An Automotive Semiconductor Design Company
LX Semicon, a semiconductor design arm of LX Group, announced on May 17 that it would secure a 10.93 percent stake in Telechips, a company specializing in automotive semiconductor design, for 26.8 billion won. LX Semicon will become the second-largest shareholder after Lee Jang-kyu, CEO of Telechips.
LX Semicon said it made the equity investment in Telechips to promote automotive semiconductor R&D. Experts regard it as a move to enter the automotive semiconductor market.
Telechips supplies semiconductors for advanced driver assistance systems (ADAS) and in-vehicle infotainment to global automakers, including Hyundai Motor Co.
Meanwhile, LX Group has joined a race to acquire Magnachip, a company that designs and manufactures analog and mixed signal semiconductor-based solutions. LX Group recently submitted a letter of intent (LOI) on the acquisition of Magnachip to lead manager J.P. Morgan.
Magnachip was established in 2004 as a spin-off of the non-memory division of SK Hynix (known as Hynix Semiconductor at the time). Currently, U.S. hedge funds are its major shareholders. It was listed on the New York Stock Exchange (NYSE) in 2011. The sale price is estimated at over one trillion won.
The owners of Magnachip agreed to sell the company to Wise Road Capital, a Chinese PEF, in March 2021, but the contract was ultimately scratched off due to opposition from the U.S. government, which was concerned about technology leaks. This prompted LX Group to consider acquiring the company.
LX Semicon's main business is production of display driving ICs (DDIs) for TVs and smartphones. Magnachip is No. 2 player in the global DDI market after Samsung Electronics.
Magnachip's sale price agreed upon with the Chinese PEF was US$1.4 billion. Industry insiders estimate its current value at around US$1.2 billion (about 1.5 trillion won), as the company's stock price fell after the deal with the Chinese PEF fell through.
LX Group is considering forming a consortium with Carlyle to raise funds for the acquisition.