DB HiTek's factory in Bucheon. [DB HiTek]
DB HiTek's factory in Bucheon. [DB HiTek]

DB HiTek said Wednesday its second-quarter consolidated sales reached 414.5 billion won ($290 million) and operating profit came in at 105.2 billion won, driven by rising demand for automotive and industrial power semiconductors. The operating margin stood at 25 percent.

DB HiTek, whose core business is 8-inch foundry — contract manufacturing of semiconductors — is benefiting from a spillover effect as TSMC and Samsung Electronics scale back their 8-inch operations.

The 8-inch foundry process is a legacy technology that produces chips on 200-millimeter wafers. Both TSMC and Samsung Electronics have been shifting focus to the more profitable 12-inch (300-millimeter) foundry segment, which offers greater surface area and higher yields.

As a result, overall production capacity in the 8-inch foundry industry has declined, while orders for power semiconductor contract manufacturing have continued to grow, keeping DB HiTek running at effectively full capacity.

DB HiTek said the strong earnings growth also reflected price increases it pushed through in the first half of this year. Second-quarter sales and operating profit rose 23 percent and 43 percent, respectively, from the same period a year earlier. China accounted for 62 percent of revenue.

Although 8-inch foundry is less productive than its 12-inch counterpart, power semiconductors, image sensors and display driver ICs are still manufactured using the older process.

DB HiTek expects favorable pricing to continue in the second half, as the supply shortage in the 8-inch foundry market shows no sign of easing.

Chinese foundry firms SMIC and Hua Hong are also moving to transition to 12-inch production in line with Beijing's chip self-sufficiency drive, which is expected to tighten 8-inch supply further.

Adding to the demand picture, contract manufacturing orders from emerging sectors — including AI data centers, robots and drones — have also been rising.

"We plan to accelerate market expansion centered on new growth areas such as AI data centers and robots to further strengthen profitability, while pressing ahead without delay on our ongoing capacity expansion to actively meet customer demand," a company official said.

The company also said it plans to pursue additional price increases in the second half.


joze@heraldcorp.com