2025. 2. 10. 14:54ㆍKorean Economy
DB HiTek is set to ramp up investments in new business areas such as power semiconductors this year. As growth opportunities in its core 8-inch foundry business become increasingly limited, the company is accelerating its efforts to commercialize future growth drivers.
According to DB HiTek's latest investor relations (IR) materials released on the 7th, the company plans to commence mass production of silicon capacitors in June. These capacitors function like a “dam” in electronic circuits, ensuring a stable flow of current. They are expected to replace multilayer ceramic capacitors (MLCCs) in the future, offering advantages such as higher signal speed and accuracy.
To manufacture these components, DB HiTek is expected to utilize its Eumseong facility in North Chungcheong Province. Currently, Samsung Electro-Mechanics is the only other company in Korea engaged in silicon capacitor production, highlighting the high entry barriers in this sector.
New Revenue Stream from Silicon Capacitors
DB HiTek expects silicon capacitor sales to be reflected in its financial statements starting this year, although the initial revenue scale is projected to be modest. As part of its previously announced corporate value enhancement plan, the company estimated that its silicon capacitor foundry business would generate only $1 million (KRW 1.4 billion) in revenue in 2024. However, it anticipates a significant expansion, projecting revenues to reach $140 million (KRW 202.5 billion) by 2030.
Additionally, the company is set to begin sample production of gallium nitride (GaN) power semiconductors in April, a next-generation power semiconductor technology. Some industry observers speculate that mass production could start as early as the second half of this year. In the long run, the GaN business is expected to become a key revenue driver for DB HiTek.
Shifting Focus Amidst Foundry Growth Limitations
DB HiTek is doubling down on new business initiatives as growth in its traditional 8-inch foundry business faces limitations.
In Q4 2023, the company recorded KRW 283.4 billion in revenue and KRW 39.5 billion in operating profit, reflecting year-over-year declines of 1% and 12%, respectively. While DB HiTek aims to increase its 8-inch foundry utilization rate from the mid-70% range last year to above 80% this year, analysts remain skeptical about any significant improvement in profitability.
The company previously considered expanding into 12-inch (300mm) foundry production as part of its long-term growth strategy. However, due to the substantial upfront investment costs, the project has been indefinitely postponed. This urgency has led DB HiTek to prioritize monetizing new business segments, such as power semiconductors.
An industry insider commented, "DB HiTek’s stock performance has been stagnant recently, largely due to concerns over the prolonged weakness in the legacy foundry business. The company urgently needs to establish new businesses as growth drivers."