DB HiTek Increases Production, Executes 65% of This Year's Investment Early in H1

8-Inch Foundry Market Boom... Expectations for Additional Investment Moves

[Asia Economy Reporter Suyeon Woo] Domestic foundry company DB HiTek has executed 65% of its annual investment plan early in the first half of this year, driven by the boom in its core business, the 8-inch foundry market. Amid the ongoing shortage of foundry supply in the market, there is also anticipation that DB HiTek will make additional investments to expand its production capacity, which has been raised to about 130,000 wafers per month.

According to DB HiTek's semi-annual report on the 3rd, the company invested 44.2 billion KRW in facilities during the first half of this year. This corresponds to 64.7% of the annual investment target of 68.3 billion KRW. The continued boom in the 8-inch foundry market is interpreted as the reason for advancing more than half of the facility investment into the first half of the year.

Considering the past investment trends, such as during the 2018 supercycle when the actual investment amount exceeded the initial plan, and last year's investment stance, it is highly likely that this year’s investment will also exceed the initial target. In 2018, DB HiTek set an annual investment target of 95.8 billion KRW but actually invested 98.3 billion KRW, 2.5 billion KRW more than planned. Last year, the company spent 91.1 billion KRW, exceeding the original plan of 70.1 billion KRW by a remarkable 30%.

With the investment expansion in the first half of this year, DB HiTek's production capacity surpassed 130,000 wafers per month. As of the first half, the production capacity reached 132,000 wafers per month, marking a 12.8% increase over the past three years. DB HiTek aims to increase this to about 140,000 wafers per month by the end of the year through steady investments.

The reason DB HiTek continues to expand production capacity is that it has confirmed solid demand in the 8-inch foundry market. The operating rates of the Bucheon and Sangwoo plants in the first half were 100% and 97%, respectively, maintaining full operation. Additionally, recent price hikes by global foundry companies such as TSMC are favorable factors for DB HiTek.

DB HiTek is actively targeting the 8-inch foundry market, focusing on high value-added system semiconductors such as power semiconductors, sensors, and display driver chips. The company has also introduced the ‘Your Fab system,’ which allows customers to monitor semiconductor process progress in real time, enhancing customer convenience and enabling immediate resolution of process issues, earning positive responses from the industry.

A DB HiTek official stated, "We are solidifying our position as an analog semiconductor foundry in the rapidly growing Chinese fabless market and the Japanese market, where fab-lite (reduction of production facilities) trends are increasing, thereby increasing orders centered on large customers."

Choi Doyeon, a researcher at Shinhan Financial Investment, said, "Due to price increases and production capacity expansion effects, significant performance improvements are expected this year and next year as well. Foundry price hikes are expected to continue at least until the first quarter of next year, and DB HiTek's production capacity is also expected to increase to about 145,000 wafers per month next year."

This content was produced with the assistance of AI translation services.