Even After Inclusion in National Core Technology... MagnaChip Says "No Korean Approval Needed for Stock Sale"

"The Korean Government Will Cooperate If There Are Questions Related to Transactions"

[Asia Economy Reporter Jeong Hyunjin] Amid the high possibility that MagnaChip Semiconductor's display driver IC (DDI) technology for organic light-emitting diode (OLED) will be designated as a national core technology in relation to the acquisition of MagnaChip by a China-based fund, MagnaChip stated that "even if it is included as a national core technology, the overseas sale of products made with this technology is not considered an export or transfer of national core technology, so generally approval is not required."

According to the industry on the 7th, MagnaChip disclosed through the U.S. Securities and Exchange Commission (SEC) filing on the 4th (local time) that "under Korean law, approval is required when national core technology is exported or transferred abroad, or when a Korean company possessing national core technology is acquired by a non-Korean party," and made the above statement. Since both the headquarters and production facilities are located domestically and no intellectual property (IP) is transferred through this acquisition deal, it is interpreted that overseas sales resulting from this will not be problematic.

MagnaChip also stated, "This stock sale does not require any approval in Korea," adding, "However, if Korean government authorities have questions regarding the transaction, we will cooperate." Regarding recent claims that Wise Road Capital, a China-based private equity fund, competed with Korea-based stakeholders to secure the contract at the time of the stock sale agreement, MagnaChip said, "We have not received any interest or credible proposals from Korea-based stakeholders, nor have we conducted any negotiations."

MagnaChip plans to hold a shareholders' meeting as scheduled on the 15th to put the sale of the company on the agenda. The Ministry of Trade, Industry and Energy is reviewing the MagnaChip sale and is also promoting the designation of OLED-related DDI technology as a national core technology.

The key issue is the review of Wise Road's MagnaChip M&A by the U.S. Committee on Foreign Investment in the United States (CFIUS). MagnaChip said, "We expect that the temporary shareholders' meeting schedule will not be changed due to CFIUS's request. The closing date of the transaction may be extended, but we cannot speculate on the timing."

Regarding China's antitrust approval process, MagnaChip said, "We applied and submitted on the 7th of last month and are responding to questions from the State Administration for Market Regulation (SAMR)," adding, "If SAMR confirms that the information included in the response and the submitted documents are sufficient and no additional information or documents are required, we expect to receive approval within a relatively short period."

MagnaChip was established in 2004 when Hynix Semiconductor (now SK Hynix) spun off its system business division. It was acquired by Citigroup Venture Capital and listed on the New York Stock Exchange (NYSE) in 2011, and sold its foundry (semiconductor contract manufacturing) business division last year.

This content was produced with the assistance of AI translation services.