Magnachip sees collapse in OLED driver buisness
Korean chip maker Magnachip Semiconductor has doubled the number of design wins for its power chips in 2022, but saw a collapse in its OLED driver business.
“We closed the fourth quarter with $61.0 million revenue, near the high-end of our guidance range,” said YJ Kim, CEO of Magnachip. “Q4 results continued to reflect the impact of severe wafer shortages and inventory correction in our Display business and deteriorating consumer demand in our Power Solutions business. Despite the challenges of this past year, we stayed focused and achieved milestones that set the foundation for recovery in 2023.”
The company saw a turnover of $230m in 2022, just up from $227m in 2021. The OLED business however saw a drop from $205m to $65m.
“In Power Solutions, we achieved a record year with 2022 revenue up 1.2% despite the slowdown in the second half due to macro weakness. Further, our Power Solutions business won a record 209 design-in/wins, more than double compared to previous years,” he said.
“In Display, we expanded our OLED business into international markets by winning a new tier one panel customer outside of Korea and strengthened our global supply chain by qualifying two additional foundries,” said Kim. “We also successfully qualified two OLED projects with our two leading panel customers and expect to begin shipping at the end of this quarter.
“Looking ahead, we continue to expect the first half of 2023 to be impacted by inventory corrections and broader macro weakness, but we believe the reopening of China should eventually lead to an improvement in their economy and consumer demand, which will help both our businesses.
In response to the industry-wide slowdown and inventory correction, the company has reduced production at its Fab 3. As a result, it expects lower gross profit margins from the lower utilization as well as higher manufacturing input costs such as electricity and wages. It sees that improving in the second half of 2023 as the industry recovers.
“We expect a recovery in Display revenue in the second half of 2023 as we ramp shipments of our four design-in projects with our two leading panel customers. For Power, we anticipate on maintaining our momentum of design wins and premium tier product mix. As channel inventories are consumed and the broader economy recovers, we expect to see a rebound in Power revenue.”
If you enjoyed this article, you will like the following ones: don't miss them by subscribing to :
