1325702--3/31/2008--MAGNACHIP_SEMICONDUCTOR

related topics

{customer, product, revenue}

{acquisition, growth, future}

{product, market, service}

{operation, international, foreign}

{control, financial, internal}

{cost, operation, labor}

{product, candidate, development}

{condition, economic, financial}

{product, liability, claim}

{regulation, change, law}

{personnel, key, retain}

{property, intellectual, protect}

{debt, indebtedness, cash}

{competitive, industry, competition}

{cost, regulation, environmental}

{tax, income, asset}

The cyclical nature of the semiconductor industry may limit our ability to maintain or increase net sales and operating results during industry downturns. We manufacture our products based on our estimates of customer demand, and if our estimates are incorrect our financial results could be negatively impacted. Our customers may cancel their orders, reduce quantities or delay production. We depend on high utilization of our manufacturing capacity. A significant portion of our sales comes from a relatively limited number of customers. Our industry is highly competitive. The average selling prices of our semiconductor products have at times declined rapidly and will likely do so in the future, which could harm our revenue and gross profit. Changes in demand for consumer electronics, including digital televisions, notebook computers, flat panel displays and mobile phones, and products in our other end markets can impact our results of operations. If we fail to develop new products and process technologies or enhance our existing products and services in order to react to rapid technological change and market demands, our business will suffer. If we fail to achieve design wins for our semiconductor products, we may lose the opportunity for sales to customers for a significant period of time and be unable to recoup our investments in our products. We have lengthy and expensive design-to-mass production and manufacturing process development cycles. We face numerous challenges relating to executing our growth strategy. The loss of our key employees would materially adversely affect our business, and we may not be able to attract or retain the technical or management employees necessary to compete in our industry. We have a history of losses and may not become profitable in the future. If we encounter future labor problems, we may fail to deliver our products and services 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 we may not realize the anticipated benefits of those transactions. The failure to achieve acceptable manufacturing yields could adversely affect our business. We rely on a number of independent subcontractors. We depend on successful parts and materials procurement for our manufacturing processes. We face product return and liability risks and the risk of negative publicity if our products fail. We could suffer adverse tax and other financial consequences as a result of changes in, or differences in the interpretation of, applicable tax laws. Our ability to compete successfully and achieve future growth will depend, in part, on our ability to protect our proprietary technology and know-how, 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 may need additional capital in the future, and such capital may not be available on acceptable terms or at all. Research and development investments may not yield profitable and commercially viable product and service offerings and thus will not necessarily result in increases in revenues for us. Our business depends on international customers, suppliers and operations in Asia, and as a result we are subject to regulatory, operational, financial and political risks, which could adversely affect our financial results. We are subject to risks associated with currency fluctuations. Our level of indebtedness is substantial, and we may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful. A decline in the ratings of our existing or future indebtedness may make the terms of any new indebtedness we choose to incur more costly. Our expenses could increase if Hynix were unwilling or unable to provide certain services related to our shared facilities with Hynix, and if Hynix were to become insolvent, we could lose certain of our leases. Investor confidence may be adversely impacted if we are unable to comply with Section 404 of the Sarbanes-Oxley Act of 2002. We may need to incur impairment and other restructuring charges, which could materially affect our results of operations and financial conditions.

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1325702--3/31/2008--MAGNACHIP_SEMICONDUCTOR_LLC