DB HiTek Withdraws Fabless Spin-off Plan Amid Shareholder Value Concerns

Suspension of Brand Division Spin-off Review Amid Expected Shareholder Opposition to Physical Division

DB HiTek Bucheon Campus View / Provided by DB HiTek

[Asia Economy Reporter Kim Pyeonghwa] As shareholders' collective actions continued over concerns about corporate value deterioration due to physical division, DB HiTek has abandoned its plan to spin off its fabless (semiconductor design) division.

According to the semiconductor industry on the 27th, DB HiTek has withdrawn the possibility of spinning off the brand business division responsible for fabless. DB HiTek announced the day before that "various strategic options, including considering the spin-off of the design business to strengthen expertise and competitiveness by business division," were reviewed, but "it has been decided to suspend the ongoing spin-off review process."

Earlier, DB HiTek had formalized its consideration of a spin-off to strengthen the expertise of the brand business division through a public disclosure in July this year. Although the method and timing of the division were undecided at the time, controversy grew as the possibility of a physical division was mentioned among shareholders.

DB HiTek shareholders showed actions such as establishing a non-profit organization for collective action, arguing that if a physical division occurs, the corporate value of the surviving company could decline. They also filed injunctions with the court to inspect and copy the shareholder register against the company. When some shareholders secured more than 10% of shares and appeared to proceed with litigation as shareholder representatives, DB HiTek eventually resolved the controversy by withdrawing the previous announcement.

A DB HiTek official explained, "There was recent controversy over shareholder value deterioration, and since legislation related to general shareholder protection policies has not been enacted, it was deemed inappropriate to proceed with the review at this time."

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