Not an Advanced Technology Owner
The Ministry of Trade, Industry and Energy is planning to reach a conclusion this month as to whether Magnachip has a national core technology. If not, the company can sell itself to Wise Road Capital, a Chinese private equity firm.
Magnachip is a display driver IC (DDI) manufacturer and DDIs are used to operate OLED panels in TVs and smartphones. Magnachip signed a contract with Wise Road Capital in March this year to sell 100 percent of its shares for US$1.4 billion.
Some point out that the sale will be done regardless of the ministry’s conclusion. “LG Group considered taking it over and then stopped because it reached a conclusion that Magnachip is not an advanced technology owner,” one of them said, adding, “The company in jeopardy with no unique technology needs to be given a second chance.”
“Magnachip’s technology is one that Chinese companies do not have and any transfer within China may affect South Korean companies down the road,” another one explained, continuing, “Still, it is somewhat difficult for the South Korean government to put the brakes as Magnachip is supposed to be sold to the Chinese private equity firm without technology transfer to a Chinese company.”