Under the terms of the agreement, MagnaChip will have a 10% equity stake in the new independent entity, and will continue to provide foundry services to the new entity.

The Application Processor business primarily includes assets, staff and intellectual property related to MagnaChip's 8-bit and 32-bit microcontroller, SmartCard controller, microperipheral IC, and linear IC product lines.

Myungsoo Kang, Head of the Application Processor Business of MagnaChip Semiconductor, commented, "This transaction was ideal for us given the natural fit with GreenChips' business. We are pleased to have such a strong partner given GreenChips' great reputation and sector knowledge."

Mr. Won Choi, CEO of GreenChips, commented, "Our strong relationship with MagnaChip gave us high confidence in this transaction. We are very optimistic about acquiring the Application Processor business as a logical extension of our current MCU business. We are also pleased that there will be no disruptions in the foundry business as the high yields historically delivered by MagnaChip are central to future profitability."

Dr. Youm Huh, President and CEO of MagnaChip Semiconductor, said, "After this deal, we plan to focus further on our three core businesses -- Display Solutions, Imaging Solutions and our Semiconductor Manufacturing Services. By maintaining a 10% equity stake in the new entity, we will continue to benefit from future upside expected from the combination of GreenChips and MagnaChip's Application Processor businesses. We are also pleased that MagnaChip will continue to provide foundry services to the new entity."

About MagnaChip Semiconductor

MagnaChip Semiconductor is a leading designer, developer and manufacturer of mixed-signal and digital multimedia semiconductors addressing the convergence of consumer electronics and communications devices. We focus on CMOS image sensors and flat panel display drivers, which are complex, high performance, mixed signal semiconductors that capture images and enable and enhance the features and capabilities of both small and large flat panel displays. MagnaChip also provides wafer foundry services utilizing CMOS high voltage, embedded memory, analog and power process technologies for the manufacture of IC's for customer-owned designs. MagnaChip has world-class manufacturing capabilities and an extensive portfolio of approximately 12,500 registered and pending patents. As a result, MagnaChip is a valued partner in providing leading technology solutions to its customers worldwide. For more information, visit www.magnachip.com.

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