Magnachip Semiconductor — Income Statement, Cash Flows & Balance Sheet

Is Magnachip profitable?

Magnachip is still losing money, but losses narrowed significantly after stripping out the closed Display business.

The headline net loss roughly halved, but that improvement was mostly driven by a large tax benefit and the winding down of the money-losing Display business — not by the core Power business turning a corner. Gross margins actually compressed, and restructuring charges (voluntary resignation program, executive severance) added an extra $4.8M to operating expenses in 2025.

One-time items are distorting the picture in both directions.

A $17.9M tax benefit — largely deferred (a future promise rather than cash received) — is the main reason the 2025 continuing-operations loss looks so much smaller. Without it, the cash operating picture is meaningfully weaker.

Where does Magnachip's revenue come from?

Power Analog Solutions is the dominant revenue driver, but both product lines shrank year over year.

Power IC is a much smaller slice of the business but commands meaningfully higher margins. The loss of Fab 3 foundry revenue (which was transitional and actually ran at a loss in 2024) flatters the year-over-year revenue comparison, but both core product lines still declined. The real margin pressure is in Power Analog Solutions, where gross margin dropped by about four percentage points.

Revenue is heavily concentrated in Asia, with a single customer accounting for nearly 30% of sales.

Korea grew while the broader Asia Pacific region — where China and Hong Kong together represent over 78% of that bucket — contracted. Customer concentration is rising, which adds risk if that key relationship weakens.

Does Magnachip generate cash?

Magnachip is burning cash from both operations and heavy equipment investment.

Free cash flow deteriorated sharply as Magnachip ramped up capital spending on its fabrication facility — equipment financed partly through KDB loans. The company is funding its losses and investments by drawing down its cash reserves rather than generating cash from its business.

How strong is Magnachip's balance sheet?

Magnachip holds meaningful cash but is spending it down at an accelerating rate.

The company has no near-term liquidity crisis — current assets comfortably cover current liabilities — but the cash cushion is shrinking by roughly $35M per year at the current run rate.

Debt has grown, and most of it is backed by the Korean factory as collateral.

Magnachip borrowed an additional ~$17M in CAPEX loans from Korea Development Bank in 2025, secured against factory machinery and real property. Debt levels remain moderate relative to equity, but the trend is in the wrong direction as the company funds expansion while losing money.