Q1 2026 Quarterly Report: DDI Revenue Slips as Display Driver Demand Softens

Quarterly Report (28th Term) Fiscal Year: January 1, 2026 to March 31, 2026 Submitted to: Financial Services Commission, Korea Exchange Date: May 15, 2026 Filing entity type: Listed company Exemption reason: None Company name: LX Semicon Co., Ltd. CEO: Lee Yoon-tae Head office: 222 Techno 2-ro, Yuseong-gu, Daejeon Tel: 02-6924-3114 Website: https://www.lxsemicon.com Preparer: Lee Hyuk-joo (Head of Management Support Division) I. Company Overview 1-5. Company overview, history, capital changes, total shares, and articles of incorporation are omitted from the quarterly report per disclosure standards (to be included in the semi-annual/annual report). II. Business Content 1. Business Overview The Company is a fabless system semiconductor firm primarily engaged in the design, manufacture, and sale of display panel driver components. Main products include Display Driver IC (DDI), Timing Controllers (T-Con), and Power Management ICs (PMIC), with the portfolio being diversified into MCUs and heat-dissipation substrates. DDI accounted for 87.58% of total quarterly revenue (vs. 90.17% in the prior-year quarter). Exports represented 99.61% of total sales (vs. 99.56% prior-year quarter). The Company designs semiconductors to customer specifications and outsources production to foundries and assembly/packaging specialists with sufficient capacity and technology. 2. Main Products and Services (as of March 31, 2026, in KRW 100 million) System Semiconductor: - DDI: Q1/28th term KRW 3,405 (87.58%); 27th term KRW 14,655 (89.41%); 26th term KRW 16,724 (89.64%) - Other than DDI: Q1/28th term KRW 483 (12.42%); 27th term KRW 1,736 (10.59%); 26th term KRW 1,932 (10.36%) - Total: Q1/28th term KRW 3,888; 27th term KRW 16,391; 26th term KRW 18,656 3. Raw Materials and Production Facilities a. Main raw materials (as of March 31, 2026, KRW 100 million): - Wafers and others: KRW 1,928 (Main suppliers: TSMC, SK hynix system ic (Wuxi), LG Innotek, etc.) - Processing fees and others: KRW 822 (Main suppliers: LB Semicon, Chipbond, etc.) As a fabless company outsourcing semiconductor manufacturing, wafer purchase cost is material and sensitive; wafer unit prices and price trend information are omitted. b. Production capacity and facilities: As a fabless company, post-design manufacturing is outsourced. The automotive heat-dissipation substrate business, established as a future growth segment, operates a 3,000-pyeong (~9,900 m²) factory at the Siheung Campus (Siheung-si, Gyeonggi-do) and began mass production in April 2025. Current capacity is 250,000 units/year. Heat-dissipation substrates feature high thermal conductivity to dissipate heat from power devices, with demand expected to grow in high-power, high-heat applications such as EVs, renewable energy, and industrial power equipment. c. Outsourced production: Post-design manufacturing is outsourced. Outsourced processes are broadly divided into foundry (wafer contract manufacturing) and OSAT (test and packaging), with vendors selected based on capacity, technology, and transaction stability. 4. Sales and Order Status a. Sales performance (as of March 31, 2026, KRW 100 million): System Semiconductor (Products and Other / DDI etc.): - Exports: Q1/28th term KRW 3,873; 27th term KRW 16,244; 26th term KRW 18,445 - Domestic: Q1/28th term KRW 15; 27th term KRW 147; 26th term KRW 211 - Total: Q1/28th term KRW 3,888; 27th term KRW 16,391; 26th term KRW 18,656 b. Sales channels, methods, strategy, and major customers: (1) Sales organization: A sales organization comprising domestic and overseas sales teams operates under the Strategic Marketing Division. (2) Sales channels: Domestic and overseas sales are made-to-order. Products are developed to customer specifications from the development stage, manufactured by major outsourced vendors, and delivered to customers. - Domestic sales: Customer order → LX Semicon (outsourced production → release → delivery) - Overseas sales: same channel structure (3) Sales strategy: Continued new product/technology development and differentiated customer support to strengthen and expand the customer base. Provides solution products tailored to customer specifications to enhance market position. (4) Major customers: Two single external customers each account for 10% or more of total sales. Sales to these customers in the current quarter were KRW 228.4 billion (prior-year quarter KRW 270.7 billion) and KRW 85.7 billion (prior-year quarter KRW 148.7 billion), respectively. c. Order status: Display driver components vary by panel size and characteristics. Due to major panel manufacturers' procurement policies, orders are typically placed every ~10 weeks based on need, rather than under long-term contracts, with frequent additional orders. 5. Risk Management and Derivative Transactions The consolidated entity is exposed to credit, liquidity, and market risks related to financial instruments. Risk information, objectives, policies, assessment procedures, and capital management are disclosed in the notes. a. Credit risk management: Credit risk is the risk of financial loss from counterparty default, arising mainly from trade receivables and investment assets. The Company transacts only with counterparties of acceptable credit quality and periodically reviews credit exposure and counterparty ratings. Banking transactions are limited in principle to highly-rated banks. New transactions involving higher-credit-risk products such as trust deposits require approval from the responsible executive. As of the end of the current quarter, maximum credit risk exposure including cash and cash equivalents, short-term financial instruments, trade receivables, and other receivables was KRW 924.8 billion. b. Liquidity risk management: Maintaining and managing appropriate liquidity is a critical management matter for the Company. [Translation truncated]