Q4 2019 Earnings Call
<unk>.
Good afternoon, ladies and gentlemen, and walk into Q4 2019, Magnachip Semiconductor Corporation earnings Conference call at this time, all participants that listen only mode.
Well, what conduct a question and answer session and instructions will follow at that site.
And then once you do parts or Security Conference. Please press star busier rolling their touched on telephone.
Your next conference coax being recorded.
I would now like turn the conference or what's your host Mr. Bruce Entin.
Head of Investor Relations. Please go ahead.
[noise] victory Alexander and thank you for joining us to discuss Magnachips financial results for the fourth quarter ended December 31st 2019, the fourth quarter earnings release, we filed today after the stock market closed and other releases can be found on the company's investor Relations website the telephone.
Replay of today's call will be available shortly after the completion of the cool new webcast will be archived dinner website for one year access information is provided in the earnings press release, joining me today are white Jae Kim Magnachips, Chief Executive Officer, and Jonathan Kim Our Chief Financial Officer.
Why Jay will discuss the company's recent operating performance and market outlook for our product categories and Jonathan will provide an overview of our Q4 and year end financial results. There will be acuity session. Following today's prepared remarks. During the course of this conference call. We may make forward looking statements.
About magnachips business outlook and expectations are 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 discussion found in our FCC filings.
During the call. We also will discuss non-GAAP financial measures. The non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended to illustrate an alternative measure magnachips operating performance that may be useful a reconciliation of the non-GAAP finish.
Sure measures to the most directly comparable GAAP measures can be found in our fourth quarter earnings release available on our website under the Investor Relations tab at Www Dot Magnachip Dot Com and now we'll turn the call over to White Jae Kim Vijay.
Thanks, Bruce and welcome to everyone on the Q4 2019 conference call.
First.
We'd like to extend our deepest thoughts and prayers to do is coping with the impact of the corner virus has crises in China and elsewhere.
I would come back to discuss this issue a little later.
Let's begin with.
With a recap of Q4 results and the business outlook.
We ended 2019 on a high note in Q4, if you recall our October 20, Threerd earnings call. We said, we expected normal seasonal Shelton less in Q4 and guided revenue to be between 281 291 million.
And gross profit margin to be between 24% to 26%.
You too on improving business environment, we updated guidance on January 13th and projected Q4 revenue between 198 to 200 million and gross profit margin between 26% to 27% today, we reported actual Q4 revenue 20 million, which.
<unk> at the high end of the updated guidance range and represented the highest level achieved in any fourth quarter since 2000 2012.
Well I seasonal softness was a factor for all three businesses as expected total revenue in Q4 increased 11.5 person from a year ago.
Boy did the revenue was slot significantly better than expected.
Andrew was better than expected and power was seasonally softer than expected corporate gross margin process.
Profit margin of 26.6% was slightly above the midpoint of the updating range due to better than expected fab utilization on improved oily deep product mix and better manufacturing is add on external foundry on latest generation oriented eat display drivers Oh gosh.
Did you mention improve by 15.5% sequentially, which Jonathan will discuss shortly.
Now, let's review the proponents of each business unit in Q4, beginning with or indeed.
Really the revenue of 67.3 million was the highest level achieved in any fourth quarter in the company history revenue increased to four from 33.2 million a year ago and declined by only 14% sequentially from Q3.
The sequential decline was significantly less than we anticipated heading into Q4 and compared very favorably to the 43% 0.1% decline we experienced from Q3 to Q4 in 2018 to smartphones without oily de drivers launch.
In Asia in Q4, and we expect up to another nine oily de smartphones with our display drivers will launch in the first half folks do it doesn't twain.
Why all I'll really de drive I see contributed to revenue in Q4, Oh 28 nanometer drivers had a very good production ramp following their initial launch of mass production in Q3.
I like to know to discuss a new technology initiative that will extend our reach into multiple address what sectors. We are excited to announce that we've developed and introduce the industry's first single chip Axiometrics micro LTV dry bye.
C four large panel television.
She is a major TV makos showcased 70, 593 and hundred 50 inch TV models that include our Michael Bayley D. I see.
Depending on the resolution of the TV opt to 256 units about my clearly di di di I see can be used for TV.
We currently expect to begin any showed pilot production towards the end of this year. Looking ahead, we believe some micro LCD driver IC will be useful or try haiyan TV and for large these tests, you're going to edge applications in commercial and industrial markets.
Speaking of extending the reach of our leading technology. We are encouraged to see that new markets. Aside from smartphones tablets in TV had begun to adopt oily D.O.J. replacement for the C D.
The auto market is a prime example, some carmakers already usually diesel break lights, but the technology is beginning to move from the trunk to drive a seat.
Just a few weeks ago catalog announced its 2021 escalate as to be will contain three screens that form a 48 inch flexible curved well indeed dashboard display Mercedes Orser has reported flat to replace each LCD called pit display was an oil it de display in E class and.
An S class models, we have number looks attractive actually the design wins in the auto segment well, we can see that date when L.C.D.'s you will convert to really de for auto application just as they have done in smartphones.
The result, we believe the auto market represents a promising long time, where did the opportunity.
To sum up annoyingly D., we now have a total of 11 oily de display drivers in our portfolio, including five over the latest generation 28 nanometer drivers one of which we added in Q4, one year ago.
At this time, Oh really de portfolio had a grand total of six drivers and we had only 120 nanometer driver. We will continue to launch new display drivers in 2020 with differentiated features like to changing market requirements for next generation Fiveg and affordable smartphones.
Oh really the drivers already support and has capabilities, enabling functions like a AR and VR with refresh rates of 220 here interfaces to optical sensing and fingerprint on display and features like true HD plus resolution and oily D correct.
And I P to compensate for pixel aging Oh drivers also a variable in different package types, including that ladies and most cost effective technology called chip on plastic.
Lastly, our 20 nanometers drivers, which are 20% smaller in chip size and the previous generation had the lowest power of any kind of captive or independent oil in the supplier in the display industry.
If we put aside the demand which from the krona virus. We are highly confident about a ability to increase well really the revenue gain market share and extend our technology lead as the number one independent supply Oh, we really need this lady drivers.
It was part of recent internal organization I have now assumed the role of general manager of the display business. In addition to my role as a CEO advanced chip.
We believe this change will allow us to provide laser like focus on the display business to best capitalize upon the attractive gross opportunity in the early D and older well 11 emerging markets over the past two years display has grown dramatically and now we have the opening.
Turning to help pay the display business to the next level of product development and market growth.
We increased our focus in power, we named a dedicated poetry and to run that business.
For now I continue to be acting general manager of foundry business.
Let's turn now to our power standards product business.
Power revenue grew for the year 2019, but revenue in Q4 was down 18.1% from Q4, 2018 and down 22.4% securing sequentially from Q3 of 2019, we said on the Q3 earnings call in October that power revenue was expected decline in Q.
Full due to seasonal softness, but the business actually declined more than we anticipated due primarily to weakness in consumer and communication markets. We also so pricing pressure stemming from an inventory correction.
We don't breakout profit margin in the power business, but I can share with you that Paul profit margin improved significantly year over year in Q4 due to improved improved product mix.
Why do we now estimate the power revenue May goes sideways in the near term we view this as a temporarily pause you know long term growth outlook.
As you May recall, we are involved in 10000, our clarification stages with auto suppliers and we expect the auto segment, we would represent a meaningful growth opportunity for our power business in 2021 and beyond.
Now turning to the foundry business foundry revenue of 86.6 million in Q4 increased 4.2% from Q4 2018 and was at the highest level for Q4 in six years revenue was down 4.1% sequentially from Q3 of 2019, but that.
Decline was less than we anticipated age followed your revenue in the second half went to die.
2019 was it each highest level since the company went public in 2011 revenue for BCD square problem increased 21% year over year and nearly 15%.
Sequentially from Q3 19.
Offsetting a decline in high voltage Oh processes.
Andrew revenue from new product held steady at 27% in Q4 as compared to Q3 in 2019, which we attribute to high touch customer service.
Excellent product and eight inch process like BCD square prom.
Did a aligned to critical market need new products are those in production for one year or less.
[noise] was for the street teasing evaluation process of the foundry business and fair for.
There's nothing Florida, we can't disclose publicly at this time, but as stated previously we continue to make substantial progress in discussion with multiple interested parties.
[noise] toward a possible sale of the business as well as consideration of accretive business conversions and other options.
We reiterate that our decision regarding the outcome of the various assumptions of the strategic evaluation process will be guided by what the board and management considered to be the best over the past to improve magnachips propco profitability and to maximize shareholder value. We appreciate your continued.
Patience.
Now, let me make a few points about our business outlook.
Krona virus aside I can recall a time when I felt more upbeat about the long term outlook for Magnachip, we are poised to expand our position as the leading independent provider of oily D. I see you know range large market space growing by double digits.
We are expanding our market reach with our first ever single chip active metrics might go LCD display driver. We're also well positioned down the road with oil easy drivers for auto displays and high voltage pop products for automotive.
When I look back on 2019 trade tensions well head win for many semiconductor firms, but a tailwind for magnachip and we are well positioned in the future since we occupy a unique place in the Asia supply chain with how hundred percent now.
He and I own fab located in Korea.
A final note I'm proud that the global semiconductor Lions has name Magnachip as one of the three finalists for the 2019 award the most respected emerging public semiconductor company.
No let me make a few comments about the current of ours.
From a business perspective, we are still assessing the potential impact since the corner virus situation is fluid.
Magnachip historically has experienced typical seasonal softness and a decline in revenue in each first quarter as compared to the prior fourth quarter, well, we entered 2020 with a more optimism <unk>.
Thank you.
Prior to their corner virus outbreak Oh prematurely internal forecasts had anticipated Q1 revenue would be slightly higher than 200 million in revenue reported in Q4 2019.
Manage manufacturing supply chain resides largely outside China. So there's a negligible impact fun Oh results. However, based on our preliminarily assessments public has measures taken to protect population, China likely will affect customer demand in Q1.
As a result, we've lowered our internal expectation and widen the typical guidance range. We normally would provide for Q1 2022, how accounted for lingering uncertainty around this public has crises no I turn the call over to Jonathan and come up.
Back for kidney Jonathan Thank you wisely and welcome to everyone on the call, let's start with key financial metrics for the 2019 year and Q.
Revenue in 2019 increased 5.5% despite macro uncertainty that caused the non memory segment of the semiconductor industry to decline by 3.8%.
It was our second straight year of annual growth.
Our growth was fueled primarily by a line of home grown standard products, including low power OLED display drivers that accounted for 87 of our display revenue.
The premium power products that represented over 50% of total power revenue.
Let's turn to all that results in 2019.
All that DDAC revenue of 267.1 million set an all time record and break our previous record of 180 million in 2018.
That 42% rate of annual all that growth was more than 2.5 times the rate of growth for OLED smartphone panel shipments worldwide. According to <unk> Hs.
Turning now to power revenue increased 12.4% for the first nine months of 2019, what a slowdown in Q4 reduced our annual growth rate to 4.1%.
A reference power market declined by 3% in 2019, according to I Hs still revenue of 176.2 million marked our third consecutive year of growth following double digit year over year increases in revenue in 2017 and 2000.
18.
Revenue from premium products, which include Super Junction MOSFET.
GBT and power IC increased by 21.2% year over year.
Now turning to foundry revenue in 2019 was 307.1 million down 5.6% from 200.
325.3 million in 2018, but those figures don't tell the whole story.
Foundry revenue and foundry fab utilization were extremely disappointing in Q1, but the business stabilized faster than we expected and Steve has been impressive recovery in the final three quarters of the year.
Now to Q4 results revenue in the standard products group, which includes display in power was 113.3 million up 17.7% year over year and down 18.6% sequentially from a record hundred 39.2 million in Q3 2019.
Display revenue was 75.5 million up 50.6% year over year end down 16.6% sequentially from a record of 90.6 million in Q3 of 2019.
The year over year increase was primarily attributable to an increase in revenue related to our mobile OLED display drivers and was especially impressive considering that we continued to strategically reduce the production and sale of our lower margin LCD products in Q4, LCD revenue was 8.2 million.
In down 52% as compared to 17 million for Q4 of 2018.
For the full year LCD revenue was 41.4 million in 2019 down 39.3% as compared to 68.1 million for all of 2018.
Well that revenue represented 89.2% of total display revenue in Q4 up from 66.2% in Q4 2018 as noted previously power revenue was 37.8 million in Q4 and foundry services group revenue was 86.6 million.
The standard products group represented 57% portal revenue in Q4 up from 54% in Q4 2018, the foundry services group represented 43% of total revenue down from 46% in Q4 2018.
Let's now recap profitability metrics in Q4, beginning with total gross profit and gross profit margin.
Total gross profit was 53.2 million or 26.6% or slightly above the midpoint of the updated guidance range of 26% to 27% provided on January 13.
Gross profit in Q4 increased from 43.9 million or 24.5% in Q4 2018 fab utilization in Q4 was in the low to mid 80% range well was higher than we had expected when we provided our initial Q4 guidance during the Q3 earnings call on.
<unk> 20 Threerd.
Fabulous vision in Q4 compared to approximately 90% in Q3 2019, and the mid 80% range in Q4 2018.
As we said on many earnings calls in the past. We believe gross profit is an important financial metric to monitor because of the potential flow through to operating income adjusted EBITDA and cash flows.
In Q4 cash and cash equivalents totaled 151.7 million up 15.5% sequentially from hundred 31 point Threemillion and highest in six years.
We recorded 20.5 billion not net operating cash flow.
This represented the third consecutive quarter of net positive operating cash flow.
The standard products group gross profit margin in the fourth quarter was 26.9% as compared to 25.6% in the fourth quarter of 2018 and 25.3% in the third quarter of 2019.
The year over year and sequential improvement in the standard products groups gross profit margin was due primarily to an improved product mix and stabilized we for yields from an external supplier on OLED products that enter production in the third quarter of 2019.
Foundry gross profit margin in the fourth quarter was 26.1% as compared to 23.2% in the fourth quarter of 2018 and 28.3% in the third quarter of 2019.
The year over year improvement in the foundries service groups gross profit margin was primarily due to an improved product mix now turning to operating expenses as gene a was 19.8 million or 9.9% of revenue as compared to 17.5 million or 9.8% of revenue in Q4.
2018, and 16.8 million or 7.3% of revenue in Q3 of 2019.
R&D was 19 million for 9.5% of revenue compared to 18.5 million or 10.3% of revenue in Q4, 2018, and 17.4 million or 7.6% of revenue in Q3 2019.
The increase in both as Ginny and R&D was primarily attributable to the timing of equity based compensation.
Turning now to the balance sheet.
As mentioned previously cash was 151.7 million.
As you recall, our interest payments occur in the first and third quarters of year.
Accounts receivable totaled 95.6 million a decline of 10% from hundred and 6.3 million in Q3 of 2019.
Inventories totaled 73.3 million were about flat with 72.7 million in Q3, 2019, Capex was 6.3 million in Q4 as compared with 1.7 million in Q3, and 10.1 million in Q4 of 2018.
Capex in 2019 was 23 million down from normalized Capex expenditures in 2018, which were approximately 29 million.
The decline in Capex is consistent with our forecast during our Q1 2019 earnings call with that I'll turn the call back to Bruce Bruce. Thank you Jonathan So Alexander This concludes our prepared remarks, we'd now like to open the call for questions.
Thank you at this time I would like to inform everyone in order to ethic question. Please press star one on your telephone keypad against the US a question. Please press star one on your telephone keypad.
We have your first question from Suji de Silva from Roth Capital. Your line is open.
Hi, why Jonathan Congratulations on the progress here outstanding results on display and across the board. So maybe why do you you said, it's most times. It can you just kind of go through again why that no led the 28 nanometer products things such a sharp design in volume ramp interest. It's helpful to understand that is going to 20 and higher compared leap.
Additionally.
Yes. Thank you so.
Hi.
My remark, we entering 2020 with 11 products, where five are 20 nanometer.
So obviously that.
We started production in Q3.
19, and though we had a very good rapidly in the fourth quarter with more a 20 nanometer so I.
I think the 20 nanometer product so would it be a key product and you will see more 20 nanometer product that's going on.
A tape out and a sample in group production in 2020, so the what's defied Gi and the Foldable you know the power consumption is very key and our key aspect is the lowest power consumption. So we think that that's going on a play to our.
Advantage and or so 20, and none of you know products put a foundation oh feature or the business roadmap.
Okay, Great and then specifically on OLED form factors like Foldable, and then talk about large panel TV at one of the first times I've heard you talk about what kind of contribution can those sub segments make when the within all that if that's the way to think about it and can those help your gross margin in that business.
Trend upward throughout 20.
I'm sorry, if you.
So my comments earlier, the the comment wasn't Mico LCD TV Oh, we have the industry's first active metrics, Michael LCD TV, a controller or D. S. One chip a full chip.
So oh, you can put as much a 256.
And we also commented that the the limited production was started towards the end of 2020. So obviously, it's not going to be big but I think it's showing the capability of what this company can do a the micro really de requires already the a knowledge as well as a power IC knowledge.
As well as some of the analog and as you know we have boasts a display business oil in the business as well as the.
How I see two discrete analog business and then the Oh, so that enable us to create the wars commercial acting metrics my clearly the TV D. I see I'm. So this isn't he is an example love of ours or address thing Jason.
Sure.
Our aggregate market, that's a next to entity.
Okay I didn't catch the part about being end of 20, so that actually helps in terms of timing and then similar question for Foldable I think I asked as well in terms of.
Separate sort of segment opportunity in 20 for OLED or just kind of blended in it can have helped the margin.
Yes, affordable as you know its enbridge stage. The good thing is that they are already a half dozen products that had been introduce or to be introduced. So we think the affordable is really future of the oily D.
And the market and the new smartphones. So we are excited about the future prospects of the affordable segments. So that's how we look at it.
Okay, Great and my last questions on the on the macro environment and the current virus trying to impact here. What's your <unk>. Since you had to guide a little bit lower than you had previously expected which of the three segments kind of most contributor to that more cautious outlook and them more generally how are your three segments, particularly foundry exposed to.
China and the demand environment there. Thanks.
Thank you for the so as you know, we don't break out the product by product on where and how much we do but I can send it to tell you that.
You know as the current of our thing again I feel.
Really sorry for the people who is going through this a tremendous crisis my heart so with them.
And but at the same time you know its Oh, you know you don't know how long this win loss, but if you look at the history.
In the sellers of course, as a long time ago, but the market really really reacted and and kick back when the.
When people saw that the numbers of the contract people started going down. So again. This one I don't know how long will last but I'm, hoping that is that similar kind of kick back they were going to see so that's going to determine the actual market and projections are but you know in a short term I think there will be some in.
Pack and how it's going to play out a we we have to be very cautious.
But in terms of foundry, we don't have a big guy exposure, yet, but it's one of the key market the.
The foundry revenue is expect to grow and so.
That's what I can say.
Appreciate the color then it's difficult time, thanks to that congratulations again why Johnson.
Thank you.
Your next question comes from the line of Reggie Hill from Needham and company. Your line is open.
Yes. Thank you want to Echo my congratulations on the on the great momentum in only D. I'm just going back to the krona buyers based on your your press release, you're thinking about little over 200 million and you're guiding to like 107 house at the midpoint says you know 11 $12 million.
Impact.
You talked about that you don't have big exposure to foundry yet in China I, just want to clarify that it is the 11 or $12 million impact mostly related to smartphones.
Oh, Yes, my concern is that demand is.
Good to be affected pretty significantly, particularly smartphones in China because of the extended Luna lunar new year. Many of you cities are locked down and.
So I just want to want to get impact trying to get it impact maybe you're going to June as well if you thought about June.
Well, thank you and I think it's very valid question, but you know.
I think a every owner agree that the visibility is fluid if you look at the.
What happened in China, you know D., we at war looking more optimistic before winter lunar new year and the lunar new year. As you know has extended almost three rigs and the their fab production in the manufacturing production just began middle of last week and someone to up to 90% needed like.
Jason.
Or some still at the.
Much less than 50% you know you do ligation. So again, we started to.
Get some the demand impact go or forecast just getting.
This week. So I think that's why you know our visibility is there a fluid and limited.
But you know the interesting thing is I'm hearing that that TV sales are up year over year.
So I think because the people staying home and are they watch TV more. So again you know I think it's all depends on how soon this corona gets a settled and you start to see that a.
Number coming down is it going to be very critical, but obviously I cannot forecast when that is gonna be but and if you look at also the history of the Sars the industry was at the bottom of the curb any of the very strong kicked back.
The industry started to recover a gino and we're hoping that though it will have a similar curb and I'm sure they're trying to government wants to also.
Due to revamp very quickly so again HM you know you the analysts I'm sure you have a similar numbers you look at so.
But beyond that I cannot really comment and give you a accurate forecast.
And on the the power business.
It was strong for three quarters, and then saw some some pricing pressure in Q4, and some weakness and communication and other end markets.
Why don't you mentioned that power May go sideways in the near term.
Just wanted to see if you can kind of elaborate a little bit further on on that comment.
It.
The pricing pressure from the inventory correction is that over and so you know maybe that reverses itself.
And and you can see kind of a a benefit there and any thoughts in terms of end markets in power.
You know the picking back up again in Q Q1 or Q2.
Any any views on power would be helpful.
Sure.
Let's forget they'll get a big picture the power last year discrete and up how I see for the word has decreased minus 3% I'm. So that's a according to your test if you look at our Apollo number we grew 4% year over year, we had a double digit growth in the first.
Corridors and fourth quarter, just like everyone else, we saw a we caught up with the supply and demand in our customer segments. Andrew a you know a but we still ended full person yervoy your gross.
You know it is.
The market assessment and all the data you see from all the power makers, they think that the market really like recover a second have this year and last year I think the how industry went down due to slow down in automotive a with a trade <unk> a change around in China or slowdown or but.
Second half we are expected to see a a really good kicked back including hopefully the current advice is gone. Therefore, there's a big installation. So so my my forecast or belief is similar to other people who ever now it's about the outlook on the power business.
That's great.
Oh, you to the highest level in six years in Q4 in the highest full annual foundry since going public.
<unk>.
Well you know you mentioned the strong growth in BCD W. prom.
Hi voltage crop.
What.
What end products end markets or driving this kind of significant increase in your and your foundry business.
And how do you describe your your competitive differentiation.
In foundry.
You know given the high growth last year.
[music].
Yes, so to look at the real numbers, we actually a decrease in the foundry revenue last year. As you know we had a very poor Q1 due to the industry downfall almost foundry had a between.
About 20% to 25% downfall Q4 to Q1 in 19.
And so despite that we really recovered nicely, especially in second half our run rate and six months was highest on the eight inch revenue in the history of the company.
Oh, you are seeing a multiple things here a I think the industry in foundry is very healthy you know I think you were see that the capacity is really tight below 40 nanometer today.
Due to Cmos image sensor too.
Ladies apds and so forced to our if I see two all kinds.
[noise] now, including already by the way and then you see a 80 ensure so the supply is tight so that helps you know favor the foundry.
And I think the out products, we offer very Ah Ah you know competitive BCD technology, we offer very a competitive each square.
For the T. market.
And we do have one of the best Ah you know alone no no noise.
Seasonal for sensors to although application in the this like legacy process and I think the you know with continued yeah.
You know progress in the a stable streeteasy evaluation and keeping our customer intact. So all these points are making Alphonse Reed business a stable.
Thank you congratulations.
[noise], we'd have your next question from Atif Malik from Citi. Your line is open.
Thank you for taking my questions and congratulations on good results in guide and why do I have a question in terms of your March quarter outlook, you're guiding to a better than seasonal <unk> total sales and I didn't know of whats embedded in in for display and in other segments, but when I do.
Got a somewhat the division the third parties on making to the global.
Smartphone unit, a forecast because if the supply and demand disruption in China from the krona virus, but looking at like 11% sequential.
Units down globally, and in China units down like 30% year over year. So I'm just trying to understand the guidance that you providing how much of that is a function of you guys gaining share.
Versus no factoring in the weakness in overall market.
Yeah, they're very good questions. So let me try to address that so.
Well I think one thing you have to look at Israeli D. is a growing segment in within the smartphone. So I think that health and order. So I think the a flight G is a growing segment within the smartphone.
If you look at the a global times that was China.
They said that China mobile believes that the fiveg phone sales.
ER or introduction in China in 2020 would it be higher than Fourg phones. So if you look at that of the Fiveg already it's all uptrend.
So even though just like last year the smartphone.
The either flat or minus four we grew 42% I'm. So I think it's a combination of already going up combination of fiveg going up.
It helps us than people, who have to sell everything or whether its oil it in a city that's one perspective.
And.
The thing is that this year our set up.
Settling into a non China market I expect to grow so.
And I think we alluded in last year that we had a a lot of phone introduced by Korean maker. So I think if you look at all these combinations.
Maybe a why we a slightly different than the others, but again, how their krona, we'll do a is its a I don't think anyone knows exactly but look we taking one quarter at a time and Oh, you know, we owe or so of putting wider Oh look for Q1.
Due to the uncertainty that we left and about one month of a full revenue.
Great and then as a follow up a Jonathan if you can give us at some point turns on or how should we think about opex modeling.
For the full year.
Sure. So you know weve been very focused on a cost savings and profitability and we were able to keep our as genie relatively flat. So as we look ahead.
For the first half of 2020, I think the as Genie will continue to be flattish to the second half of 2019, then also with respect to R&D a as weve.
As discussed previously given or [noise], given our old related activities R&D could Oh go up but overall I think on the as Ginny side itll be flattish and on the R&D <unk> be the amounts related to R&D will fluctuate based on our exit activities related to it.
Thank you.
I'm showing no further questions at this time I would know like to turn the conference back to Mr. Bruce Anderson. Please continue.
Okay. Thank you operator. So this concludes our fourth quarter 2019 earnings Conference call. Please look for details of our future events on Magnachips Investor Relations website. Thank you for joining us today.
Ladies and gentlemen, this concludes the city's conference call. Thank you for your participation and have the wonderful day email disconnect.
[music].