1325702--3/31/2006--MAGNACHIP_SEMICONDUCTOR

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{customer, product, revenue}

{acquisition, growth, future}

{product, market, service}

{operation, international, foreign}

{interest, director, officer}

{cost, operation, labor}

{product, candidate, development}

{product, liability, claim}

{regulation, change, law}

{condition, economic, financial}

{personnel, key, retain}

{property, intellectual, protect}

{control, financial, internal}

{cost, regulation, environmental}

{competitive, industry, competition}

The cyclical nature of the semiconductor industry may limit our ability to maintain or increase net sales and profit levels during industry downturns. Customer demand is difficult to accurately forecast. Our customers may cancel their orders, change production quantities or delay production. A significant portion of our sales comes from a relatively limited number of customers. Our industry is highly competitive. A decline in average selling prices could decrease our profits. Growth in the consumer electronics and other end markets for our products is an important component in our success. We depend on successful technological advances for growth. We may not be able to attract or retain the technical or management employees necessary to remain competitive in our industry. If we encounter future labor problems, we may fail to deliver our products in a timely manner which could adversely affect our revenues and profitability. We may incur costs to engage in future business combinations or strategic investments and the anticipated benefits of those transactions may not be realized. We depend on high utilization of our manufacturing capacity. The failure to achieve acceptable manufacturing yields could adversely affect our business. We rely on certain subcontractors. We depend on successful parts and materials procurement for our manufacturing processes. We face product liability risks and the risk of negative publicity if our products fail. Our ability to compete successfully and achieve future growth will depend, in part, on our ability to protect our proprietary technology, as well as our ability to operate without infringing the proprietary rights of others. We are subject to many environmental laws and regulations that could affect our operations or result in significant expenses. We could suffer adverse tax and other financial consequences as a result of changes in, or differences in the interpretation of, applicable tax laws. A limited number of persons indirectly control us. We may need additional capital in the future and it may not be available on acceptable terms or at all. Our international operations are subject to various risks that may lead to decreases in financial results. We are subject to risks associated with currency fluctuations. Our historical financial information may not be representative of our results as a separate company. Our expenses could increase if Hynix were unwilling or unable to provide certain services related to our shared facilities with Hynix. Research and development investments may not yield profitable and commercially viable products and thus will not necessarily result in increases in revenues for us. Investor confidence may be adversely impacted if we are unable to comply with Section 404 of the Sarbanes-Oxley Act of 2002.

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1325702--3/31/2006--MAGNACHIP_SEMICONDUCTOR_LLC