Magnachip Semiconductor Corp. may not be a common name for the majority of our readers, but the company is an ongoing semiconductor between China and, well, essentially the rest of the world. It has become just another front line of the trade war. South Korean and US regulators have recently blocked the sale of Magna chips to China’s private-equity investment fund, Wise Road Capital, in order to limit access to China’s advanced chip technology.
Committee on Foreign Investment in the United States (CFIUS) at the end of last month Asked Magnachip has announced that it will suspend its acquisition by Wise Road Capital until a complete review of the government’s deal has been completed. June 17 application.. The company reports that it faced further hurdles in the deal as South Korean regulators labeled the Magnachip OLED DDIC as a “national core technology.” EE Times.. With Magnachip supplying DDIC to various OLED screen manufacturers in South Korea, regulators may be right in their assessment.
Magnachip spun off from SK Hynix in 2004, and the company has abolished its non-memory semiconductor business. The company acquired five fabs and foundry operations from its parent company, but had to close two over time. Magnachip is an analog and mixed-signal semiconductor-based solution that includes display driver ICs (DDICs), switches, converters, power management ICs (PMICs), MOSFETs, and many other types of products for OLEDs of various sizes. Is being developed and manufactured. Magnachip is a Korean company traded on the New York Stock Exchange, with offices around the world and selling chips for a variety of applications to hundreds of corporate clients.
Wise Road Capital is an investor in Huaqin, a Chinese smartphone maker backed by Qualcomm (among other companies). Smartphone makers can benefit significantly from Magnachip technology, but it’s unlikely that Wise Road will insist on offering Magnachip’s DDICs and PMICs to just one company.
In March 2021, MagnaChip sold its largest wafer manufacturing facility (70% of production) and foundry business to a consortium of South Korean-based investors for $ 435 million. EE Times..Same month it too Entered A final agreement was reached to sell the company to Wise Road Capital in China for $ 1.4 billion and keep it private. Under the terms of the agreement, MagnaChip shareholders will receive $ 29 in cash per share. This corresponds to a 54% premium on the March 2, 2021 Magna Chip unaffected closing price. Early June, Magna Chip received At the suggestion of Cornucopia Investment Partners, the company will be sold for $ 1.66 billion. This will result in each shareholder receiving $ 35 in cash per share.
Given the high bids on Magnachip, management may not need to sell the company to Wise Road, but South Korean and US regulators do not have to formally block the deal. Meanwhile, it was an order from CFIUS that demanded Magnachip to suspend trading (even before South Korean regulators contacted the company), and the U.S. government had access to Chinese companies’ advanced semiconductor technology. Shows how serious it is about blocking.
In fact, the U.S. government reports that it has blocked multiple transactions with tech companies for a variety of reasons, including Aixtron, Micron, Lattice Semiconductor, and Qualcomm. Foreign policy.. However, this seems to be the first time South Korea has tried the same thing. This is actually a bit surprising, as it is South Korea that is decisively dependent on chip exports and should be afraid of China’s expansion into this market.
“This apparent tag team of US and South Korean regulators seems strange,” said Chris Miller, an assistant professor at Tufts University’s Fletcher School of Law and Democracy. Foreign policy.. “It’s not clear whether the first urge to block the deal came from Washington or Seoul. However, both governments have only taken tentative steps, but both governments have closed the deal in their current form. It seems unlikely that you will let me
https://www.tomshardware.com/uk/news/magnachip-wise-road-deal-stalled-by-regulators US and South Korea block sale of Magna Chip to Chinese fund