Wednesday, October 08, 2008

Magnachip Officially Abandons Image Sensor Business

As said in comments to the previous post, Magnachip's 8K SEC filing reveals the details of the decision to abandon CIS business (Yahoo):

"Effective October 6, 2008, MagnaChip Semiconductor LLC (the "Company") will close its Imaging Solutions business segment, subject to support for existing customers. The Company expects the business segment closure to strengthen its financial performance and allow for continued investment in strategic growth areas.

In connection with this action, the Company will reduce its global workforce by approximately 200 employees, primarily located in the United States and South Korea, and primarily including managerial, engineering, sales, and administrative positions. The departure of terminated employees is expected to be substantially completed by October 31, 2008.

The Company expects to complete final activities associated with the closure by the end of its second fiscal quarter of 2009. The Company anticipates that it will record total restructuring and impairment charges of approximately $54.8 million related to one-time employee termination benefits and impaired assets, as well as expenditures related to the closure of facilities and contract termination costs. Of this amount, approximately $43.6 million relates to non-cash charges and approximately $11.2 million relates to cash expenditures, which is expected to be recognized over the next four fiscal quarters.

As a result, the Company expects costs savings, including reductions in research and development and capital expenditures, of approximately $50.0 million in the Company's fiscal year 2009."

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