A Semiconductor Company to Be Sold to Chinese Private Equity Firm
MagnaChip announced on May 20 that it would invest 500 billion won in South Korea for five years to come. The investment will go to its R&D centers in Seoul and Cheongju and production facilities in Gumi.
Specifically, approximately 340 billion won will go to the R&D centers and the facilities will be expanded at an investment of about 93 billion won. The latter may be increased to 110 billion won or more depending on market conditions. The company invested 38 billion won in the facilities last year.
MagnaChip was spun off from Hynix Semiconductor, which is now SK Hynix, in October 2004. Then, the company was acquired by Citigroup Venture Capital and went public in New York. Early this year, the company signed a contract in order to sell 100 percent of its U.S. HQ shares to limited partners associated with China-based private equity firm Wise Road Capital.
Under the circumstances, some pointed out that the sale would lead to a tech leak. The private equity firm said in response that it would conduct financing for the acquisition by gathering limited partners outside China.