[Peace&Chips] Standing Alone from DB HiTek 'DB Global Chip'... A Difficult but Necessary Path

DB HiTek Brand Division Physical Spin-off.
Focus on High-Value-Added DDI Business Such as OLED Predicted.
Will Korean Companies Increase Market Share in the Global DDI Market?

The DB HiTek spin-off issue, which has been a hot topic since last year, has taken a pause. On the 2nd, DB HiTek announced that it has completed the physical division of its brand business unit, which was responsible for its fabless (semiconductor design) business, and launched it as a subsidiary.

The brand business unit was previously referred to as 'DB Fabless (tentative name),' but it has now officially been named 'DB Global Chip.' DB HiTek also expressed its ambition to enhance corporate value by strengthening fabless expertise separately from its main foundry (semiconductor contract manufacturing) business.

DB Global Chip has focused on the design business of display driver ICs (DDI). DDI is a type of system semiconductor that controls pixels on displays to express colors. Simply put, it is a core component that drives the screens of smartphones, tablet PCs, and TVs.

DB HiTek Bucheon Campus Exterior / Photo by DB HiTek

Since DDIs are essential for IT devices and home appliances such as TVs, related companies enjoyed a COVID-19 boom. However, from the second half of last year, as the global economic downturn intensified, the DDI market has also contracted.

According to market research firm Omdia, the DDI market revenue in Q3 last year was $2.5 billion, down 30.19% from $3.581 billion in the same period the previous year. In Q4, it recorded $2.48 billion, continuing the decline.

For DB Global Chip, this is a challenging market environment at a time when it needs to show new achievements. Especially, the opposition from the market, including minority shareholders, during the separation process from DB HiTek has increased the company's burden.

In this situation, DB Global Chip has announced plans to diversify its DDI business. While it previously focused on LCD-based DDI, it now aims to strengthen its OLED-based DDI business, which has higher added value.

In particular, it plans to increase DDI products used in OLED smartphones and establish itself as a major supplier in the display industry. For its mid- to long-term business vision, it has also announced plans to enter the new market of miniLED TVs.

If DB Global Chip's blueprint is realized, it could be good news not only for the individual company but also for the domestic fabless industry. Currently, there are no large-scale fabless companies in the domestic industry. Samsung Electronics and LX Semicon hold significant shares in the DDI market, but they have not yet achieved competitiveness comparable to the memory industry.

As of Q4 last year, the global DDI market share was ▲Samsung Electronics (33.6%) ▲Novatek (18.8%) ▲LX Semicon (12.3%) ▲Himax (7.6%) ▲Raydium (5.2%) in that order. If DB Global Chip adds its name to the major rankings, it could help strengthen the competitiveness of the domestic fabless industry. We should pay attention to what achievements it will show in the future.