March 17, 2025 /SemiMedia/ — South Korean chipmaker Magnachip Semiconductor has announced plans to sell its display business by mid-2024 as part of a strategic transition toward the rapidly growing power semiconductor market. The company is exploring multiple options, including a sale, merger, joint venture, licensing agreement, or even the potential closure of its display division to optimize its business structure and improve profitability.

Headquartered in South Korea and listed on the New York Stock Exchange, Magnachip specializes in display driver integrated circuits (DDIC) and automotive power semiconductors. With surging demand in automotive chips, data centers, industrial robotics, and artificial intelligence (AI) infrastructure, the company has decided to accelerate its shift toward power semiconductors. The power semiconductor market is estimated to be ten times larger than the OLED DDIC market, spanning applications in electric vehicles (EVs), industrial equipment, AI infrastructure, and energy storage systems (ESS). Magnachip aims to capitalize on this growth opportunity with a target of reaching $300 million in annual revenue and a 30% gross margin within the next three years.

Since entering the power semiconductor market in 2007, Magnachip has steadily expanded its technology portfolio, developing next-generation products such as fifth- and sixth-generation insulated gate bipolar transistors (IGBTs), sixth-generation superjunction MOSFETs, and eighth-generation medium- and low-voltage MOSFETs. The company plans to launch over 40 new products this year to strengthen its market position further. Additionally, Magnachip is investing KRW 100 billion ($69 million) over the next three years to upgrade its manufacturing facility in Gumi, North Gyeongsang Province, enhancing its power semiconductor production capabilities.

Magnachip CEO Kim Young-joon stated that while selling the display business is a difficult decision, ensuring sustainable profitability and maximizing shareholder value remains the top priority. In February 2024, industry sources reported that the company had engaged a foreign investment bank as an advisor and was in talks with potential buyers, including Samsung Electronics, LG Electronics, LX Group, Doosan Group, and DB HiTek. Notably, Magnachip had previously reached a $1.4 billion acquisition agreement with Chinese private equity firm Wise Road Capital in 2021, but the deal was ultimately blocked due to ongoing U.S.-China trade tensions. LX Group has emerged as a strong candidate for the acquisition, aiming to merge its foundry subsidiary, LX Semicon, with Magnachip to expand its market presence in chip design and manufacturing.

Magnachip’s strategic transformation signifies a decisive move into high-growth markets, positioning the company for greater success in the power semiconductor industry.