DB HiTek Reports Record Q1 Operating Profit of 181.5 Billion Won...8-Inch Semiconductor Hero (Comprehensive)

Benefits from Prolonged Semiconductor Shortage
8-Inch Wafer Profits Surge
Annual Sales Expected at 1.7 Trillion Won
New Business Focuses on Power Semiconductors

[Asia Economy Reporters Jin-ho Kim and Sun-mi Park] DB HiTek continued its record-breaking performance in the first quarter of this year, leveraging its foundry (semiconductor contract manufacturing) competitiveness specialized in 8-inch (200㎜) processes. This valuable achievement was made in the first quarter, typically considered a semiconductor off-season, and significantly exceeded market expectations.

DB HiTek announced on the 13th that its sales and operating profit for the first quarter of this year were 395 billion KRW and 181.5 billion KRW, respectively. This represents a 62.1% increase in sales and a 199.62% increase in operating profit compared to the same period last year.

DB HiTek, which surpassed 1 trillion KRW in sales for the first time last year after 20 years of entering the foundry business, has grown into a key affiliate responsible for the cash cow within the DB Group. Given the record-breaking performance in the first quarter, there are forecasts that this year’s sales will reach around 1.7 trillion KRW.

The driving force behind this success is the 8-inch (200㎜) foundry. Semiconductor wafers have evolved from 6-inch and 8-inch to 12-inch (300㎜), and as wafer size increases, their applications broaden, leading to a reduced position for 8-inch products since the advent of 12-inch wafers. In fact, global major foundry companies, including Samsung Electronics, are focusing on producing 12-inch (300㎜) wafers, which have higher added value.

However, due to the ongoing supply shortage of 8-inch analog semiconductors used in automobiles, home appliances, laptops, and PCs, the benefits have concentrated on DB HiTek, which has strengths in producing 8-inch wafers through a multi-product, small-volume production method.

DB HiTek plans to focus solely on 8-inch production, which is currently operating at full capacity, and will not invest in 12-inch production for the time being. A DB HiTek representative dismissed the possibility of 12-inch investment, stating, "We are not considering it," and explained, "DB HiTek focuses on analog semiconductors overall through a multi-product, small-volume production method, so our investment strategy differs from TSMC and Samsung Electronics, which focus on small-product, large-volume production centered on 12-inch wafers."

The industry expects the shortage of 8-inch foundry capacity to continue for the next two to three years. Accordingly, DB HiTek’s strong performance is also expected to continue for the time being.

Meanwhile, DB HiTek identifies SiC and GaN-based power semiconductors as future growth engines. Based on the technological expertise accumulated in its existing power semiconductor (PMIC) business, the company has been developing process technologies for SiC and GaN-based power semiconductors, which have high added value and high entry barriers, since last year. These semiconductors, which offer high power efficiency and durability, are next-generation products widely used in artificial intelligence (AI), 5G mobile communications, and the rapidly growing electric vehicle market. However, considering that development is still in the early stages and that process development and customer acquisition will require two to three years, mass production is expected to be possible around 2024.

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