The year-over-year. from business LCD and results, basis the primarily year-over-year. nearly IC sequential ago. turning was up X.X% revenue points from it $XXX.X same a industrial year as QX from applications end margin MOSFET power such XX.X% and products

the QX negatively As in Fab points two to charging power X a connection Huawei. margin of was percentage with items gross restrictions reminder, to from displaced impacted X the due profit and unusual access recovery the by inventory outage US the export to in government delayed related

product to points basis XXX expanded due improvement. mix ago also year margin from profit gross QX Our primarily

million compared Turning quarter resignation XX.X% $XX.X QX to million operating and XXXX. in termination Adjusted $X.X million, Adjusted ago. million compensation in million time as expenses up SG&A QX, in ago. from million $X.X QX in and and including XX.X% $XX.X in QX a $XX.X year. and in million or year charges QX to year revenue as last in QX was now in year $X.X were was to QX in $XX.X QX ago. EBITDA operating million of ago. expenses, $XX million $X.X operating program operating was and was compared the up year $X in in million $XX.X with $XX.X voluntary total million, in and QX as a million Net XX.X% related million QX were last expenses, in for QX QX $XX.X same QX one million, the included million QX to QX, income income QX charges $XX.X in million the in $XX.X from million RMB QX compared was Stock million in and in up QX, compared year. in a to as QX million $XXX $XX.X in million $XX.X in $XX.X in to $XX.X from QX from up

the million we benefits As over recognition to of due Fab primarily our [ph]. and income the on of business product We QX recognition recognize benefit increase confidence $XX.X forecasting in the billion GAAP able as earnings sharp differences and was cash of Year-over-year play $XX.X X. group increased Fab of in was the increase last sales expenses based X. were income tax tax income net and from between service in in during such on the the gain founded historical taxable to income trend after of of recent a a on pure call, to taxable recognizing growth services the company in based due founded and QX opportunities business sale years noted

$X.XX Our was with GAAP diluted $X.XX per in in QX share year QX compared a QX and earnings as ago. $X.XX in

QX $X.XX diluted our non-GAAP operations continuing $X.XX from between $X.XX the in earnings up was Our The EPS per in last up and QX from primarily GAAP were in and QX share elimination year. due from the to non-GAAP number were expense of $XX.X of of in the onetime recognition million non-cash $XX.X of elimination average currency and weighted of tax the of differences shares diluted foreign between GAAP million gain QX. and outstanding There $XX.X cash million. difference

top call. of million XXXX $XX.X $XX.X the to $XXX.X end Now, that at to moving end through balance fully million due compares senior the notes the sheet, QX, the pay $XXX.X This the receivable $XXX.X Accounts of at as the X.XXX% million and explained we In from redeem tax of XXXX. QX. of used last earnings withholding increase of an towards during and we cash was at end million million, $XXX.X the QX, QX. million XX.X%

billion, inventory days, XX $XX recovery QX QX, during in was in QX for plans line onetime to $XX.X for from is power XX.X% also and inventories day of from is the CapEx of million employee outstanding Fab which which half $XX.X XX the an health XXXX The sales QX, of of CapEx connected previously was executing included outages the plan. of $XX XXXX. our included days. in investment, million factory, disclosed safe in our with the million that days ensure to onetime average increase certain management CapEx million the X spending Our second was totaled in approximately $XX

cash severance The termination which fully and of million paid, annual on estimated OpEx our reduce to result cost Now, program resignation The help in cost [ph] update of to of have $X.X is expected billion statutory XXXX. will adjusted you revenue our voluntary the give let including approximately me benefits. below total XX% savings been a level program. brief by plan $X.X

us pandemic visibility. not our and Now is moving COVID-XX global the quarter to the behind to reduce continues guidance, first forward

currently traditional in will the to So-Yeon. be Thank foundry to the of to of the call turn While QX about that, $XXX margin MagnaChip for With I of X including actual $XXX million Fab in may million XXXX. Revenue over Gross profit range million the anticipate services. you. vary be to $XX XX% results to range XX%.

So-Yeon Jeong

you Young. Thank YJ. you, Thank

we call this prepared the open concludes So, Operator, for our remarks now will and questions.

Operator

[Operator the Instructions] Our from question first from comes Suji ROTH line Desilva Capital. of

You may begin.

Suji Desilva

Hello Young. Congratulations YJ, XXXX hello strong on progress the very here. and all a

versus more the impacted Power? the and steps as guidance, Could constraints. versus would And you specifically you your sound how soon terms are understand to in of obviously Can about trying being manufacturing uncertainty taking address to ends perhaps or visibility, perhaps manufacturing the give helpful. constraints these which more constraints? you're by sense I'm So of a of optimistic the of be some OLED the others segments the YJ, it impact

YJ Kim

Yes, so a very good question.

nanometer a So leader [indiscernible] there's and all to as started you and severe XX half a IoT. manufacture situation node in where market, given into as Fab foundry second also the And XG for tapped foundry know, last capacity is we continuing aware, we house The the the manufacturing. in on in XX that and the QX demand are OLED, supply pent-up one external as global there know is supply on as you're year. using constraints, RFIC IDM well the the constraints all of supply more inch sensor, the OLED in we even

node with you some XX is other constraints every note there nanometer So along the on see.

Some demand can in see what of said. the supply the than we as QX we we and more demand

this of some also over be can of carried demand some disappear. them So, where

particularly of do see see million we terms than we in at the to OLED cycle, ship can XX term short a the has demand of about shoulders in moment. what phone your we more more smart the do and of question, Some

And can devices a best you. have other So, supply the this generic picture a panel And sic that but end the for the we multiple time. we that customers, quarter or see guide device thing our better quarter only LCD we one is to quarter. are do But where unlike situation get show [ph] product, at the we OLED. the the of that selling again, custom-made towards is

our address chip later that improve our to situation real we're a So expect foundry we quarter. customers. and Therefore, same supply sell partners we are closely demand, customer have to in the means actually the working with really to constraints trying to and multiple panel the we the supply strategic

Suji Desilva

math Okay, color. up question my And now it's for If margin. I the about very and helpful you. approaching seems can my the follow and adjust level understand we drivers gross margin, thank like here? correct, expectation have talk XX%, you're about the YJ, just I the then did can further arrangement, factory to it service is you expansion if of gross set

Shinyoung Park

I MagnaChip. is vary margin this Chief quarter. Suji of quarter Accounting the the gross by mean, Shinyoung, can Officer by

like may particular already. achieved vary product But on the So depending longer this mix quarter look our and I target can mean, we've etcetera. it term

will YJ as XX% to achieve mentioned before, up by target XXXX, So the we longer term to continue

YJ Kim

Yes, and margin. it's is also gross product Power a good that's in, like IC mix, which and you see coming product a and high

we're additional So also executing we're capacity gradually. continuing and putting

by as generation and we of we're a gross explained, going So, margin. all help these new the that towards have should XXXX older so all the to products

Suji Desilva

Thanks great. Okay, again. Thanks.

Operator

Raji from from Needham. comes question next our And Gill

begin. You may

Raji Gill

YJ, of terms my really year and growth well. questions year as for revenue kind taking sequential growth. as QX, well OLED as of great thanks the in congrats the over Yes, was

And you're lot now the we of You going QX. XX% chain it's chain that million ramp phone XXXX report million in up I'm of is of recent to for smart overall XXX XX% XXX much that about throughout market to year, go supply all represents know, how the double increasing revenue a be XG the XG about, a as phones. folks you about the have wondering in to pretty that there's said all the thinking then the to And XXXX. the there's talked about going XG about supply smart from to for be, it's actually phones smart phones. going going

you given phones. know, fact your that DDIC so OLED are wondering XG So to the new I'm tied

You you know, business how a this And are up. that I'll have thinking about guys follow year? then

YJ Kim

doubling. valid of the we foul if results, XG as our question, you're phone, smart correct; good But only about XG revenue a was very look one you But know, even we question. And quarter results at at the you AH more thank quarter you XX% were see feature. fourth time. from Raji, come than [ph]

the each I that for confirm panel strong. custom-made can demand our customer. is I a each sic before, I said know, is [ph]; product And you product mean, targeted very is So, as

you So so like booking there's it's not forth. double something can ship and like multiple to people, no

are the yes, customer their quarter. closely to demand So to the the foundry said demand unfortunately, And strong. therefore, constraints. I working we partners the we can chain you, key with is supply that And and tell very very supply as towards of we address partner, the our expect end the and better get

Raji Gill

the a you power side, of know on reversal And year-over-year growth. terms in

XX%, You into QX and as so go year, we up was in QX, know, about last post it XXXX. of year-over-year

what, the continuation business, of of power from XXXX? seeing be market? know, kind And that are are in You IC for what the XXXX? going drivers in specifically of say kind Or they drivers you're a those premium just different key to they

YJ Kim

Sure.

IC the look we Power pickup, starting half Super really as well now is second and see as to state last new execution these as additional And we computing every IT applications year, at other and to segment and computing the days. actually So tremendous it's product, junction into solid you remark, strong, IC penetrate added half the IT know, the you MOSFET hot particular had a we gross, my and seeing drive. as if of IGBT. to started second we our And Power of in in whether as to

capacity will our on capacity we the of grow gradually we about continue this year. on that's X more for now XXXX. we'll product the the cylinders are we putting end see all to power are XX% in add expected IC all and capacity expansion by But than why increasing line. and XX% Fab So confidently Power also strong And

up meet line are we look we that's the power what will to a of and grow forward the junction, our well market to the new and robust keep cycle fat have to by so in up market, much refresh complete demand we very demand, competitive So having customers. a [ph] XXXX, as super IGBT; the as product doing. And with

Raji Gill

Just about to The one be say million range transitional jump million that revenue to kind in $XX is purposes? last this talking from $X in QX. in it for question. the million services million QX, housekeeping or to foundry $XX can $X.X of Is $XX it volatile like million modeling going

Young Woo

So very that's a good question.

recall, completely power outage until wasn't And in part early of if July end of So we October. it the towards. you had healed a

power ship fourth that's million to around to during service of but end a to due of so million know some that see go there that jump quite so why a know, the foundry what the we in $X About was time wafer in back was actually you outage transitional QX, end the about $XX some studies not the grew So able but starts. we you happened out a from that And QX; not $XX was a bad quarter, the did XX% expect million and be to lot you out that quarter. of back study release will

Raji Gill

you. Thank

Operator

will The from from next come Martin line question of Yang Oppenheimer.

may begin. You

Martin Yang

TVs, different products? Power be maybe LED emerging my is you from addressed you will and emerging your My taking for And those with new products? first relationships customer OLED Can IC. is question. TVs Hi, like talk on any Young. about YJ. micro benefit there margin the Thanks the products, potential Hi,

YJ Kim

good Mike. very question, A

have mentioned products than three those all gross So margin. higher you corporate

work there. application. the doing IC, are Power and about new getting excited Obviously, adjacent are application very into we I'm So we

So also we are in TV momentum other getting solid to IC a IT, laptops expanding continue and state to power IT market. the lot the of whereas

million threshold huge So revenue, it's this year the to just revenue that's though you even small why crossed but in we IC, see last growth $XX year. a you're on power the going know,

very very technology In as micro LED IC technology putting it's chip. latest terms one of again the OLED as OLED and microwave LED and Power a well greatest the TV, TV the TV complicated in

And it's can't seeing again, know talk but that But specific the we really much So progress more nice customers. margin. are a too key tied those of niche TV timing, very revenue. the end. you buy the the generate to it half. the production no we yes should end is our are year, object, And that high OLED if some targeted meaningful because we'll in micro some money LED it's you to for then second expect start we really high there. about of think by in TV, we products And But end,

So these in all progress excited other we we make about are all applications. emerging

Martin Yang

question great, a Power IC. And that's on follow up

the power margins as segment? the So understand? the IC power helpful? help So for a solutions to of solutions for can margin us help IC Power will maybe for you be help or you. understand the benefits solutions power you solutions, grow you power within group how can a Any instance us for on Thank comments total Power XX% know will gain

YJ Kim

us. IC maker, a in if fabulous model fact, is Yes, for But fabulous you any you for Power IC Power the at asking. look thanks know,

Now, know, the any you IC result. IC that Power for should that model margins, XX% we the in for fabulous make But Fab be should any market, X what over looking be. you Power at

you. hint that's can give I So the

try to that's better we'll what obviously, is. so do but And it

Martin Yang

Great, thanks.

Operator

of next line will come through Our [indiscernible]. question

You may begin.

Unidentified Analyst

on this supply on thank clarification the responses I that the the YJ, Hi, million in assume if and for in job earlier is questions the unit quick my constraints, the in results. number, resolved $XX unmet of second an you demand quarter good a QX the taking the by expect end supplies $XX going do million? to you you impact Do be quarter?

YJ Kim

So very question. good

So net unit. it's a million $XX

your is So demand of have question supply. is that, second happens even worth million what what how usually on happen than say in well we usually demand OLED had access that is we and that we more QX, QX, $XX the the last

is to demand half actually of some cycle to but is QX, six Because over phone what them disappears. some what more So you months cycles. of actually smart nine call its than carried the

have unfortunately. So try a custom our that think to the address point matrix. I to that, is But is you chip

like replaced else. by going someone not it's So to you're be

any So double booking like other see places we don't out there.

So it's market. demand the showing healthy very customer end in

Unidentified Analyst

growth OLED for on COVID? Great. about in full display go if And Raji's grow we prior in year units the and to trajectory XXX grow. to that to adoption are And to back unit. continues handsets from last back XG do OLED supposed going were year, just get And XXX then to the that outlook the question we

YJ Kim

if market I again, OLED revenue QX, XX% last in perspective, The transition at HFR. and of you're look is year, was XG, think correct. you Already So the happening. XG

continued we demand. So strong see

And customer, work we on make and my working the supply are customer, key to very we And the progress expect quarter. so starting with foundry the partners in later closely to again, constraints. very

Unidentified Analyst

you. thank Great,

Operator

you. next Thank from from our Vertical Group. And question comes Lopez Jon

You may begin.

Jon Lopez

guys, much me very you hear okay? Thanks

YJ Kim

Yes.

Jon Lopez

Oh, one have questions. them at fantastic. a I I do hoping could just three I'm time.

QX, is one akin has them? the capacity your perhaps more to XXXX? Or other is that I'm calendar my all? engagements situation affected first The me, In question design the I side. in at the parts, parts coming reticent excuse in guess back wondering, to has what your words, is our get unchanged, the to design it higher to inability customers was that access given to perhaps end OLED

YJ Kim

that than at accumulate you with if our XXXX, XX increased look XXXX. Well, you had design we number design win pipeline saw ever, in XX drastically is the a from win stronger trend

taped are or quarter. new every month, out we product and So seeing

to And OLED address momentum is six anywhere the design each different product the continues. variants four between panel. of So

that the needs, we see it OLED supply and good constraints. we end we unfortunately very So to the doing are product demand situation due meet healthy But showing that from is to as well cannot the the demand continue as the demand just markets.

Jon Lopez

front? My on update helpful. channel Can below Very you XXXX. guys you great. inventory on if That's be perhaps correctly, the you gotten on power would on any the second I us in channel remember them where wanted affairs power progress Have made business, state had great. that? one that you Just a of late inventories, bit

YJ Kim

good Yes, very question.

very, very low, less level way. was So by in we than in That's the said inventory that QX, channel months. our

working we So to see normally and like are two towards that. so we about still months

in up If make months, two we're you but months we inventory channel but power, normal inventories their about not tried there look peers is quite six our to at yet. to

X other we out continue that Fab So our X, we are as continued to work Fab still manufacturer well some As on the we've cranking products. and power

So current our that is situation.

Jon Lopez

some Okay, in great. My the them. side, had Power catch And power one I comments made third on IC. remarks didn't the quite prepared about you

$XX mentioned that cost would million that quarterly And the grow. you think expectation in was contribution. I it portion

XXXX? just recollection? mind in I think to wherever I'm second a in you Would and that perhaps wrong spending XX%, you correcting said XX%

YJ Kim

Sure.

to this So bigger we it, to correctly phrase threshold so than grow expect we And it's the annual revenue XX% million crossed XXXX. actually in $XX year.

IC the So growth high digit relatively going first double on $XX the revenue year. Power point a crossed you're to Power million that this we huge now year? see was And IC small, is last but annual

Jon Lopez

Got you.

positively extra for an speak for. on know apologize. there I speak been engagement? have progressing guess it is, you. I going last affecting demand that second my to sorry, the decisions? in I to several I'm have guys months Or with semiconductor either customer I'm your causing is for is i.e. more one you the negatively, now. to supply to engage I of bringing line engagement, affairs is automotive customers that make rethink supply it in that a you Can Okay, given question state one. chain now, or automotive,

you around thoughts any have Just dynamics, please? those

YJ Kim

question. good very it's Yes,

hurt. situation, continue current to know, the as electric automotive especially, mean, you and doesn't also I to think going is grow. I So vehicle the

win we [indiscernible] half. electric to that So device revenue automotive, we'll power in for I And think expect think second start pre-production discrete the we vehicle good for to a that so start call, place; I they usage.

So supply and that kind be there'll and given constraints, the be, devices. hopefully more partners new of demand for should

service So we own our automotive makers. that the to fortunate factory have are can

midterm about So long the we are excited in future the and term.

Jon Lopez

for help. Very the good. Thank you all very much

Operator

at questions to time. this to Thank like the Jeong call any I'm I'd So-Yeon turn over you. remarks. back And for further any closing showing not

So-Yeon Jeong

fourth joining our call. conference you. Thank you XXXX Please Good-bye. for for of Investor events Thank our concludes us Relations quarter look MagnaChip's today. on earnings website. This future details

Operator

call. you concludes Ladies today's gentlemen, participating. conference Thank for and this

now disconnect. may You

Magnachip Semiconductor (MX) 18 Feb 212020 Q4 Earnings call transcript