Sale of MagnaChip to China Finally Falls Through Amid US-China Conflict... Withdrawal of Sale Review Application to Ministry of Trade, Industry and Energy

US CFIUS Break... MagnaChip Terminates Stock Sale Agreement with WiseRoad Capital
Plans to Withdraw Sale Approval Review Application to Ministry of Trade

[Sejong=Asia Economy Reporter Kwon Haeyoung] The sale of MagnaChip Semiconductor to Chinese capital has ultimately fallen through due to the US-China technological hegemony war. While the technology held by MagnaChip is competitive, the consensus is that it is not advanced enough to block overseas sales. SK Hynix is also facing difficulties importing advanced semiconductor equipment into China due to US opposition, and the impact on Korean companies from escalating US-China tensions is gradually becoming a reality.

According to the government and related industries on the 14th, MagnaChip terminated its stock sale contract with Wise Road Capital after the US Committee on Foreign Investment in the United States (CFIUS) disapproved the sale.

Earlier, in March, MagnaChip signed a stock sale contract to sell all its shares to Wise Road Capital, a Chinese private equity fund, for $1.4 billion. However, as CFIUS, aiming to curb China's technological rise, judged the sale to pose a risk to US national security and opposed it, the deal eventually fell through.

An industry insider stated, "MagnaChip is also expected to soon withdraw its application for sale approval from our government."

Initially, our government tentatively judged that MagnaChip did not possess national core technology and saw no grounds to block the sale. Although MagnaChip's main technology, OLED DDI (Display Driver IC for Organic Light Emitting Diode), is competitive, it was not considered advanced enough to prevent the sale. However, as US measures to check China intensified, the government hurriedly designated OLED DDI technology as 'national core technology' to create grounds to block the sale.

As US sanctions against China continue to escalate, the number of cases where Korean companies fall directly under the influence or become scapegoats is expected to increase.

SK Hynix's planned introduction of advanced semiconductor equipment at its Wuxi plant in China, expected as early as next year, has also been stalled due to US opposition. In February, Hynix signed a five-year contract with Dutch company ASML to purchase EUV equipment, investing 4.75 trillion won. Considering the recent application of EUV processes to the DRAM production line at its Icheon plant, it is presumed that the Wuxi plant, which has a 1-3 year technology gap, planned to introduce EUV equipment as early as next year, but the original plan has been disrupted. Pushing forward with advanced upgrades at the Wuxi plant despite US opposition could lead to even greater retaliation from the US.

An industry insider said, "Cases where our companies are affected by or become scapegoats in the US-China tech competition will continue to occur, and active government involvement is necessary."

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