Q4 2025 Magnachip Semiconductor Corp Earnings Call

March 4, 2026

At this time, all participants aren't listening only mode after the speaker's presentation, there will be a question and answer session to ask a question during the session. You'll need to press star 1 1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue simply press star 1 1 again, as a reminder today,

Speaker #1: session, you'll need to press star 11 on your

Speaker #1: telephone. If your question has been

Speaker #1: answered and you'd like to remove yourself from the

Be recorded. And now I'd like to introduce your host for today's program. Mike Bishop with investor relations. Please go ahead sir.

Speaker #1: queue, simply press star 11

Speaker #1: again. As a reminder, today's program is being recorded. And now I'd

Speaker #1: like to introduce your host for today's

Speaker #1: program, Mike Bishop, with Investor webcast replay of today's call will be

Thank you. Hello everyone. And thank you for joining us to discuss magnitude Financial results for the fourth quarter and year, end December 31, 2025.

Speaker #1: Relations. Please go ahead, sir.

Speaker #2: joining us to discuss MagnaChip's financial results for the fourth quarter and

Speaker #2: year-end December 31, Officer, and Shin Park, our Chief 2025. The fourth quarter earnings release that was issued today after the close of market can be found on the company's investor relations

Speaker #2: Thank you for standing by, and welcome to the MagnaChip Semiconductor Corporation's fourth quarter 2025 earnings conference call. At this time, all participants are in listen-only mode.

The fourth quarter, earnings release, that was issued today. After the close of Market can be found on the company's investor relations website. The webcast replay of today's call will be archived in on available on our website shortly afterwards.

Speaker #2: website. The webcast replay of today's call will be archived Financial Officer.

Speaker #2: After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone.

Joining me today are Camila, Martino Magna chips, chief executive officer and shiny Young Park. Our Chief Financial Officer.

Speaker #2: and available on our website shortly Camillo

Speaker #2: If your question has been answered and you'd like to remove yourself from the queue, simply press

Speaker #2: are Camillo Martino, MagnaChip's Chief

Speaker #2: Executive Officer, and Shin

Speaker #2: Park, our Chief Financial

Speaker #2: star 11 again. As a

Camilo will discuss the company's recent operating performance and business overview and shiny. Young will review the results for the quarter and provide guidance for the first quarter of 2026.

Speaker #2: Officer Camillo will discuss the company's goals and expectations.

Speaker #2: reminder, today's program is being

Speaker #2: recorded. And now I'd like to introduce

Speaker #2: recent operating performance and business

There will be a Q&A session following the prepared remarks.

Speaker #2: your host for today's program, Mike

Speaker #2: overview, and Shin will review

Speaker #2: Bishop, with Investor Relations.

Speaker #2: the results for the quarter and provide

Speaker #2: Please go ahead, in listen-only mode.

Speaker #2: sir.

Speaker #2: guidance for the first quarter of

Speaker #3: Thank you. Hello,

Speaker #2: 2026. There will be a Q&A session following the prepared our subject to risks and remarks. During the course of

Speaker #3: everyone, and thank you for joining us to

Speaker #3: discuss MagnaChip's financial results for the fourth

Speaker #3: quarter and year-end December

Speaker #3: 31, 2025.

Speaker #2: this conference call, we may make forward-looking

Speaker #3: The fourth quarter earnings release that was

Speaker #2: statements about

Speaker #2: MagnaChip's business outlook and

Speaker #3: issued today after the close of

Speaker #2: expectations. Our forward-looking statements and hereof and are subject to change for future

Speaker #3: market can be found on the company's investor relations website. The

Speaker #2: all other statements that are not historical developments.

During the course of this conference call. We may make forward-looking statements about magnitude business, Outlook, and expectations, our forward-looking statements and all other statements that are not historical facts, reflect our beliefs and predictions as of today and therefore our subject to risks and uncertainties as described in the safe, harbor statement found in our SEC filings

Speaker #2: facts reflect our beliefs and

Speaker #3: archived and available on

Speaker #2: therefore are subject to

Speaker #3: our website shortly Thank you.

Speaker #3: afterwards. Joining me today are Camillo Martino, MagnaChip's Chief Executive Hello, everyone, and thank you for

Speaker #2: risks and uncertainties as described in the

Speaker #2: Safe Harbor Statement found in our

Speaker #2: SEC filings. Such

Speaker #2: statements are based upon information

Speaker #3: We will discuss the company's recent operating performance and business overview, and Shin will review the results for the quarter and provide guidance for the first quarter.

such statements are based upon information available to the company as of the date hereof and are subject to change for future developments except as otherwise required by law. The company does not undertake any obligation to update these statements.

Speaker #2: the date hereof and are subject to

Speaker #2: change for future developments.

Speaker #2: Except as otherwise required by

Speaker #2: law, the company does not

Speaker #3: quarter of afterwards.

Speaker #3: 2026. Joining me today, there will be a Q&A session following the prepared remarks. During the course of this conference call,

Speaker #2: undertake any obligation to update these statements. During the call, we'll also discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles but are intended as supplemental measures of MagnaChip's operating performance that

Speaker #3: we may make forward-looking statements

Speaker #3: about MagnaChip's business outlook

Speaker #3: Our forward-looking statements and all other statements that

Speaker #3: are not historical facts

Speaker #3: reflect our beliefs and predictions as

Speaker #2: may be useful to investors. A reconciliation of the non-GAAP financial directly comparable GAAP measures can be found in

During the call. We'll also discuss non-gaap Financial measures. These non-gaap measures are not prepared in accordance with generally accepted accounting principles, but our intended as supplemental measures of magnitudes operating performance. That may be useful to investors a reconciliate. A Reconciliation of the non-gaap financial measures to the most directly comparable. Gaap measures can be found in our fourth quarter earnings release in the investor relations section of our website

Speaker #3: of today and therefore

Speaker #3: uncertainties as described in the Safe Harbor Statement found in our SEC filings. Such statements are

Speaker #2: measures to the most directly comparable GAAP

With that, I'll now turn the call over to Camilla. Martino Camilo.

Thank you, Mike and good afternoon, everyone.

Speaker #2: release in the investor relations sections of

Speaker #3: based upon information available to the

Speaker #2: our website. With that,

Speaker #2: I'll now turn the call over to

Speaker #3: company as of the date

Speaker #2: Camillo Martino.

Speaker #2: Camillo?

Speaker #3: Except as otherwise required by law, the company

Speaker #3: Thank you,

Speaker #3: Mike, and good afternoon,

Speaker #3: Everyone, I would like to open with a comment.

Speaker #3: does not undertake any obligation

Speaker #3: to update these predictions as of today and

Speaker #3: made last quarter,

Speaker #3: statements. During the call, we'll also

Speaker #3: specifically MagnaChip has a strong

I would like to open with a comment I made last quarter. Specifically Magna chip, has a strong Foundation, a strong history, and power a reputation for reliability and quality and relationships with customers who care about performance and execution.

Speaker #3: discuss non-GAAP financial measures.

Speaker #3: foundation, a strong history and

Speaker #3: power reputation for

Speaker #3: These non-GAAP measures are not

Speaker #3: prepared in accordance with generally accepted

Speaker #3: reliability and quality and

Speaker #3: relationships with customers who

Speaker #3: accounting principles but are

Speaker #3: intended as supplemental measures of MagnaChip's available to the company as of

Speaker #3: care about performance and

Speaker #3: operating performance that may be useful to

Speaker #3: Looking back at

Speaker #3: 2025, we have

Speaker #3: investors. A

Looking back at 2025, we have implemented, many changes to lay the foundation to improve the financial and go-to Market fundamentals. Which we believe will result in a positive and consistent recovery over time.

Speaker #3: reconciliation of

Speaker #3: implemented many changes to lay the foundation to improve the financial and

Speaker #3: the non-GAAP financial measures to the most

Speaker #3: go-to-market fundamentals, which we

Speaker #3: believe will result in a positive completed and what we will

Speaker #3: our fourth quarter earnings release in the investor relations sections of our

Speaker #3: and consistent recovery

We are investing responsibly in areas where we see great potential while staying disciplined and realistic about what it takes to turn a power semiconductor business around.

Speaker #3: over time. We are

Speaker #3: I'll call over to Camillo Martino. Camillo?

Speaker #3: investing responsibly in areas where

Speaker #3: we see great potential while staying disciplined and realistic about what the quarter.

Speaker #4: Thank you, Mike, and good afternoon, everyone. I would like to open with a comment I made last

Speaker #3: semiconductor business around. I would

I would like to look back on Q4 and 2025 highlighting what we have completed and what and we will provide more detail on our go forward, operating strategy.

Speaker #4: quarter, specifically measures can be found in our fourth quarter earnings MagnaChip has a strong foundation, a strong history and power reputation for reliability and

Speaker #3: like to look back on Q4 and

First, a quick review of the quarter.

Speaker #3: 2025, highlighting

Speaker #3: what we have completed and

Speaker #3: what we will provide more detail

Speaker #4: quality and relationships with

Speaker #3: on our go-forward operating

For Q4 Revenue was 40.6 million dollars and gross margin was 9.3%.

Speaker #3: strategy.

Speaker #4: customers who care about

Speaker #3: First, a quick review of the quarter.

Speaker #4: performance and execution.

Speaker #3: For Q4, revenue was

Speaker #4: Looking back at

Speaker #4: 2025, we have implemented many changes

For the full year, Revenue was 178.9 million and gross. Margins were 17.6%.

Speaker #3: $40.6 million and

Speaker #3: gross margin was

Speaker #4: to lay the foundation to improve the

Speaker #3: 9.3%. For the full year,

Speaker #4: financial and go-to-market

Speaker #4: fundamentals, which we believe will result

Speaker #3: revenue was

Speaker #3: $178.9 million and gross margins

Consistent with our comments from our last Earnest, call our results continue to reflect free realities.

Speaker #4: in a positive and

Speaker #4: consistent recovery over

Speaker #3: were

Speaker #3: 17.6%. Consistent with our comments from our

Speaker #4: time. We are investing

Pricing pressure on Legacy products remains intense, especially in China.

Speaker #4: responsibly in areas where we see great

Speaker #3: last earnings call, our

Speaker #3: results continue to reflect

Speaker #4: potential while staying disciplined

Factory loading, and utilization was a headwind.

Speaker #4: and realistic about what it takes to

Speaker #3: three realities.

Speaker #3: Pricing pressure on legacy products

Speaker #4: turn a power semiconductor business

Speaker #4: around. I would like to look back

Speaker #3: remains intense, especially have competitive products, we can

Speaker #4: on Q4 and 2025, highlighting what we have

Speaker #3: in China. Factory

Although we saw utilization slightly above in Q4, what we had said during last quarter, earnings score.

Speaker #3: loading and utilization was a

Speaker #3: headwind, although we

Speaker #4: provide more detail on our

Speaker #3: saw utilization slightly

Speaker #4: go-forward operating

Speaker #3: above in Q4 what we had

Speaker #4: strategy. First, a quick review of

Speaker #3: said during last quarter's earnings

Speaker #3: call. We

We need highly competitive products to win. This is a very important reality and where we do have competitive products, we can absolutely win. That's the core Point behind our product strategy,

Speaker #4: For Q4, revenue was 40.6 million dollars and gross margin

Speaker #3: need highly competitive products to

Speaker #3: win. This is a very important reality and when we do have competitive

Speaker #4: was it takes to turn a power

Speaker #4: 9.3%. For the full year, revenue was

Speaker #3: products, we can absolutely win. The past several months, we have

Speaker #4: 178.9 million dollars

Speaker #3: That's the core point behind our

Kyu, Yong will walk through the financial details and guidance later, moving to, the more important changes that we have made during 2025,

Speaker #3: product strategy. Shin reduced our cost

Speaker #4: and gross margins were

Speaker #4: 17.6%. Consistent

Speaker #3: We'll walk through the financial details and structure.

Speaker #3: and guidance later, moving to

Speaker #4: With our comments from our last earnings,

Speaker #4: call, our results continue

Over the past year. And especially over the past several months, we have taken 3, meaningful actions.

Speaker #4: to reflect three

Speaker #3: 2025. Over the past year, and

Speaker #4: realities. Pricing pressure

Firstly, we significantly reduce our cost structure.

Speaker #4: on legacy products remains

Speaker #4: intense, especially in

Speaker #3: especially over the past several months,

Speaker #4: China. Factory loading and

Speaker #3: we have taken three meaningful actions. Firstly, we

We exited the display business and we resized the organization accordingly.

Speaker #4: utilization was a

Speaker #4: headwind, although we saw

Speaker #3: significantly reduced our cost

Speaker #4: utilization slightly above in

Speaker #3: structure. We

Speaker #3: exited the display business, and we

Speaker #4: Q4 what we had said during

Speaker #4: last quarter's earnings

Speaker #3: resized the organization

Speaker #4: call. We need highly

Speaker #3: accordingly. We also

Speaker #3: executed workforce actions and cost reduction programs to reduce OPEX and.

Speaker #4: competitive products to win. This is a

Speaker #4: Very important reality, and when we do,

Speaker #4: absolutely win. That's the core

Speaker #4: point behind our product

Speaker #4: strategy. Shin will walk through the

Speaker #4: financial details, and guidance

Speaker #4: later, moving to the more important

Secondly we've reorganized and focused our sales and marketing teams on specific market segments and customers. This is important because winning and power semis is not a 1 size, fits all it is segment by segment and customer by customer.

Speaker #4: changes that we have made

Speaker #4: during

Speaker #4: 2025. Over

Speaker #4: the past year, and especially over the

Thirdly, we increased our investment in R&D to significantly improve our mid to longer-term product competitiveness.

Speaker #4: taken three meaningful actions. Firstly, we significantly

Speaker #4: We exited the display business and we resized the

In 2025, we launched 55 New Generation products versus a total of 4 for the entire 20 2024 year.

Speaker #4: organization

Speaker #4: accordingly. We also executed the more important changes that

Speaker #4: workforce actions and cost we have made during reduction programs to reduce OPEX

This is a massive acceleration by our engineering team and reflects targeted investment for longer term growth.

Speaker #4: and to focus the company

Speaker #4: exclusively on the power

Speaker #4: business. Secondly, we reorganized

Speaker #4: and focused our sales and marketing teams

These new generation products are designed to improve our competitiveness and improve, our product margin structure over time.

Speaker #4: on specific market

So, those 3 definitive changes have already been made.

Speaker #4: segments and customers. This

Speaker #4: is important because winning in power

Speaker #4: semis is not a one-size-fits-all. It is segment by segment and customer by customer.

With respect to our go forward, operating strategy, I would now like to highlight 6 foundational pillars. That we believe are fundamental to the successful recovery and longer term profitable growth in our power business.

Number 1, Focus market segments, we are investing in the priority and markets where we believe we can earn better margins and build durable customer positions.

The markets are the funnel.

Automotive.

Industrial motor control.

Camillo Martino: In 2025, we launched 55 new generation products versus a total of 4 for the entire 2024 year. This is a massive acceleration by our engineering team and reflects targeted investment for longer term growth. These new generation products are designed to improve our competitiveness and improve our product margin structure over time. Those 3 definitive changes have already been made. With respect to our go forward operating strategy, I would now like to highlight 6 foundational pillars that we believe are fundamental to the successful recovery and longer term profitable growth in our power business. Number 1, focus market segments. We are investing in the priority end markets where we believe we can earn better margins and build durable customer positions. The markets are the following: automotive, industrial motor control, solar and energy-related applications, and server data infrastructure.

Solar and energy related applications and server data infrastructure.

And in the future, we expected the delivery of advanced Power Solutions to the robotics Market as well.

In 2025, we launched 55 New Generation products versus a total of 4 for the entire 20 2024 year.

This is a massive acceleration by our engineering team and reflects targeted investment for longer term growth.

We are not going to chase every in Market. We are going to concentrate on segments where our technology roadmap and proximity to significant and strategically. Important customers can translate into sustainable share and better economics.

These new generation products are designed to improve our competitiveness and improve, our product margin structure over time.

Number 2, our product competitiveness.

So, those 3 definitive changes have already been made.

At the heart of our turnaround strategy is product, competitiveness. This is a comment that we have made many times previously.

We are continuing to accelerate our product development activities. Our plan is to deliver more than 40 New Generation products in 2026.

This is, in addition to the 55 New Generation products launched in 2025.

Number one, focus market segments. We are investing in the priority markets where we believe we can earn better margins and build durable customer positions.

The markets are the funnel.

Automotive.

Industrial motor control.

This compares to a total of only 4 new generation products launched in 2024 and none at all in 2023.

Camillo Martino: In the future, we expect to be delivering advanced power solutions to the robotics market as well. We are not going to chase every end market. We are going to concentrate on segments where our technology roadmap and proximity to significant and strategically important customers can translate into sustainable share and better economics. Number two, our product competitiveness. At the heart of our turnaround strategy is product competitiveness. This is a comment that we have made many times previously. We are continuing to accelerate our product development activities. Our plan is to deliver more than 40 new generation products in 2026. This is in addition to the 55 new generation products launched in 2025. This compares to a total of only 4 new generation products launched in 2024, and none at all in 2023.

Solar and energy related applications and server data infrastructure.

Again this is the result of a targeted investment with a specific aim to increase Revenue utilization and product margins over time.

And in the future, we expected the delivering Advanced Power Solutions to the robotics Market as well.

These products are designed to be meaningfully better, not incremental.

Number 3, is our power AC business.

Number 2, our product competitiveness.

As we expand our focus on certain market segments, we will begin to develop Key Systems expertise that will align power. ICS and gate driver Aces with our future power product program and it will have meant magnitudes Revenue generation potential.

At the heart of our turnaround strategy is product, competitiveness. This is a comment that we have made many times previously.

Number 4 modules.

We are also expanding how we go to market with customers through a module strategy.

We are continuing to accelerate our product development activities. Our plan is to deliver more than 40 New Generation products in 2026.

This is in addition to the 55 New Generation products launched in 2025.

A module allows us to combine multiple Dives, sometimes our own sometimes third party, into a package solution that should increase our product content per application.

This compares to a total of only four new-generation products launched in 2024, and none at all in 2023.

Camillo Martino: Again, this is the result of a targeted investment with a specific aim to increase revenue, utilization, and product margins over time. These products are designed to be meaningfully better, not incremental. Number 3 is our Power IC business. As we expand our focus on certain market segments, we will begin to develop key systems expertise that will align Power ICs and Gate Driver ICs with our future power product roadmap, and it will augment Magnachip's revenue generation potential. Number 4, modules. We are also expanding how we go to market with customers through a module strategy. A module allows us to combine multiple dies, sometimes our own, sometimes third party, into a packaged solution that should increase our product content per application.

Number 5, Technology Program.

Again this is the result of a targeted investment with a specific aim to increase Revenue utilization and product margins over time.

These products are designed to be meaningfully better, not incremental.

Number 3, is our power IC business.

To continue to support and offer greater value to our key customers. We are actively evaluating offering silicon carbide, product solutions to them.

our entry into the silicon carbide Market will be thoughtful and deliberately targeting markets where we can have longer term Revenue visibility and in which return on investment capital and payback as demonstratively attractive

As we expand our focus on certain market segments, we will begin to develop key systems expertise that will align power, ICS, and gate driver ACES with our future power product program, and it will augment magnet chips, revenue, generation potential.

Number 4 modules.

We believe our reputation and geographical location should enable us to access such attractive Market service.

We are also expanding how we go to market with customers through a module strategy.

Strategic Partnerships.

Camillo Martino: Our aim is to increase sales efficiency, drive higher revenue at better target markets and margins in markets where customers want integration and where the economics support it. Number 5, technology roadmap. To continue to support and offer greater value to our key customers, we are actively evaluating offering silicon carbide product solutions to them. Our entry into the silicon carbide market will be thoughtful and deliberately targeting markets where we can have longer term revenue visibility and in which return on invested capital and payback are demonstrably attractive. We believe our reputation and geographical location should enable us to access such attractive market segments. Finally, number 6, strategic partnerships. Our position as a trusted power semiconductor company in Korea places us in a strong position to establish mutually beneficial relationships with key customers and technology partners who value our local access, security of supply, expertise, and reputation.

A module allows us to combine multiple guides—sometimes our own, sometimes third-party—into a package solution that should increase our product content per application.

Our position, as a trusted power, Semiconductor Company in Korea, places us in a strong position. To establish mutually beneficial relationships with key customers and Technology Partners who value our local access security of Supply, expertise and reputation.

Our aim is to increase sales and efficiency, drive higher revenue at better target markets, in the margins, in markets where customers want integration, and where the economics support it.

Number 5, Technology Program.

Building stronger and deeper customer relationships in our Focus. Micro segments is critical and we believe having multiple anchored customers that have dropped. A broad range of our products will be highly beneficial and a testament to our value proposition.

To continue to support and offer greater value to our key customers. We are actively evaluating offering silicon carbide, product solutions to them.

Likewise Partnerships with technology leaders who recognize our value as a trusted partner in a strategically important Market will accelerate our product road maps while expanding our Market reach in a capital efficient manner.

Our entry into the silicon carbide market will be thoughtful and deliberate, targeting markets where we can have longer-term revenue visibility and in which return on investment capital and payback are demonstrably attractive.

We believe our reputation and geographical location should enable us to accept such attractive Market C.

We Believe developing these close relationships with anchored, customers and Technology Partners will provide a foundation for significant value creation over time.

Finally, number 6.

Strategic Partnerships.

We believe the Strategic customer relationships, we have developing the focused mind of segments, we are pursuing and the advanced technology we are developing including silicon, carbide will significantly, expand, magnitudes, tan, and sand.

Camillo Martino: Building stronger and deeper customer relationships in our focus market segments is critical, and we believe having multiple anchored customers that adopt a broad range of our products will be highly beneficial and a testament to our value proposition. Likewise, partnerships with technology leaders who recognize our value as a trusted partner in a strategically important market will accelerate our product roadmaps while expanding our market reach in a capital efficient manner. We believe developing these close relationships with anchored customers and technology partners will provide a foundation for significant value creation over time. We believe the strategic customer relationships we are developing, the focus market segments we are pursuing, and the advanced technology we are developing, including silicon carbide, will significantly expand Magnachip's TAM and SAM. Selling modules and higher value-added power ICs will further expand our TAM to approximately double over the next five years.

Selling modules and higher value added power. SES will further expand our tan to approximately double over the next 5 years. Even more importantly, our sand

is expected to nearly triple over the next 5 years.

We are building a more balanced resilient business.

Customer relationships and our Focus micro segments is critical and we believe having multiple anchored customers that have dropped. A broad range of our products will be highly beneficial and a testament to our value proposition.

1 where customer relationships, support investment, decisions, and value creation over a multi-year horizon.

Now, let me address some recent board level activities.

likewise Partnerships with technology leaders who recognize our value as a trusted partner in a strategically important Market will accelerate our product roadmaps while expanding our Market reach in a capital efficient manner,

We recently announced that Cristiano amoruso Chief investment officer of beer fur.

Has joined the board as a director.

We believe developing these close relationships with anchored customers and technology partners will provide a foundation for significant value creation over time.

His form. His firm became a significant shareholder of magnachip because it believes in magnitudes ability to create significant long-term value for its customers, shareholders and employees.

The board also believes that companies, significantly undervalued relative to its long-term value creation potential.

And believes that focused execution.

We believe the Strategic customer relationships, we have developing the focused market segments, we are pursuing and the advanced technology we are developing including silicon, carbide will significantly, expand, magnitudes, tan, and sand.

Camillo Martino: Even more importantly, our SAM is expected to nearly triple over the next five years. We are building a more balanced, resilient business, one where customer relationships support investment decisions and value creation over a multi-year horizon. Now let me address some recent board-level activities. We recently announced that Cristiano Amoruso, Chief Investment Officer of Melburg Capital, has joined the board as a director. His firm became a significant shareholder of Magnachip because it believes in Magnachip's ability to create significant long-term value for its customers, shareholders, and employees. The board also believes the company is significantly undervalued relative to its long-term value creation potential, and believes that focused execution and the strategic realignments we are implementing, product competitiveness, market focus, technology roadmap, and customer technology partnerships can turn the company to growth and create significant long-term shareholder value.

Selling modules and higher value added power Aces will further, expand our tan to approximately double over the next 5 years. Even more importantly, our sand

And the Strategic realignments. We are implementing product, competitiveness Market, Focus, technology, roadmap and customer technology Partnerships can turn the company to growth and create significant long-term shareholder value.

Is expected to nearly triple over the next 5 years.

In line, with its traditional responsibilities.

We are building a more balanced resilient business 1 way, customer relationships, support investment, decisions, and value creation over a multi-year horizon.

Now, let me address some recent board level activities.

The board will responsibly and carefully evaluate any actionable opportunities that can accelerate and de-risk shareholder value of creation and compare it with all other options available to the company.

Looking forward. Allow me to set the expectations clearly.

This turnaround will take time.

We recently announced that Cristiano Amoruso, Chief Investment Officer of Beer.F, has joined the board as a director.

We believe that great products and great customer Partnerships will turn magnitude around.

His form. His firm became a significant shareholder of magnitude because it believes in magnitudes ability to create significant long-term value for its customers, shareholders and employees.

At the same time and as we discussed previously, New Generation products can take take time to qualify to ramp and to contribute meaningfully towards Revenue.

The board also believes that the company is significantly undervalued relative to its long-term value creation potential.

And believes that focused execution.

in 2026, we still expect Legacy products to represent the vast majority of Revenue and pricing pressure affecting these products will continue

Camillo Martino: In line with its fiduciary responsibilities, the board will responsibly and carefully evaluate any actionable opportunities that can accelerate and de-risk shareholder value creation and compare it with all other options available to the company. Looking forward, allow me to set the expectations clearly. This turnaround will take time. We believe that great products and great customer partnerships will turn Magnachip around. At the same time, and as we discussed previously, new generation products take time to qualify, to ramp, and to contribute meaningfully towards revenue. In 2026, we still expect legacy products to represent the vast majority of revenue, and pricing pressure affecting these products will continue. We expect new generation products to comprise approximately 10% of our total revenue in Q4 2026, up from 2% for the full year 2025.

In line with its fiduciary responsibilities.

we expect the new generation products to comprise approximately 10% of our total revenue in the fourth quarter of 2026 up from 2%, for the full year, 2025

So 2026.

period, especially

transition to portfolio and scale New Generation products.

The board will responsibly and carefully evaluate any actionable opportunities that can accelerate and de-risk shareholder value, creation, and compare it with all other options available to the company.

Looking forward. Allow me to set the expectations clearly.

We believe we are taking the right corrective actions to improve our competitive position and create a path to meaningful value creation.

This turnaround will take time.

We will continue to be transparent.

We believe that great products and great customer Partnerships will turn magnitude around.

Prioritize cash discipline and execute the product roadmap with urgency.

Over to turn over the call to Shino to walk through a quarterly Financial results.

And their Outlook.

At the same time and as we discussed previously, New Generation products can take take time to qualify to ramp and to contribute meaningfully towards Revenue.

Can, you know, thank you, Camilo. And welcome everyone on the call. Let's say, let's start with Chief Financial metrics for Q4 and full year 2025.

In 2026, we still expect legacy products to represent the vast majority of revenue, and pricing pressure affecting these products will continue.

Quarter Q4 Consolidated revenue from continuing operations, which includes power, analog, Solutions, and power IC with 40.6 million, approximately at the midpoint of our guidance range of 38.5 to 42.5 million.

This was down 17% year-over-year and down 11.7%, sequentially on an Apple space.

We expect the new generation products to comprise approximately 10% of our total revenue in the fourth quarter of 2026, up from 2% for the full year 2025.

Camillo Martino: 2026 will remain a challenging period, especially for gross margin, as we transition the portfolio and scale new generation products. We believe we are taking the right corrective actions to improve our competitive position and create a path to meaningful value creation. We will continue to be transparent, prioritize cash discipline, and execute the product roadmap with urgency. With that, I'll turn over the call to Shinyoung to walk through the quarterly financial results and our outlook. Shinyoung?

Compared with the equivalent revenue of 48.9 million in Q4 2024, and 45.9 million in Q3 2025.

So 2026 will remain a challenging period especially for gross margin as we transition to portfolio and scale New Generation products.

We believe we are taking the right corrective actions to improve our competitive position and create a path to meaningful value creation.

We will continue to be transparent.

For the full year, 2025 total Consolidated revenue from continuing operations was 178.9 Million compared with 185.8 million in 2024 representing a 3.7% year-over-year decline.

Prioritize cash discipline and execute the product roadmap with urgency.

This result was consistent with our prior guidance, which anticipated an approximately 3.8%, year-over-year, decrease.

With that, I'll turn over to turn over the call to sheno to walk through the quarterly Financial results.

Shinyoung Park: Thank you, Camillo, and welcome everyone on the call. Let's let's start with key financial metrics for Q4 and full year 2025. Total Q4 consolidated revenue from continuing operations, which includes Power Analog Solutions and Power IC, was $40.6 million, approximately at the midpoint of our guidance range of $38.5 to 42.5 million. This was down 17% year-over-year and down 11.7% sequentially on an apples-to-apples basis. This compares with the equivalent revenue of $48.9 million in Q4 2024 and $45.9 million in Q3 2025. For the full year 2025, total consolidated revenue from continuing operations was $178.9 million, compared with $185.8 million in 2024, representing a 3.7% year-over-year decline. This result was consistent with our prior guidance, which anticipated an approximately 3.8% year-over-year decrease.

And our Outlook.

Can you thank you, Camilo and welcome everyone on the call. Let's see, let's start with Chief Financial metrics for Q4 and full year 2025.

Revenue from Power analog Solutions in queue forward. 36.8 million down, 15.3% year-over-year and down. 11.4% sequentially, primarily due to competitive pricing pressure on our older generation products, which was, especially intense in China.

Definitely at the midpoint of our guidance range of 38.5 to 42.5 million.

The 2.7 million. 1-time sales incentive was recognized as a reduction in Revenue in Q4 2025. As part of our efforts reduced elevated inventory, levels in the channel primarily in China.

For the full year 2025 revenue from Power analog Solutions worth 160.5 million compared with 166.8 million in 2024.

This was down 17% year-over-year and down 11.7%, sequentially on an Apple tapos face this compared with the equivalent revenue of 48.9 million in Q4 2024, and 45.9 million in Q3 2025.

These 3.8% year-over-year. Decline was primarily due to intensified pricing pressure on our older generation products partially occupied by Revenue growth, in low voltage mosfet attributable to market share games.

For the full year 2025 total Consolidated revenue from continuing operations was 1 178.9 million compared with 185.8 million in 2024. Representing a 3.7% year-over-year decline.

Revenue from power IC and Q4 was 3.8 million. This was down 30.4% year-over-year and down 14.5% sequentially.

The sequential decline with you mainly to custom order pools in Q3 from Q4.

Shinyoung Park: Revenue from Power Analog Solutions in Q4 was $36.8 million, down 15.3% year-over-year and down 11.4% sequentially, primarily due to competitive pricing pressure on our older generation products, which was especially intense in China. The $2.7 million one-time sales incentive was recognized as a reduction in revenue in Q4 2025 as part of our effort to reduce elevated inventory levels in the channel, primarily in China. For the full year 2025, revenue from Power Analog Solutions was $160.5 million, compared with $166.8 million in 2024. This 3.8% year-over-year decline was primarily due to intensified pricing pressure on our older generation products, partially offset by revenue growth in Low-Voltage MOSFET attributable to market share gains. Revenue from Power IC in Q4 was $3.8 million.

This result was consistent with our prior guidance, which anticipated an approximately 3.8%, year-over-year, decrease.

Revenue from power IC for the full year. 2025 was 18.4 Million down 3.4% year-over-year compared with 19 million in 2024.

Revenue from Power analog Solutions in Q4 was 36.8 million down to 15.3% year-over-year and down. 11.4% sequentially primarily due to competitive pricing pressure on our older generation products, which was, especially intense in China.

In Q4, Consolidated gross profit margin from continuing operations was 9.3%. We invite us range of 8 to 10% compared with 23.2% in Q4, 2024, and 18.6% in Q3 2025 on an Apple Staples basis.

The 2.7 million. 1-time sales incentive was recognized as a reduction in Revenue in Q4 2025. As part of our efforts reduced elevated inventory, levels in the channel primarily in China.

The previously mentioned 1, time sales incentive had a 560 basis point negative impact on the gross profit margin.

For the full year 2025, revenue from Power Analog Solutions was $160.5 million, compared with $166.8 million in 2024.

Year over year. And sequential decline was primarily attributable to an unfavorable product, mix driven, mainly by ASC version, particularly in China and filling our fabric, lower margin products, and a lower utilization rate.

This 3.8% year-over-year decline was primarily due to intensified pricing pressure on our older-generation products, partially offset by revenue growth in low-voltage MOSFET attributable to market share gains.

Shinyoung Park: This was down 30.4% year-over-year and down 14.5% sequentially. The sequential decline was due mainly to customer order pullings in Q3 from Q4. Revenue from Power IC for the full year 2025 was $18.4 million, down 3.4% year-over-year, compared with $19 million in 2024. In Q4, consolidated gross profit margins from continuing operations was 9.3% within the guidance range of 8% to 10%, compared with 23.2% in Q4 2024 and 18.6% in Q3 2025 on an apples-to-apples basis. The previously mentioned onetime sales incentive had a 560 basis point negative impact on gross profit margin. Year-over-year and sequential decline was primarily attributable to an unfavorable product mix, driven mainly by ASP erosion, particularly in China, including our fab in lower margin products and a lower utilization rate.

For the full year, 2025 Consolidated growth sparking margin from continuing operations, with 17.6%, within our annual guidance range of 17 to 18% compared with 21.5% in 2024.

Revenue from Power in Q4 was $3.8 million. This was down 30.4% year-over-year and down 14.5% sequentially. The sequential decline was due mainly to custom order pull-ins in Q3 from Q4.

You will be your change was primarily driven by continuing pricing pressure continued. Pricing pressure, lower margin products loaded in our effect and a lower fat utilization rate.

revenue from Power, I see for the full year 2025 was 18.4 Million down 3.4% year-over-year compared with 19 million dollars in 2024

The company's display business has been classified as a discontinued operation in 2025, accordingly, all of the following figures, reflect results, from continuing operations, and prior periods. Have been recalled on a comparable basis.

In Q4 Consolidated for stock in margin from continuing operations, worth 9.3%, with invite us, range of 8, to 10% compared with 23.2%, in Q4, 2024, and 18.26% in Q3 2025 on an Apple status basis.

Q4 sgna was 8.6 million compared with equivalent sgna of 9.8 million, in Q4 24 and 8.3 million in Q3 2025.

The previously mentioned 1 time series incentive had a 560 basis point negative impact on the gross profit margin.

We expect to see annual Opex Savings of more than 2 million dollars. Beginning in Q4 2025 from our cost reduction efforts, including the execution of the voluntary resignation program primarily for a shared function employees in Q3.

Year-over-year and sequential decline was primarily attributable to an unfavorable product. Mix driven. Mainly by ASB region, particularly, China and filling our fabric, lower margin products, and a lower utilization rate.

Shinyoung Park: For the full year 2025, consolidated gross profit margin from continuing operations was 17.6% within our annual guidance range of 17% to 18%, compared with 21.5% in 2024. Year-over-year change was primarily driven by continued pricing pressure, lower margin products loaded in our fab and a lower fab utilization rate. The company's display business has been classified as a discontinued operation in 2025. Accordingly, all of the following figures reflect results from continuing operations and prior periods have been recost on a considerable basis. Q4 SG&A was $8.6 million, compared with equivalent SG&A of $9.8 million in Q4 2024 and $8.3 million in Q3 2025.

Stop this stuff. Based compensation charges including sgna work, point, 4 million dollars in Q4 as compared with 1.6 million dollars in Q4 2424 and negative -28,000 in Q3 2025

For the full year, 2025 Consolidated growth sparking margin from continuing operations, with 17.6%, within our annual guidance range of 17 to 18% compared with 21.5% in 2024.

We think Q3 and Q4, we recorded adjustments to stop based compensation expense related to the separation of certain Executives and Associate for future of their Equity grounds.

Year-over-year, change was primarily driven by continuing pricing pressure continued. Pricing pressure, lower margin products loaded in our effect and a lower fat relationship rate.

July, 2025 sgna was 35.1 Million compared with 38.1 million in 2024.

Stuff is compensation charges, including sgna award, 1.9 million in 2025 and 4.8 million in 2024.

The companies this business has been classified as a discontinued operation in 2025, accordingly. All of the following figures reflect features from continuing operations, and prior periods. Have been recalled on a considerable basis.

Shinyoung Park: We expect to see annual OpEx savings of more than $2 million beginning in Q4 2025 from our cost reduction efforts, including the execution of a voluntary resignation program primarily for shared function employees in Q3. Stock-based compensation charges including SG&A were $0.4 million in Q4, as compared with $1.6 million in Q4 2024 and -$28,000 in Q3 2025. Both in Q3 and Q4, we recorded adjustments to stock-based compensation expense related to the separation of certain executives and associated full vesting of their equity grants. For the full year 2025, SG&A was $35.1 million, compared with $38.1 million in 2024. Stock-based compensation charges including SG&A were $1.9 million in 2025 and $4.8 million in 2024.

Q4 R&D was 7.6 million compared with equivalent R&D of 6.6 million dollars in Q4 2024 and 7.8 million in Q3 2025.

Q4 sgna was 8.6 million dollars compared with the equivalent exchange area of 9.8 million in Q4 24 and 8.3 million in Q3 2025.

R&D and Q4 increase year-over-year due to the acceleration of new product development.

We introduced 65 New Generation products in 2025 of which 44% were introduced in Q4.

We expect to see annual Opex Savings of more than 2 million dollars. Beginning in Q4 2025 from our cost reduction efforts, including the execution of the voluntary reservation program primarily for a shared function employees in Q3.

This compares to 4 in all of 2024.

For the full year, 2025 R&D was 27.3 Million compared to 25 million in the prior year.

That staff based compensation charges including sgna work, point, 4 million dollars in Q4 as compared with 1.6 million dollars in Q4 2424, and negative -28,000.23 2025.

Before I go into the details of our non web results, please note that our gaap financial results are available in our home AK filing with our fourth quarter, earnings release,

Our non-gaap results are as follows.

both in Q3 and Q4, we recorded adjustments to stop based compensation expense related to the separation of certain Executives and Associate for future of their Equity ground

for the full year, 2025 sgna was 35.1 million dollars compared with 38.1 million dollars in 2024

Q4 adjusted. Operating loss was 11.9 Million, compared with an equivalent adjusted operating loss of 3.5 million in Q4 2024 and adjusted operating loss of 7.4 million in Q3 2025.

Stock based compensation charges including sgna War, 1.9 million dollars in 2025 and 4.8 million dollars in 2024.

Shinyoung Park: Q4 R&D was $7.6 million, compared with equivalent R&D of $6.6 million in Q4 2024 and $7.8 million in Q3 2025. R&D in Q4 increased year-over-year due to the acceleration of new product development. We introduced 65 new generation products in 2025, of which 44% were introduced in Q4. This compares to four in all of 2024. For the full year 2025, R&D was $27.3 million compared to $25 million in the prior year. Before I go into the details of our non-GAAP results, please note that our GAAP financial results are available in our Form 8-K filing with our fourth quarter earnings release.

Q4 adjusted ebita was negative 8.9 million compared with an equivalent adjust. Evita Point 3 million dollars in Q4 2024 and -4 million in Q3 2025.

24 and 7.8 million in Q3 2025.

R&D and Q4 increase year-over-year due to the acceleration of new product development.

For the full year. 2025 adjusted operating loss was 28.85 Million compared with an equivalent adjusted offering loss of 19.1 million in 2024.

We introduced 65 New Generation products in 2025 of which 44% were introduced in Q4.

This compares to 4 in all of 2024.

Adjusted Evita in 25.6 million, compared with an equivalent of negative 4.2 million in 2024.

For the full year, 2025 R&D was 27.3 Million compared to 25 million in the prior year.

Adjusted operating loss and I'll just deteriorated your rear primarily due to lower gross profit and higher R&D expenses as explained about.

Shinyoung Park: Our non-GAAP results are as follows: Q4 adjusted operating loss was $11.9 million, compared with an equivalent adjusted operating loss of $3.5 million in Q4 2024 and adjusted operating loss of $7.4 million in Q3 2025. Q4 adjusted EBITDA was negative $8.9 million, compared with an equivalent adjusted EBITDA of $0.3 million in Q4 2024 and negative $4 million in Q3 2025. For the full year 2025, adjusted operating loss was $28.5 million, compared with an equivalent adjusted operating loss of $19.1 million in 2024. Adjusted EBITDA in 2025 was negative $15.6 million, compared with an equivalent adjusted EBITDA of negative $4.2 million in 2024.

Before I go into the details of our non-GAAP results, please note that our GAAP financial results are available in our Form, a case filing, with our fourth quarter earnings release.

Our non-gaap results are as follows.

Our Q4 non-gaap diluted loss per share with. As compared with equivalent non-gaap diluted earnings per share of 15 cents in Q4 2024 and non-gaap diluted loss per share of 1 cent in 232025.

Q4 adjusted. Operating loss was 11.9 Million, compared with an equivalent adjusted operating loss of 3.5 million in Q4 2024 and adjusted operating loss of 7.4 million dollars in Q3 2025.

Our weighted diverse non-gaap diluted shares outstanding for the quarter were 36 million 37.7 million in Q4 2024 and 35.9 million shares in Q3 2025.

Q4 adjusted EV service negative -8.9 million compared with an equivalent budget. If the queen 3 million dollars in Q4 2024 and negative -4 million dollars in Q3 2025.

For the full year 2025 non-gaap diluted loss per share was 22 cents. Compared with 22 cents in 2024. Weighted average non get diluted shares outstanding for 2025 or 36.2 million shares compared with 37.8 million in 2024.

Moving to the balance sheet.

For the polio 2025 adjusted operating loss was 28.85 Million compared with an equivalent adjusted offering loss of 19.1 million in 2024.

Previously, we had expected our cash at the end of 2025 to be in the mid 90 million range.

Adjusted EBITDA in 2025 was negative $15.6 million, compared with an equivalent of just a bit of negative $4.2 million in 2024.

Shinyoung Park: Adjusted operating loss and adjusted EBITDA deteriorated year-over-year, primarily due to lower gross profit and higher R&D expenses, as explained above. Our Q4 non-GAAP diluted loss per share was $0.08, compared with equivalent non-GAAP diluted earnings per share of $0.15 in Q4 2024 and non-GAAP diluted loss per share of $0.01 in Q3 2025. Our weighted average non-GAAP diluted shares outstanding for the quarter were 36 million, 37.7 million in Q4 2024, and 35.9 million shares in Q3 2025. For the full year 2025, non-GAAP diluted loss per share was $0.22, compared with $0.22 in 2024. Weighted average non-GAAP diluted shares outstanding for 2025 were 36.2 million shares, compared with 37.8 million in 2024. Moving to the balance sheet.

However, we ended Q4 with cash of 103.8 million and this compared with 138.6 million, at the end of 242024,

Adjusted operating loss. And I just a deteriorated over year primarily due to lower growth profit and higher R&D expenses as explained.

Our Q4 2025 GAAP diluted loss per share was as compared with equivalent non-GAAP earnings per share of 15 cents in Q4 2024 and non-GAAP diluted loss per share of 1 cent in Q3 2025.

The main cash outflow during 2025 included 13 million in net cash. Net cash capex 4 million dollars related to package costs and just 37 associated with the voluntary education program executed in Q3 and 3.6 million dollars. Spent on share repurchases primarily in the first half of 2025.

The remaining Gap was primarily attributable to net cash loss from operations.

Our weighted diverse non-gaap diluted shares outstanding for the quarter were 36 million 37.7 million in Q4 2024 and 35.9 million shares in Q3 2025.

At end of Q4, our long-term borrowing, quartered 44.6 million, which included 16.7 million dollars of the equipment loan.

Including maintenance capex, our total capex for the full year 2025 was $30 million. However, the net cash impact was 13 million due to partial funding through the equipment loan.

For the full year, 2025 non-GAAP diluted loss per share was $0.22 compared with $0.22 in 2024. Weighted average non-GAAP diluted shares outstanding for 2025 were 36.22 million shares, compared with 37.8 million in 2024.

Shinyoung Park: Previously, we had expected our cash at the end of 2025 to be in the mid $90 million range. However, we ended Q4 with cash of $103.8 million, and this compared with $138.6 million at the end of Q4 2024. The main cash outflow during 2025 included $13 million in net cash, net cash CapEx, $4 million related to package costs, and $67 million associated with the voluntary resignation program executed in Q3, and $3.6 million spent on share repurchases primarily in the first half of 2025. The remaining debt was primarily attributable to net cash loss from operations. At end of Q4, our long-term borrowings totaled $44.6 million, which included $16.7 million of the equipment loan.

Moving to the balance sheet.

Previously, we had expected our cash at the end of 2025 to be in the mid-$90 million range.

Now, moving to our first quarter 2026 Biden. Well, actually results May Vary for 21202, Magnus is currently expects Consolidated revenue from continuing operations which include power, analog Solutions and power IC businesses.

However, we ended Q4 with forward cash of $103.8 million, and this compares with $138.6 million at the end of Q4 2024.

To be in the range of 44 million, 444 to 48 million up, 13.4% sequentially and up to 2.9% year-over-year at the midpoint.

This Compares with 40.6 million dollars in Q4 2025 and 44.7 million in 212025.

The main cash outflow during 2025 included 13. Million in net cash net, cash capex. So million dollars related to package cost and systems associated with the voluntary education program executed in Q3. And 3.6 million spent on share repurchases, primarily in the first half of 2025.

The remaining gap was primarily attributable to net cash loss from operations.

24 2025 but down from 20.9%, in q1, 2025.

At end of Q4.

Longterm borrowing.

Which included 16.7 million dollars of the equipment loan.

Shinyoung Park: Including maintenance CapEx, our total CapEx for the full year 2025 was $30 million. However, the net cash intake was $13 million due to partial funding through the equipment loan. Now moving to our Q4 2026 guidance. While actual results may vary, for Q1 2026, Magnachip is currently expect consolidated revenue from continuing operations, which includes Power Analog Solutions of Power IC businesses, to be in the range of $44 to $48 million, up 13.4% sequentially and up 2.9% year-over-year at the midpoint. This compares with $40.6 million in Q4 2025 and $44.7 million in Q1 2025.

Finally, I'd like to add that on a reported basis and excluding stock-based compensation and 1-time charges total operating expenses sgna R&D together. Decreased by 35% in 2025, compared with 2024

Including maintenance capex, our total capex for the full year 2025 was $30 million. However, the net cash impact was $13 million due to partial funding through the equipment loan.

also, as a result of our cost reduction efforts, we expect more than 2 million dollars of annualized sgna savings that started in the fourth quarter of 2025

On the other hand, to support the go forward offering strategic formula discussed earlier. We expect to increase replant increase our investment in R&D in 2026,

Thank you. And now I'll turn the call over to Camille for his final look.

Thank you. Sh

Now, moving to our first quarter 2026 guidance—while actual results may vary for Q1 2026—Magnachip currently expects consolidated revenue from continuing operations, which includes Power, Analog Solutions, and Power IC businesses, to be in the range of $44 million to $48 million. This is up 13.4% sequentially and up to 0.9% year-over-year at the midpoint.

we are committed to executing on the 6th foundational pillars. We emphasized earlier.

This Compares with 40.6 million, in Q4 2025 and 44.7 million in 212025.

Shinyoung Park: Consolidated gross profit margin from continuing operations to be in the range of 14% to 16%, up from 9.3% in Q4 2025, but down from 20.9% in Q1 2025. Finally, I'd like to add that on a reported basis and excluding stock-based compensation and one-time charges, total operating expenses, SG&A and R&D together, decreased by 35% in 2025 compared with 2024. Also, as a result of our cost reduction efforts, we expect more than $2 million of annualized SG&A savings that start in Q4 2025. On the other hand, to support the go forward operating strategy Camillo discussed earlier, we plan to increase our investment in R&D in 2026. Thank you. Now I'll turn the call over to Camillo for his final remarks. Camillo?

We have implemented a new go forward strategy and many of the necessary changes to position magnitude for future success and value creation.

I want to thank our employees for their continued, hard work, and dedication, and our investors, and partners for their patience and support as we return. The company to growth,

Stock in margin from continuing operations to be in the range of 14 to 16% up from 9.3% in 242025 but down from 20.9%, in 2125.

I will turn the call to the operator to open the call for questions.

Operator.

Certainly. And our first question for today comes from the line of suji Della from Roth Capital your question, please.

Finally, I'd like to add that, on a reported basis and excluding stock-based compensation and one-time charges, total operating expenses, as grouped together, decreased by 35% in 2025 compared with 2024.

More than dollars of annualized, FNA savings that start in the fourth quarter of 2025.

on the other hand, to

Hi Kamala. Hi, Shin Young. Um, first a question on the gross margin guidance, um I know there was a gross, margin inventory, Reserve hit and 4 q. Are you assuming a similar impact or an? I assuming an impact, shiny young, and 1 key or is that 14 to 16 range of pure range with how expected?

Support offering strategic, commonly discussed earlier. We expect to increase, reprint, and increase our investment in R&D in 2026.

Camillo Martino: Thank you, Shinyoung. We are committed to executing on the 6 foundational pillars we emphasized earlier. We have implemented a new go-forward strategy and many of the necessary changes to position Magnachip for future success and value creation. I want to thank our employees for their continued hard work and dedication and our investors and partners for their patience and support as we return the company to growth. I will turn the call to the operator to open the call for questions. Operator?

Thank you. And now I'll turn the call over to Camilo for his final remark. And

We are committed to executing on the 6th foundational pillars. We emphasized earlier.

We have implemented a new go-forward strategy and many of the necessary changes to position Magnachip for future success and value creation.

That did not include the the 1 time incentive that we did executed in 2425. So had we excluded 24/41. Time impact Q4 margin would be like 15% inch. So like we are expecting the q1 2026 to be the similar range and that's mainly driven by the utilization and also the, the pricing pressure. So that's actually impacting us. Our gross margin at this time because our revenue is still best. Majority of that is older generation product, we are still feeling the price and pressure especially in China.

I want to thank our employees for their continued, hard work, and dedication, and our investors, and partners for their patience and support as we return. The company to growth,

I will turn the call to the operator to open the call with the questions.

Operator: Certainly. Our first question for today comes from the line of Suji Desilva from ROTH Capital. Your question please.

Operator.

Understood. Okay, that helps. And then on the, on the operating expense, um, savings from the restructuring, uh, it'll flow through. You said, I think you said sgna, write the 2 million run rate and that would be we'd see that benefit like toward the end of 26 or when would that

Step down. What what's, what's the linearity of that step down?

Suji Desilva: Hi, Camillo. Hi, Shinyoung. First a question on the gross margin guidance. I know there was a gross margin inventory reserve hit in Q4. Are you assuming a similar impact or are you assuming an impact, Shinyoung, in Q1, or is that 14 to 16 range a pure range without expected reserve?

Shinyoung Park: No, that did not include the one-time incentives that we did, executed it in Q4 2025. Had we excluded Q4's one-time impact, Q4 margin would be like 15%. Like we are expecting the Q1 2026 to be the similar range, that's mainly driven by the utilization and also the pricing pressure. That's actually impacting us, our gross margin at this time. Our revenue, still the vast majority of that is older generation product. We are still feeling the pricing pressure, especially in China.

Well that's actually the it's going to be the the continuing basis. So you started in 24 2025, I just qualified the adual in Peggy's like 2 million plus and we are going to see the full impact in 2026 and I'm hoping that that's going to minimize the investment that we are going to do in R&D to support the go forward strategy, operating expense. I believe the the strategy

Certainly. And our first question for today comes from the line of suji Della from Roth Capital your question, please. Hi Kamala. Hi, shiny young. Um, first a question on the gross margin guidance, um, I know there was a gross, margin inventory, Reserve hit in 4. Q are you assuming a similar impact or an IRA swimming at impact shiny young and 1 Q or is that 14 to 16 range of pure range without expecting difference?

Okay.

And then the question for yourself or maybe Camilo um the geographic exposure. Um, as you bring these new products to Market and the new Focus segments, does that move your business out of China? Where it's competitive price-wise or does it stay in China and less price competitive markets, what's the, um, the shift there as you got a new products and new markets and versus the, the competitive China market right now.

Suji Desilva: Understood. Okay, that helps. Then on the operating expense savings from the restructuring, it'll flow through, you said, I think you said SG&A, right? The $2 million run rate. We'd see that benefit toward the end of 2026 or when would that step down? What's the linearity of that step down?

That did not include the the 1 time incentives that we did executed in 2425. So had we excluded 241 timing path Q4 margin within like 15 percentage. So like we are expecting the q1 2026 to be the similar range and that's mainly driven by the utilization and also the the pricing pressure. So that's actually impacting us. Our gross margin at this time. So our Revenue still best majority of that is older generation product. We are still feeling the pricing pressure, especially in China.

Shinyoung Park: Well, that's actually it's gonna be the continuing basis. It started in Q4 2025. I just quantify the annualizing impact is like $2 million+, we are gonna see the full impact in 2026. I'm hoping that that's gonna minimize the investment that we are gonna do in R&D to support the go-forward strategy, I mean, the strategy.

Understood. Okay, that helps. And then on the on the operating expense, um, savings from the restructuring, uh, it'll flow through. You said, I think you said sgna, write the 2 million run rate and that would be we'd see that benefit like toward the end of 26, or when would that step down? What what, what's, what's the linearity of that step down?

Well, that's actually the it's going to be the, the continuing basis. So you started in 2420

255, I just quantify the annualized impact.

2 million.

Look. It's, it's very clear that we have, uh, some very, very important strategically important and very large customers right here in Korea. And so, I think it's important that we do an excellent job in servicing, uh, their needs for the next, many, many years. It's so, so, to me, it's they're here. They're in that backyard. Let's deliver the value that we can, uh, we can realize together. It's not a strategy of moving away. Necessarily from any 1 country. It's more of that focusing more on Career because we're right here and, and clearly, you know, at the same time, we, we are a global company. We have sales offices, and every country

Suji Desilva: Okay. A question for yourself or maybe Camillo. The geographic exposure, as you bring these new products to market and the new focused segments, does that move your business out of China where it's competitive price-wise, or does it stay in China in less price competitive markets? What's the shift there as you go to new products and new markets and versus the competitive China market right now?

And we are going to see the full impact in 2026, and I'm hoping that that's going to minimize the investment that we are going to be doing in R&D to support the go-forward strategy, operating system, and the strategy.

Okay.

Every major country around the world. And so we're going to continue to service them as well. But but frankly, I would expect to have a higher, uh, percentage of our Revenue coming from Korea because they they're they're very close to us, right? Very, very close and we want to and and really service them extremely well.

Camillo Martino: Look, it's very clear that we have some very important, strategically important and very large customers right here in Korea. I think it's important that we do an excellent job in servicing their needs for the next many years. To me, it's they're here, they're in our backyard, let's deliver the value that we can realize together. It's not a strategy of moving away necessarily from any one country. It's more about focusing more on Korea because we're right here. Clearly, you know, at the same time, we are a global company. We have sales offices in every country, every major country around the world, we're gonna continue to service them as well.

And then a question for yourself or maybe Camilo um the geographic exposure. Um, as you bring these new products to Market and the new Focus segments, does that move your business out of China? Where it's competitive price-wise or does it stay in China and less price competitive markets? What's the? Um, the shift there as you go to new products and new markets and versus the, the competitive China market right now?

Okay. That's very helpful. And then last question, um, on the silicon carbide, effort, can you tell us where you are in that? Is that in development effort? Do you have the Technologies in house? Do you need? Do you have to invest or partner to get there? And what products are and markets? Might you target with silicon carbide?

Camillo Martino: frankly, I would expect to have a higher percentage of our revenue coming from Korea because they're very close to us, right? Very close, and we wanna and really service them extremely well.

Suji Desilva: Okay. That's very helpful, Camillo. Last question, on the silicon carbide effort. Can you tell us where you are in that? Is that in development effort? Do you have the technologies in-house that you need? Do you have to invest or partner to get there? What products or end markets might you target with silicon carbide?

Look, it's very clear that we have, uh, some very, very important strategically important and very large customers right here in Korea. And so, I think it's important that we do an excellent job in servicing, uh, their needs for the next, many, many years. It's so, so, to me, it's, they're here. They don't have backyards. Let's deliver the value that we can, uh, we can realize together. It's not a strategy of moving away necessarily. So maybe 1 country is more of that focusing more on Career because we're right here and, and clearly, you know, at the same time, we, we are a global company. We have sales offices and every country, every major country around the world, and so we're going to continue to service them as well. But but frankly, I would expect to have a higher, uh, percentage of our Revenue coming from the Korea because they they they're very close to us, right? Very, very close and we want to and really service them extremely well.

And to some of our key customers with with sharing some of that information with them under under NDA um, at the same time. Uh, I would say that uh this is a long-term plan. Uh, this is not a 12-month plan. Clearly, uh, you still can carbon is going to take many years first to develop and then, potentially, we're going to look for ways to potentially manufacture. It either. Um, in-house or maybe in the short term, we may go to an outside fabric, a short term, so we're looking at everything there but very clearly, as I stated in my, in my prepared remarks, uh, silicon carbide is a very, very important part of our future road map. If you look at the market segments that we are pursuing, if you look at the key customers, that we are deepening, our relationships with silicon carbide is very, very important for them.

Okay, appreciate the color Camelo. Thanks Camelo. Thanks, Danielle.

Camillo Martino: I don't wanna disclose what products we're developing. I would say that we're in development. We are in development, absolutely. We're building the team as well as we're speaking. To some of our key customers, we're sharing some of that information with them under NDA. At the same time, I would say that this is a long-term plan. This is not a 12-month plan. Clearly, you know, silicon carbide is gonna take many years, first to develop, and then potentially we're gonna look for ways to potentially manufacture it, either in-house or maybe in the short term, we may go to an outside foundry in the short term. We're looking at everything there.

Okay, that's very helpful. And then, last question—on the silicon carbide effort, can you tell us where you are in that? Is that a development effort? Do you have the technologies in-house that you need? Do you have to invest or partner to get there? And what products and markets might you target with silicon carbide?

All right. Thank you.

Thank you. This does conclude the question and answer section of today's program. I'd like to hand the program back to Mike Bishop for any further remarks.

Thank you, everyone for participating. On today's call. We appreciate your support of magnet chip.

Operator.

So, uh, I don't want to disclose what products we're developing. I would say the word 'development,' we are a development, absolutely. Uh, we're building the team as well as we're speaking. Um, and just some of our key customers, we're sharing some of that information with them under NDA.

Thank you, ladies and gentlemen for your participation. In today's conference, this does conclude the program. You may now disconnect good day.

Camillo Martino: Very clearly, as I stated in my prepared remarks, silicon carbide is a very, very important part of our future roadmap. If you look at the market segments that we are pursuing, if you look at the key customers that we are deepening our relationships with, silicon carbide is very, very important for that.

In house or it may be in the short term, we may go to an outside battery in the short term. So we're looking at everything there but very clearly, as I stated in my, in my prepaid remarks,

Suji Desilva: Okay. Appreciate the color, Camillo. Thanks, Camillo. Thanks, Shinyoung.

Silicon carbide is a very, very important part of our future roadmap. If you look at the market segments that we are pursuing, if you look at the key customers that we are deepening our relationships with, silicon carbide is very, very important for that.

Camillo Martino: All right. Thank you.

Okay, appreciate the color, Kamala. Thanks, Kamala. Thanks, Danielle.

Shinyoung Park: Thank you.

All right. Thank you.

Operator: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Mike Bishop for any further remarks.

Shinyoung Park: Thank you everyone for participating on today's call. We appreciate your support of Magnachip. Operator?

Mike Bishop: Thank you everyone for participating on today's call. We appreciate your support of Magnachip. Operator?

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Mike Bishop for any further remarks.

Thank you everyone for participating.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

We appreciate your support of Megan chip, operator.

Thank you, ladies and gentlemen, for your participation. This does conclude today's conference program. You may now disconnect. Good day.

Q4 2025 Magnachip Semiconductor Corp Earnings Call

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