Research Update: Korea-Based MagnaChip Semiconductor Outlook Revised To Positive On Improved Financial Flexibility; 'B-' Rating Affirmed

We believe Korea-based chip maker MagnaChip Semiconductor Corp.'s sale of its foundry business and its Fab 4 manufacturing facility could help the company significantly lower its debt leverage, if the proceeds are used to pay down debt. However, the company's smaller scale with annual sales of about US$500 million and higher customer concentration after the asset disposal is likely to constrain its credit profile to some extent. We are revising the outlook on MagnaChip to positive from stable. We are also affirming our 'B-' long-term issuer credit rating and issue ratings on the company. The positive outlook reflects our expectation that the company will improve its financial metrics over the next 12-24 months, primarily by using its cash proceeds from

...- We believe Korea-based chip maker MagnaChip Semiconductor Corp.'s sale of its foundry business and its Fab 4 manufacturing facility could help the company significantly lower its debt leverage, if the proceeds are used to pay down debt. - However, the company's smaller scale with annual sales of about US$500 million and higher customer concentration after the asset disposal is likely to constrain its credit profile to some extent. - We are revising the outlook on MagnaChip to positive from stable. We are also affirming our 'B-' long-term issuer credit rating and issue ratings on the company. - The positive outlook reflects our expectation that the company will improve its financial metrics over the next 12-24 months, primarily by using its cash proceeds from the asset disposal to lower its leverage....

Research Update