이 기사는 2022년 05월 23일 08:05 thebell 에 표출된 기사입니다.

LX Semicon, South Korean fabless chip company under LX Group, has joined a race to acquire local non-memory chip designer and maker Magnachip Semiconductor to expand its automotive electronics business portfolio.

LX Group has recently submitted a letter of intent to JP Morgan overseeing the sale of Magnachip, according to industry sources on Thursday.

Some market insiders were skeptical about LX Semicon’s participation in the race due to its heavy reliance on display driver integrated circuits (DDICs) for TVs and smartphones. DDICs account for nearly 90% of LX Semicon’s products. Magnachip also generates about 50% of its total revenue from DDICs.

LX Semcion’s possible acquisition of Magnaship may expand its capacity, but there were views that it would be better to invest in the next-generation semiconductor segment other than DDICs in order for LX Semicon to transform into a comprehensive fabless semiconductor company.

Yet, LX Semicon seems to have focused on the fact that there are many areas to cooperate with Magnachip in the automotive chip segment, which it has chosen as its new growth pillar. Magnachip has also grown its power management integrated circuit (PMIC) business alongside DDICs. LX Semicon aims to benefit from Magnachip’s DDIC-related patents, customer base and manufacturing facilities.

LX Semicon is developing microcontroller units (MCUs) for electronics, silicon carbide (SiC)-based power chips and battery management systems (BMS) ICs as part of its efforts to diversify its business. Last year, LX Semicon acquired LG Innotek’s SiC semiconductor tangible and intangible assets for SiC research and development.

It also acquired a stake in Telechips, which supplies vehicle infotainment (IVI)/automotive infotainment, DAB radio and TV tuner ICs to Hyundai Motor and European OEMs.

Magnachip and LX Semicon have different client bases. While LX Semicon counts LG Display, BOE and Apple as its main clients, Magnachip supplies its mobile DDICs to Samsung Display.

“I understand that LX Semicon is trying to purchase Magnachip to capitalize on Magnachip’s PMIC business, which accounts for 50% of its revenue, instead of DDICs,” an industry source said. (Reporting by Hye-ran Kim)