MX

Image source: The Motley Fool. Wednesday, July 29, 2026 at 5:00 p.m. ET Investor Relations - Mike Bishop Chairman - Camillo Martino Chief Executive Officer - Chae Lee Chief Financial Officer - Shin Young Park Operator: Good day, and thank you for standing by. Welcome to the Magnachip Semiconductor Second Quarter 2026 Earnings Conference Call. Please note that today's conference may be recorded. I will now hand the conference over to your first speaker today, Mike Bishop of Investor Relations. Please go ahead. Mike Bishop: Thank you. Hello, everyone, and thank you for joining us to discuss Magnachip's financial results for the second quarter ended June 30, 2026. The second quarter earnings release that was issued today after the market closed can be found on the company's Investor Relations website. The webcast replay of today's call will be archived on our website shortly afterwards. Joining me today are Camillo Martino, Magnachip's Chairman; recently appointed CEO, Chae Lee; and Shin Young Park, our Chief Financial Officer. We will discuss the company's recent operating performance and business overview, followed by a review of the financial results for the quarter and provide guidance for the third quarter of 2026. There will be a Q&A session following the prepared remarks. During the course of this conference call, we may make forward-looking statements about Magnachip's business outlook and expectations. Our forward-looking statements and all other statements that are not historical facts reflect our beliefs and predictions as of today and therefore, are subject to risks and uncertainties as described in the safe harbor statement found in our SEC filings. Such statements are based on information available to the company as of the date hereof and are subject to change for future developments. Except as otherwise required by law, the company does not undertake any obligation to update these statements. During the call, we'll also discuss non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, but are intended as supplemental measures of Magnachip's operating performance that may be useful to investors. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in our second quarter earnings release in the Investor Relations section of our website. And with that, I'll now turn the call over to Camillo Martino. Camillo? Camillo Martino: Thank you, Mike, and good afternoon, everyone. Before discussing the quarter, I'd like to take a moment to welcome Chae Lee to his first earnings call as Chief Executive Officer of Magnachip. On behalf of our Board of Directors, I want to say how pleased we are to have Chae leading our company. The Board conducted an extensive search for this new CEO position, and Chae distinguished himself through his deep experience in power semiconductors, his proven track record of building successful businesses and his vision for where Magnachip can create value over the longer term. Over the past several months, we've taken important steps to reposition Magnachip as a pure-play power semiconductor company. We believe Chae is the right leader to build on that foundation, accelerate our product strategy and strengthen our competitive position through differentiated solutions. Having known Chae for nearly 3 years now and also having worked closely with him for over the past month, I have been impressed by the speed with which he has immersed himself in the business and also the way he has engaged with our employees and customers and also established clear priorities for the future. The Board has great confidence in his leadership, and I look forward to continue working closely with Chae as the Chairman of the company. With that, it is my pleasure to introduce Magnachip's Chief Executive Officer, Chae Lee. Chae Lee: Thank you, Camillo. Good afternoon, everyone, and thank you for joining us today. It is an honor to speak with you for the first time as Chief Executive Officer of Magnachip. Although I officially joined the company just a month ago, it feels as though I've been here much longer. During that time, I spent my days listening and learning, meeting with our engineering teams, speaking with employees across the organization, reviewing our technology road map and engaging with customers. What has impressed me the most is the quality of our people. Magnachip has talented engineers, deep process technology expertise and efficiently managed manufacturing operations and long-standing strategic relationship with many market-leading customers. These are important strengths that provide a solid foundation for future growth. At the same time, I recognize that our recent financial performance has not reflected the strength of those assets. Our shareholders have been patient, and they rightly expect better execution and improved results. And my focus is to deliver on those results. One of the things that attracted me to Magnachip was the work already underway to reposition the company as a pure play power semiconductor company. I want to thank Camillo, the Board and the management team for the important progress they have made over the past several months. Rather than changing direction, my objective is to build on that foundation and accelerate our pace of innovation and execution. As I think about the future of Magnachip, One idea stands above all others. Our goal is to transition from being a follower to becoming a leader. I believe we have the capability to drive innovation, launch differentiated technology and become a stronger player in power semiconductor industry. That does not necessarily mean becoming the largest company in every market we serve. Rather, it means developing differentiated products that solve meaningful customer problems, creating solutions that customers actively seek out and competing on innovation instead of price alone. Much of today's power semiconductor market, particularly for legacy products has become increasingly commoditized. Competing primarily on price is not a sustainable strategy, especially in today's environment. Instead, we intend to focus our resources and products that offer greater differentiation, deliver higher customer value and generate stronger long-term profitability. Our marketing and engineering organizations are already moving in that direction. While I cannot discuss specific products today, we are actively developing differentiated application-specific solutions that leverage our strength in power semiconductor technology to solve customer problems that are not adequately addressed by standard commodity products. There is a renewed sense of purpose throughout the organization, and our teams are energized by the opportunity to develop industry-leading products that create meaningful value for our customers. Of course, this transformation will not happen overnight. But we are well on our way from being a follower to becoming a leader. To accelerate that journey, last week, we announced a strategic partnership with Navitas Semiconductor that advances two key pillars of our growth strategy: technology expansion and strategic partnerships. Under the agreement, we will license Navitas' proven GeneSiC, Gen 4, Gen 5 technology covering 1,200-volt, 2,300-volt, 3,300-volt and higher voltage applications while also gaining access to its established silicon carbide supply chain ecosystem. This partnership provides Magnachip with a capital-efficient path to accelerate our entry into the high-voltage and ultra-high-voltage silicon carbide market. We plan to port, qualify and ultimately manufacture those products in our fab in Korea, leveraging our manufacturing expertise to accelerate commercialization and support long-term growth. We believe this partnership will significantly expand our addressable market and strengthen our ability to serve customers in energy and grid infrastructure, industrial electrification, automotive, renewable energy and other high-power applications. It also positions Magnachip to participate in some of the fastest-growing and highest value segments of the silicon carbide power semiconductor market. Strategically, this partnership brings together Navitas' industry's proven silicon carbide technology with Magnachip's expertise in silicon IGBT and MOSFET technologies and advanced manufacturing capabilities. Together, these complementary strengths create a strong foundation for future innovation across a broad range of power semiconductor solutions, accelerate our technology road map, expand our market opportunity, strengthen our competitive position and create long-term value for our shareholders. Turning now to our quarterly results. Our second quarter performance reflects our heavy dependence on legacy products with limited differentiation. While pricing pressure in our legacy product portfolio will continue for some time, we are also starting to see strength from our recently introduced new generation products that carry higher margins. While it's still early, we believe this is an encouraging sign that our product strategy is beginning to gain traction. As we look ahead, our priorities are straightforward and remain aligned with the six strategic pillars Camillo described on prior calls. Our highest priority is disciplined R&D execution while continuing to develop innovative, differentiated solutions. While we still have significant work ahead, we believe these early results reinforce that we are moving in the right direction. I am excited about the opportunities ahead. Magnachip has talented people, valuable technology and a clear opportunity to strengthen its competitive position with differentiated products over time. While there is important work ahead, I am confident we are building the right foundation for the company's next chapter and for creating sustainable long-term value for our shareholders. With that, I'll turn the call over to our Chief Financial Officer, Shin Young Park, to review our financial results and provide current quarter outlook. Shin Young Park: Thank you, Chae, and welcome, everyone. Let me begin with our key financial results for Q2. Total Q2 consolidated revenue from continuing operations, which includes Power Analog Solutions and Power IC was $44.7 million, within the guidance range of $44.5 million to $48.5 million. Revenue was down 6.1% year-over-year and down 3.3% sequentially compared to $47.6 million in Q2 2025 and $46.2 million in Q1 2026. Year-over-year revenue decline was primarily driven by weaker demand for our legacy products, resulting from intensified pricing competition. Sequentially, revenue declined mainly due to seasonal softness in the Communication segment. As we noted last quarter, Q1 revenue was stronger than typical seasonality, benefiting from a onetime sales incentive program to reduce channel inventory levels. In Q2, consolidated gross profit margin from continuing operations improved to 19.3%, exceeding the high end of our guidance range of 17% to 19%. This compares with 20.4% in Q2 2025 and 15.6% in Q1 2026. The year-over-year decline in gross profit margin was primarily attributable to an unfavorable product mix, driven mainly by ASP erosion, particularly in China. Sequentially, gross profit margin improved primarily due to the one quarter lag benefit from higher utilization rate in Q1 2026. Moving to operating expenses. SG&A expense was $8.7 million in Q2 compared with $9 million in Q2 2025 and $7.7 million in Q1 2026. Stock-based compensation included in SG&A was $0.8 million in Q2 compared with $0.8 million in Q2 2025 and $0.6 million in Q1 2026. R&D expense was $7.9 million in Q2 compared with $6.5 million in Q2 2025 and $6.7 million in Q1 2026. The year-over-year and sequential increase primarily reflects the timing of continued investment in our new-generation product development activities. As we mentioned on our prior earnings call, we remain on track to deliver our target of 55 new-generation products in 2026. Before turning to our non-GAAP results, please note that our GAAP financial results are available in our Form 8-K filing with our second quarter earnings release. Our non-GAAP results are as follows. Adjusted operating loss was $7 million in Q2 compared with a loss of $4.8 million in Q2 2025 and a loss of $6.5 million in Q1 2026. Adjusted EBITDA was negative $4.2 million in Q2 compared with negative $1.5 million in Q2 2025 and negative $3.6 million in Q1 2026. The quarter-over-quarter decline in our non-GAAP results was primarily driven by higher operating expenses such as SG&A and R&D expenses as discussed earlier. Q2 non-GAAP diluted loss per share was $0.13 compared to a loss per share of $0.05 in Q2 2025 and a loss per share of $0.11 in Q1 '26. Weighted average non-GAAP diluted shares outstanding for the quarter were 36.5 million compared to 36.1 million in Q2 2025 and 36.4 million in Q1 2026. Moving to the balance sheet. We ended Q2 with cash of $87.9 million compared to $94.6 million at the end of Q1. The decrease was primarily driven by operating cash outflows and $1.3 million of capital expenditures. At the end of Q2, total borrowings were $41.5 million, including $15.6 million of the equipment loan. During the quarter, we established a $50 million at-the-market offering program, which provides us with additional financial flexibility if and when we choose to utilize it in the future. Now moving to our third quarter '26 guidance. While actual results may vary, for Q3 2026, we currently expect consolidated revenue from continuing operations, which includes Power Analog Solutions and Power IC businesses to be in the range of $41.5 million to $45.5 million, a decrease of 2.7% sequentially and down 5.2% year-over-year at the midpoint. This compares with $44.7 million in Q2 '26 and $45.9 million in Q3 2025. Consolidated gross profit margin from continuing operations to be in the range of 17% to 19% compared with 19.3% in Q2 2026 and 18.6% in Q3 2025. The sequential decline is primarily due to an unfavorable product mix. I would like to provide some additional context behind our Q3 guidance. We continue to see healthy demand for our Low Voltage BatteryFET product line for mobile products. Nevertheless, we expect third quarter revenue to decline sequentially due to three near-term factors. Firstly, packaging constraints in our supply chain that are limiting our ability to fully satisfy demand. Secondly, our customers' volumes in certain custom applications are lower than their earlier plans. And finally, an unfavorable product mix resulting from continued pricing pressure on our legacy products. While these factors will affect our third quarter results, we remain focused on executing our multiyear portfolio transformation and increasing the contribution from differentiated new generation products, which we believe will strengthen our competitive position and support improved financial performance over time. We continue to expect new generation products to contribute at least 10% of our revenue in fourth quarter of 2026 compared with approximately 2% for full year 2025. Looking ahead, the lower fab utilization in Q3 resulting from the planned electrical substation upgrade is expected to have a one-quarter lag effect on gross margin. As a result, we currently expect Q4 gross margin to decline slightly from Q3. Thank you. I'll now turn the call over to Chae for his final remarks. Chae? Chae Lee: Thank you, Shin Young. The financial results we reported today reflect the company that is still in the early stages of our transition. While we delivered results within our guidance, there is still significant work ahead to improve our financial performance. We are not satisfied with where we are today, although I am encouraged by what I have seen during my first month at Magnachip and our recent partnerships with Navitas. We have a talented team, a focused strategy and a product road map that I believe can ultimately lead the industry. Our priorities are clear: execute with discipline, develop differentiated products that create greater value for our customers and steadily improve our financial performance. We understand that ultimately, we will be judged by our results, and we are committed to earning the confidence of our shareholders through consistent execution. With that, operator, we would now be happy to take your questions. Operator: Thank you. And it appears there are no questions in the queue at this time. I will now turn the call back over to Mike Bishop. Mike Bishop: Thank you, everyone, for participating on our call today. We appreciate your support. And with that, this concludes the call. Operator? Operator: This concludes today's conference call. Thank you for your participation, and you may now disconnect. Before you buy stock in Magnachip Semiconductor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Magnachip Semiconductor wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Magnachip (MX) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Magnachip Semiconductor Corp.? Here are five stocks we like better. Q2 revenue fell to $44.7 million, down 6.1% year over year, as legacy products faced weaker demand and pricing pressure. Gross margin improved sequentially to 19.3%, but adjusted operating and EBITDA losses widened. New CEO Chae Lee is emphasizing differentiated, application-specific power semiconductors over commoditized products. Magnachip plans to launch 55 new-generation products in 2026, targeting at least 10% of annual revenue versus roughly 2% in 2025. The Navitas partnership will expand Magnachip’s silicon-carbide offerings for high-voltage applications, while Q3 guidance calls for lower revenue and gross margin due to product mix, packaging constraints, legacy pricing pressure and reduced fab utilization. 5 Semiconductor stocks under $10 Magnachip Semiconductor (NYSE:MX) reported second-quarter revenue within its forecast range as the power semiconductor company continued to face pricing pressure in legacy products while investing in newer, higher-margin offerings. Revenue from continuing operations, including its Power Analog Solutions and Power IC businesses, was $44.7 million for the quarter ended June 30, down 6.1% from $47.6 million a year earlier and 3.3% from $46.2 million in the first quarter. The company said the year-over-year decline reflected weaker demand and intensified pricing competition for legacy products, while the sequential decrease was driven primarily by seasonal softness in communications. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Silicon Motion: The Market's Best Merger Arbitrage Opportunity Chief Financial Officer Shinyoung Park said first-quarter sales had benefited from a one-time sales incentive program that reduced channel inventory, making the subsequent quarter's seasonal trends more pronounced. The call marked the first earnings presentation by Chae Lee, who joined Magnachip as chief executive officer about a month earlier. Chairman Camillo Martino said the board selected Lee following an extensive search, citing his experience in power semiconductors and record of building businesses. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now SGH Bottomed, But Can It Reverse And Move Higher? Lee said the company is building on its repositioning as a pure-play power semiconductor company, with a focus on differentiated products rather than competing largely on price in commoditized markets. “Our goal is to transition from being a follower to becoming a leader,” Lee said, adding that the company intends to develop application-specific solutions addressing customer needs that standard commodity products do not adequately serve. → 3 Value ETFs to Consider as Growth Stocks Lag Behind Lee acknowledged that Magnachip's recent financial performance has not reflected its engineering, process technology, manufacturing and customer-relationship capabilities. He said the company's newer-generation products, which carry higher margins, are beginning to show strength, though he characterized the progress as early. The company remains on track to introduce 55 new-generation products in 2026, according to Park. Magnachip expects those products to account for at least 10% of full-year revenue, compared with roughly 2% in 2025. Magnachip also discussed its recently announced strategic partnership with Navitas Semiconductor. Under the agreement, Magnachip will license Navitas' Gen 4, Gen 5 and Gen 6 technology for 1,200-volt, 2,300-volt, 3,300-volt and higher-voltage applications, while gaining access to Navitas' silicon carbide supply-chain ecosystem. Lee said the agreement provides a capital-efficient route into high-voltage and ultra-high-voltage silicon carbide markets. Magnachip plans to support, qualify and eventually manufacture the products at its fab in Korea. The partnership is intended to expand Magnachip's opportunity in energy and grid infrastructure, industrial electrification, automotive, renewable energy and other high-power applications. Lee said combining Navitas' silicon carbide technology with Magnachip's silicon IGBT, MOSFET and manufacturing capabilities could accelerate the company's technology roadmap. Second-quarter gross margin from continuing operations was 19.3%, above the company's 17% to 19% guidance range and up from 15.6% in the first quarter. The margin remained below 20.4% in the second quarter of 2025. Park attributed the sequential improvement primarily to a one-quarter-lag benefit from higher fab utilization during the first quarter. The year-over-year margin decline was tied to an unfavorable product mix, particularly in Asia-Pacific markets including China. Operating expenses rose as the company continued development work on new products. Research and development expense totaled $7.9 million, compared with $6.5 million a year earlier and $6.7 million in the prior quarter. Selling, general and administrative expense was $8.67 million, versus $9 million a year ago and $7.7 million in the first quarter. Adjusted operating loss was $7 million, compared with a $4.8 million loss a year earlier and a $6.5 million loss in the prior quarter. Adjusted EBITDA was negative $4.2 million, compared with negative $1.5 million in the prior-year quarter and negative $3.6 million in the first quarter. Non-GAAP diluted loss per share was $0.13, compared with losses of $0.05 a year earlier and $0.11 in the prior quarter. The company ended the quarter with $83.9 million in cash, down from $94.6 million at the end of the first quarter, primarily due to operating cash outflows and $1.3 million in capital expenditures. Total borrowings were $41.5 million, including $15.6 million in equipment loans. During the quarter, Magnachip established a $50 million at-the-market offering program, which Park said gives the company additional financial flexibility if it chooses to use it. For the third quarter, Magnachip forecast continuing-operations revenue of $41.5 million to $45.5 million. At the midpoint, the outlook represents a 2.7% sequential decline and a 5.2% decline from the same period last year. The company reported revenue of $45.9 million in the third quarter of 2025. Magnachip projected third-quarter gross margin of 17% to 19%, compared with 19.3% in the second quarter. Park cited an unfavorable product mix for the expected sequential decline. Although demand remains healthy for its low-voltage battery FET products used in mobile devices, the company said third-quarter results will be affected by packaging constraints that limit its ability to meet demand, lower-than-expected customer volumes in certain custom applications, and continued pricing pressure on legacy products. Park also said a planned electrical substation upgrade will reduce fab utilization in the third quarter and is expected to have a one-quarter-lag effect on margins. As a result, Magnachip currently expects fourth-quarter gross margin to decline slightly from the third quarter. Lee said the company remains focused on disciplined execution, differentiated product development and improving financial performance over time. Magnachip Semiconductor Inc is a fabless semiconductor company specializing in high-performance analog and mixed-signal solutions for the display, power management and lighting markets. Its core product portfolio includes display driver ICs for LCD and OLED panels, high-voltage MOSFETs, DC-DC converters, LED driver ICs and power management devices used in consumer electronics, mobile devices, industrial equipment and automotive applications. Founded in 2004 as a spin-off from MagnaChip, Magnachip is incorporated in the United States with design and sales offices strategically located across North America, Europe and Asia. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Magnachip Semiconductor Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is repositioning Magnachip as a pure-play power semiconductor company, shifting focus from being a market follower to a leader through differentiated, application-specific solutions. The company is intentionally moving away from legacy products that have become commoditized and are subject to intense pricing competition, particularly in China. A new strategic partnership with Navitas Semiconductor provides a capital-efficient entry into the high-voltage silicon carbide market by licensing GeneSiC technology. Second quarter revenue declines were primarily driven by weaker demand for legacy products and seasonal softness in the communication segment. Gross margin improvement in Q2 was a result of a one-quarter lag benefit from higher fab utilization rates achieved in Q1 2026. The company is prioritizing R&D execution to solve specific customer problems rather than competing on price alone in standard commodity markets. Management expects new-generation products to contribute at least 10% of revenue by Q4 2026, a significant increase from approximately 2% in full year 2025. Q3 2026 guidance assumes a sequential revenue decline due to supply chain packaging constraints and lower-than-planned customer volumes in custom applications. A planned electrical substation upgrade in Q3 is expected to lower fab utilization, creating a one-quarter lag effect that will likely compress Q4 gross margins. The company remains on track to deliver its target of 55 new-generation products within the 2026 calendar year. The Navitas partnership will involve qualifying and manufacturing high-voltage products at Magnachip's existing fab in Korea to accelerate commercialization. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Established a $50 million at-the-market (ATM) offering program to provide additional financial flexibility for future capital needs. Supply chain constraints in packaging are currently limiting the company's ability to fully satisfy healthy demand for Low Voltage BatteryFET products. R&D expenses increased year-over-year due to the specific timing of investments required for the 2026 new-generation product roadmap. The transition to differentiated products is characterized as a multi-year portfolio transformation that will not result in an immediate financial turnaround.

Q2 Results Summary Consolidated revenue from continuing operations (which includes Power Analog Solutions ("PAS") and Power IC ("PIC") businesses) was $44.7 million, within the guidance range of $44.5 to $48.5 million. Consolidated gross profit margin from continuing operations of 19.3% was above the high end of our guidance range of 17.0% to 19.0%. Recent Highlights Appointment of Chae Lee as Chief Executive Officer Launches New 6th-Generation 600V SJ MOSFETs for AI Servers and EV Charging Applications Formed strategic partnership with Navitas Semiconductor to license SiC technology for use in high-voltage and ultra-high-voltage power markets SEOUL, South Korea, July 29, 2026--(BUSINESS WIRE)--Magnachip Semiconductor Corporation (NYSE: MX) ("Magnachip" or the "Company") today announced financial results for the second quarter 2026. Chae Lee, Magnachip’s CEO said, "Our second quarter results underscore both the challenges and the opportunity ahead. Our strategic relationship with Navitas marks an important milestone toward our plan to rebuild Magnachip. As I have met with our employees and customers over the past month, I have become increasingly confident in the strength of Magnachip's technology, engineering talent and manufacturing capabilities. Building on the strategic transformation already underway, we are focused on developing more differentiated power semiconductor solutions, improving our execution, and positioning Magnachip to compete through advanced innovation. While this transformation will take time, I believe it will strengthen our competitive position and create greater long-term shareholder value." Q3 2026 Financial Guidance While actual results may vary, Magnachip currently expects the following: Consolidated revenue from continuing operations (which includes Power Analog Solutions and Power IC businesses) to be in the range of $41.5 million to $45.5 million, a decrease of 2.7% sequentially and a decrease of 5.2% year-over-year at the mid-point. This compares with $44.7 million in Q2 2026 and $45.9 million in Q3 2025. Consolidated gross profit margin from continuing operations to be in the range of 17% to 19%, compared with 19.3% in Q2 2026 and 18.6% in Q3 2025. The sequential decline is primarily due to an unfavorable product mix. Commenting on the third quarter guidance, Shinyoung Park, Chief Financial Officer, said, "We continue to see healthy demand for our Low Voltage BatteryFET product line for mobile products. Nevertheless, we expect third-quarter revenue to decline sequentially due to three near-term factors: packaging constraints in our supply chain that are limiting our ability to fully satisfy demand, lower-than-expected customer volumes in certain consumer applications, and an unfavorable product mix resulting from continued pricing pressure on our legacy products." Q2 2026 Earnings Conference Call Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Wednesday, July 29, 2026, to discuss its financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this event including the dial-in numbers, a PIN number, and an e-mail with detailed instructions to join the conference call. A live and archived webcast of the conference call and a copy of the earnings release will be accessible from the ‘Investors’ section of the Company’s website at www.magnachip.com. Online registration: https://register-conf.media-server.com/register/BIb70b5b5cb65045238d2757182fd0d278 Safe Harbor for Forward-Looking Statements Information in this press release regarding Magnachip’s forecasts, business outlook, expectations and beliefs are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include expectations regarding our financial performance and business outlook, including third quarter 2026 revenue and gross profit margin, future growth and revenue opportunities, strategic relationships, product development and commercialization, and other future events. All forward-looking statements included in this release are based upon information available to Magnachip as of the date of this release. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include, among others: changes in macroeconomic conditions, trade policies, geopolitical conditions and market conditions; manufacturing capacity constraints, supply chain disruptions and changes in customer demand; the impact of competitive products and pricing; our ability to establish, maintain and expand strategic relationships with customers and business partners, and to realize the anticipated benefits of those relationships; customer acceptance of our products and technologies; our ability to develop, introduce and ramp new products into volume production; changes in semiconductor industry supply and demand, including overcapacity and manufacturing utilization; financial stability in foreign markets and the impact of foreign exchange rates; unanticipated costs and expenses; changes in, or compliance with, applicable trade, export and other laws and regulations; public health issues; other business interruptions; and other risks described in Magnachip's filings with the SEC, including our Annual Report on Form 10-K filed on March 16, 2026. Magnachip assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise. About Magnachip Semiconductor Magnachip is a designer and manufacturer of analog and mixed-signal power semiconductor platform solutions for various applications, including industrial, automotive, communication, consumer and computing. The Company provides a broad range of standard products to customers worldwide. Magnachip, with about 45 years of operating history, owns a substantial number of registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. We present Adjusted Operating Loss from continuing operations as a supplemental measure of our performance. We define Adjusted Operating Loss from continuing operations for the periods indicated as operating loss from continuing operations adjusted to exclude (i) Equity-based compensation expense and (ii) Other charges. For the three and six months ended June 30, 2026, we recorded $1,981 thousand of other charges, consisting of a $1,095 thousand customer goodwill payment related to a certain product, and $886 thousand of one-time employee incentives. For the same period in 2025, we recorded $496 thousand of one-time employee incentives and $350 thousand of certain executive separation benefit related accruals. We present Adjusted EBITDA from continuing operations and Adjusted Loss from continuing operations as supplemental measures of our performance. We define Adjusted EBITDA from continuing operations for the periods indicated as EBITDA – continuing operations (as defined below), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net and (iv) Other charges. EBITDA – continuing operations for the periods indicated is defined as income (loss) from continuing operations before interest income, interest expense, income tax benefit, net and depreciation and amortization. We prepare Adjusted Loss from continuing operations by adjusting income (loss) from continuing operations to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Loss from continuing operations is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Loss from continuing operations for the periods as net loss, adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss (gain), net, (iii) Derivative valuation loss (gain), net, (iv) Other charges and (v) Income tax effect on non-GAAP adjustments. For the three and six months ended June 30, 2026, we recorded $1,981 thousand of other charges, consisting of a $1,095 thousand customer goodwill payment related to a certain product, and $886 thousand of one-time employee incentives. For the same period in 2025, we recorded $496 thousand of one-time employee incentives and $350 thousand of certain executive separation benefit related accruals. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729493522/en/ Contacts Mike BishopBishop IR, LLCTel. +1 (415) [email protected]

Management is executing a multiyear transformation focused on returning to profitable growth by building on its technical foundation in power semiconductors. Q1 revenue growth was partially driven by a prior-quarter sales incentive program designed to clear elevated channel inventory and improve channel health. The company continues to face significant pricing pressure on legacy products, particularly within the Chinese market, necessitating a shift toward more competitive offerings. A core strategic pillar involves maintaining the accelerated pace of R&D to launch 55 new generation products in 2026, matching the 55 products launched in 2025 and significantly exceeding the four launches in 2024 and zero in 2023. New generation products, including 8th generation BatteryFET and MV MOSFETs, are expected to reach approximately 10% of total revenue by Q4 2026. The Power IC business is being strategically aligned with the power discrete roadmap to eventually enable higher value-added integrated power modules. Gross margin improvement is expected to be gradual as the company works through a challenging competitive environment and transitions its product portfolio. Q2 2026 revenue is expected to be roughly flat sequentially as the impact of the Q1 sales incentive program normalizes. Gross margins are projected to rise in Q2 due to higher factory utilization but will decline in Q3 and Q4 due to a planned electrical substation upgrade in Gumi. The company plans to build additional inventory in Q2 and early Q3 to mitigate potential customer disruptions during the scheduled factory downtime. Management expects to extend the maturity of its $26.4 million term loan beyond March 2027, consistent with standard market practices in Korea. Capital expenditure is being prudently managed to upgrade equipment for new generation products rather than simply converting idle capacity. Approximately 20% of the Gumi factory capacity remains idle following the expiration of a foundry services contract in early 2025, which continues to suppress gross margins. A voluntary resignation program implemented in Q3 2025 is expected to yield approximately $2.5 million in annual operating expense savings. The planned upgrade to the Gumi electrical substation represents a known headwind for factory operations and margins in the second half of 2026. R&D expenses increased year-over-year, reflecting the deliberate acceleration of investment required to hit the 55-product launch target. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Power IC margins hover around 40% but represent a smaller portion of total revenue, while Power Analog margins are heavily influenced by Gumi Fab utilization and fixed costs. Management emphasized that utilization remains the primary lever for margin fluctuations in the discrete business. The 55 planned products span medium voltage, low voltage, IGBT, and super junction categories. While these products will contribute to Q4 revenue, the positive margin impact will be partially offset by the planned substation upgrade downtime. The company is not converting idle foundry capacity to power products overnight due to the time required for product development and qualification. CapEx has been reduced by half and is being focused specifically on equipment upgrades that support new generation power products rather than legacy capacity. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Q1 Results Summary Consolidated revenue from continuing operations (which includes Power Analog Solutions ("PAS") and Power IC ("PIC") businesses) was $46.2 million, approximately at the mid-point of our guidance range of $44.0 to $48.0 million. Revenue grew by 3.3% year over year and 13.9% quarter over quarter. Consolidated gross profit margin from continuing operations of 15.6% was above the mid-point of our guidance range of 14.0% to 16.0%. Recent Highlights Launched 8th-generation ultra low-Rss(on) 12V BatteryFET designed for smartphone battery power efficiency Launched 8th-generation 40V and 60V MV MOSFETs for servers and high-performance PCs On track to launch 55 new-generation products in 2026 SEOUL, South Korea, April 28, 2026--(BUSINESS WIRE)--Magnachip Semiconductor Corporation (NYSE: MX) ("Magnachip" or the "Company") today announced financial results for the first quarter 2026. Camillo Martino, Magnachip’s CEO said, "We delivered better-than-seasonal revenue growth in the quarter, reflecting both solid execution and also the impact of the previously communicated inventory and channel actions. We are comfortable with our progress toward our multi-year transformation, and we are showing some good early signs, particularly with the 55 new-generation products launched in 2025. Our focus remains on improving product competitiveness through an accelerated pace of new-generation product launches, which we believe will drive sustainable revenue growth, margin expansion, and improved utilization over time. We believe disciplined execution of our six-pillar strategy will deliver long-term shareholder value." Shinyoung Park, Magnachip’s CFO, commented, "We remain committed to financial discipline to significantly improve our financial performance during this multi-year transformation." Q2 2026 Financial Guidance While actual results may vary, Magnachip currently expects the following: Consolidated revenue from continuing operations (which includes Power Analog Solutions and Power IC businesses) to be in the range of $44.5 million to $48.5 million, roughly flat sequentially and a decrease of 2.3% year-over-year at the mid-point. This compares with $46.2 million in Q1 2026 and $47.6 million in Q2 2025. Consolidated gross profit margin from continuing operations to be in the range of 17% to 19%, up from 15.6% in Q1 2026 but down from 20.4% in Q2 2025. Q1 2026 Earnings Conference Call Magnachip will host a corresponding conference call at 2:00 p.m. PT / 5:00 p.m. ET on Tuesday, April 28, 2026, to discuss its financial results. In advance of the conference call, all participants must use the following link to complete the online registration process. Upon registering, each participant will receive access details for this event including the dial-in numbers, a PIN number, and an e-mail with detailed instructions to join the conference call. A live and archived webcast of the conference call and a copy of the earnings release will be accessible from the ‘Investors’ section of the Company’s website at www.magnachip.com. Online registration: https://register-conf.media-server.com/register/BId9ff896cba6d4bf6bc5204e0fd2d7a6b Safe Harbor for Forward-Looking Statements Information in this press release regarding Magnachip’s forecasts, business outlook, expectations and beliefs are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties. These statements include expectations about estimated historical or future operating results and financial performance, outlook and business plans, including second quarter 2026 revenue and gross profit margin expectations, future growth and revenue opportunities from new and existing products and customers, and the timing and extent of future revenue contributions by our products and businesses. All forward-looking statements included in this release are based upon information available to Magnachip as of the date of this release, which may change, and we assume no obligation to update any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from our current expectations. Factors that could cause or contribute to such differences include, among others: the impact of changes in macroeconomic conditions, including those caused by or related to recent trade and tariff actions announced by the U.S. globally and the related retaliatory tariffs and disruptions in supply chains and global trade as a result thereof, inflation, potential recessions or other deteriorations, economic instability or civil unrest; geopolitical conflicts, including between Russia and Ukraine and between Israel, the United States and Iran and sustained military action and conflict in the Red Sea, including fuel supply disruptions and rising energy costs related thereto; disruptions or economic impact resulting from United States government shutdowns; manufacturing capacity constraints or supply chain disruptions that may impact our ability to deliver our products or affect the price of components and impact demand for our products from customers; the impact of competitive products and pricing; timely acceptance of our designs by customers; timely introduction of new products and technologies; the potential impact of emerging technologies such as artificial intelligence on industry dynamics, customer demand, supply chain operations, and regulatory environments; our ability to ramp new products into volume production; industry-wide shifts in supply and demand for semiconductor products; overcapacity within the industry or at Magnachip; effective and cost-efficient utilization of manufacturing capacity; financial stability in foreign markets and the impact of foreign exchange rates; unanticipated costs and expenses or the inability to identify expenses that can be eliminated; compliance with U.S. and international trade and export laws and regulations by us, our customers and our distributors; change to or ratification of local or international laws and regulations, including those related to environment, health and safety; public health issues; other business interruptions that could disrupt supply or delivery of, or demand for, Magnachip’s products; and other risks detailed from time to time in Magnachip’s filings with the SEC, including our Form 10-K filed on March 16, 2026, and subsequent registration statements, amendments or other reports that we may file from time to time with the SEC and/or make available on our website. Magnachip assumes no obligation and does not intend to update the forward-looking statements provided, whether as a result of new information, future events or otherwise. About Magnachip Semiconductor Magnachip is a designer and manufacturer of analog and mixed-signal power semiconductor platform solutions for various applications, including industrial, automotive, communication, consumer and computing. The Company provides a broad range of standard products to customers worldwide. Magnachip, with about 45 years of operating history, owns a substantial number of registered patents and pending applications, and has extensive engineering, design and manufacturing process expertise. For more information, please visit www.magnachip.com. We present Adjusted Operating Loss from continuing operations as a supplemental measure of our performance. We define Adjusted Operating Loss from continuing operations for the periods indicated as operating loss from continuing operations adjusted to exclude (i) Equity-based compensation expense. We present Adjusted EBITDA from continuing operations and Adjusted Loss from continuing operations as supplemental measures of our performance. We define Adjusted EBITDA from continuing operations for the periods indicated as EBITDA – continuing operations (as defined below), adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss, net and (iii) Derivative valuation loss (gain), net. EBITDA – continuing operations for the periods indicated is defined as loss from continuing operations before interest income, interest expense, income tax benefit, net and depreciation and amortization. We prepare Adjusted Loss from continuing operations by adjusting loss from continuing operations to eliminate the impact of a number of non-cash expenses and other items that may be either one time or recurring that we do not consider to be indicative of our core ongoing operating performance. We believe that Adjusted Loss from continuing operations is particularly useful because it reflects the impact of our asset base and capital structure on our operating performance. We define Adjusted Loss from continuing operations for the periods as net loss, adjusted to exclude (i) Equity-based compensation expense, (ii) Foreign currency loss, net, (iii) Derivative valuation loss (gain), net and (iv) Income tax effect on non-GAAP adjustments. View source version on businesswire.com: https://www.businesswire.com/news/home/20260428668185/en/ Contacts Mike Bishop Bishop IR, LLC Tel. +1 (415) 891-9633 [email protected]

Magnachip reported Q1 revenue of $46.2M that was stronger-than-seasonal but partially boosted by a one-time $2.7M sales incentive; gross margin improved sequentially to 15.6% yet remains below last year due to ASP erosion and pricing pressure, and management says the company is in the early stages of a multi-year turnaround. The company is aggressively accelerating new-product launches—after 55 "new generation" products in 2025 it is targeting another 55 in 2026—and expects new-generation products to reach about 10% of revenue by Q4 2026, while aligning Power IC roadmaps with discrete power devices for higher-value modules long term. For Q2 Magnachip guides revenue of $44.5M–$48.5M and gross margin of 17%–19% (up sequentially), but warns a planned electrical substation upgrade in Gumi in Q3 will reduce utilization and likely pressure margins in Q3–Q4 despite building inventory in Q2 to mitigate customer impact. Interested in Magnachip Semiconductor Corp.? Here are five stocks we like better. 5 Semiconductor stocks under $10 Magnachip Semiconductor (NYSE:MX) reported first-quarter 2026 results that management said were stronger than typical seasonal patterns, while reiterating that the company remains in the early stages of a multi-year turnaround focused on improving product competitiveness and profitability. Chief Executive Officer Camillo Martino said first-quarter revenue delivered both sequential and year-over-year growth and came in “stronger than typical seasonality would suggest.” He cautioned, however, that a portion of that strength reflected the company’s previously disclosed one-time sales incentive program intended to reduce channel inventory, which he said was necessary to improve channel health but can create short-term variability in revenue. → Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales Tank Silicon Motion: The Market's Best Merger Arbitrage Opportunity Martino said Magnachip continues to operate in a “challenging competitive environment,” pointing to ongoing pricing pressure on legacy products, “particularly in China.” He emphasized that competitiveness is central to the company’s efforts, saying, “Where we have competitive products, we can win. Where we do not, it is difficult to win in this market.” On profitability, Martino said gross margin improved sequentially and described the company as being “at the beginning of a multi-year journey to substantially improve gross margin.” → Meta Platforms Earnings Preview: What to Watch in Q1 2026 Report SGH Bottomed, But Can It Reverse And Move Higher? Martino reiterated the strategy introduced in the prior quarter, built around “six foundational pillars,” with product competitiveness—driven by new product development—at the center. He said the company launched 55 new generation products in 2025 and is now targeting another 55 in 2026, after launching “only four” in 2024 and “zero” in 2023. Martino pointed to recently announced products, including the company’s “newest 8th generation” BatteryFET and MV MOSFET offerings. He noted that customer qualification cycles mean revenue impact takes time, but said management believes the consistent introduction of new products should support revenue growth and margin improvement over time. → Palantir Is Down 30%: Noise? Or a Signal to Accumulate? Magnachip expects new generation products to represent about 10% of total revenue in the fourth quarter of 2026, up from 2% for full-year 2025, according to Martino. He also discussed Power IC as a longer-term opportunity. While acknowledging it is currently a smaller part of the business and expected to remain so through 2026, Martino said Magnachip is aligning Power IC and future gate driver IC roadmaps with its power discrete roadmap (including MOSFETs and IGBTs), with the longer-term goal of enabling higher value-added integrated power modules. Chief Financial Officer Shinyoung Park said total first-quarter consolidated revenue from continuing operations (power analog solutions and Power IC) was $46.2 million, near the midpoint of guidance of $44 million to $48 million. Revenue rose 3.3% year over year and increased 13.9% sequentially from $40.6 million in the fourth quarter of 2025. Power analog solutions revenue: $41.6 million, up 4.5% year over year and up 13.1% sequentially. Park said the sequential improvement was “primarily driven” by the $2.7 million one-time sales incentive that had been recognized as a reduction in revenue in Q4 2025. Power IC revenue: $4.6 million, down 6.2% year over year, but up 21.3% sequentially. Consolidated gross margin from continuing operations was 15.6%, above the midpoint of guidance of 14% to 16%. That compared with 20.9% in the first quarter of 2025 and 9.3% in the fourth quarter of 2025. Park attributed the year-over-year decline primarily to an unfavorable product mix driven by average selling price erosion, “particularly in China.” Park also provided context on the prior quarter: excluding the $2.7 million one-time sales incentive recorded in Q4 2025, fourth-quarter gross margin would have been 15%. On that basis, he said gross margin improved 60 basis points sequentially, driven primarily by higher utilization rates. Operating expenses included SG&A of $7.7 million, down from $9.2 million a year earlier and $8.6 million in the prior quarter. Park reiterated that Magnachip expects annual OpEx savings of about $2.5 million beginning in Q4 2025 tied primarily to a voluntary resignation program implemented in the third quarter of the prior year. R&D expense was $6.7 million, up from $5.4 million in the year-ago period, reflecting accelerated investment in new product development. On a non-GAAP basis, Park reported an adjusted operating loss of $6.5 million, compared with a $4.4 million loss a year earlier and an $11.9 million loss in Q4 2025. Adjusted EBITDA was negative $3.6 million, compared with negative $1.2 million in Q1 2025 and negative $8.9 million in Q4 2025. Non-GAAP diluted loss per share was $0.11. Magnachip ended the quarter with $94.6 million in cash, down from $103.8 million at the end of Q4 2025. Park said the decrease was primarily driven by $3.9 million in capital expenditures, with the remainder largely due to operating cash outflows. Total borrowings were $42.3 million, including $15.9 million of an equipment loan. Park noted that about $26.4 million of the term loan was reclassified to short-term during the quarter due to its March 2027 maturity. He described the reclassification as standard accounting treatment and said Magnachip expects to be able to extend the maturity beyond March 2027 “in the ordinary course of business,” consistent with typical market practice in Korea. During the question-and-answer session, Park addressed differences in segment profitability, stating that Power IC gross margin has been “hovering around like 40%” depending on product mix, while power analog solutions margins are influenced by utilization and the fixed-cost profile of the Gumi fab. He also discussed the impact of the end of foundry services provided to the buyer of Magnachip’s former foundry business. Park said the foundry service ended in early 2025 and that roughly 20% of Gumi capacity previously dedicated to foundry services is now idle, which has pressured gross margins. For the second quarter of 2026, Park guided for consolidated revenue from continuing operations of $44.5 million to $48.5 million, which he characterized as roughly flat sequentially and down 2.3% year over year at the midpoint. Magnachip guided for consolidated gross margin from continuing operations of 17% to 19%, up from 15.6% in Q1 2026 but below 20.4% in Q2 2025. Park also flagged an operational factor expected to affect the second half. A planned upgrade to an electrical substation by a service provider in Gumi is expected in Q3 and is expected to impact factory operations. To mitigate potential customer disruptions, Magnachip plans to build additional inventory in Q2 and into Q3, which Park said should lift utilization in Q2 before utilization declines in Q3. Because utilization is “main driver of gross margin,” Park said Q2 gross margin would likely be higher, while gross margin is expected to decline in Q3 and “decline further in Q4” as a result of the planned upgrade. In closing remarks, Martino said the company remains committed to executing its turnaround strategy and that management is seeing “initial signs of success,” while noting that financial improvement is expected to be gradual. Magnachip Semiconductor Inc is a fabless semiconductor company specializing in high-performance analog and mixed-signal solutions for the display, power management and lighting markets. Its core product portfolio includes display driver ICs for LCD and OLED panels, high-voltage MOSFETs, DC-DC converters, LED driver ICs and power management devices used in consumer electronics, mobile devices, industrial equipment and automotive applications. Founded in 2004 as a spin-off from MagnaChip, Magnachip is incorporated in the United States with design and sales offices strategically located across North America, Europe and Asia. The article "Magnachip Semiconductor Q1 Earnings Call Highlights" was originally published by MarketBeat.

This article first appeared on GuruFocus. Total Q1 Revenue: $46.2 million, up 3.3% year over year and 13.9% sequentially. Power Analog Solutions Revenue: $41.6 million, up 4.5% year over year and 13.1% sequentially. Power IC Revenue: $4.6 million, down 6.2% year over year but up 21.3% sequentially. Gross Profit Margin: 15.6%, compared to 20.9% in Q1 2025 and 9.3% in Q4 2025. SG&A Expenses: $7.7 million, compared to $9.2 million in Q1 2025 and $8.6 million in Q4 2025. R&D Expenses: $6.7 million, compared to $5.4 million in Q1 2025 and $7.6 million in Q4 2025. Adjusted Operating Loss: $6.5 million, compared to a loss of $4.4 million in Q1 2025 and $11.9 million in Q4 2025. Adjusted EBITDA: Negative $3.6 million, compared to negative $1.2 million in Q1 2025 and negative $8.9 million in Q4 2025. Non-GAAP Diluted Loss Per Share: $0.11, compared to a loss per share of $0.08 in both Q1 2025 and Q4 2025. Cash Position: $94.6 million at the end of Q1, compared to $103.8 million at the end of Q4 2025. Total Borrowings: $42.3 million, including $15.9 million of the equipment loan. Q2 2026 Revenue Guidance: $44.5 million to $48.5 million. Q2 2026 Gross Profit Margin Guidance: 17% to 19%. Warning! GuruFocus has detected 6 Warning Signs with MX. Is MX fairly valued? Test your thesis with our free DCF calculator. Release Date: April 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. MagnaChip Semiconductor Corp (NYSE:MX) reported stronger-than-expected revenue for Q1 2026, with both sequential and year-over-year growth. The company launched 55 new generation products in 2025 and aims to launch another 55 in 2026, indicating a strong focus on product development. Gross margin improved sequentially, reflecting progress in the company's multiyear journey to enhance profitability. Revenue from Power Analog Solutions increased by 4.5% year over year and 13.1% sequentially, driven by strategic actions to reduce channel inventory. The company is actively executing a new strategy comprising six foundational pillars aimed at long-term recovery and profitable growth. MagnaChip Semiconductor Corp (NYSE:MX) continues to face pricing pressure on legacy products, particularly in China, impacting overall profitability. The company's gross profit margin declined year-over-year due to an unfavorable product mix and ASP erosion. Revenue from Power IC decreased by 6.2% year over year, highlighting challenges in this segment. The company reported an adjusted operating loss of $6.5 million in Q1 2026, higher than the loss in Q1 2025. Cash reserves decreased from $103.8 million at the end of Q4 2025 to $94.6 million at the end of Q1 2026, primarily due to capital expenditures and operating cash outflows. Q: Could you please explain the variation in gross margins by segment and whether one segment is more manufacturing exposed than the other? A: We have two main segments: Power Analog Solutions and Power IC. Power IC has a gross margin hovering around 40%, which is higher than the corporate average due to its product mix. Power Analog Solutions, produced in our Gumi fab, has margins influenced by factors like utilization and fixed costs. Utilization is a key driver of gross margin variability in this segment. - Shin Young Park, CFO Q: Can you discuss the expected gross margin trends for the new products in 2026 compared to those introduced in 2025? A: We plan to launch 55 new generation products in 2026, including medium voltage, low voltage, and super junctions. These products are expected to contribute approximately 10% of total revenue by Q4 2026. However, the planned upgrade to the electrical substation will impact Q4 margins negatively. - Camillo Martino, CEO Q: Can you update us on how you are filling the manufacturing services capacity that was previously contracted out? A: The foundry services contract ended in early 2025, leaving about 20% of our Gumi factory idle. We are cautiously converting this capacity to support new generation power products, but it will take time due to product development pace and market conditions. We are being prudent with CapEx to ensure profitability and cash flow. - Shin Young Park, CFO Q: What is the impact of the planned upgrade to the electrical substation on your operations? A: The upgrade is expected in Q3 and will affect our Fab 3 operations. To mitigate disruptions, we plan to build additional inventory in Q2 and Q3, leading to higher utilization in Q2 and lower in Q3. This will affect gross margins, which are expected to decline in Q3 and Q4. - Shin Young Park, CFO Q: How are you addressing the competitive challenges in the market, particularly in China? A: We continue to face pricing pressure on legacy products, especially in China. Our strategy focuses on improving product competitiveness by developing new generation products. We launched 55 new products in 2025 and aim for another 55 in 2026, which we believe will contribute to revenue growth and improved margins over time. - Camillo Martino, CEO For the complete transcript of the earnings call, please refer to the full earnings call transcript.