South Korean power chipmaker Magnachip is in trouble: 10-year CEO YJ Kim has resigned, with the board deciding to sell the company and slash capital expenditure by half.
YJ Kim steps down immediately as CEO and board member, replaced by Chairman Camillo Martino as interim CEO.
Magnachip tried selling in 2020—divesting its largest fab and foundry business for $350 million to focus on power MOSFETs. A later acquisition bid by China’s Wise Road Capital was blocked by U.S. authorities. Now focused on automotive MOSFETs (having dropped display driver ops), its latest sale may face similar hurdles.
The leadership change amid a semiconductor recovery signals shareholder rifts over strategy. Martino noted Kim served through a turbulent decade, but Magnachip needs a new team to tackle strategic, operational, and financial challenges in its shift to a power semiconductor firm.
As part of capital allocation, the board will review all strategic options, including a sale. Capital expenditure is cut from ~$65 million to $30 million (mainly via borrowing), with 2027 capex revised to $30–35 million (from $65–70 million).
Cost-cutting continues, targeting adjusted EBITDA break-even. Layoffs (mostly in support roles) aim to save $2–3 million annually, with a 1.5-year payback period.
ICgoodFind: Magnachip’s sale plans face new twists; management and strategy shifts make its trajectory worth watching.
