SecProbe.io

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

DIVISION OF
CORPORATION FINANCE
Mail Stop 3030

        May 4, 2010  John McFarland, Esq. Senior Vice President, Gene ral Counsel and Secretary
c/o MagnaChip Semiconductor, Inc. 20400 Stevens Creek Boulevard, Suite 370 Cupertino, CA  95014
Re: MagnaChip Semiconductor LLC
Amendment No. 1 to Registrati on Statement on Form S-1
Filed April 20, 2010
  File No. 333-165467

Dear Mr. McFarland:

We have reviewed your filing and have the following comments.  Where
indicated, we think you should re vise your document in response to these comments.  If
you disagree, we will consider your explanation as to why our comment is inapplicable or
a revision is unnecessary.  Please be as deta iled as necessary in your explanation.  In
some of our comments, we may ask you to provi de us with information so we may better
understand your disclosure.  After reviewing th is information, we may raise additional
comments.
We welcome any questions you may have  about our comments or any other
aspect of our review.  Feel fr ee to call us at the telephone numbe rs listed at the end of this
letter.  1.      While we do not necessarily agree or disagr ee with your analysis in response to
prior comment 2, we do not object to your registration of the offering of the depositary shares at this time.  Please note that we may have further comments on
this issue once we have review ed the Deposit Agreement.
 2.    While we do not necessarily agree or disagr ee with your analysis in response to
prior comment 3, we do not have any further comments on the issues raised by that comment at this time.

John McFarland, Esq.
c/o Magnachip Semiconductor, Inc.
May 4, 2010 Page 2  Prospectus Cover Page

 3.       We note your response to prior comment 6.  Please expand to clarify when each
of the securities you mention will be quoted.  For example, disclose, if true, that
the depositary shares will be quoted only until they are cancelled and that the
common stock will not be quoted until the depositary shares are cancelled.
 Overview, page 1

 4.    Please expand your response to prior comme nt 11 to clarify how the factors you
cite are “objective” such th at it is appropriate to identify the customers you
mention in your summary.
 Corporate Information, page 5

 5.       Please expand your revisions added in res ponse to prior comment 18 to clarify
what is meant by your disclosure that Av enue and its affiliates “specialize in
distressed and undervalued securities.”
 6.       Please refer to our prior comment 17. We see from your response that you intend
to present pro forma information at the time the estimated price range is provided
in the prospectus. Please tell us how you pl an to revise the pro forma information
currently presented on page F-4. We will review your revised pro forma information and disclosures when provi ded and may have further comment.
 Risk Factors, page 17

 7.       We will evaluate your response to prior comment 19 after you complete the
blanks in your document, including the blanks on page 125.
 If our Korean subsidiary . . ., page 27

 8.       We note your revisions added in response to prior comment 23.  Please expand to
clarify the nature of the “costly co mpliance” measures you mention and how
those measures “could” adversely affect your business.  For example, you refer to reducing energy consumption; does that mean you will be required to reduce your
operations or change your ma nufacturing processes?
 Our level of indebtedness . . ., page 29

 9.     Please expand the third bullet point to clarify the amount of your borrowings that
are at a variable rate of interest.  Also tell us why those variable-rate borrowings do not appear to be discussed in your  disclosure on pages 79 and 141.

John McFarland, Esq.
c/o Magnachip Semiconductor, Inc.
May 4, 2010 Page 3  Dilution, page 38

 10.      We see that your pro forma net tangible book value per share gi ves effect to the
offering. Please tell us and revi se the disclosures in this section to clearly indicate
how you plan to reflect the impact of th e distribution in your determination of
dilution per share to new investors.
 Management’s Discussion and Analysis . . ., page 55

 Overview, page 55

 11.       Please disclose the substance of your response to prior comment 32.
 Recent Changes to Our Business, page 57

 12.    We note your revisions in response to pr ior comment 34.  Please clarify how the
actions you mention “reduced [y]our costs and improved our margins,” given that your disclosure on pages 68 and 69 indi cates that your cost and margin
improvements relate to factors othe r than those you mention here.
 13.    Please clarify that your recent debt o ffering, which quadrupled your outstanding
indebtedness, will have the effect of increasing your interest expenses in future periods.  Quantify this known trend to the extent practicab le and discuss any
known trends that your increased interest expenses will have on your net income/losses.
 Liquidity and Capital Resources, page 76

 14.     Please clarify here, under your new risk factor which begins on page 29 and on
page 142 under “Covenants,” if true, that  your current ratings on your debt are
below investment grade.  Also, it appear s that your debt was already rated below
investment grade prior to your recent o ffering in April 2010.  Since that offering
had the effect of quadrupling your outsta nding indebtedness, please include any
known trends in your credit ratings.
 Contractual Obligations, page 78

 15.      We note your response to prior comment 41.  Please revise this section to clarify
how the table in your disclosure has cha nged as a result of the notes offering you
mention.  Also revise your discussion  on page 76 to clarify the operational
purpose of that offering.  It is unclear from your disclosure why you replaced your
prior debt with the notes, pa rticularly since a primary purpose of that note offering
was to provide a distribution to your unit hol ders and that a signi ficant portion of
the proceeds were received from  your largest unit holder.

John McFarland, Esq.
c/o Magnachip Semiconductor, Inc.
May 4, 2010 Page 4  Large Display Solutions, page 90

 16.       It remains unclear from your revisions added in response to prior comment 45
how you reduce die sizes in your mobile display solutions without moving to
smaller geometry processes.  Therefore, we reissue the portion of prior comment 45 which requested such disclosure.
 Customers, page 97

 17.       Regarding your response to prior comment 50:

• It remains unclear from your disc losure whether the information you
present regarding sales to LG Display is on a consolidated basis or for a
single segment.  Please revise, and ensu re that your disclosure includes the
identity of each customer who accounts for more than 10% of the sales for each segment and whose loss would ma terially impact your business;

• If you continue to highlight your relationships with “leading innovators”
like Samsung and Sharp, as you do on page 86, and that Samsung and
Sharp account for a substantial porti on of your revenues, as you indicate
on page 84, then please tell us how you concluded that investors can
assess the relative signif icance of those customers without disclosure of
the specific percentage of sales attr ibutable to those customers; and

• Please clarify how the relationships you mention “were . . . adversely
impacted” by your reorganization proceedings.
 Directors and Executive Officers, page 99

 18.     We note your response to prior comment 54.  Refer to the last sentence of the
disclosure regarding the business experien ce of each of Messrs. Elkins, Klein and
Tan and revise to clarify, as appropriate, how those directors “have gained significant knowledge with respect to th e management of companies through their
investment in, and ownership of, numerous  companies in multiple industries” and
the experience they gained in “advising companies undergoing financial turnarounds,” including the sp ecific companies.  Also re vise to clarify which of
the directors you note has “substantial l ong-term experience investing in multi-
national semiconductor manufacturing companies” and how that investment experience relates to the significant knowle dge with respect to the management of
companies.
 19.       We note your revisions on page 100 in re sponse to prior comment 55; however,
the nature of Mr. Elkins’ management e xperience continues to be unclear.  For
example, do you mean he has 15 years of  portfolio management experience?

John McFarland, Esq.
c/o Magnachip Semiconductor, Inc.
May 4, 2010 Page 5
Also, please tell us, with a view toward disclosure, the nature of the portfolio
companies for whom Mr. Elkins served and serves as a director.  For example, are
these public companies?
 Board Composition, page 102

 20.       We note your revisions added in response to prior comment 57.  Please expand to
disclose how not having a majority of your board be “independent” satisfies the
exchange rules mentione d in your document.
 Assessment of Risk, page 103

 21.    Your disclosure implies that your board  conducted the review mentioned in your
response to prior comment 63 and concl uded that your compensation programs do
not encourage excessive risk taking.  Your  response to prior comment 63 states
that management conducted the review and reached that conclusion.  Please
reconcile.
 General Background, page 106

 22.      We reissue prior comment 64 with re spect to the “ranges” for overall
compensation mentioned in the second paragraph.  Please revise to clarify this “range” and how it relates to the “overall compensa tion” you pay to your named
executive officer.
 Base Salary, page 107

 23.    Please expand your revisions in response to prior comment 65 to clarify where the current base salaries of your named executive officers are in relation to the
median.
 24.       We note your revisions in response to prio r comment 66.  You refer here to a one-
time payment of 20% of monthly base sa lary, but note 1 on page 111 indicates the
payment was 30%.  Please reconcile.  Also, your disclosure here indicates that these payments are included in th e “Bonus” column, but note 1 on page 11
indicates that the payments are in the “Sal ary” column.  Please reconcile.  Ensure
that your revisions clearly identify th e amount of the payments you mention for
each named executive officer.
 Cash Incentives, page 108

 25.      Please note that prior comment 67 was not  limited to your cash incentive program
for 2009.  Expand your response or revise  your disclosure accordingly.

John McFarland, Esq.
c/o Magnachip Semiconductor, Inc.
May 4, 2010 Page 6  26.    We note your revisions in response to  prior comments 68 and 72.  Given your
disclosure that the disc retionary incentive you paid to Mr. Hwang, Ms. Sakai and
Mr. McFarland was for the same purpose, please revise to cl arify why different
amounts were paid to those named executives.
 27.   Please expand your revisions to the last pa ragraph of this section to disclose
whether payments were made for the first fiscal quarter and, if so, the amounts of
those payments.
 Equity Compensation, page 109

 28.    We note your revisions in response to pr ior comment 70; however, it continues to
be unclear from your disclosure how you determined the relative proportion of
options and restricted unit granted to your named executives.  It is similarly
unclear how you determined the amounts of restricted units to  award to each
named executive.  We note the vague refe rence to providing an “embedded value”
but it is unclear what that value was or how it was determined.  Please revise.
 Summary Compensation Table, page 111

 29.    We note your response to prior comment 74.  If the “bonus” for Mr. Rowe was
fixed in amount, non-discreti onary and subject only to his continued employment,
it is unclear why it does not represent “ongoing base compensation.”  Similarly, if
the “bonus” you paid to Mr. Park mentione d in note 4 and in Exhibit 10.27 was
fixed, non-discretionary and subject only to his continued employment, it is
unclear why that payment is reflected in the “Bonus” column.  Please expand your response or revise, as appropriate.

Pension Benefits . . ., page 122

 30.     Please expand the disclosure added in re sponse to prior comment 77 to quantify
the amount of the accrual resulting from the multiplier you note.
 Selling Stockholders, page 125

 31.    Please expand the revisions in response to  prior comment 79 to disclose the price
per unit paid in the offering you mention, a nd the effective pri ce per share paid by
Avenue including the additional sh ares it acquired under the backstop
commitment referenced in your disclosure.  Also, when you complete the blanks in your table, please ensure it is clear from your disclosure which offered shares
are registered for resale.  For example, if a selling stockholde r is offering all of
the shares related to your floating rate notes and a portion of th e shares related to
the offering you mention, pleas e make that clear.

John McFarland, Esq.
c/o Magnachip Semiconductor, Inc.
May 4, 2010 Page 7  Certain Relationships and Re lated Transactions, page 130

 32.    Please ensure that the full scope of your related-party transac tions is clear from
your disclosure.  For example, it is unclear what amount Avenue received upon repayment of the senior secu red credit agreement.  It is similarly unclear what
amount each of your affiliate unitholders  received from the proceeds of your
senior note offering.  Please revise.
 33.      Please reconcile your response to prior comment 82 that the purpose of the offering is to allow all equity holders to  benefit with your disclosure on page 138
that the purpose is to allow only the selling stockholders  to benefit.
 Rule 144, page 144

 34.    Please note that prior comment 92 related to what extent, if any, your disclosure
addressed how the time periods in Rule 144 are impacted by the 45-day period mentioned in your disclosure.  For example, does the six month and one-year periods you mention include or exclud e those 45 days?  Please expand your
response accordingly and cite a ll authority on which you rely.
 Material U.S. Federal Income Tax Consequences, page 146

 35.    We your revisions in response to prior comments 89 and 93 and the repeated
statements as to what the depositary shares “should” represent, which appears to simply move the equivocal term that wa s mentioned in prior comment 89 to this
section.  If counsel is
 able to opine on a matter but doubt exists because of a lack
of relevant authority or ot herwise, you may use the term “should” to make it clear
that the opinion is subject to a degree of uncertainty.  In such cases, you should
explain why counsel cannot give a “will” opinion, describe the degree of uncertainty in the opinion, and provide risk factor and/or other appropriate
disclosure setting forth the risks to i nvestors.  If, in contrast, your counsel is not

able to opine on a material tax matter, please say so dire ctly, disclose why counsel
is not able to provide the opinion, and st ate the possible outcomes and risks to
investors of that tax consequence.  Wh ere you are unable to provide unequivocal
disclosure regarding the tax consequences  throughout this section, please revise
your disclosure accordingly.
 Underwriting, page 150

 36.     Refer to page 153.  Revise to clarify the amount of senior notes purchased by each entity you mention and disclose the regi stration and exchange rights mentioned on
page 141 and in Exhibit 4.4.  Also revise  to disclose the amounts those entities
received upon repayment of your senior secured credit facilities.

John McFarland, Esq.
c/o Magnachip Semiconductor, Inc.
May 4, 2010 Page 8  Financial Statements, page F-1

 Note 3. Fresh Start Reporting, page F-11

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