Magnachip Semiconductor Corp. Q1 FY2026 earnings call

Camilla mentioned MagnetChip has a strong technical foundation and is executing a multi-year transformation. Q1 revenue was stronger than seasonality due to prior one-time sales incentive program. Facing competitive environment with pricing pressure on legacy products. Gross margin improved sequentially. Company is executing on six foundational pillars for longer-term recovery. Accelerating R&D and launching new products, aiming for 55 new generation products in 2026. Shin-Young reviewed Q1 financial metrics, operating expenses, non-GAAP results, balance sheet, and provided Q2 guidance.

Total Q1 consolidated revenue from continuing operations, including power analog solutions and RIC, was $46.2 million, around the midpoint of the guidance range of $44 to $48 million. Revenue from power analog solutions in Q1 was $41.6 million, up 4.5% year-over-year and up 13.1% sequentially. Revenue from PowerIC in Q1 was $4.6 million, down 6.2% year-over-year but up 21.3% sequentially. Consolidated gross profit margin from continuing operations was 15.6%, above the midpoint of the guidance range of 14 to 16%.

For Q2 2026, consolidated revenue from continuing operations is expected to be in the range of $44.5 million to $48.5 million, roughly flat sequentially and down 2.3% year-over-year at midpoint. Consolidated gross profit margin from continuing operations is expected to be in the range of 17% to 19%, up from 15.6% in Q1 2026 but down from 20.4% in Q2 2025. Planned electrical substation upgrade in Q3 will impact Fab 3 operations, with factory utilization expected to be higher in Q2, then lower in Q3 and further in Q4.

Forward-looking statements subject to inherent risks and uncertainties. Non-GAAP financial measures not in accordance with GAAP. Planned electrical substation upgrade may cause customer disruption.

Q: Could you please start first with maybe the gross margins by segment and how they vary and is one more manufacturer exposing the other any color that would be helpful?

A: We have Power Analog Solutions and Power IC businesses. Power IC margin has been hovering around 40% while Power Analog Solutions' margin is affected by factors like utilization and fixed cost.

Q: can you talk about the products you're expecting in 2026? and what kind of gross margin trend we can expect above the product you've already introduced, the 25?

A: Plan to launch 55 new generation products in 2026. New generation products will have an impact on gross margin but it takes time. Q4 2026 expects new generation products to comprise approx 10% of total revenue.

Q: Can you update us on where the manufacturing is from filling back in for the manufacturing services capacity you had before?

A: Foundry service ended in early last year. About 20% of Gumi factory was dedicated for foundry service and now converting capacity for power products, but it's a gradual process considering product development pace and revenue.