What Happened?
Shares of semiconductor manufacturer Magnachip Semiconductor (NYSE: MX) jumped 3% in the pre-market session after the company announced the release of a new semiconductor component designed for e-scooters and other light electric vehicles. The new product, an 80V MXT MV MOSFET, featured an innovative TOLT (TO-Leaded Top-Side Cooling) package. Unlike conventional designs that dissipated heat from the bottom, the TOLT package released heat from the top, allowing for better thermal management. Magnachip's testing showed this new design reduced the component's key operating temperature by 22%. The company also confirmed it had already begun supplying the new part to a leading global electric motor manufacturer, signaling immediate market adoption and validation for the technology.
After the initial pop the shares cooled down to $4.17, up 1% from previous close.
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What Is The Market Telling Us
Magnachip’s shares are very volatile and have had 26 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 21 days ago when the stock dropped 3.2% on the news that the major indices pulled back (Nasdaq -0.8%, S&P 500 -0.77%), largely due to escalating concerns surrounding the July 9th deadline for new US tariffs, now amplified by specific announcements. Earlier in the day, President Trump confirmed that Japan and South Korea would face new 25% tariffs on their imports to the US, effective August 1st.
These announcements came ahead of the broader July 9th expiration of a 90-day pause on reciprocal tariffs, which failed to produce comprehensive trade deals with most nations. This action against two major trading partners, coupled with the ongoing threat of further tariffs on countries associated with the BRICS bloc, injected significant uncertainty and apprehension into global markets. Investors were likely reacting to the increased costs for businesses, potential disruptions to global supply chains, and the broader implications for international trade relations.
Magnachip is up 3.6% since the beginning of the year, but at $4.17 per share, it is still trading 27.6% below its 52-week high of $5.75 from July 2024. Investors who bought $1,000 worth of Magnachip’s shares 5 years ago would now be looking at an investment worth $394.41.
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