Magnachip Semiconductor Corp (MX) 2024 Q3 法說會逐字稿

Hello, everyone. And thank you for standing by. Welcome to the third-quarter 2024 Magna Ship Semiconductor Corporation earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. Now, it's my pleasure to turn the call to Steven Paleo, head of Investor Relations.

大家好。感謝您的支持。歡迎參加麥格納船舶半導體公司 2024 年第三季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。現在，我很高興打電話給投資者關係主管史蒂文·帕里奧（Steven Paleo）。

Great. Thank you, Carmen. Hello, everyone. Thank you for joining us to discuss MagnaChip's financial results for the third quarter ended September 30, 2024. The third quarter earnings release that was issued today after the market closed can be found on the company's Investor Relations website.

偉大的。謝謝你，卡門。大家好。感謝您與我們一起討論 MagnaChip 截至 2024 年 9 月 30 日的第三季財務業績。今天收盤後發布的第三季財報可以在該公司的投資人關係網站上找到。

The webcast replay of today's call will be archived on our website shortly afterwards. Joining me today are YJ Kim, Magnachip's Chief Executive Officer; and Shin Young Park, our Chief Financial Officer. YJ will discuss the company's recent operating performance and business overview, and Shin Young will review financial results for the quarter and provide guidance for the fourth quarter. There will be a Q&A session following the prepared remarks. During the course of this conference call, we may make forward-looking statements about Magnachip's business outlook and expectations.

今天電話會議的網路廣播重播將很快在我們的網站上存檔。今天與我一起出席的有 Magnachip 執行長 YJ Kim；和我們的財務長 Shin Young Park。YJ將討論公司近期的經營業績和業務概況，Shin Young將審查本季的財務表現並提供第四季度的指導。準備好的發言後將舉行問答環節。在本次電話會議期間，我們可能會對 Magnachip 的業務前景和期望做出前瞻性陳述。

Our 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 statement found in our SEC filings. Such statements are based upon information available to the company as of the date hereof and are subject to change for future developments.

我們的前瞻性陳述和所有其他非歷史事實的陳述反映了我們截至目前為止的信念和預測，因此受到美國證券交易委員會文件中安全港聲明中所述的風險和不確定性的影響。此類聲明基於截至本協議發布之日公司可獲得的信息，並可能因未來發展而發生變化。

Except as required by law, the company does not undertake any obligation to update these statements. 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 as supplemental measures of Magnachip's operating performance that may be useful to investors.

除法律要求外，本公司不承擔任何更新這些聲明的義務。在電話會議期間，我們還將討論非公認會計準則財務指標。非 GAAP 指標並非根據公認會計原則制定，而是旨在作為 Magnachip 經營績效的補充指標，可能對投資者有用。

A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in our third-quarter earnings release in the Investor Relations section of our website. With that, I'll now turn the call over to YJ Kim. YJ?

非公認會計原則財務指標與最直接可比較的公認會計原則指標的調節可以在我們網站投資者關係部分的第三季收益發布中找到。現在，我將把電話轉給 YJ Kim。楊傑？

Hello, everyone, and thank you for joining us today, and welcome to Magnachip's Q3 earnings call. Q3 revenue was $66.5 million, up 8.5% year-over-year and up 25% sequentially. Revenue was at the high end of our guidance range of $61.5 million to $66.5 million. Consolidated Q3 gross profit margin of 23.3% was down 0.3 percentage points year-over-year, but up 1.5 percentage points sequentially. The overall gross margin results was in line with the midpoint of our guidance range of 22.5% to 24.5%.

大家好，感謝您今天加入我們，歡迎參加 Magnachip 第三季財報電話會議。第三季營收為 6,650 萬美元，年增 8.5%，季增 25%。收入處於我們指導範圍的上限，即 6,150 萬美元至 6,650 萬美元。第三季綜合毛利率為 23.3%，較去年同期下降 0.3 個百分點，但較上季上升 1.5 個百分點。整體毛利率結果符合我們指導範圍 22.5% 至 24.5% 的中點。

Shin Young will provide more details in her section. As we wind down and exit the Transitional Foundry Service business, Magnachip will be a pure-play standard products company based on industry-leading mixed signal expertise. Our standard products comprise of our offerings in the MSS and PAS businesses, which include power ICs, advanced OLED DDICs and discrete power products for industrial, automotive, consumer communications and computing applications.

Shin Young 將在她的部分提供更多詳細資訊。隨著我們逐步退出過渡代工服務業務，Magnachip 將成為一家基於業界領先的混合訊號專業知識的純標準產品公司。我們的標準產品由我們在 MSS 和 PAS 業務中提供的產品組成，其中包括電源 IC、先進的 OLED DDIC 以及用於工業、汽車、消費通訊和計算應用的分立電源產品。

Revenue in Q3 for our Standard Product business was $64.0 million, up 24.0% year-over-year and up 25.9% sequentially. Standard Product business gross margin was 24.4%, up 1.3 percentage points sequentially. We are on track with our guidance given at the beginning of the year for double-digit growth in MSS and PAS for 2024. We will provide 2025 guidance on our Q4 and year-end call as we've done in the past.

我們的標準產品業務第三季的營收為 6,400 萬美元，年成長 24.0%，季增 25.9%。標準產品業務毛利率為24.4%，較上一季上升1.3個百分點。我們正按照年初給予的指導，在 2024 年 MSS 和 PAS 實現兩位數成長。我們將像過去一樣，在第四季和年終電話會議上提供 2025 年指引。

Now let me provide more detailed comments for each of our Standard Products business lines. In terms of revenue contribution, PAS represented 74.3% of Standard Product revenue in Q3. Reported PAS revenue was $47.6 million, up 16.1% year-over-year and 21.2% quarter-over-quarter. The sequential increase was broad-based, so I'll share some details by application.

現在讓我對我們的每個標準產品業務線提供更詳細的評論。從營收貢獻來看，第三季 PAS 佔標準產品營收的 74.3%。報告的 PAS 收入為 4,760 萬美元，較去年同期成長 16.1%，較上季成長 21.2%。連續增長的基礎廣泛，因此我將按應用分享一些詳細資訊。

The Industrial segment continued to see a strong rebound in solar. The issues of excess distributor and customer inventory in China now is behind us in this business segment. In addition to solar inverters, demand for solar pumps are expanding the range of applications we address. The Industrial segment also saw growth from additional design wins in the China lighting market with our sixth-generation Super Junction devices.

工業領域太陽能持續強勁反彈。在這個業務領域，中國分銷商和客戶庫存過剩的問題現在已經成為過去。除了太陽能逆變器之外，對太陽能泵的需求也在擴大我們的應用範圍。工業領域也因我們的第六代超級結元件在中國照明市場贏得更多設計勝利而實現成長。

Finally, the shift to high-speed e-motors for scooters and motorcycles is leading to an increase in bill-of-material content and carries the potential for stronger growth. While a relatively smaller contributor to PAS, the Automotive segment continues to show strength. We are building upon our past success in Korea with additional design wins and production ramps for automotive customers in Japan and China. The end applications continue to vary widely across many subsystems in a vehicle. More recently, we obtained design wins for additional applications such as power outlets and idle, stop, go functionality.

最後，踏板車和摩托車向高速電動馬達的轉變導致物料清單內容增加，並具有更強勁增長的潛力。雖然汽車產業對 PAS 的貢獻相對較小，但仍繼續表現出強勁的實力。我們正以過去在韓國的成功為基礎，為日本和中國的汽車客戶贏得更多設計勝利並擴大生產規模。車輛中許多子系統的最終應用仍然存在很大差異。最近，我們獲得了其他應用的設計勝利，例如電源插座和空閒、停止、運行功能。

The Communication segment shows slight sequential improvement driven by continued demand for low-voltage MOSFETs for high-end foldables and leading-edge AI smartphones in Korea. We also are seeing incremental design opportunities for tablets, wearables and China smartphones.

由於韓國高階可折疊設備和領先人工智慧智慧型手機對低壓 MOSFET 的持續需求，通訊領域出現了輕微的環比改善。我們也看到平板電腦、穿戴式裝置和中國智慧型手機的增量設計機會。

In Consumer, we saw growth from TV driven by strong seasonal demand from Korea. Further, we continue to see steady demand for our Super Junction MOSFET and IGBT products in home appliances such as refrigerators and induction cooktops. Additionally, we expect a recent design-in for air purifiers to transition into a design win in Q4. While a relatively small contributor, the Computing segment saw strong growth driven by seasonal demand from China for PC and laptop power adapters.

在消費領域，我們看到韓國強勁的季節性需求推動了電視業務的成長。此外，我們繼續看到冰箱和電磁爐等家用電器對我們的超級結 MOSFET 和 IGBT 產品的穩定需求。此外，我們預計最近的空氣清淨​​機設計將在第四季度轉變為設計勝利。雖然貢獻相對較小，但計算領域在中國對個人電腦和筆記型電腦電源適配器的季節性需求的推動下實現了強勁增長。

In Q3, we hired a Chief Technology Officer and Assistant GM in PAS. He is a proven expert in the field of power semiconductors with more than 20 years of experience. Prior to joining MagnaChip, he worked at Hyundai Mobis, where he led the development of IGBT and SiC products for automotive applications. Prior to Hyundai Mobis, he made a significant contribution to the company by entering the Planar MOSFET market for the first time and achieving the largest market share of Super Junction MOSFETs in Korea.

第三季度，我們聘請了 PAS 首席技術長和助理總經理。他是功率半導體領域公認的專家，擁有 20 多年的經驗。在加入 MagnaChip 之前，他曾在 Hyundai Mobis 工作，並領導汽車應用 IGBT 和 SiC 產品的開發。在加入現代摩比斯之前，他首次進入平面MOSFET市場並取得了韓國超級結MOSFET最大的市場份額，為該公司做出了重大貢獻。

His rich experience and knowledge of power semiconductors, his insight into automotive markets and his ability to develop power semiconductor products will greatly contribute to our company's technology and product road maps and overall competitiveness. In summary, the strong sequential growth in Q3 for PAS was ahead of typical seasonal patterns and was driven by leaner distribution channels and design wins for existing and new products.

他在功率半導體方面豐富的經驗和知識、對汽車市場的洞察以及功率半導體產品的開發能力將對我們公司的技術和產品路線圖以及整體競爭力做出巨大貢獻。總而言之，PAS 在第三季度的強勁環比成長領先於典型的季節性模式，並受到更精簡的分銷管道以及現有和新產品的設計勝利的推動。

We are continuing to execute in delivering a new strong product pipeline for Power in 2024. We believe many of these new products will have similar performance to Tier 1 suppliers, which will give us an opportunity to penetrate new markets and help fill idle Gumi fab capacity in 2025 created by the phase-out of the Transitional Foundry Services businesses.

我們將繼續在 2024 年為 Power 提供新的強大產品線。我們相信，其中許多新產品將具有與一級供應商相似的性能，這將使我們有機會滲透新市場，並幫助填補因過渡代工服務業務逐步淘汰而在2025 年產生的閒置龜尾晶圓廠產能。

Turning to MSS. Q3 revenue was $16.4 million, up 54.5% year-over-year and up 41.8% sequentially. The results represented 25.7% of standard product revenue and was near the high end of our guidance range of $14.5 million to $16.5 million. The quarter-over-quarter revenue growth was due to increased demand from OLED DDICs for China smartphone OEMs as well as for automotive and power IC for OLED DDIC.

轉向MSS。第三季營收為 1,640 萬美元，年增 54.5%，季增 41.8%。結果佔標準產品收入的 25.7%，接近我們指導範圍 1,450 萬美元至 1,650 萬美元的上限。收入環比增長是由於中國智慧型手機原始設備製造商對 OLED DDIC 以及 OLED DDIC 的汽車和電源 IC 的需求增加。

During Q3, we continued to make inroads with OLED panel makers and smartphone OEMs focusing on the China market. At a high level, we have several DDIC at different stages of development, customer evaluation and in production. These designs cover the broad smartphone market spectrum from mass-market to premium segments and extend to other display markets like automotive and wearable tech, including smartwatches.

第三季度，我們繼續向專注於中國市場的 OLED 面板製造商和智慧型手機 OEM 廠商進軍。從高水準來看，我們有多個 DDIC 處於不同的開發、客戶評估和生產階段。這些設計涵蓋了從大眾市場到高端市場的廣泛智慧型手機市場範圍，並擴展到汽車和穿戴式技術（包括智慧手錶）等其他顯示市場。

In line with our original expectations, we have now moved into production on two smartphone models. More specifically, following the purchase order received in Q2, we started initial production and shipment in Q3 for a QHD+ DDIC for a premium smartphone model from a leading China OEM. We are the primary DDIC supplier for this model, and we expect increased shipment growth to this customer throughout Q4. During Q3, we also received a purchase order as a second source supplier from another leading China smartphone OEM and commenced shipments in October.

根據我們最初的預期，我們現在已經開始生產兩種智慧型手機型號。更具體地說，在第二季收到採購訂單後，我們在第三季開始為中國領先 OEM 的高階智慧型手機型號 QHD+ DDIC 進行初步生產和出貨。我們是該型號的主要 DDIC 供應商，我們預計整個第四季該客戶的出貨量將有所成長。第三季度，我們還收到了另一家中國領先智慧型手機原始設備製造商作為第二來源供應商的採購訂單，並於 10 月開始出貨。

We believe this initial win gives us an opportunity to deepen our relationship and positions us well for future smartphone models. As mentioned in our Q2 call, we began sampling our next-generation DDIC in October. This OLED driver is targeted for mid- to high-end smartphone models in China and incorporates advanced IP, including sub-pixel rendering, SPR, refined color enhancement and brightness uniformity control. Notably, this chip reduces power consumption by more than 20% compared to the previous generation. We expect a China panel maker to begin evaluation in Q4 and move into production in 2025.

我們相信，這一初步勝利讓我們有機會加深我們的關係，並為我們未來的智慧型手機型號做好準備。正如我們在第二季電話會議中提到的，我們在 10 月開始對下一代 DDIC 進行採樣。此OLED驅動器面向中國中高階智慧型手機型號，採用先進的IP，包括子像素渲染、SPR、精細色彩增強和亮度均勻性控制。值得注意的是，該晶片與上一代相比功耗降低了20%以上。我們預計中國面板製造商將於第四季開始評估，並於 2025 年投入生產。

We plan to introduce this chip to multiple China OLED panel makers to further diversify our customer base next year. Evaluations are underway for a new DDIC targeted at the smartwatch market. We look forward to leveraging this relationship with a China model maker to expand into new high-growth adjacent markets. With regard to our automotive DDIC business, revenue increased for the third quarter in a row. Business was driven primarily by increased demand from a panel maker that supply to multiple automakers in Europe. We also saw DDIC growth for automotive LCD.

我們計劃明年向多家中國 OLED 面板製造商推出這款晶片，以進一步豐富我們的客戶群。針對智慧手錶市場的新型 DDIC 的評估正在進行中。我們期待利用與中國模型製造商的這種關係，擴展到新的高成長的鄰近市場。汽車DDIC業務收入連續第三季成長。業務主要是由向歐洲多家汽車製造商供貨的面板製造商的需求增加所推動的。我們也看到汽車 LCD 的 DDIC 成長。

Our Power IC business, which is including MSS, saw sequential and year-over-year growth, driven primarily by increased demand for OLED DDIC, tablets and notebooks. We continue to build new Power IC products for both LCD TV and OLED DDIC applications for potential new customers.

我們的電源 IC 業務（包括 MSS）實現了環比和同比增長，這主要是由 OLED DDIC、平板電腦和筆記型電腦的需求增長推動的。我們持續為潛在的新客戶打造適用於 LCD TV 和 OLED DDIC 應用的新電源 IC 產品。

In summary, within MSS, we are executing our strategy and making inroads with top-tier panel makers and major smartphone OEMs. Our decision to act locally was the right strategy for our OLED business in China. At the same time, we are also working to drive revenue from adjacent markets in wearable, automotive, TV and IT. For Q4, we currently see flattish revenue sequentially, which is better than typical seasonality in this market.

總而言之，在 MSS 內部，我們正在執行我們的策略，並與頂級面板製造商和主要智慧型手機 OEM 廠商取得進展。我們決定在當地採取行動對於我們在中國的 OLED 業務來說是正確的策略。同時，我們也致力於提高穿戴式裝置、汽車、電視和 IT 等鄰近市場的收入。對於第四季度，我們目前看到收入環比持平，這比該市場的典型季節性要好。

In conclusion, we believe that with the growing trend of AI-enabled smartphones and PCs, power consumption is on the rise. It is crucial to reduce the overall power usage of these systems. The display is a major power consumer and one of the few areas where power can be significantly reduced by switching from LCD to OLED panels.

總而言之，我們認為，隨著人工智慧智慧型手機和個人電腦的發展趨勢，功耗正在上升。降低這些系統的整體功耗至關重要。顯示器是主要的電力消耗者，也是少數幾個可以透過從 LCD 面板切換到 O​​LED 面板來顯著降低功耗的領域之一。

As smartphones incorporate high-performance AI capabilities and adapt larger foldable and flexible displays, the need for power-efficient OLED DDIC has become increasingly important. Our newest and most advanced OLED DDIC offers a power reduction of over 20% compared to the previous generation using the same process technology.

隨著智慧型手機融入高性能人工智慧功能並適應更大的可折疊和柔性顯示屏，對高能效 OLED DDIC 的需求變得越來越重要。與使用相同製程技術的上一代產品相比，我們最新、最先進的 OLED DDIC 功耗降低了 20% 以上。

Additionally, smartphone OEMs are looking to offset the rising power demands of AI features by utilizing advanced battery FET technologies like those in our PAS segment, alongside the growing use of the OLED screens. I will now turn the call over to Shin Young to give you more details of our financial performance in the third quarter and provide Q4 guidance. Shin Young?

此外，智慧型手機 OEM 廠商正在尋求利用先進的電池 FET 技術（例如 PAS 領域的技術）以及 OLED 螢幕的日益普及，來抵消人工智慧功能不斷增長的電力需求。我現在將把電話轉給 Shin Young，向您提供有關我們第三季度財務業績的更多詳細信息，並提供第四季度的指導。申英？

Thank you, YJ, and welcome, everyone, on the call. Let's start with key financial metrics for Q3. Total revenue in Q3 was $66.5 million, which came in at the high end of our guidance range of $61.5 million to $66.5 million. This was up 8.5% year-over-year and up 25% sequentially. Revenue from MSS business was $16.4 million, near the high end of the guidance range of $14.5 million to $16.5 million.

謝謝你，YJ，歡迎大家來電。讓我們從第三季的關鍵財務指標開始。第三季的總收入為 6,650 萬美元，處於我們指導範圍 6,150 萬美元至 6,650 萬美元的高端。年增 8.5%，季增 25%。MSS 業務的收入為 1,640 萬美元，接近 1,450 萬至 1,650 萬美元指導範圍的上限。

This was up 54.5% year-over-year and up 41.8% sequentially. PAS business revenue was $47.6 million, above the midpoint of our guidance range of $45.5 million to $48.5 million. This was up 16.1% year-over-year and up 21.2% sequentially.

年增 54.5%，季增 41.8%。PAS 業務收入為 4,760 萬美元，高於我們 4,550 萬至 4,850 萬美元指導範圍的中位數。年增 16.1%，季增 21.2%。

Revenue from Transitional Foundry Services was flattish sequentially at $2.4 million and down from $9.6 million in Q3 2023 as we continued to wind down this service as we've explained previously. Consolidated gross profit margin in Q3 was 23.3%, slightly below the midpoint of our guidance range of 22.5% to 24.5%, down from 23.6% year-over-year, but up from 21.8% sequentially.

過渡代工服務的收入環比持平，為 240 萬美元，低於 2023 年第三季的 960 萬美元，因為我們繼續減少這項服務，正如我們之前所解釋的那樣。第三季綜合毛利率為 23.3%，略低於我們指引範圍 22.5% 至 24.5% 的中點，低於去年同期的 23.6%，但高於上一季的 21.8%。

MSS gross profit margin in Q3 was 38.7%, above the midpoint of the guidance range of 36.5% to 39.5%, up from 28.8% in Q3 2023 and up from 34.6% in Q2 2024. The year-over-year and sequential improvement was primarily attributable to a favorable product mix.

MSS 第三季毛利率為 38.7%，高於指引範圍 36.5% 至 39.5% 的中點，高於 2023 年第三季的 28.8%，高於 2024 年第二季的 34.6%。同比和環比的改善主要歸功於有利的產品組合。

PAS gross profit margin in Q3 was 19.4%, slightly below the midpoint of the guidance range of 18.5% to 20.5%, down from 28.6% in Q3 2023 and slightly lower than the 19.7% in Q2 2024. The year-over-year decline was mainly due to a lower Gumi fab utilization rate from the wind down of Transitional Foundry Services. Turning now to operating expenses.

第三季 PAS 毛利率為 19.4%，略低於指引範圍 18.5% 至 20.5% 的中點，低於 2023 年第三季的 28.6%，略低於 2024 年第二季的 19.7%。年比下降的主要原因是過渡代工服務結束導致龜尾晶圓廠利用率下降。現在轉向營運費用。

Q3 SG&A was $12.1 million as compared to $11.7 million in Q2 2024 and $12.1 million in Q3 2023, primarily driven by the increase in stock compensation charges that coincide with the timing of the stock grant. Q3 R&D was $14.4 million as compared to $12.7 million in Q2 2024 and $11.6 million in Q3 last year.

第三季的銷售管理及管理費用為1,210 萬美元，而2024 年第二季為1,170 萬美元，2023 年第三季為1,210 萬美元，這主要是由於與股票授予時間一致的股票補償費用增加所致。第三季研發費用為 1,440 萬美元，而 2024 年第二季為 1,270 萬美元，去年第三季為 1,160 萬美元。

As a reminder, R&D expense fluctuates quarter over quarter due to the timing and number of products in development. Stock compensation charges, including operating expenses were $1.8 million in Q3 compared to $1.1 million in Q2 and $2.1 million in Q3 last year. These charges fluctuate every quarter depending on the timing and size of stock grant.

需要提醒的是，由於開發產品的時間和數量，研發費用逐季波動。第三季的股票報酬費用（包括營運費用）為 180 萬美元，而去年第二季為 110 萬美元，第三季為 210 萬美元。這些費用每季都會波動，具體取決於股票授予的時間和規模。

Q3 operating loss was $11 million. This compares to an operating loss of $12.8 million in Q2 and operating loss of $9.2 million in Q3 2023. On a non-GAAP basis, Q3 adjusted operating loss was $9 million compared to adjusted operating loss of $11.6 million in Q2 and adjusted operating loss of $7.1 million in Q3 last year. Net loss in Q3 was $9.6 million as compared with a net loss of $13 million in Q2 and a net loss of $5.2 million in Q3 last year. Q3 adjusted EBITDA was negative $4.9 million.

第三季營運虧損為 1,100 萬美元。相比之下，2023 年第二季的營運虧損為 1,280 萬美元，第三季的營運虧損為 920 萬美元。以非公認會計準則計算，第三季調整後營運虧損為 900 萬美元，而去年第二季調整後營運虧損為 1,160 萬美元，去年第三季調整後營運虧損為 710 萬美元。第三季淨虧損為 960 萬美元，而第二季淨虧損為 1,300 萬美元，去年第三季淨虧損為 520 萬美元。第三季調整後 EBITDA 為負 490 萬美元。

This compares to a negative $7.6 million in Q2 and negative $2.7 million in Q3 last year. Our GAAP diluted loss per share in Q3 was $0.26 as compared with diluted loss per share of $0.34 in Q2 and diluted loss per share of $0.13 in Q3 last year. Our non-GAAP diluted loss per share in Q3 was $0.34. This compares with diluted loss per share of $0.21 in Q2 and diluted loss per share of $0.04 in Q3 last year. Our weighted average diluted shares outstanding for the quarter were 37.5 million shares.

相比之下，去年第二季為負 760 萬美元，第三季為負 270 萬美元。我們第三季的 GAAP 攤薄每股虧損為 0.26 美元，去年第二季的攤薄每股虧損為 0.34 美元，去年第三季的稀釋每股虧損為 0.13 美元。我們第三季的非 GAAP 攤薄每股虧損為 0.34 美元。相較之下，去年第二季的攤薄每股虧損為 0.21 美元，第三季的稀釋每股虧損為 0.04 美元。本季我們的加權平均稀釋後流通股為 3,750 萬股。

Under our $50 million stock buyback program authorized in July 2023, we repurchased in Q3 2024 approximately 0.5 million shares for aggregate purchase price of $2.5 million, leaving about $27.5 million remaining authorization as of September 30, 2024.

根據我們於2023 年7 月授權的5,000 萬美元股票回購計劃，我們在2024 年第三季回購了約50 萬股股票，總購買價為250 萬美元，截至2024 年9 月30 日，剩餘授權約2750 萬美元。

Moving to the balance sheet. We ended Q3 with cash of $121.1 million. And same as last quarter end, we had an additional nonredeemable short-term financial investment of $30 million, which will mature on November 5, 2024. This amount is classified on our balance sheet as short-term financial instrument, but will transition back to cash upon maturity.

轉向資產負債表。第三季結束時，我們的現金為 1.211 億美元。與上季末相同，我們還有 3,000 萬美元的額外不可贖回短期金融投資，將於 2024 年 11 月 5 日到期。這筆金額在我們的資產負債表上被歸類為短期金融工具，但到期後將轉回現金。

Net accounts receivable at the end of the quarter totaled $28.7 million, which represents a decrease of 8% from Q2 2024. Our days sales outstanding for Q3 was 40 days and compares to 53 days in Q2. Our average days in inventory for Q3 was 65 days and compares to 76 days in Q2. Inventories net at the end of the quarter totaled $36.1 million and $34.8 million in Q2 2024. Lastly, Q3 CapEx was $2.6 million.

本季末應收帳款淨額總計 2,870 萬美元，較 2024 年第二季下降 8%。第三季的應收帳款天數為 40 天，而第二季為 53 天。我們第三季的平均庫存天數為 65 天，而第二季為 76 天。截至本季末的庫存淨額總計為 3,610 萬美元，2024 年第二季的庫存淨額為 3,480 萬美元。最後，第三季資本支出為 260 萬美元。

Our prior CapEx forecast for the full year 2024 was to spend $10 million to $12 million primarily for our PAS business and Gumi fab, and now we now expect the amount to be closer to the high end of the range. This expectation includes approximately $3.5 million of one-time CapEx for our newly established operating entity in China. Now moving to our fourth quarter and full year 2024 guidance.

我們先前對 2024 年全年的資本支出預測是主要用於 PAS 業務和龜尾晶圓廠的支出 1000 萬至 1200 萬美元，現在我們預計該金額將接近該範圍的高端。這項預期包括為我們在中國新成立的營運實體提供約 350 萬美元的一次性資本支出。現在轉向我們的第四季和 2024 年全年指引。

While actual results may vary, for Q4 2024, Magnachip currently expects consolidated revenue to be in the range of $59 million to $64 million, including approximately $2 million of Transitional Foundry Services. MSS revenue to be in the range of $15 million to $17 million, down 2.7% sequentially, but up 87% year-over-year at the midpoint.

雖然實際結果可能有所不同，但 Magnachip 目前預計 2024 年第四季的綜合收入將在 5,900 萬美元至 6,400 萬美元之間，其中包括約 200 萬美元的過渡代工服務。MSS 營收將在 1,500 萬美元至 1,700 萬美元之間，比上一季下降 2.7%，但中位數年增 87%。

This compares with MSS revenue of $16.4 million in Q3 2024 and MSS equivalent revenue of $8.6 million in Q4 2023. PAS revenue to be in the range of $42 million to $45 million, down 8.6% sequentially, but up 33.3% year-over-year at the midpoint. This compares with PAS revenue of $47.6 million in Q3 2024 and PAS equivalent revenue of $32.6 million in Q4 2023. Consolidated gross profit margin to be in the range of 21.5% to 23.5%. MSS gross profit margin to be in the range of 37.5% to 40.5%.

相較之下，2024 年第三季 MSS 營收為 1,640 萬美元，2023 年第四季 MSS 等效收入為 860 萬美元。PAS 營收將在 4,200 萬美元至 4,500 萬美元之間，比上一季下降 8.6%，但年比中位數成長 33.3%。相較之下，2024 年第三季的 PAS 收入為 4,760 萬美元，2023 年第四季的 PAS 等效收入為 3,260 萬美元。綜合毛利率在21.5%至23.5%之間。MSS毛利率將在37.5%至40.5%之間。

This compares with MSS gross profit margin of 38.7% in Q3 2024 and MSS equivalent gross profit margin of 41.3% in Q4 2023. PAS gross profit margin to be in the range of 17% to 19%. This compares with PAS gross profit margin of 19.4% in Q3 2024 and PAS equivalent gross profit margin of 18.1% in Q4 2023.

相較之下，2024 年第三季 MSS 毛利率為 38.7%，2023 年第四季 MSS 等效毛利率為 41.3%。PAS毛利率將在17%至19%之間。相較之下，2024 年第三季 PAS 毛利率為 19.4%，2023 年第四季 PAS 等效毛利率為 18.1%。

For the full year 2024, we currently expect MSS revenue to grow double digits year-over-year as compared with MSS equivalent revenue of $44.4 million in 2023, consistent with what we communicated throughout the year. PAS revenue to grow double digits year-over-year as compared with PAS equivalent revenue of $151.3 million in 2023, consistent with what we communicated throughout the year.

對於 2024 年全年，我們目前預計 MSS 收入將同比增長兩位數，而 2023 年 MSS 同等收入為 4,440 萬美元，這與我們全年傳達的信息一致。與 2023 年 PAS 等效收入 1.513 億美元相比，PAS 收入將同比增長兩位數，這與我們全年傳達的信息一致。

Transitional Foundry Services will be wound down by end of 2024 as expected. We expect any remaining amounts to be immaterial beyond Q4 2024. Consolidated revenue flattish as compared to our prior expectation of flattish to slightly down. Consolidated gross profit margin between 21% to 22% as compared to our prior expectation of 19% to 22%. This compares with the consolidated gross profit margin of 22.4% in 2023.

過渡代工服務將於 2024 年底如預期結束。我們預計 2024 年第四季之後任何剩餘金額都將變得無關緊要。與我們之前持平或略有下降的預期相比，綜合收入持平。綜合毛利率在 21% 至 22% 之間，而我們先前的預期為 19% 至 22%。相較之下，2023 年綜合毛利率為 22.4%。

Thank you. Now I'll turn the call back over to YJ for his final remarks. YJ?

謝謝。現在我將把電話轉回給 YJ，聽他最後的演講。楊傑？

In conclusion, Magnachip's strategic focus on its core Standard Products business drove a better-than-seasonal Q3 and outlook for Q4. We are on track with our expectations set at the beginning of the year for double-digit growth in both MSS and PAS. As we continue transitioning into a pure-play standard products company, we are focused on leveraging our industry-leading mixed signal expertise applied to Power ICs, advanced OLED DDICs and power discretes.

總之，Magnachip對其核心標準產品業務的策略重點推動了第三季和第四季的前景好於季節性。我們正在實現年初設定的 MSS 和 PAS 兩位數成長的預期。隨著我們繼續轉型為純粹的標準產品公司，我們專注於利用業界領先的混合訊號專業知識應用於電源 IC、高級 OLED DDIC 和功率分立裝置。

These ongoing efforts position us well for the future. We will provide our outlook for 2025 on the next call, but I am confident that our business strategies are leading us in the right direction. We remain dedicated to enhancing shareholder value in every way possible. Now I will turn the call back to Steven. Steven?

這些持續的努力為我們的未來奠定了良好的基礎。我們將在下次電話會議上提供 2025 年的展望，但我相信我們的業務策略正在引領我們走向正確的方向。我們仍然致力於以各種可能的方式提高股東價值。現在我將把電話轉回給史蒂文。史蒂文？

Thank you. This concludes the prepared remarks section of our call today. Operator, you may now open up the call for questions.

謝謝。我們今天電話會議準備好的評論部分到此結束。接線員，現在可以撥打電話提問。

(Operator Instructions)

（操作員說明）

Suji Desilva, ROTH Capital.

蘇吉·德西爾瓦，羅仕資本。

Hi, YJ. Hi Shinyoung. Congrats on the progress here. I'll start off maybe with the gross margin. Can you talk about what drives the recovery to target here? Is it MSS utilization -- I mean, is it utilization for PAS? And kind of what's the time frame, I guess, for new products getting rolled into the foundry capacity that's -- the foundry usage that's being taken off?

嗨，YJ。嗨新英。恭喜這裡的進展。我可能會從毛利率開始。您能談談是什麼推動了復甦達到目標嗎？是 MSS 使用率嗎？我想，新產品投入代工產能的時間範圍是──正在減少的代工產能？

So you're talking about probably the PAS gross margin because you talked about the utilization rate --

所以你可能在談論 PAS 毛利率，因為你談到了利用率--

Correct. Yes.

正確的。是的。

Yes. So the power margin -- I mean, if you look at our -- the Transitional Foundry revenue kind of size, it used to be kind of $10 million per quarter, came down to $5 million. Like this quarter, we had $2.4 million of foundry. We're going to have $2 million next quarter as well. So it's going to be almost -- kind of it's going to be wound down by end of this year, 2024.

是的。因此，功率利潤率——我的意思是，如果你看看我們的——Transitional Foundry 的收入規模，它曾經是每季 1000 萬美元，現在下降到了 500 萬美元。與本季一樣，我們的代工費用為 240 萬美元。下個季度我們也將有 200 萬美元。所以到今年年底，也就是 2024 年，它幾乎會結束。

So going into 2025, we'll have to convert that portion for the power product. So as I said, depending on the product mix, we used to use approximately 1/3 of our capacity for the foundry products. We can probably do a little better like with efficiency and kind of use some of the equipment for the power products. So maybe 20% can be idle after 2024. So we are doing the conversion like gradually.

因此，進入 2025 年，我們必須將這部分轉換為電力產品。正如我所說，根據產品組合，我們過去將大約 1/3 的產能用於代工產品。我們可能可以做得更好一點，例如提高效率，並使用一些電源產品設備。因此，2024 年後可能有 20% 會閒置。所以我們正在逐步進行轉換。

So I mean, that conversion will not going to happen overnight. So kind of switching that for the power product and fill that with the new product, a PAS product, it will going to take -- I mean, take some time. So it will not going to happen like in Q1, but it will take some quarters. So it's kind of happening throughout the 2024.

所以我的意思是，這種轉變不會在一夜之間發生。因此，將電源產品切換為新產品，即 PAS 產品，這將需要——我的意思是，需要一些時間。因此，這不會像第一季那樣發生，但需要幾個季度的時間。所以這種情況會在 2024 年發生。

Okay. And then switching over to the MSS business. The time -- like the ramp-up in '25, YJ, would that be -- 1Q would be a seasonal impact? Or are you having program ramps with your two China customers and perhaps more that would kind of offset that? Would it be steady growth from here?Or is it lumpy with programs? Any color on MSS outlook would be helpful.

好的。然後切換到MSS業務。時間－就像 25 年的成長一樣，YJ，第一季會受到季節性影響嗎？或者您正在與您的兩個中國客戶進行專案升級，也許更多的專案可以抵消這一影響？從這裡開始會穩定成長嗎？程序混亂嗎？MSS 前景上的任何顏色都會有幫助。

Yeah. So we said we are going to guide '25 next earnings call, but to repeat what we said, we have two products that are going to production this fourth quarter. That's going to increase throughout this quarter. And we also said that we have a new product that's 20% less power than previous generation. We just sampled.

是的。因此，我們說我們將指導 25 日的下一次財報電話會議，但重複我們所說的，我們有兩種產品將在第四季度生產。這一數字在整個季度都會增加。我們也表示，我們有一款新產品，其功耗比上一代低 20%。我們剛剛採樣。

We expect to go into production '25. And we expect to use that chip to multiple panel markets and makers. So beyond that -- we don't have a crystal ball in '25 to give an outlook at the moment, but we can say we are very positioned well and we'll be in the right direction. Our product pipeline is improving in both PAS as well as MSS. And that's going to also help fill the Gumi fab. And we are currently cautiously optimistic, but not guiding 2025.

我們預計將於 25 年投入生產。我們希望將該晶片用於多個面板市場和製造商。除此之外，我們目前還沒有 25 年的水晶球來預測前景，但我們可以說我們的定位非常好，我們將朝著正確的方向前進。我們的 PAS 和 MSS 產品線都在不斷改進。這也將有助於填補龜尾工廠的空缺。我們目前持謹慎樂觀態度，但不指導 2025 年。

Okay. Very good. And then one last quick question. When you talk about your two customers -- I think you talked about one of them. You're the primary DDIC vendor. And the other one, you're a second source, if I heard that right. I'm just curious what kind of share difference that can imply as those models ramp up? Thanks.

好的。非常好。最後一個簡短的問題。當你談論你的兩位客戶時——我想你談論的是其中一位。您是主要的 DDIC 供應商。另一個，如果我沒聽錯的話，你是第二個消息來源。我只是好奇隨著這些模型的增加，可能意味著什麼樣的份額差異？謝謝。

The primary -- and that's really good. It's a major. And then the secondary means you are second. So you have a much less share. So that's typically how it's done.

主要的——這真的很好。這是一個專業。然後次要意味著你是第二。所以你的份額少很多。這就是通常的做法。

Okay. Thanks, YJ. Thanks, Shinyoung.

好的。謝謝，YJ。謝謝，欣榮。

(Operator Instructions)

（操作員說明）

Nic Doyle, Needham & Company.

尼克‧多伊爾，李約瑟公司。

Hey, guys. I'll echo the congrats on specifically the first year-over-year revenue growth in a long time. I guess on gross margins also, we're getting a bit of a surprise, $2 million in the foundry revenue next quarter. So does that kind of push out this gross margin bottom to 2Q '25? I understand you're not guiding into '25, but we are kind of thinking the transition would really accelerate in 4Q and hopefully finish around 1Q, maybe into 2Q, but that kind of shaped a 1Q bottom for gross margin. So maybe anything else you could tell us about that?

嘿，夥計們。我將特別對長期以來首次同比收入成長表示祝賀。我想在毛利率方面，我們也會感到有點意外，下個季度的代工收入為 200 萬美元。那麼，這是否會將毛利率觸底推到 2025 年第二季？我知道你並沒有引導進入25 年，但我們認為這種轉變將在第四季度真正加速，並希望在第一季度左右完成，也許進入第二季度，但這在某種程度上塑造了第一季度毛利率的底部。那麼您還可以告訴我們其他什麼嗎？

So the foundry -- I mean, we've given them the end-of-life, I mean, the notice, and they've given that to their customers as well. Some of our clients' customers, I mean, they are kind of using our product for their automotive applications. So they were kind of giving our customers their end-of-life orders, the last time purchase orders rather slowly or more cautiously. So we thought initially we are going to have probably almost 0 revenue in Q4, but we are going to see some -- kind of $2 million-ish revenue in Q4. But beyond that, it's not going to be material.

所以鑄造廠——我的意思是，我們已經向他們發出了生命週期結束的通知，他們也向他們的客戶發出了通知。我的意思是，我們客戶的一些客戶正在將我們的產品用於他們的汽車應用。因此，他們向我們的客戶提供了生命週期終止訂單，最後一次採購訂單相當緩慢或更謹慎。因此，我們最初認為第四季度的收入可能幾乎為零，但我們將在第四季度看到一些 - 200 萬美元左右的收入。但除此之外，它就不再重要了。

So we're going to manage our utilization rate, I mean, along with our power product demand. And also we are -- we can -- we're going to manufacture the foundry product in Q4. But in terms of the gross margin impact, I mean, depending on when we are going to load those wafers into our fab, we may have, I mean, slightly kind of the carryover effect in Q1 2025. But 2025 Q1 is usually a seasonally soft quarter anyway for us. So we'll have to see the other kind of factors that's impacting gross margin. But we'll see.

因此，我們將管理我們的利用率，以及我們的電力產品需求。而且我們 - 我們可以 - 我們將在第四季度生產代工產品。但就毛利率影響而言，我的意思是，根據我們何時將這些晶圓裝載到我們的晶圓廠，我的意思是，我們可能會在 2025 年第一季產生輕微的結轉效應。但無論如何，2025 年第一季對我們來說通常是季節性疲軟的季度。因此，我們必須看看影響毛利率的其他因素。但我們會看到。

Thanks. And just as a follow-up. I guess, what drove the uptick in R&D spending in the third quarter? And kind of do we expect that level going forward? I'm just trying to figure out what drove the larger-than-expected EPS miss or lower EPS. And I think that might be one of the big parts.

謝謝。並且只是作為後續行動。我猜，是什麼推動了第三季研發支出的上升？我們預計未來會達到這個水準嗎？我只是想找出是什麼導致每股收益超出預期或更低。我認為這可能是最重要的部分之一。

Yes. So for the R&D, I would say it's rather a quarterly fluctuation. So did that fluctuate quarter over quarter depending on the timing and the number of products in development for both business lines, MSS and PAS? So it looks bigger. But like when I kind of -- when I gave out the guidance for the full year 2024, the OpEx, SG&A, R&D together without stock-based charges, we said initially $100 million, but we lowered that to $95 million-ish like when we had a call last time. And I think still we can finish 2024 with $94 million to $95 million range.

是的。因此，對於研發來說，我認為這是一個季度波動。那麼，這一數字是否會根據 MSS 和 PAS 兩個業務線開發的時間和產品數量而逐季波動？所以看起來更大。但就像當我給出2024 年全年指引時，營運支出、SG&A、研發加在一起，不計入股票費用，我們最初說是1 億美元，但後來我們將其降低到9,500 萬美元左右，就像當時一樣我們上次打過電話。我認為到 2024 年我們的收入仍可達到 9,400 萬至 9,500 萬美元。

So the Q3 was kind of -- rather a kind of quarterly distribution depending on the timing of the development. But again, for the annual expectation, we still stand by our previous comment that it's going to be between $94 million to $95 million. And also, yes, for your question about EPS, that's literally kind of mechanics of how we calculate the quarterly -- the income tax provision versus benefit. So we have to apply the annual ETR rate to the quarterly pretax income or loss.

因此，第三季更像是一種季度分配，這取決於開發的時間。但同樣，對於年度預期，我們仍然堅持先前的評論，即它將在 9,400 萬美元至 9,500 萬美元之間。而且，是的，對於你關於每股盈餘的問題，這實際上是我們如何計算季度的一種機制——所得稅撥備與福利。因此，我們必須將年度 ETR 率應用於季度稅前收入或損失。

So we actually -- that means we took a little bigger income tax benefit in the first half, and then we had to take a income tax expense provision in Q3. But again -- and that really doesn't change our kind of the expectation for the annual guidance. So annually we still think that we are going to see some kind of $2 million-ish of income tax benefit. So that income tax benefit expense whole kind of fluctuation, kind of that's impacting our EPS on a quarterly basis.

所以我們實際上 - 這意味著我們在上半年獲得了更大的所得稅優惠，然後我們必須在第三季度獲得所得稅費用撥備。但這並沒有改變我們對年度指導的預期。因此，每年我們仍然認為我們將看到某種 200 萬美元左右的所得稅優惠。因此，所得稅福利費用的整體波動，對我們每季的每股盈餘產生了影響。

Thank you.

謝謝。

Martin Yang, Oppenheimer.

馬丁楊，奧本海默。

Good morning. Thank you for taking my question. My first question is on your OLED customers. As we're getting to 4Q, are you seeing any macro factors affecting your customers that are -- that leads you to believe the market could trend differently comparing to a few quarters ago? Are you seeing any fundamental improvement, deterioration on OLED markets in China?

早安.感謝您回答我的問題。我的第一個問題是關於你們的 OLED 客戶。當我們進入第四季度時，您是否看到任何影響您的客戶的宏觀因素 - 讓您相信與幾個季度前相比，市場趨勢可能會有所不同？您認為中國 OLED 市場有根本性的改善還是惡化？

So for the fourth quarter, we don't see any -- for our businesses, our products and customers, we don't see any much difference in Q3 and Q4. And we -- I think we guided based on our quarterly -- quarter visibility, and we are guiding better than seasonality than our previous few years.

因此，對於第四季度，我們沒有看到任何變化——對於我們的業務、我們的產品和客戶來說，我們沒有看到第三季度和第四季度有任何太大差異。我認為我們根據季度可見性進行指導，而且我們的指導比前幾年的季節性要好。

Got it. And then also on OLED market, can you maybe comment on how you think about some of the emerging display technologies like microOLED and microLED for AR/VR devices? Is that a market that looks attractive to you? And do you already have programs targeting those markets? Thank you.

知道了。那麼在 OLED 市場上，您能否評論一下您如何看待一些新興的顯示技術，例如用於 AR/VR 設備的 microOLED 和 microLED？這個市場對您有吸引力嗎？您是否已經有針對這些市場的計劃？謝謝。

We've been disclosing that we are a leader in the microLED TV from the leading TV manufacturer. So that's the only enhanced product and that's the product that we're shipping. We haven't mentioned anything about the microLED for virtual reality at the moment.

我們已經透露，我們是領先電視製造商的 microLED 電視領域的領導者。所以這是唯一的增強型產品，也是我們正在出貨的產品。目前我們還沒有提及任何有關虛擬實境的 microLED。

Thank you, YJ. My last question is on gross margin for MSS. So is there anything additional you can share with us other than product mix that contributed to the improvement for our gross margin?

謝謝你，YJ。我的最後一個問題是關於 MSS 的毛利率。那麼，除了產品組合之外，您還有什麼可以與我們分享的，這有助於提高我們的毛利率？

So the -- because -- YJ mentioned that we had more automotive OLED, the product, and also the Power IC. Both of those kind of the segment out of the MSS business line, and they tend to have a higher gross margin. So depending on like how much we have like from the generated revenue from the OLED automotive and also the Power IC and the mobile OLED, that's what I meant by the product mix. So because of the increase in the automotive OLED and Power IC, that's kind of boosting of our MSS gross margin.

所以——因為——YJ 提到我們有更多的汽車 OLED、產品以及電源 IC。這兩個細分市場都屬於 MSS 業務線之外，而且它們往往具有更高的毛利率。因此，這取決於我們對 OLED 汽車、電源 IC 和行動 OLED 產生的收入有多少，這就是我所說的產品組合。因此，由於汽車 OLED 和電源 IC 的成長，我們的 MSS 毛利率有所提高。

Got it. Thank you, Shinyoung. That's it for me.

知道了。謝謝你，欣榮。對我來說就是這樣。

Thank you so much. And with that, I will turn the call back to Steven Pelayo for his final comments.

太感謝了。接下來，我將把電話轉回史蒂文·佩拉約（Steven Pelayo），徵求他的最終評論。

Okay, thank you. This concludes our Q3 earnings conference call. Please look for details of our future events on MagnaChip's investor relations website. Thank you and take care.

好的，謝謝。我們的第三季財報電話會議到此結束。請在 MagnaChip 投資者關係網站上尋找我們未來活動的詳細資訊。謝謝你，保重。

Thank you all for participating in today's conference and you may now disconnect.

感謝大家參加今天的會議，現在可以斷開連結了。