Magnus private investment partnership (PEF), which is invested by SK Hynix and others, acquired the foundry business unit of MagnaChip Semiconductor for 530 billion won.
MagnaChip Semiconductor announced on March 31 that it has signed an agreement to sell its foundry business division and its plant in Cheongju to a special purpose company (SPC), which was established by Alchemist Capital Partners Korea and Credian Partners. The sales amount is $435 million (530 billion won), and the sale is expected to be completed as early as August.
The terms of the acquisition include succession to the employment of about 1,500 executives and employees at the Magna Chip Foundry Business Department and the Cheongju plant. It is expected to take about four to six months for the acquisition deal to be completed.
MagnaChip Semiconductor is the world's No. 1 supplier of organic light-emitting diode (OLED) display drive chips based on non-captive standards that do not have panel companies.
It is supplying a variety of OLED drive chips, including 28-nano products with the lowest power in the industry, to Samsung Display and LG Display. It also produces power semiconductors used in IoT and electric vehicles. Last year's sales amounted to $792.9 million.
MagnaChip Semiconductor is planning to take out foundry and focus its capabilities on developing displays and power semiconductors.
"We decided that it would be best to sell the foundry business to an organization that can realize economies of scale and focus on display solutions and power solution businesses, which account for 60 percent of all sales," said Kim Young-joon, CEO of MagnaChip Semiconductor.
Industry sources expect SK Hynix to seek synergy from the acquisition. Currently, Alchemist Capital Partners Korea, which led the fund, and Credian Partners set up separate operating companies to run the company.
Although SK Hynix does not participate in the management of new companies, it is expected that there will be some partnership since it has know-how in producing semiconductors.