SK Hynix mulls buying MagnaChip fab, foundry business
SK Hynix is almost exclusively a DRAM and NAND memory chip maker and with prices for those products expected to fall as the market faces oversupply it makes sense to move in to foundry business and away from the roller-coaster consumer and smartphone sectors.
In February MagnaChip announced that it had begun a strategic evaluation of the company’s foundry business and of the future for Fab 4 in Cheongju, the larger of its two 200mm manufacturing facilities. Fab 4 is an analog and mixed signal fab responsible for 73 percent of MagnaChip’s total capacity. MagnaChip is also a producer of standard products, but could opt to outsource manufacturing to whoever is the eventual owner of Fab 4 and the foundry business.
MagnaChip said its options include: “joint ventures, strategic partnerships as well as merger and acquisition possibilities.” Local reports value the businesses up for sale at about $300 million.
SK Hynix is now considering bidding for the foundry business and the fab, according to reports referencing unnamed sources. This would help it enter the foundry business.
MagnaChip was founded in 2004 by the spin-off of the non-memory chip unit of Hynix Semiconductor, owned by Citigroup Venture Capital Equity Partners L.P., CVC Asia Pacific Ltd. and Francisco Partners. MagnaChip, inherited business lines from Hynix that included: CMOS image sensors, LCD drivers and foundry services.
The company’s revenue in 2018 was $750.9 million up 10.5 percent year-on-year. It’s foundry revenue was $325.3 million up 1.6 percent on the same basis.
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