South Korean Magnachip closes chip factory due to overstocking

South Korean Magnachip closes chip factory due to overstocking

If relatively recently there was an acute shortage of chips for any purpose, now the manufacturers of the corresponding products are suffering from the opposite – unused semiconductors are piling up in their warehouses. That’s why South Korean manufacturer Magnachip (Magna Semiconductor) has taken an unprecedented step for itself – a week-long factory shutdown in the city of Gumi.

    Image source: Magnachip

Image source: Magnachip

Production will be suspended from Saturday, which is extremely unusual for a company that normally works 24 hours a day, all year round. Accordingly the electrMagnachip had to take such measures precisely because of large stocks and low demand for products.

Accordingly the electr, a power outage is not planned at the plant, but the employees will have to take a week off. Magnachip specializes in display drivers, power regulators and other types of semiconductors. However, this business only develops drivers, only power management chips are produced directly by the company in Gumi.

According to statistics from the South Korean portal IJIWEI, Magnachip is the world’s largest independent manufacturer of OLED driver chips (DDIC) with a share in the corresponding segment of the world market of 33.2% – insofar as the company ranks second after the absolute leader – Samsung Electronics.

Typically, a plant in the city produces about 40,000 eight-inch records per month. According to information the electr, Semiconductor factories very rarely completely stop production, mainly due to certain emergencies. For example, two years ago, Samsung’s plant in Austin, Texas, had to be closed for three days due to a power outage. Importantly, it took the company a full month to fully resume production.

Last year, Magnachip had sales of $337 million and an operating loss of $5.24 million. Sales are down 28.8% since 2021. Meanwhile, media reports are reporting that most 8-inch wafer processors have reduced production volumes due to declining demand in the semiconductor segment.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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