Wonik Group, Will It Acquire Semiconductor DDI TLI?

Wonik D2I Shows Intent to Expand DDI Business with TLI Acquisition
TLI Major Shareholder: "No Ongoing Matters but Positive Review"

Wonik Group is set to acquire TLI, a fabless company specializing in display panel driver chip design. According to investment banking (IB) industry sources on the 12th, Wonik Group has shown interest in acquiring TLI. A TLI representative stated, “There are no concrete developments yet,” but added, “It is true that Wonik Group has made contact regarding the acquisition and has requested a price proposal.”

TLI is a semiconductor manufacturing company focused on high-performance display-related products, primarily developing key components for display panel driving such as Timing Controllers (TCON) and Display Driver ICs (DDI). These components receive video signals to be displayed on the screen and convert them into the necessary voltage and current signals for the panel. Simply put, they are essential semiconductor materials that enable images to appear on the panel. Due to the high level of technology involved, the market entry barriers are quite high.

Wonik Group’s active interest in acquiring TLI is closely related to its efforts to expand its DDI business. Wonik Group has traditionally focused on semiconductor, display, and battery manufacturing equipment and materials businesses. However, at the end of last year, it expanded into the DDI sector by acquiring Design to Innovation (now Wonik D2I), a fabless company specializing in display driver chips.

Industry insiders believe that Samsung Display’s influence played a role in Wonik’s entry into the DDI business. As the base for organic light-emitting diode (OLED) technology expands, disruptions in DDI supply have caused production issues for panels. It is analyzed that Samsung requested Wonik, with whom it has a close cooperative relationship, to secure a stable supply chain. Currently, Samsung has partnered with Wonik D2I, LX Semicon, and DB HiTek to secure DDIs used in mobile, watch, notebook, and TV panels. Wonik D2I specializes in small DDIs used in mobile tablet panels produced by Samsung Display.

In this context, if Wonik Group acquires TLI, which produces medium-to-large DDIs used in notebook and TV panels, it will secure businesses related to both small and medium-to-large DDIs. An industry insider hinted, “If Wonik D2I and TLI merge, they could become a company capable of producing DDIs for all IT devices, similar to LX Semicon, which likely explains Wonik Group’s interest in TLI.”

Representatives from TLI have also responded positively. Currently, TLI’s largest shareholder is a small shareholder coalition called the “Turnaround Shareholders’ Union” holding 16.54%, while the founder and former CEO Kim Dalsu holds 15.8% of the shares. The small shareholder coalition, which secured management rights by ousting former CEO Kim Dalsu at last year’s extraordinary general meeting, has stated it will make the best choice for the future. Currently, TLI is under a trading suspension after receiving a qualified audit opinion last year due to allegations of breach of duty and embezzlement involving key executives including former CEO Kim Dalsu. As of the end of last year, the company recorded an operating loss of approximately 6.6 billion KRW, with prolonged deficits and unresolved management disputes with Kim Dalsu, meaning more time is needed to stabilize the company.

A representative of the shareholder coalition said, “Although no specific discussions have taken place yet, considering the company’s future under the current circumstances, the shareholder union is likely to support the acquisition.” It is also reported that former CEO Kim has a close relationship with Wonik Group Chairman Lee Yong-han. During the management dispute in June last year, Kim entered into a collateral agreement with Lee’s personal company, Horizon Capital, pledging 1 million shares as collateral to receive 5 billion KRW.