SEC Comment Letter for MAGNACHIP SEMICONDUCTOR Corp (MX) (CIK 0001325702) (MX) — Aug 12, 2015
MAGNACHIP SEMICONDUCTOR Corp (MX) (CIK 0001325702)
Date: Aug. 12, 2015 · CIK: 0001325702 · Accession: 0000000000-15-041353
AI Filing Summary & Sentiment
Reasoning
Letter
August 7, 2015 Via E -mail Young -Joon Kim Chief Executive Officer MagnaChip Semiconductor Corporation c/o MagnaChip Semiconductor S.A. 1, Allée Scheffer , L-2520 Luxembourg, Grand Duchy of Luxembourg
Re: MagnaChip Semiconductor Corporation Form 10-K for Fiscal Year Ended December 31, 2014 Filed May 28, 2015 File No. 1 -34791
Dear Mr. Kim :
We have limited our review of your filing to your contacts with countries that have been identified as state sponsors of terrorism, and we have the following comments. Our review with respect to this issue does not preclude further review by the Assistant Director group with respect to other issues. In our comments, we ask you to provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments appl y to your facts and circumstances, please tell us why in your response.
General
1. You state on pages 13 and 22 of the 10 -K that your customer Samsung Display Corporation accounted for more than 11.4% of your net sales for the year ending December 31, 2014. The Samsung Electronics (Samsung) 2014 Annual Report states that Samsung Display is a subsidiary of Samsung. The Samsung website indicates that Samsung has a store in Sudan and that Samsung televisions are available in Syria. We also are aware of a 2013 news article that refers to a Samsung license and a Samsung franchise in Syria.
Sudan and Syria are designated by the Department of State as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls. Please descr ibe to us the nature and extent of your past, current, and anticipated contacts with Sudan and Syria, if any, whether through subsidiaries, affiliates, distributors, customers, joint ventures or other direct or indirect arrangements. You should describe a ny services, products, information or technology you have provided to Sudan or Syria, directly or indirectly,
Young -Soon Kim MagnaChip Semiconductor Corporation August 7, 2015 Page 2
and any agreements, commercial arrangements, or other contacts you have had with the governments of those countries or entities they control.
2. Please discuss the materiality of any contacts with Sudan and Syria you describe in response to the comment above, and whether those contacts constitute a material investment risk for your security holders. You should address materiality in quantitative terms, including the approximate dollar amounts of any associated revenues, assets, and liabilities for the last three fiscal years and the subsequent interim period. Also, address materiality in terms of qualitative factors that a reasonable investor would d eem important in making an investment decision, including the potential impact of corporate activities upon a company's reputation and share value. Various state and municipal governments, universities, and other investors have proposed or adopted divestm ent or similar initiatives regarding investment in companies that do business with U.S. - designated state sponsors of terrorism. You should address the potential impact of the investor sentiment evidenced by such actions directed toward companies that have operations associated with Sudan and Syria.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicabl e Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In responding to our comments, please provide a written statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the C ommission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
You may contact Daniel Leslie, Staff Attorney, at (202) 551 -3876 or me at (202) 551 - 3470 if you have any questions about the comments or our review.
Sincerely,
/s/ Cecilia Blye
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August 7, 2015 Via E -mail Young -Joon Kim Chief Executive Officer MagnaChip Semiconductor Corporation c/o MagnaChip Semiconductor S.A. 1, Allée Scheffer , L-2520 Luxembourg, Grand Duchy of Luxembourg Re: MagnaChip Semiconductor Corporation Form 10-K for Fiscal Year Ended December 31, 2014 Filed May 28, 2015 File No. 1 -34791 Dear Mr. Kim : We have limited our review of your filing to your contacts with countries that have been identified as state sponsors of terrorism, and we have the following comments. Our review with respect to this issue does not preclude further review by the Assistant Director group with respect to other issues. In our comments, we ask you to provide us with information so we may better understand your disclosure. Please respond to these comments within ten business days by providing the requested information or advise us as soon as possible when you will respond. If you do not believe our comments appl y to your facts and circumstances, please tell us why in your response. General 1. You state on pages 13 and 22 of the 10 -K that your customer Samsung Display Corporation accounted for more than 11.4% of your net sales for the year ending December 31, 2014. The Samsung Electronics (Samsung) 2014 Annual Report states that Samsung Display is a subsidiary of Samsung. The Samsung website indicates that Samsung has a store in Sudan and that Samsung televisions are available in Syria. We also are aware of a 2013 news article that refers to a Samsung license and a Samsung franchise in Syria. Sudan and Syria are designated by the Department of State as state sponsors of terrorism, and are subject to U.S. economic sanctions and export controls. Please descr ibe to us the nature and extent of your past, current, and anticipated contacts with Sudan and Syria, if any, whether through subsidiaries, affiliates, distributors, customers, joint ventures or other direct or indirect arrangements. You should describe a ny services, products, information or technology you have provided to Sudan or Syria, directly or indirectly, Young -Soon Kim MagnaChip Semiconductor Corporation August 7, 2015 Page 2 and any agreements, commercial arrangements, or other contacts you have had with the governments of those countries or entities they control. 2. Please discuss the materiality of any contacts with Sudan and Syria you describe in response to the comment above, and whether those contacts constitute a material investment risk for your security holders. You should address materiality in quantitative terms, including the approximate dollar amounts of any associated revenues, assets, and liabilities for the last three fiscal years and the subsequent interim period. Also, address materiality in terms of qualitative factors that a reasonable investor would d eem important in making an investment decision, including the potential impact of corporate activities upon a company's reputation and share value. Various state and municipal governments, universities, and other investors have proposed or adopted divestm ent or similar initiatives regarding investment in companies that do business with U.S. - designated state sponsors of terrorism. You should address the potential impact of the investor sentiment evidenced by such actions directed toward companies that have operations associated with Sudan and Syria. We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicabl e Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. In responding to our comments, please provide a written statement from the company acknowledging that: the company is responsible for the adequacy and accuracy of the disclosure in the filing; staff comments or changes to disclosure in response to staff comments do not foreclose the C ommission from taking any action with respect to the filing; and the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. You may contact Daniel Leslie, Staff Attorney, at (202) 551 -3876 or me at (202) 551 - 3470 if you have any questions about the comments or our review. Sincerely, /s/ Cecilia Blye Cecilia Blye, Chief Office of Global Security Risk Young -Soon Kim MagnaChip Semiconductor Corporation August 7, 2015 Page 3 cc: Amanda Ravitz Assistant Dire ctor Division of Corporation Finance Theodore S. Kim Chief Compliance Officer , Executive Vice President , General Counsel and Secretary MagnaChip Semiconductor Corporation W. Stuart Ogg Partner Jones Day