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MagnaChip Semiconductor Corporation (NYSE:MX) Q2 2019 Earnings Conference Call July 30, 2019 5:00 PM ET
Bruce Entin - Head of Investor Relations
YJ Kim - Chief Executive Officer
Jonathan Kim - Chief Financial Officer
- Bruce Entin - 投资者关系主管
- YJ Kim - 首席执行官
- Jonathan Kim - 首席财务官
Suji Desilva - ROTH Capital
Rajvindra Gill - Needham & Company
- Suji Desilva - 罗仕证券
- Rajvindra Gill - Needham＆Company
Hello and welcome to MagnaChip Semiconductor's Q2 2019 Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time.
And now, I would like to introduce your host for today's call, Bruce Entin, Head of Investor Relations. You may begin.
您好，欢迎来到MagnaChip Semiconductor的2019年第二季度收益电话会议。 此时所有参与者都处于只听模式。 之后，我们将进行问答环节，届时将提供相关说明。
现在，我想向您的主持人介绍今天的电话，投资者关系负责人Bruce Entin。 你可以开始吧。
Thank you, Towanda and thank you for joining us to discuss MagnaChip's financial results for the second quarter ended June 30, 2019. The second quarter earnings release that we filed today after the stock market closed and other releases can be found on the company's Investor Relations website. A telephone replay of today's call will be available shortly after the completion of the call and the webcast will be archived on our website for one year, access information is provided in the earnings press release.
Joining me today are YJ Kim, MagnaChip's Chief Executive Officer; and Jonathan Kim our Chief Financial Officer. YJ will discuss the company's recent operating performance and market outlook for our product categories. And Jonathan will provide an overview of our Q2 financial results and provide financial guidance for Q3, 2019. There will be a question-and-answer session following today's prepared remarks.
During the course of the conference call, we may make forward-looking statements about MagnaChip's business outlook and expectations. Our forward-looking statements and all 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 discussion found in our SEC filings.
During the call, we will also discuss our non-GAAP financial measures. The non-GAAP measures are not prepared in accordance with Generally Accepted Accounting Principles but are 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 directly comparable GAAP measures can be found in our second quarter earnings release available on our website under the Investor Relations tab at www.magnachip.com.
I now will turn the call over to YJ Kim. YJ?
今天加入我的是MagnaChip的首席执行官YJ Kim;和我们的首席财务官Jonathan Kim。 YJ将讨论该公司近期的产品类别的经营业绩和市场前景。 Jonathan将概述我们的第二季度财务业绩，并为2019年第三季度提供财务指导。在今天准备好的评论之后，将会有一个问答环节。
我现在将把电话转给YJ Kim。 YJ？
Welcome to everyone on the Q2 conference call. Revenue of $205.1 million surpassed the updated guidance we provided on June 11 and represented the highest revenue recorded in a second quarter since our IPO in 2011. Sequential revenue growth of 30.4% was due to strong customer demand across the board and throughout the quarter.
Revenue for the OLED and power businesses both set records and foundry revenue rose sharply over Q1. An increase in wafer loading in the foundry business led to higher fab utilization that helped lift our gross profit margin in Q2 to 21.4%.
On our Q1 earnings call on April 30th, we provided Q2 revenue guidance of $173 million to $181 million or up 12.5% at the midpoint of the range. On that call, we guided for sequential OLED revenue growth of approximately 30% in Q2 and predicted that foundry revenue would be about flattish in Q1. Our guidance at the time reflected our best estimates during a period of low visibility across the industry and widespread concerns about macroeconomic uncertainty and fears of a trade war.
When it became clear that we were on track to significantly exceed the high end of the guidance range, we updated our Q2 revenue guidance on June 11th to at least $194 million. We also updated our gross margin guidance to at least 21% from 16% to 18%.
When all was said and done, we executed well in Q2. We surpassed revenue expectations in each of our three business lines and met our updated gross margin guidance.
Let's review Q2 beginning with OLED. OLED revenue of $73 million was a record. Revenue increased 50.4% sequentially, which exceeded our April guidance of approximately 30% sequential growth and increased 17.4% from the previous record of $62.2 million in Q2, a year ago.
OLED revenue represented 86.7% of our Display business as compared to 83.3% in Q1 2019, and 79% in Q2 a year ago. For the first half of the year, OLED revenue was $121.6 million, up 25.9% from the first half of 2019.
Our OLED business in Q2 benefited from the launch of six new OLED smartphones in Asia. Our current family of 40-nanometer, Display drivers accounted for the majority of OLED revenue in Q2, but our ultra-low power 28-nanometer Display driver is now in mass production and will be a major contributor to the revenue in future quarters.
We had four new designs wins in Q2 including two for the 28-nanometer driver and two for a 40-nanometer driver. Since its introduction, a few months ago, the 28-nanometer Display driver has had a total of three design wins, so it is up to an excellent start. The 28-nanometer driver features more than a 20% reduction in chip size and power consumption as compared to the previous generation Display driver.
It also supports various display types such as rigid, flexible, foldable and VR and AR applications, and maximize design flexibility for the latest full-screen displays, such as bezel-less or fold-type displays. It also supports various interface technology like optical sensing and fingerprint on display.
Our OLED business strategy is to innovate our way to future success. We have developed two new 28-nanometer display drivers that are being sampled at major smartphone OEMs. We also have two new 40-nanometer display drivers currently being sampled and another 40-nanometer device that's being taped out in preparation for sampling.
By the end of this year, we'll have a total of seven 40-nanometer display drivers and three 28-nanometer drivers in various stages of design and production that will set the stage for continued growth.
During Q2, we achieved the milestone of shipping a cumulative of total of 500 million OLED display drivers, which reflects our long track record of success as the industry's high volume and leading independent supplier of OLED, DDICs to two world-class panel makers in Korea.
Let's turn now to our Power standard products business in Q2. Power revenue of $47.7 million set a record, and increased 13.5% sequentially, and 19.2% year-over-year. In the first half of 2019, Power revenue was $89.8 million, up 14.1% from the first half of 2018.
Premium Power products including Super Junction MOSFETs, IGBT and Power ICs accounted for 53.6% of total Power revenue, and was nearly 13% quarter-on-quarter up.
Demand was especially strong for Super Junction MOSFETs, a product that generated its sixth consecutive quarter of record revenue. Demand came primarily from the UHD television segment and industrial lighting markets.
Revenue for battery FET devices, which help protect lithium-ion batteries in devices like smartphones, was at its highest level since the business launched in 2008. We are currently in develop on a -- about a dozen different battery projects in Asia and have the number one market share for battery FET at a leading smartphone maker.
Looking ahead, we continue to view the automotive market because of long-term growth opportunity for our Power business. We currently are engaged with a half dozen designs projects in the Automotive sector, where our Power products match up well in industry requirements. This is especially true for electric vehicles that need high-speed switching devices to control the speed of electric motors.
We continue to believe that the automotive sector will account for approximately 5% of our Power discrete revenue in 2021 and 10% in 2022 due mainly to sharp growth expected in EVs.
Now turning to the Foundry business. Foundry revenue was $73.1 million, down 9.7% from Q2 a year ago and up 28.1% from Q1 of this year. The year-over-year decline was far less than we had anticipated and the double-digit sequential increase was better than our April guide for flattish sequential results.
On the Q1 earnings call back in April, we said Foundry weakness stand from a customer inventory correction, as well as our decision to be more selective about taking new Foundry business, as a result of strategic evaluation process of the Foundry business and Fab 4.
However we also added on that call that customer inventories were slowly being worked out, the China market appeared to be leveling-off and that several new products from Foundry customers were in early-stage production.
Super Junction MOSFET的需求尤其强劲，该产品连续第六个季度实现创纪录收入。需求主要来自UHD电视部门和工业照明市场。
电池FET器件的收入，有助于保护智能手机等设备中的锂离子电池，是自2008年推出以来的最高水平。我们目前正在开发一个 - 在亚洲的十几个不同的电池项目，并拥有领先智能手机制造商的电池FET市场份额排名第一。
As it turns out, new products in early-stage production ramped faster than we expected in Q2. Demand was especially strong from the computing segment, but we also saw positive signs from the consumer and communications segment. Foundry demand also increased for BCD and E 2PROM and mix signal technologies and another encouraging sign was that the number of tape outs increased in Q2 versus Q1.
On the Q1 earnings call, we also said that current market conditions at that time pointed to a gradual improvement for the Foundry business in the second half of the year. However, it's clear now that the improvement, we projected started a quarter sooner than we expected.
As it stands now, we expect continued sequential improvement in the Foundry business in Q3. As the strategic -- urge for the strategic evaluation of the Foundry business and Fab 4, I'm encouraged by where we are in the ongoing process.
Our decisions regarding the outcome of the strategic evaluation process, will be guided by what the Board and management consider to be the best available path to improve MagnaChip's profitability and to maximize shareholder value. There has been a lot of really good analytical work done by -- behind the scenes by our internal strategy team our outside advisors and the Board has been actively engaged with our management team, as we consider the range of possible options including, but not limited to joint ventures, strategic partnerships and M&A stay tuned.
Now, I'd like to share my perspective on the business environment. Looking back on the first half of 2019 we've met or surpassed expectations while also contending with macro uncertainty, fears of a trade war and on industry-wide customer inventory correction.
In past conference calls, we indicated that total revenue for 2019 likely would decline by no more than mid single digit percentage points as compared with 2018 despite weakness in Foundry. However, with our higher than expected revenue performance in Q2 and expected sequential growth in Q3, we now believe total revenue in 2019 has the potential to show modest growth over 2018.
We currently expect revenue to grow between 7% to 12% in Q3, over Q2 but we remind you that quarterly distribution of revenue for each business typically varies widely, especially in Q4 and Q1, due to seasonality and other factors.
Now, I'll turn the call over to Jonathan. And come back for the Q&A. Jonathan?
事实证明，早期生产的新产品增长速度超过了我们在第二季度的预期。计算领域的需求尤为强劲，但我们也看到了消费者和通信领域的积极迹象。 BCD和E 2PROM以及混合信号技术的代工需求也有所增加，另一个令人鼓舞的迹象是，第二季度的磁带输出数量与第一季度相比有所增加。
Thank you, YJ. And welcome to everyone on the call. Let's start with revenue for the two business segments. And then move to a review of profitability, fab utilization, operating expenses and balance sheet items. Revenue in the Standard products group, which includes Display and Power business lines was a record $132 million up 11.2% year-over-year, and 31.6% quarter-over-quarter.
Display revenue, was a record $84.3 million up 7% year-over-year and up 44.7% quarter-over-quarter. The year-over-year improvement in the Display business was offset in part by a continuing strategic reduction of our lower margin LCD business, of 31.9% from a year ago.
As stated previously, Power revenue was a record, $47.7 million up 19.2%, year-over-year and up 13.5% from Q1. The Standard products group represented 64.3% of total revenue, up from 59.5% in Q2 a year ago and slightly up from 63.7% in Q1 of 2019.
Display was 41.1% of total revenue in Q2, up from 39.4% a year ago. And up from 37% in Q1 2019. Power was 23.3% of total revenue, up from 20% in Q2, a year ago. And down from 26.7% in Q1 2019.
The Foundry Services Group represented 35.6% of total revenue, down from 40.5% in Q2 a year ago. And down from 36.3% in Q1 2019. Let's now recap profitability metrics in Q2.
Total gross profit was $43.8 million, down 18.6% compared to a year ago and up 93.1% from $22.7 million in Q1 of 2019. We believe gross profit is an important financial metric to monitor, because of the potential flow-through to operating income, adjusted EBITDA and cash flows.
Total gross profit margin of 21.4% in Q2, met the updated gross profit margin guidance we provided on June 11. Gross profit margin was down from 27% a year ago, and up from 14.4% in Q1 of 2019.
The sharp improvement in the total gross profit and gross profit margin in Q2, versus Q1 was due primarily to an increase in fab utilization, as a result of higher-than-expected wafer loading, and better-than-expected revenue in the Foundry business as well as an increase in our OLED revenue.
Fab utilization in Q2 was in the low 80% range, as compared to the mid-to high 60% range in Q1 and compared to the low 90% range, in Q2 of 2018. We currently expect that, fab utilization will increase in Q3, primarily due to an anticipated increase in Foundry revenue.
Gross profit, from our Foundry Services group segment was $12.2 million down 45.1%, from 22.2% million in Q2 2018 and up more than threefold from $3.6 million in Q1 of this year.
Gross profit margin in Foundry, was 16.7% versus 27.4% in Q2 a year ago and 6.4% in Q1 of this year. Gross profit from our Standard products group segment, was $31.6 million or flat as compared with $31.6 million a year ago. And up from $19 million in Q1 of 2019.
Gross profit margin in SPG was 23.9%, as compared to 26.6% in Q2 a year ago, and 19% in Q1 of this year. Gross profit and gross profit margin in Q2 of 2019 benefited from an increase in revenue of OLED Display drivers and premium Power products, but was impacted by a reserve of $2.2 million related to a legacy Display product.
Turning now to operating expenses in Q2. SG&A was $17 million or 8.3% of revenue as compared to $18.9 million, or 9.5% of revenue in Q2 2018, and was down 6.1% from $18.1 million in Q1 of 2019. The year-over-year decline was attributable primarily to decreases in certain employee incentives, equity-based compensation and legal and consulting service fees.
Looking ahead, SG&A expense for the second half of the year will be about flattish with that what we reported in the first half of 2019. R&D was $19 million or 9.3% of revenue compared to $21 million or 10.5% of revenue in Q2 2018 and $20 million in Q1 2019. The year-over-year decrease was primarily attributable to a decrease in certain employee incentives and a decrease in outside service fees and various overhead expenses. Operating expenses excluding special charges in 2019 are expected to be slightly lower than 2018 as we continue to focus on cost control.
Turning now to the balance sheet. Cash flow is $123.8 million at the end of Q2 as compared to $105.8 million due primarily to an increase in gross profit dollars. We generated net operating cash flow of $28.8 million in Q2 and $17.2 million in the first half of 2019.
Accounts receivable totaled $96.8 million, an increase of 5.1% from $92.1 million in Q1. The increase in accounts receivable in Q2 was attributable to the timing of payments from certain customers. The related payments were all collected during the first week of Q3.
Inventory totaled $67.2 million, down 16.8% from $80.8 million in Q1, as we continue to focus on balancing the need between meeting customer demand and keeping inventories lean.
CapEx was $3.8 million in Q2 as compared to $11.2 million in Q1 and $8.4 million Q2 2018. CapEx for 2019 will be lower than the normalized CapEx expenditures made in 2018, which was approximately $29 million.
With that, here is our guidance for Q3. For the third quarter of 2019, MagnaChip anticipates revenue to be in the range of $220 million to $230 million, up 9.7% at the midpoint of projected range when compared with revenue of $205.1 million in the second quarter of 2019, and up 9.2% year-on-year when compared to $206 million revenue recorded in the third quarter of 2018.
Revenue guidance for the third quarter reflects a current expectation that revenue for both Standard products group and Foundry Services Group will show sequential improvement as compared to Q2 2019. Gross profit margins to be in the range of 22% to 24%, as compared to 21.4% in the second quarter of 2019 and 27.1% in the third quarter of 2018. Gross margin guidance for the third quarter primarily reflects the current expectation that fab utilization will show sequential improvement from the second quarter of 2019.
With that, I'll turn the call back to Bruce. Bruce?
Thank you, Jonathan. So, Towanda, this concludes our prepared remarks. We would now like to open the call for questions.
谢谢你，乔纳森。 所以，Towanda，我们准备的评论到此结束。 我们现在想打开问题的电话。
[Operator Instructions] Our first question comes from line of Suji Desilva of ROTH Capital. Your line is open.
[操作员说明]我们的第一个问题来自ROTH Capital的Suji Desilva。 你的线是开放的。
Hi, YJ and Jonathan. Congratulations on the progress here in the recovery. So the OLED market you have very strong design momentum here. How would you describe what's happening for you guys versus the overall smartphone market? Is the smartphone market recovering or are you seeing secular growth in what's a stable smartphone market? Any contrast there will be helpful.
嗨，YJ和Jonathan。 祝贺恢复工作取得进展。 所以OLED市场你在这里拥有非常强大的设计动力。 您如何描述您和整个智能手机市场的情况？ 智能手机市场正在复苏，或者您是否看到稳定的智能手机市场的长期增长？ 任何对比都会有所帮助。
Yeah. Sure. I mean according to the market studies smartphone overall is -- I don't think is that growing, but OLED portion is growing and as you can see. And if you look at the market outside the high end of the Samsung or the Apple phones most of the phones right now is a rigid or rigid variance. And we're doing very well in that regard. So I think we have about 12 -- about dozen end customers or end users. We -- as you know we sell directly to the panel makers and we have about dozen end customers and so we saw a very healthy growth in the Q2.
是啊。 当然。 我的意思是根据市场研究智能手机整体而言 - 我不认为这种增长，但OLED部分正在增长，你可以看到。 如果你看看三星或苹果手机以外的市场，现在大多数手机都是严格或严格的差异。 我们在这方面做得很好。 所以我认为我们有大约12个 - 大约十二个最终客户或最终用户。 我们 - 如您所知，我们直接向面板制造商销售产品，我们拥有大约十几家终端客户，因此我们在第二季度看到了非常健康的增长。
Okay. And then in the Power products segment, can you tell me if the premium part of the Power products has that a potential to go higher than the just over the 50% mix that it's at now or is this kind of a natural sort of mix long term with the lower end products kind of staying at levels there as well?
好的。 然后在Power产品部分，您能告诉我Power产品的优质部分是否有可能超过现在的50％以上的混合物，或者这种天然的混合物是多长的 低端产品的期限也在那里保持水平？
Our continued desire to increase the premium products the premium products are the Super Junction, IGBT and the Power IC and also when the automotive start kick in a few years that also is one of the premium products. So we hope to continue to grow the premium products segment.
Okay. And then the last thing on the Foundry restructuring efforts any thoughts on the -- in the overall macro environment impact on that process? Is it realistic with the linearity you've seen here in Foundry recovery to be achieved prior mid-80s level or is that not the target here? And is the macro environment at all affecting the restructuring effort?
好的。 然后关于Foundry重组工作的最后一件事 - 在整个宏观环境中对这个过程有什么影响？ 您在Foundry恢复中看到的线性度是否在80年代中期之前达到或者不是目标？ 宏观环境是否会影响重组工作？
As we said today that the -- some of the new product that were in preproduction in Q1 we saw a very good sign of full production. Those included somewhere in the computing segment as were some in the communication and also recovering some of the existing customer base in the consumer. And so we are going to grow in the -- sequentially in Q3 as well. So I cannot say about the overall Foundry, but our Foundry has done a better than expected in Q2 and we're going to sequentially grow in Q3.
正如我们今天所说的那样 - 在Q1的一些新产品中，我们看到了完全生产的一个非常好的迹象。 这些包含在计算领域的某个地方，与通信中的某些人一样，并且还恢复了消费者中的一些现有客户群。 因此，我们将在第三季度顺序成长。 所以我不能说整体铸造厂，但我们的铸造厂在第二季度的表现好于预期，我们将在第三季度继续增长。
All right. Thanks YJ, thanks, Jonathan, nice job.
Thank you. Our next question comes from the line of Rajvindra Gill with Needham & Company. Your line is open.
谢谢。 我们的下一个问题来自Rajhamindra Gill与Needham＆Company的合作。 你的线是开放的。
Yes. Thanks and congrats as well on good results. On the Foundry recovery in the last few quarters, China was a decent percentage of the Foundry business Chinese customer. I just want to get a sense of the business environment on the ground in China as you see it. Is it improving, or -- are your Chinese customers starting to rebuild inventory for some of your Foundry products? Any sense on the environment in China given the whole ongoing trade China trade war would be helpful.
是。 谢谢，并祝贺取得好成绩。 在过去几个季度的铸造厂复苏中，中国是Foundry业务中国客户的一个不错的百分比。 我只是想让你了解中国的商业环境。 它是否正在改善，或者 - 您的中国客户是否开始为您的某些Foundry产品重建库存？ 鉴于整个中国贸易战持续不断，对中国环境的任何认识都会有所帮助。
Yes. Thanks for the question. So just to clarify, our Chinese direct customers or that Chinese companies that was established in China is still relatively small and -- so we have a tremendous opportunity to grow in that regard. And our customers whether they are located in the U.S. or Europe or Asia they do business in China. So again, so I think the -- all the combination we have a lot of potential to grow, especially with the direct customer in China in Foundry. So I think that's a good place to have because we still have a lot of room.
是。 谢谢你的提问。 所以，澄清的是，我们的中国直接客户或在中国成立的中国公司仍然相对较小 - 因此我们在这方面有巨大的发展机会。 我们的客户无论是在美国，还是在欧洲或亚洲，他们都在中国开展业务。 所以我认为 - 所有组合我们都有很大的发展潜力，特别是在中国的直接客户中。 所以我觉得这是个好地方，因为我们还有很大的空间。
Okay. And on the Power business, you talked about premium products showing a lot of growth over 50% of Power and you mentioned specific growth in Super Junction MOSFETs, can you talk about the capacity environment the supply environment? As you know this is an area where there's been a lot of tight capacity for many quarters, how do we think about the ability to meet accelerating demand and what the capacity constraints are and are they being lifted from your suppliers? Any sense there will be helpful.
好的。 在Power业务方面，您谈到了超过50％Power的大量增长产品，并且您提到了Super Junction MOSFET的具体增长，您能谈谈供应环境的容量环境吗？ 如您所知，这是一个许多方面存在大量紧张能力的领域，我们如何考虑满足加速需求的能力以及产能限制是什么以及它们是否会从供应商处解除？ 任何意义都会有所帮助。
Yes. So, again, I'm going to focus the -- our situation where the total market I think each maker has a different situation. But for us, as you can see there, we probably outpaced the growth of the market of the discrete. We grow in the first half over double-digit. We manufacture IGBT and Super Junction internally, so we are trying to increase the output there very smartly and efficiently.
We are also a leader in battery FET, which is a special battery protection FET and so we, I think, one of the leader in the marketplace. And then, some of the Power IC we also manufacture internally. And we have ways to grow the capacity, both internally or externally, so we can continue to grow this power business. So that's our case.
是。 所以，再次，我将集中讨论 - 我们的情况，我认为每个制造商的总市场有不同的情况。 但对我们来说，正如你所看到的那样，我们可能超过了离散市场的增长。 我们在上半年增长了两位数。 我们在内部制造IGBT和超级结，因此我们正在尝试非常智能和高效地增加输出。
我们也是电池FET的领导者，这是一种特殊的电池保护FET，因此我们认为，它是市场的领导者之一。 然后，我们也在内部生产一些Power IC。 我们有办法增加内部或外部的容量，因此我们可以继续发展这种电力业务。 这就是我们的情况。
Okay, great. And last question for me on the OLED segment. You're seeing a lot of good traction, both on the 40-nanometer and the 28-nanometer product. Can you talk about, as you're going to encounter 2020, how you think about 5G as being a catalyst for OLED? Is that something that will, based on your feedback, would your customers really accelerate the adoption of OLED, or is it just going to be -- you're seeing just an increase in penetration rates and having that continue given the transition from LCD to OLED?
好，太棒了。 关于OLED细分市场的最后一个问题。 在40纳米和28纳米产品上，您都看到了很多良好的牵引力。 你可以谈谈，正如你将要遇到2020年，你如何看待5G作为OLED的催化剂？ 根据您的反馈意见，您的客户是否会真正加速OLED的采用，或者只是 - 您只看到渗透率的提高，并且从LCD到OLED？
Yes. Very good question. So, I think, there are a couple of fronts there. One, 5G and AI, which is increasing, that's very power intensive. So having 28-nanometer driver IC in the market, there are only two of us in the market do that. And that creates a compelling advantage.
First of all, our 28-nanometer is lowest power consumption device in the market. So that's a key advantage. And even for us comparing 40 to 28, we can reduce the power another 20%. So I think that becomes a compelling feature when you are building a 5G smartphone or a phone that has a lot of artificial intelligence, because they tend to use more CPU Power.
Second, in terms of the LCD to OLED penetration that is happening, I was in China about three weeks ago and what we saw is that the -- many of our end customer or end users, they are -- in 2018 they may had -- 20% of the phone was OLED. They have grown that to 18% -- I mean, to 30%. Now, looking to 40% a year later. So I see the gradual shift there.
And then the other interesting was they think the foldable is really future to go. So I think that's really good and foldable really require one or more driver IC and also will be very 5G-based, because given the price points. So, I think, it all points to who is going to have the lowest power consumption device. And I think that's going to be an edge for us.
第二，就LCD正在发生的渗透而言，我在大约三周前在中国，我们看到的是 - 我们的许多终端客户或最终用户 - 他们在2018年可能会 - - 手机的20％是OLED。他们已经增长到18％ - 我的意思是，增长到30％。现在，一年后期望达到40％。所以我看到那里逐渐转变。
Very good, Thank you.
Thank you. I'm showing no further questions at this time. I will now like to turn the call back over to Bruce Entin for closing remarks.
谢谢。 我现在没有再问任何问题了。 我现在想把这个电话转回Bruce Entin，以便结束发言。
Okay. Thank you, Towanda. So this concludes our second quarter 2019 earnings conference call. Please look for details of our future events on MagnaChip's Investor Relations website. Thank you for joining us today.
好的。 谢谢你，Towanda。 所以这结束了我们2019年第二季度的收益电话会议。 请在MagnaChip的投资者关系网站上查看我们未来活动的详细信息。 感谢您今天加入我们。
Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.
女士们，先生们，今天的会议结束了。 感谢您的参与。 您现在可以断开连接。 每个人，都有美好的一天。
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