Magnachip Semiconductor Corporation

Thank you for standing by and welcome to Magnet Chip Semiconductor's first quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Mike Bishop with Investor Relations. Please go ahead, sir.

Thank you, Jonathan. Hello, everyone, and thank you for joining us to discuss MagnetShip's financial results for the first quarter ended March 31, 2026. The first quarter earnings release that was issued today after the close of market can be found on the company's Investor Relations website. The webcast and webcast replay of today's call will be archived on our website shortly afterwards. Joining me today are Camilla Martino, NITCHP's Chief Executive Officer, and Shin-Young Park, our Chief Financial Officer. Camilla will discuss the company's recent operating performance and business overview, and Shin-Young will review the financial results for the quarter and provide guidance for the second quarter of 2026. 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 NITCHP's business outlook and expectations. Our forward-looking statements and all of their statements that are not historical facts reflect our beliefs and predictions as of today and therefore are subject to inherent risks and uncertainties as described in the Safe Harbor Statement found in our SEC filing. Such statements are based upon information available to the company as of the date hereof and are subject to change for future developments. Except as otherwise required by law, the company does not undertake any obligation to update these statements. During the call, we will also discuss non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but are intended as supplemental measures of MagnetShip's operating performance that may be useful to investors. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures can be found in our first quarter earnings release in the investor relations section of our website. And with that, I'll now turn the call over to Camilla Martino. Camilla?

Thanks, Mike. Good afternoon, everyone, and thank you for joining us. I am very happy to be here today for my third earnings call with Magnetrip. Let me reiterate a point that I've made consistently over the past several quarters. Specifically, Magnetrip has a strong technical foundation, with a long history in power semiconductors and deep relationships with important customers. We are building on that foundation to execute a multi-year transformation to return the company to profitable work. Although we are in the early stages of this transition, I believe that we are making good progress. Let me address the quarter directly. From a revenue standpoint, Q1 came in stronger than typical seasonality would suggest, with both sequential and year-over-year growth. Allow me to provide some clarity on how to interpret that result. A portion of the strength was driven by actions we took in prior quarters, specifically our previously communicated one-time sales incentive program to reduce channel inventory. This action was necessary to improve the health of the sales channel, but it also creates some short-term variability in revenue. While the top line growth is encouraging, we are still operating in a challenging competitive environment. Consistent with our communications in prior quarters, we continue to face pricing pressure on legacy products, particularly in China. And as we have said before, Product competitiveness is the key to winning. Where we have competitive products, we can win. Where we do not, it is difficult to win in this market. On gross margin, we saw sequential improvement. We feel good about our progress, and we are at the beginning of a multi-year journey to substantially improve gross margin. Let me just now step back and reconnect this quarter to our broader strategy. As you may recall, last quarter we articulated a new strategy comprising six foundational pillars for the company's longer-term recovery and profitable growth. We are actively executing on all of them. I will not go through each one of them in detail today, but I would like to reinforce a few key points. As we have consistently said, at the center of everything we are doing is improving product competitiveness by developing new generation products. These are all critical to our long-term success. We have focused our efforts on accelerating our R&D and launching new products. We launched 55 new generation products in 2025. And we are now aiming for another 55 new generation products in 2026 after launching only four new generation products in 2024 and zero in 2023. We believe that the launch of many new generation products on a consistent basis will have a meaningful contribution to our financial recovery efforts. Some of these new generation products include those we mentioned in our recent press release, including our newest eighth generation of products for the battery test, as well as for MV MOSFETs. While it takes some time for our customers to qualify a new product and subsequently drive revenue, we believe that over time, these new products will return the company to revenue growth and improve margins. Consistent with our comments last quarter, we expect new generation products to comprise approximately 10% of our total revenue in the fourth quarter of 2026, up from only 2% for the full year 2025. In parallel, we expect to continue deepening our relationships with important industry leaders in our target market segments. This will be crucial to returning to work. I would like to address our PowerIC business, as that is an area of opportunity, and it's also critical to our long-term success. It is a smaller portion of our business right now, and we expect it to remain so through 2026. At the same time, we do see significant opportunity for our PowerIC business in the coming years. We continue to align our power IC products as well as our future gate driver IC products with our power discrete product roadmaps, such as MOSFETs and IGBTs. The longer term alignment of our discrete MOSFETs and our product IC products will enable MagnetShip to launch higher value-added integrated power modules in the future as well. We believe magnet chips' longer-term potential is substantial, and the accelerated launch of new generation products are building initial successes. So while we are confident in the direction, the financial improvement will be gradual. Let me turn it over to Xinyu. Xinyu?