MagnaChip Q4 2022 Earnings Report
Key Takeaways
MagnaChip reported Q4 2022 revenue of $61.0 million, near the high-end of their guidance range, but a 44.7% decrease YoY due to wafer shortages and inventory correction. GAAP diluted earnings per share was $0.07, while non-GAAP diluted loss per share was $0.36.
Q4 revenue was $61.0 million, near the high-end of guidance.
Gross profit margin for Q4 was 26.4%.
Expanded OLED business into international markets by winning a new tier one panel customer outside of Korea.
Power Solutions business won a record 209 design-in/wins, more than double compared to previous years.
MagnaChip
MagnaChip
MagnaChip Revenue by Segment
Forward Guidance
The company expects the first half of 2023 to be impacted by inventory corrections and broader macro weakness. Q1'23 revenue is expected to be in the range of $55 million to $59 million, including about $5 million of Transitional Fab 3 Foundry Services. Q1'23 gross profit margin is expected to be in the range of 21% to 23%.
Positive Outlook
- Reopening of China should eventually lead to an improvement in their economy and consumer demand.
- Recovery in Display revenue in the second half of 2023 as we ramp shipments of our four design-in projects with our two leading panel customers.
- Anticipate on maintaining momentum of design wins and premium tier product mix for Power Solutions.
- As channel inventories are consumed and the broader economy recovers, expect to see a rebound in Power revenue.
Challenges Ahead
- Near-term outlook is being challenged by previous OLED wafer allocation constraints that impacted 2nd half 2022 design-in projects.
- Ongoing inventory correction in smartphones and other consumer end markets driven by weakening consumer demand.
- Q1 is typically the Company’s seasonally slowest quarter following holiday shipments and is impacted by slower activity around the Chinese New Year.
- In response to the industry-wide slowdown and inventory correction, the Company has reduced production at its Fab 3.
- Gross profit margin will be further impacted by lower utilization as well as higher manufacturing input costs such as electricity and wages.
Revenue & Expenses
Visualization of income flow from segment revenue to net income