Good day, and thank you for standing by. Welcome to the Q2 2022 Magnachip Semiconductor Corporation earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star one one on your cell phone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Yujia Zhai. Please go ahead. Hello, everyone. Thank you for joining us to discuss Magnachip's financial results for the second quarter ended June 30, 2022. The second quarter earnings release that was issued today after the stock market close can be found on the company's investor relations website. The webcast replay of today's call will be archived on our website shortly afterwards. Access information is provided in the earnings press release. Joining me today are YJ Kim, Magnachip's Chief Executive Officer, and Shinyoung Park, our Chief Financial Officer. YJ will discuss the company's recent operating performance and business overview, and Shinyoung will review financial results for the quarter, and then YJ will come back to provide guidance for the third quarter of 2022. There will be a Q&A session following the prepared remarks. During the course of this conference call, we may make forward-looking statements about Magnachip's business outlook and expectations. Our forward-looking statements and other statements that are not historical facts reflect our beliefs and predictions as of today, and therefore are subject to risks and uncertainties as described in the safe harbor statement found in our SEC filings. During the call, we will also discuss non-GAAP financial measures. The non-GAAP measures are not prepared in accordance with generally accepted accounting principles or intended to illustrate an alternative measure of Magnachip's operating performance that may be useful. A reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures can be found in our second quarter earnings release available on our website under the Investors section at www.magnachip.com. I will now turn the call over to YJ Kim. YJ? Hello, everyone. Thank you for joining us today, and welcome to Magnachip's Q2 earnings call. I'd like to start today by quickly touching on our Q2 consolidated financial results, and then give an update on some of the near-term challenges we are facing in the second half of 2022. After that, I will give an update on our capital allocation plan before wrapping it up with a detailed review of our business segments. In Q2, revenue was $101.4 million and was within our guidance range. Similar to Q1, our OLED revenue continued to be impacted by severe supply constraints for 20- nanometer 12-inch wafers, and our power solution business continued its positive momentum of double-digit year-over-year growth. Looking forward into the remainder of the year, our second half faces a few challenges, particularly in our OLED business, that will continue to impact our near-term results before recovery in 2023. First, in the second half, we are facing further supply constraints of 20-nanometer 12-inch wafers. Lower wafer allocation from our foundries impacted our new design assignments for second half of 2022 from our large panel customer in Korea. Typically, these design assignments are awarded nine to 12 months in advance based on future wafer supply. Second, in June, we successfully sampled our fully functional next generation OLED driver IC to our new top-tier panel customer using our newly qualified foundry partner, and customer qualification is proceeding. However, in mid-June, there were additional feature changes to the OLED driver IC product just sampled to meet the current market changes. Therefore, we modified the product design and completed the new tape-out in July. We anticipate the timing of our initial mass production to be around end of the year compared to our previous expectation of the end of Q3. With that said, our customer is going through full evaluation of the current version of the chip. This should significantly speed up the evaluation timeline of the new chip once it is sampled at the end of Q3. As such, we remain confident that our production ramp with this new customer remains on track as we enter 2023, and we expect them to contribute meaningfully to next year's growth. While these first two events are not related to customer demand, we are also seeing a slowdown in our key consumer end markets, such as smartphone and TV, due to continued stress in the global economy, such as the Ukraine conflict, the China COVID lockdown of major cities, and global inflation. These macro factors are driving end customer product inventory build in distributors and retail channels, which has caused temporary order cuts at our large Korean customer. The consumer market slowdown is showing temporarily additional capacity becoming available in the near term. We are in active negotiations with our foundry partners and seeing signs of better allocations in 2023. Given these industry market dynamics, we believe it is mutually prudent to pursue shorter-term supply agreements for the next few years. With this decision, our board of directors has reaffirmed the remaining $37.5 million stock purchase program that was announced previously. We believe that this stock purchase repurchase program and continue to drive our OLED business recovery plan, combined with the continued momentum of our power solution business, we are well-positioned to drive significant accretion and value for shareholders over the coming years. Finally, in order to improve its internal processes, the company's board of directors has activated a strategic review committee to assist the board in reviewing, considering, exploring, and evaluating strategic alternatives that may be available to the company to maximize shareholder value. The committee's mandate is to review the company's capital allocation plan and actively explore potential strategic and transactional opportunities, including, but not limited to joint ventures, strategic partnerships, and M&A possibilities that may arise in the future, and make recommendation to the board regarding those matters as appropriate. Now, I'd like to move to a detailed review of our Q2 results, starting with OLED. Our OLED revenue in Q2 was $24.6 million, down 44.3% year-over-year and 5.7% sequentially. The year-over-year decline was due to continued severe supply shortage for 28-nanometer 12-inch OLED wafers, which began at the end of 2020 and worsened last year and this year. Sequentially, OLED revenue decreased due to lower demand for China's smartphones and the Korean flagship smartphone, but partially offset by higher demand for the latest generation Korean flagship model that launched in Q2. During Q2, we made progress in these following areas. First, as I already mentioned, in Q2, we successfully developed and released our first OLED DDI sample to our new top-tier panel maker outside of Korea. Over the next few years, OLED production in this region of the world is expected to more than double, and we are excited about our growing relationship with this customer. Second, during the quarter, we kicked off development of two new OLED driver IC projects with the top-tier panel maker in Korea. We are targeting to begin mass production in the second half of next year. Third, in our new business areas, we continue to ramp our other OLED products, such as OLED TV and automotive. To date, we have three automotive customers with European automakers, and initial mass production remains on track for the first half of 2023. Finally, our additional 28-nm manufacturing capacity in Asia remains on track to come online in the later part of this year, and we continue to engage in active discussions with multiple foundry partners for additional capacity for mobile and TV products. In summary, we continue to face challenges in our OLED business. However, we believe the strategic actions that we are taking to secure additional wafer capacity, together with the recent new panel maker customer and project wins, we will set us up for having a strong recovery in 2023. Now, let's turn to the power solutions business. It was another solid quarter for our power solution business, driven by strong demand for our premium power products as well as Battery FET products. Our power solution business revenue in Q2 was $63 million, up 11.1% year-over-year and down 2.9% sequentially. The year-over-year growth was driven by continued strong demand across the board for almost all of our products, but particularly for our premium products, such as our Super Junction MOSFET, Power IC, and IGBT in key end markets like communication, consumer, industrial and computing, all driven by trend in electrification of everything. Sequentially, Super Junction MOSFET, BatteryFET, and Power IC product revenue decreased slightly in line with the slowdown in smartphone, TV, and computing applications, but was partially offset by growth in medium voltage MOSFET and IGBT due to growing demands for e-bikes and solar inverters. In our Super Junction product line, we continue to see robust demand from TV, PC power, and lighting application due to increasing energy efficiency requirement. During the quarter, we are also awarded a new design for telecom power, and we're expanding the lineup for server and premium computing markets. For Power IC, we were awarded five new design wins for premium display panels from a large Korean display customer and continued ramping shipments of our boost ICs for solid-state disk for servers and data centers. In our IGBT product line, revenue grew 36% year-over-year. This was driven by accelerating demand and new design wins from the renewable energy market, particularly solar inverter applications. Our medium voltage MOSFET product line achieved record revenue during the quarter due to strong demand and multiple design wins, particularly in power tool motors and e-bikes. Our latest generation, 200-volt medium voltage MOSFET with our advanced trench technology demonstrates much lower resistance and fast switching performance with higher cell density than prior generations. Further, our 40-volt medium voltage MOSFET for electric water pump in EVs started mass production during the quarter, and we are working on expanding the product portfolio to 60-volt for electric oil pumps, power doors, seats, and windshield wipers. During the quarter, we continued to develop and introduce new power products. The new 650-volt IGBT provides 30% better current density compared to the prior generation. We're excited about this new product as we continue to see growing demand for solar-based applications because of accelerating global adoption of solar power to reduce carbon emissions. In summary, we will continue to execute the growth plan of our power solution business by strengthening fab-lite productivity and introducing new products with superior performance and improved costs for new markets, such as renewable energy market. For Q3, we expect our power solution business revenue to be down due to some softness in consumer smartphone and computing end markets, which will be offset in part by a strong IGBT demand for solar applications. Before I conclude my business summary, I want to say that we feel comfortable about our long-term growth prospects. Most of our business have leading technology and are at the intersection of two major trends. We are continuing to focus on executing our OLED recovery plan in 2023 and continuing our success in power solutions business. Now, I turn the call over to Shinyoung and come back for closing remarks and Q3 guidance. Shinyoung? Thank you, YJ, and welcome to everyone on the call. Let's start with key financial metrics for Q2. Total revenue in Q2 was $101.4 million, down 2.6% sequentially and down 11% year-over-year. Revenue from the standard product business was $91.3 million, down 2.9% from Q1 and down 11.6% year-over-year. As YJ already mentioned, both the sequential and year-over-year decrease was mainly attributable to severe supply shortages in 20-nanometer 12-inch wafers in our OLED business. Our power solutions business in Q2 maintained its solid momentum as revenue of $63 million represented growth of 11.1% year-over-year. Sequentially, revenue declined 2.9% due to slowdown in TV and computing applications, but was partially offset by higher demand in solar and industrials. Gross profit margin in Q2 was 28.6%, below the low end of our guidance range. This represented a 120 basis point decline year-over-year and 890 basis points sequentially. The sequential decrease was primarily the result of a couple of factors. As a reminder, our Q1 gross profit margin benefited 200 basis points from a one-time timing mismatch of lower cost 12-inch wafers that was purchased in Q4 last year and sold in Q1. During Q2, our large Korean panel customer decommitted on their volume agreement due to lower demand for China smartphones. This resulted in an inventory reserve of approximately $4.7 million related to 12-inch display products. We also experienced higher foundry costs relating to 12-inch wafers and unfavorable product mix in Q2. Had we not recorded the material twelve-inch inventory reserve of approximately $4.7 million, our Q2 gross profit margin would have been 33.2%. Turning now to operating expenses. Q2 SG&A was $12.7 million as compared to $14.2 million in Q1 2022, and $14 million in Q2 last year. Q2 R&D was $13.4 million as compared to $12 million in Q1 2022, and $13.3 million in Q2 last year. Stock compensation charges including operating expenses were $2 million in Q2, compared to $1.6 million in Q1, and $2.4 million in Q2 last year. In Q2, our operating income was $2 million compared to $12.9 million in Q1, and $1.6 million in Q2 2021. Adjusted operating income in Q2 was $4.8 million compared to $14.5 million in Q1, and $9.1 million in Q2 a year ago. Adjusted EBITDA in Q2 was $8.5 million compared to $18.8 million in Q1, and $12.7 million in Q2 a year ago. Our tax expense for the first six months of the year was $2.6 million. The income tax expense for the first half of 2022 primarily resulted from a higher than expected income tax rate as a result of a combination of the change in Section 174 of the US Tax Code, which requires R&D expenditures to be capitalized and amortized over 15 years, and lower projected current-year full-year taxable income. We believe that there is a possibility that the referred Section 174 legislation could be reversed, and if such action were to be successful, our 2022 annual effective income tax rate would be significantly reduced. Net loss in Q2 was $3.3 million as compared with a net income of $9.5 million in Q1, and a net loss of $0.2 million in Q2 a year ago. Our GAAP diluted loss per share in Q2 was $0.07, as compared with an earnings per share of $0.20 in Q1 and $0.00 in Q2 last year. Our non-GAAP diluted earnings per share in Q2 was $0.23, down from $0.28 in Q1, but up from $0.15 in Q2 last year. There were about 46 million shares outstanding in Q2, calculated on a diluted weighted average basis. Now moving to the balance sheet. Our cash balance at the end of Q2 was $273.8 million. This compares to $284.9 million at the end of Q1. Accounts receivable net totaled $59.8 million, an increase of 16.8% from Q1. Our day sales outstanding for Q2 was 54 days and 44 days in Q1. The increase in accounts receivable net in Q2 was attributable to the timing of monthly sales and related payments from certain customers. Inventories net totaled $36.2 million, a decrease of 2.1% from Q1. Our average days in inventory for Q2 was 45 days and 51 days for Q1. In terms of our capital allocation plan, Q2 CapEx was $0.6 million. For the remainder of 2022 and first half 2023, we're expecting previously planned CapEx related to our factory upgrades and normal CapEx, as well as large foundry wafer prepayments to secure capacity and certain employee costs, including an annual contribution of statutory severance to certain external deposit accounts. Our current estimate for these major items approximate between $80 million-$90 million. Now I'll turn the call back over to YJ for Q3 guidance as well as closing remarks. YJ? Thank you, Shinyoung. Let me summarize my earlier remarks and then I'll move on to the third quarter guidance. The current environment for OLED is very challenging, starting with wafer supply shortage, followed by delays in new customer ramp due to spec changes and a slowdown in the China smartphone market due to extended COVID citywide lockdowns and slowing global economy. However, let me highlight three factors that give us confidence about our business long-term growth prospects and recovery in 2023. First, we have successfully sampled the OLED chip to our new panel customer and have begun qualification, and we expect to go production by the end of the year. Secondly, we started two new product designs for our Korean panel customer and expect to go into production by the second half of next year. Thirdly, we are also making good progress in getting more wafer capacity for our display business next year. As a result, our board of directors have reaffirmed its intention toward the remaining $37.5 million stock repurchase program. We believe the recovery of our OLED business and the continued momentum of our power solution business position us well to drive significant accretion and value for shareholders over the coming years. Finally, the newly activated strategic review committee will evaluate all strategic alternatives to maximize shareholder value. I look forward to updating all of you on the progress of our recovery of business during the upcoming quarters. Now, moving to our third quarter guidance. Our results will be challenged by some of the things that I just mentioned and further OLED wafer shortages, as well as cost challenges, including labor, due to inflationary pressures. While actual results may vary, for Q3, Magnachip currently expects revenue to be in the range of $70 million-$75 million, including about $9 million transitional foundry services. Gross profit margin to be in the range of 26.5%-28.5%. Thank you. Now I will turn the call back over to Yujia Zhai. Thanks, YJ. That concludes the prepared remarks section of this earnings call. Operator, please begin the Q&A session. All right. Thank you. As a reminder, to ask a question, you will need to press star one one on your telephone. Once again, that is star one one on your telephone. Please stand by while we compile the Q&A roster. All right, for your first question, it comes from the line of Suji Desilva from ROTH Capital Partners. Your line is now open. Hi, YJ. Hi, Shinyoung. First question on the strategic review committee. I know you've been through this a few times in the past. I'm curious, YJ, what triggered the formation of the strategic review committee at this juncture? Any insight there would be helpful. Yes, as we mentioned, we have reactivated strategic review committee, and they are responsible for reviewing, considering exploring and evaluating all these strategic alternatives. That is to mainly to maximize shareholder value. One of their mandate is also includes reviewing the company's capital allocation plan and also looking at other, active, strategic and transitional activities. I think that is very good to look at all the alternatives as well as reviewing the company's capital allocation plan. Thanks for that. On the guidance of $70 million-$75 million, can you give us a sense of what the mix might be roughly of OLED display rather than power and whether the fourth Q has an opportunity for display to recover or whether that's more of an early 2023 recovery there? Well, as we mentioned that the OLED, we expect to go to production by end of the year. Our new foundry is coming on in conjunction with that. As we also said, in second half, we also see supply constraints from the primary foundry vendors. I think I'll leave it at that on those comments. Okay, great. Last question on the 28-nanometer constraints are certainly persisting here. Any sense of when those might be able to kind of come back into a more normal pattern? Any thoughts, that'd be helpful. Thanks. I said, made a remark that in 2023, our allocation is very improving. We are hoping that we can ramp up with the new design wins that we mentioned with the new China customer and the two new designs in Korean panel maker, and so forth. Okay. Thanks, YJ. All right. One moment while we queue up for the next question. For our next question, it comes from the line of Rajvindra Gill from Needham & Company. Your line is now open. Yeah, thank you for taking my questions. YJ, just wanted to get some clarity on one of the things you said about the OLED business. You said that there are some changes in the design of the, I guess, the architecture or that that's leading to you know, some more issues. Can you elaborate that? I know there's difficulty in you getting access to 20 nanometer wafers. You know, there's difficulty in the overall end market, et cetera. But could you elaborate on what's going on the design side? I guess that would basically prevent kind of a Q4 ramp, and seems like that would be more likely to happen in the first half of next year, if I understood what you're saying. Yeah. You know, what we said is that we sample the part in Q2 in June, and the part is fully functional. In mid-June, we've been notified to change some of the feature to meet the current market dynamics needs of the customer. We had to redesign and re-tape-out, and we re-taped-out in July, and then we expect to sample by end of Q3, which is few months away. But the good thing is that with the initial chip, which is fully functional, the customer is doing full qualification. We expect the, when we sample the new chip, the evaluation and qualification will be shorter. We expect to start shipping towards the end of the year. I hope that answered your question. I guess with the new design, is that, you know, with your new panel customer? The, uh- The non-Korean customer. Are they one and the same? Yeah, this is for the outside Korean panel customer. There were slight change in feature, additional feature. It's, you know, I would say, you know, I can't go too much detail, but it's a minor change we did in order to meet the new market requirements. Got it. Okay. It seems like it's been very challenging to get. Well, it doesn't seem like it. It has been challenging to get 28-nanometer wafers from your existing foundry for several quarters now. With your new foundry that's put in place, are you going to start to shift more capacity over the long term or medium to long term over to that second foundry in order to ensure that this situation doesn't occur again or is not, at least not as extreme as it has been, where the inability to get access to wafers has really put a huge dent on your OLED business in a negative way? Yes, a very good question. To answer your question, the new foundry that is outside Korea, that is expected to provide about 2-4x of what the wafer capacity we got in 2022 over the next few years. This new foundry is aimed to serve non-Korean panel customers. At the same time, we are in a good negotiation with our existing foundry as well, and we expect to improve the allocation over the next few years as well. Shinyoung, just a couple of finance questions, if I may, and then I'll step back in the queue. How do we think about the OpEx going forward? Revenue is coming down 43% year-over-year for September because of the big drawdown in OLED, the big drop in OLED. Are there any changes in terms of OpEx there to kinda offset that massive decline in revenue on a year-over-year basis? If you keep the OpEx relatively the same, you're gonna be, obviously, moving into an operating loss territory. Just any thoughts there? I just wanna make sure I understood in terms of the CapEx. Is the CapEx gonna be $80 million-$90 million in 2022 because of the severance? I'm just unclear about that, if you could clarify on those two issues. Thank you. In your first question, the OpEx side, I mean, if we look at the components of our SG&A and R&D, I mean, the majority of them are fixed costs. I know that our revenue is coming down, so we are looking into the details of the costs to kind of review and try to find ways to kind of reduce our costs. At least for Q3, I mean, most of them are already confirmed costs for the R&D materials and the labor. I don't think that reduction can be that quickly. At least for the next quarter, probably we have to stand by our previous guidance for the quarterly OpEx expenses. On your CapEx question, no. What we said was our kinda the major cash outflows for the second half of this year and the first half of next year were gonna amount to $80-$90 million, including like various kinda things, and one of the item was the CapEx. CapEx, we said special CapEx of $88 million earlier this year and normal CapEx of $20 million. But if you look at our cash flow statement, we've only spent $1.5 million so far, so there is $26.5 million kinda remaining, which is already kinda committed. That's one part. I mean, this one we need to look at again, but at least for now, we are planning about $10-$15 million CapEx in the first half of next year. The severance, what I meant was, we are looking for like $14 million expected kinda cash outflow in relation to certain employee-related costs, including annual contribution of statutory severance to certain external deposit accounts to comply with the local labor laws. Then we are looking for some cash tax payments in the next twelve months amount to $7 million. If you sum up all of those guys, the remaining portion, a good portion of the remaining consisting of the kinda securing wafers. We were talking about the quarter net cash outflow exposure of $8 million-$9 million for the next twelve months. There are no further questions at this time. I would now like to hand the conference back over to Yujia Zhai for closing remarks. Thank you, operator. This concludes our Q2 earnings conference call. Please look for details of our future events on Magnachip's Investor Relations website. Thank you, everyone, and take care. This concludes today's conference call. Thank you for participating. You may now disconnect.