S&P lifts MagnaChip to stable

S&P said it revised the outlook on MagnaChip Semiconductor Corp. to stable from negative.

The agency also said it affirmed the company’s CCC+ long-term corporate credit and debt ratings.

The outlook revision reflects an expectation that the company will modestly improve its profitability and operating cash flows over the next 12 months, S&P explained.

This is due to its ongoing cost-reduction efforts, including discontinuation of unprofitable operations and growing demand for active matrix organic light emitting diodes (Amoled) display drivers, the agency said.

MagnaChip is expected to grow its display solution revenues because of the increasing adoption of Amoled technology for smartphones, wearable devices and TVs given its good relationship with a leading Amoled panel maker, S&P said.

But the company's operating and financial performances are expected to remain volatile over the next one- to two-years due to its relatively small scale and less competitive technological capabilities, particularly associated with its semiconductor foundry business, the agency said.

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