Good day and thank you for standing by. Welcome to the Magnitude Semiconductor Second Quarter 2026 earnings conference 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 during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please know that today's conference may be recorded. I will now hand the conference over with you as first speaker today, Mike Bishop of Investor Relations. Please go ahead.

Thank you. Hello, everyone, and thank you for joining us to discuss MagnaChip's financial results for the second quarter ended June 30, 2026. The second quarter earnings release that was issued today after the market closed 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. Joining me today are Camillo Martino, MAGA TIP's Chairman, recently appointed CEO Chae Lee, and Shin Young Park, our Chief Financial Officer. We will discuss the company's recent operating performance and business overview, followed by a review of the financial results for the quarter and provide guidance for the third 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 Magnetship'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 Statement found in our SEC filing. Such statements are based on 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'll also discuss non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles, but are intended as supplemental measures of MangaChip'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 second quarter earnings release in the investor relations section of our website. And with that, I'll now turn the call over to Camillo Martino. Camillo?

Thank you, Mike, and good afternoon, everyone. Before discussing the quarter, I'd like to take a moment to welcome Chae Lee to his first earnings call as Chief Executive Officer of Magnuship. On behalf of our Board of Directors, I want to say how pleased we are to have Che leading our company. The Board conducted an extensive search for this new CEO position, and Che distinguished himself through his deep experience in power semiconductors, his proven track record of building successful businesses, and his vision for where Magnuship can create value over the longer term. Over the past several months, we've taken important steps to reposition Magnanship as a pure play power semiconductor company. We believe Che is the right leader to build on that foundation, accelerate our product strategy, and strengthen our competitive position through differentiated solutions. Having known Che for nearly three years now, and also having worked closely with him for over the past month, I have been impressed by the speed with which he has immersed himself in the business, and also the way he's engaged with our employees and customers, and also established clear priorities for the future. The board has great confidence in his leadership, and I look forward to continue working closely with Che as the chairman of the company. With that, it is my pleasure to introduce MagnaChip's Chief Executive Officer, Chae Lee.

Thank you, Camelo. Good afternoon, everyone, and thank you for joining us today. It is an honor to speak with you for the first time as Chief Executive Officer of MagnaChip. Although I officially joined the company just a month ago, it feels as though I've here much longer spend my days listening and learning meeting with our engineering teams speaking with employees across reviewing our technology roadmap and engaging with customers what has impressed me the most is the quality of our people magnitude has talented engineers deep process technology expertise and efficiently managed manufacturing operations and long-standing strategic relationship with many market-leading customers these are important strengths that provide a solid foundation for future growth. At the same time, I recognize that our recent financial performance has now reflected the strength of those assets. Our shareholders have been patient, and they rightly expect better execution and improved results. And my focus is to deliver on those results. One of the things that attracted me to Magnitschiff was the work already underway to reposition the company as a cure. I want to I thank Camelo, the board, and the management team for the important progress they have made over the past several months. Rather than changing direction, my objective is to build on that foundation and accelerate our pace of innovation. One ideal stance above all others. Our goal is to transition from being a follower to becoming a leader. to drive innovation, launch differentiated technology, and become a stronger player in power semiconductor industry. That does not necessarily mean becoming the largest company in every market we serve. Rather, it means developing differentiated products that solve meaningful customer problems, creating solutions that customers actively seek out, and competing on innovation instead of price alone. much of today's power semiconductor market particularly for legacy products has become increasingly commoditized competing primarily on price is not a sustainable strategy especially in today's environment instead we intend to focus our resources and products that offer greater differentiation and generate stronger long-term profitability our marketing and engineering organizations are already moving. While I cannot discuss specific products today, we are application-specific solutions that leverage our strength, empower semiconductor technology to solve customer problems that are not adequately addressed by standard commodity products. There is a renewed sense of, and our teams are energized by the opportunity to develop industry-leading products that create meaningful value for our customers. Of course, this transformation would not happen over. We are well on our way, a follower to becoming a leader. We announced a strategic partnership with Navitas Semiconductor that advances two key pillars and strategic partnerships. Under the agreement, we will license Navitas' proven Gen 6, Gen 4, Gen 5 technology, 1200 volt, 2300 volt, 3300 volt, and higher-voltage applications, while also gaining access to its established silicon carbide supply chain ecosystem. This partnership provides magnitude with a capital-efficient path into the high-voltage and ultra-high-voltage. We plan to port, qualify, and ultimately manufacture those products in our fab in Korea, leveraging our manufacturing expertization and support long-term growth. This partnership will significantly expand our addressable market and strengthen our ability to serve customers in energy and grid infrastructure, industrial electrification, automotive, renewable energy, and other high-power applications. It also positions Magnitschip to participate in some of the fastest-growing and highest-value segments of the silicon carbide power semiconductor market. This partnership brings together Navitas's industry's proven silicon carbide technology with magnet chips expertise in silicon IGBT and MOSFET technologies and advanced manufacturing capabilities. Together, these complementary strengths create a strong foundation for future innovation across a broad range of power semiconductor solutions, accelerate our technology roadmap, expand our market opportunity, strengthen our competitive position, heavy dependence on legacy products with limited differentiation. While pricing pressure in our legacy product portfolio will continue for some time, we are also starting to introduce new generation products that carry, while it's still early, we believe this is an encouraging sign that our product strategy is beginning to gain traction. As we look ahead and remain aligned, Camillo described on prior calls, R&D execution while continuing to develop innovative, differentiated solutions. We'll have significant work results reinforced. I am excited about the opportunities ahead. Balanced people, valuable technology, and a clear opportunity to strengthen its competitive position with differentiated products over time. While there is important work ahead, I am confident we are building the right foundation for the company's next chapter and for creating sustainable, long-term value for our shareholder. With that, I'll turn the call over to our Chief Financial Officer, Chin Young Park, to review our financial results and provide current corridor outlook.

Thank you, Choi, and welcome, everyone. Let me begin with our key financial reserves for Q2. Total Q2 consolidated revenue from continuing operations, which includes Power Analog Solutions and Power ISC, was $44.7 million. million dollars within the guidance range of 44.5 to 48.5 million dollars. Revenue was down 6.1 percent year-over-year and down 3.3 percent sequentially, compared with 47.6 million dollars in Q2 2025 and 46.2 million dollars in Q1 2026. Year-over-year revenue decline was primarily driven by recurrent demand for our legacy products resulting from intensified pricing competition.

Sequentially, revenue declined mainly due to seasonal softness in the communication segment.

As we noted last quarter, Q1 revenue was stronger than typical seasonality, benefiting from a one-time sales incentive program that reduced channel inventory levels. In Q2, consolidated gross profit margin from continuing operations improved to 19.3%, exceeding the high end of our guidance range of 17 to 19%. This compares with 20.4% in Q2 2025 and 15.6% in Q1 2026. The year-over-year decline in gross profit margin was primarily attributable to an unfavorable product mix driven mainly by ASP origin, particularly in China. Sequentially, gross profit margin improved primarily due to the one-quarter lack benefit from higher utilization rate in Q1 2026. Moving to operating expenses. SG&A expense was $8.67 million in Q2 compared with $9 million in Q2 2025 and $7.7 million in Q1 2026. Stock-based compensation included in SG&A was $0.8 million in Q2 compared with $0.8 million in Q2 2025 and $0.6 million in Q1 2026. R&D expense was $7.9 million in Q2 compared with $6.5 million in Q2 2025 and $6.7 million in Q1 2026. The year-over-year and sequential increase primarily reflects the timing of continued investment in our new generation product development activities. As we mentioned on our prior earnings call, we remain on track to deliver our target of 55 new generation products in 2026. Before turning to our non-GAB results, please note that our GAB financial results are available in our Form 8K filing with our second quarter earnings release. Our non-GAB results are as follows. Adjusted operating loss was $7 million in Q2 compared with a loss of $4.8 million in Q2 2025 and a loss of $6.5 million in Q1 2026. Our adjusted EBITDA was negative $4.2 million in Q2 compared with negative $1.5 million in Q2 2025 and negative $3.6 million in Q1 2026. The quarter over quarter decline in our non-GAP results was primarily driven by higher operating expenses such as a GNA and R&D expenses as discussed earlier. Q2 non-get diluted loss per share was $0.13, compared to a loss per share of $0.05 in Q2 2025 and a loss per share of $0.11 in Q1 2026. Weighted average non-get diluted shares outstanding for the quarter were $36.5 million, compared to $36.1 million in Q2 2025 and $36.4 million in Q1 2026. Moving to the balances. We ended Q2 with cash of $83.9 million, compared to $94.6 million at the end of Q1. The decrease was primarily driven by operating cash outflows and $1.3 million of capital expenditures. At the end of Q2, total borrowings were $41.5 million, including $15.6 million of the equipment loan. During the quarter, we established a $50 million at-the-market offering program, which provides us with additional financial flexibility if and when we choose to utilize it in the future. Now moving to our third quarter 26 guidance, while actual results may vary, for Q3-2026, we currently expect consolidated revenue from continuing operations, which includes power analog solutions, and power IC businesses to be in the range of $41.5 million to $45.5 million, a decrease of 2.7% sequentially, and down 5.2% year-over-year at the midpoint. This compares with $44.7 million in Q2-26 and $45.9 million in Q3-2025. Consolidated gross profit margin from continuing operations to be in the range of 17% to 19%. compared with 19.3% in Q2-2026 and 18.6% in Q3-2025. The sequential decline is primarily due to an unfavorable product mix. I would like to provide some additional context behind our Q3 guidance. We continue to see healthy demand for our low-voltage, battery-fed product line for mobile products. Nevertheless, we expect third-quarter revenue to decline sequentially due to three near-term factors. Firstly, packaging constraints in our supply chain that are limiting our ability to fully satisfy demand. Secondly, our customers' volumes in certain customer applications are lower than their earlier plans. And finally, an unfavorable product mix reserting from continued pricing pressure on our legacy products. While these factors will affect our third quarter results, we remain focused on executing our multi-year portfolio transformation and increasing the contribution from differentiated new generation products, which we believe will strengthen our competitive position and support improved financial performance over time. We continue to expect new generation products to contribute at least 10% of our revenue in fourth quarter of 2026, compared with approximately 2% for full year 2025. Looking ahead, the lower fab utilization in Q3 reserting from the planned electrical substation upgrade expected to have a one-quarter leg effect on gross margin. As a result, we currently expect Q4 gross margin to decline slightly from Q3. Thank you. I'll now turn the call over to Che for his final remarks.

Thank you, Shinya. Now, the financial results we reported today reflects a company that is still in the early stages of our transition. While we deliver results within our guidance, there is still a significant work ahead to improve our financial. We are not satisfied with where we are today, although I am encouraged and our recent partner team, a focused strategy and a product roadmap that I believe can ultimately lead the industry. execute with discipline, develop differentiated products for our customers, and steadily improve our financial performance. We understand that ultimately confidence of our shareholders execution. We would now be happy to take your questions.

And as I'm minded to ask a question at this time, please press star 1-1 on your touchtone telephone. We'll give it a moment to compile the Q&A roster. And it appears there are no questions in the queue at this time. I will now turn the call back over to Mike Bishop.

Thank you, everyone, for supporting our call today, for participating on our call today. We appreciate your support. And with that, this concludes the call. Operator?

This concludes today's conference call. Thank you for your participation, and you may now disconnect.