Magnachip Semiconductor Corp. (MX)

Company website 2020 Financial Report Stock Analysis

323

Million KWh's

~1,200 registered patents (p. 2) in Magnachip’s portfolio

50.75^%

Increase

$520 million (p. 52) in 2019 revenue

16.26^%

Reduction

$80.4 million (p. 11) in sales revenue from organic LED in Q4 2020

View Our Analysis

The Path to Drawdown: Irrigation

Light-emitting diodes (LEDs) were initially invented in 1994 as high-brightness, high-efficiency light bulbs. LEDs work like solar panels in reverse, converting electrons to photons instead of the other way around. LEDs use 90% less energy than incandescent bulbs for the same amount of light, and half as much as compact fluorescents. While other lighting technologies convert energy into heat (and wasting most of it), LEDs turn 80% of energy into light.

Environmental advantages of LED lighting are many. Its efficiency in converting energy into light, rather than heat, helps reduce electricity consumption and air-conditioning loads. For people without access to ample energy, LEDs can be powered with small solar cells and can replace expensive kerosene lamps and their noxious fumes and emissions. Where LEDs are installed in streetlights, they can save up to 70% of energy and significantly reduce maintenance costs.

Project Drawdown projects that if LED lighting becomes widely used in the residential and commercial lighting market, it can help avoid between 10.2-10.8 gigatons of CO2 emissions in residential, and between 5.9 - 6.7 gigatons in commercial buildings. To achieve this, the global market share of LEDs needs to scale rapidly:

<::marker> In 2018, LEDs comprised 3% of the total commercial lighting market and 2% of the residential lighting market
<::marker> By 2050, LEDs should account for 95% and 90% of the residential and commercial markets, respectively
<::marker> That’s 12.82% CAGR for residential LED, and 11.21% CAGR for commercial LED lighting between 2018 - 2050.

About

Magnachip Semiconductor Corporation (stock ticker: MX) designs and manufactures analog and mixed-signal semiconductor platform solutions for communications, Internet of Things (IoT) applications, consumer, industrial and automotive applications. They are headquartered in Luxembourg and sell their products through distributors across Asia and Europe.

MX's Role in Drawdown

Magnachip provides source and gate drivers (p. 3) and timing controllers. These products support a wide range of flat panel displays used in mobile communications, automotives, entertainment devices, notebook PCs, monitors and liquid crystal display, organic LEDs and LED televisions.

They also offer a number of power management semiconductor products, including LED drivers, with applications in a range of devices like TCs, smartphones, wearable devices, as well as LED lighting.

Combined, these two product lines account for over 90% of Magnachip’s total revenue.

MX: What We Like

We’ll update this section once Magnachip makes their sustainability information available.

What We Want to See Improve

Disclose Sustainability Metrics

On their sustainability page, Magnachip claims to be “actively reducing greenhouse gas emissions and energy consumption.” But unfortunately they don’t back up this claim with evidence. We’d like to see Magnachip publish a sustainability report on an annual basis, in which they clearly report their direct and indirect GHG emissions as well as energy consumption by source.

Transition to Renewable Energy

Magnachip’s manufacturing takes place in a couple of facilities (p. 34) in Korea. We think that switching to renewable sources of energy - from an off-grid solar or wind farm, for example - wouldn’t be too difficult too expensive. This would allow Magnachip to cut direct emissions in a meaningful way.

Enhance Supplier Transparency

Magnachip’s supply chain (p. 30) is global, with suppliers, subcontractors and operations located primarily across Asia. We nudge Magnachip to disclose more information regarding their suppliers -- their location, how much of Magnachip’s purchases they account for, and most importantly, their GHG emissions.

Related LED Lights Stocks in the Climate Index

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Allocated	Company	Description
5.00%	Applied Materials (AMAT)	Applied Materials supplies equipment, services and software for LED manufacturing. LEDs help conserve energy and cut emissions
0.56%	Universal Display (OLED)	Universal Display makes organic LEDs, replacing fluorescent and incandescent lighting and improving building energy efficiency
0.47%	Acuity Brands (AYI)	Acuity makes LEDs, smart lighting and building technology solutions that can improve energy efficiency and emissions from buildings
0.40%	Power Integrations, Inc. (POWI)	POWI makes energy-efficiency products like AC-DC power converters and LED drivers. These solutions help buildings conserve energy and cut emissions
0.28%	Diodes Incorporated (DIOD)	Diodes makes a range of semiconductor products for LCD display, LED monitors and lighting. LED lighting is a key solution for cutting building emissions
0.07%	Veeco Instruments Inc. (VECO)	Veeco makes equipment and processing systems used in making high-tech LEDs. Energy-efficient LEDs help buildings cut energy use and emissions
0.05%	Magnachip Semiconductor Corp. (MX)	Magnachip Semiconductor derives its revenue in part from the promotion of LEDs and solar PVs, through the sale of LED products and products used with solar PVs. It creates no products specifically for the fossil fuel industry.
0.02%	Agrify Corporation (AGFY)	Agrify provides LED lighting and other products for high-yield indoor agriculture. Efficient LEDs are an energy-saving alternative to conventional lights
0.02%	Amtech Systems, Inc. (ASYS)	Amtech Systems makes semiconductor equipment for LED and power device applications. LED lighting helps buildings cut emissions
0.02%	AXT, Inc. (AXTI)	AXT sells semiconductor substrates used in LEDs, thermal imaging, and autonomous vehicles. It makes no products specifically for the fossil fuel industry, thus passing our revenue filter.
0.02%	Energy Focus (EFOI)	Energy Focus makes LEDs for the Navy, federal, state and local governments, and big organizations, helping them save energy and cut building emissions
0.02%	Highway Holdings Limited (HIHO)	HIHO makes electronic components, some of which are used in making LEDs. LEDs are energy-efficient lighting that can cut emissions from buildings
0.02%	SemiLEDs Corporation (LEDS)	SemiLEDs makes LED components for lighting and other applications. LEDs are an energy-efficient lighting alternative that can cut building emissions
0.02%	LSI Industries Inc. (LYTS)	LSI Industries makes LEDs for automotive, restaurant, retail and grocery store customers. Energy-efficient LEDs help buildings cut emissions
0.02%	Orion Energy Systems, Inc (OESX)	Orion offers LED lighting and custom-made energy management systems for big organizations - a solution that cuts energy use and emissions from buildings
0.02%	O2Micro International Limited (OIIM)	O2Micro International makes LED products and lighting. LEDs are an energy-efficient lighting alternative that can cut emissions

Magnachip Semiconductor Corp. (MX)

The Path to Drawdown: Irrigation

About

MX's Role in Drawdown

What We Want to See Improve

Related LED Lights Stocks in the Climate Index

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