What happened

Shares of South Korean chipmaker Magnachip Semiconductor (MX -2.79%) were up by 14.3% as of noon ET Wednesday. There was no specific news from the company that drove that jump. However, rumors emerged Wednesday morning that it had been approached with a buyout offer from South Korean conglomerate LX Group and private equity firm Carlyle Group (CG -1.57%).

Someone in a lab suit holding a chip.

Image source: Getty Images.

So what

This news wasn't exactly new. Last month, South Korean media outlets reported on indications that LX Group was interested in buying Magnachip. However, Wednesday's report suggests the acquisition price could be around $25 a share -- 26% above the current stock price. Bear in mind that neither the buyout nor that offer price has been confirmed by either company.

Nevertheless, it isn't a stretch to think there's interest in Magnachip. Semiconductor stocks have been blasted this year as investors worry about the possibility of an economic slowdown, or worse, a downturn. Even as this concern grows, though, many electrical component companies are scrambling to keep up with booming demand and are reporting record sales amid a global chip shortage. 

Magnachip is not one of the chipmakers enjoying resurging sales. The company, which supplies display parts for TVs and other consumer electronics, reported a 15% year-over-year decline in sales in Q1 2022 due to supply chain issues.

Now what

In spite of the company's recent woes, institutional investors still see value in Magnachip. The stock presently trades for less than 13 times trailing 12-month earnings.  

Magnachip isn't the only semiconductor stock trading on the cheap right now. With the market swooning but chip demand expected to rise throughout the next decade, there are lots of deals to be had among designers and manufacturers of technology's basic building blocks.