Intangible Assets

12 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

7. Intangible Assets

Intangible assets as of December 31, 2013, 2012 and 2011 are as follows:


	December 31,
	2013			2012 (As Restated)			2011 (As Restated)
Technology	$	20,081		$	25,011		$	21,126
Customer relationships		29,444			29,010			26,777
Intellectual property assets		7,829			7,145			5,868
Less: accumulated amortization		(54,243	)		(49,266	)		(36,984	)
Goodwill		—			3,360			—

Intangible assets, net	$	3,111		$	15,260		$	16,787

Aggregate amortization expenses for intangible assets totaled $6,792 thousand, $9,042 thousand and $9,412 thousand for the years ended December 31, 2013, 2012 and 2011, respectively. The aggregate amortization expense of intangible assets for the next five years are estimated to be $1,488 thousand, $305 thousand, $305 thousand, $305 thousand and $305 thousand, for the years ended December 31, 2014, 2015, 2016, 2017 and 2018, respectively.

On March 2, 2012, the Company’s Korean subsidiary, MagnaChip Semiconductor, Ltd., completed the acquisition of Dawin Electronics, a privately-held semiconductor company that designs and manufactures insulated-gate bipolar transistors, or IGBTs, Fast Recovery Diode and metal oxide semiconductor field effect transistor, or MOSFET, modules (the “Dawin acquisition”). As required by accounting guidance for business combinations, the Company allocated the purchase price to assets and liabilities based on their estimated fair value at the effective date of acquisition. The total consideration paid for the acquisition amounted to $9,291 thousand and the Company recognized goodwill of $3,163 thousand.

During the fourth quarter of 2013, the Company’s management became aware that certain technology being developed in relation to the Dawin acquisition could no longer be used. The Company considered this event as an indicator of impairment in performing its annual analysis for potential impairment of its goodwill, which included examining, based on factors and conditions then existing, the impact of current general economic conditions on its future prospects. Based on this analysis, the Company determined that goodwill and certain technology associated with the Dawin acquisition were impaired and recorded an impairment charge of $3,389 thousand related to goodwill and $1,864 thousand of intangible assets.

In addition, the Company recognized an impairment charge of $617 thousand related to certain existing technology from restructuring its fabrication facilities in 2013.

The Company accounts for IPR&D as an indefinite-lived intangible asset until completion or abandonment of the associated research and development projects.

When a project is completed, the carrying amount of the related IPR&D is reclassified into technology and amortized over the remaining estimated life of the asset beginning in the period in which the project is completed and sales of related product is recognized. In this regard, IPR&D of $1,572 thousand was reclassified into technology in 2011

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details