[CEO Rivals] 'Seoul National University' Alumni Leading Korea's Semiconductor Supply Chain... Bulldozer Salesman - Meticulous Materials Expert

DB HiTek-SK Siltron CEO Rivals

DB HiTek and SK Siltron operate businesses essential to South Korea's semiconductor supply chain. DB HiTek is a foundry (contract manufacturing) and fabless (design) company, while SK Siltron specializes in wafers (semiconductor substrates). DB HiTek manufactures semiconductors used in TVs, computers, mobile phones, and automobiles according to customer orders. SK Siltron produces wafers, the substrates on which numerous circuits are built for semiconductors. If semiconductors are pizza toppings, wafers are the dough that supports the toppings.

The leaders of the two companies are alumni born in 1964. Jo Gi-seok, CEO of DB HiTek, graduated from Seoul National University’s Department of Metallurgical Engineering, and Jang Yong-ho, CEO of SK Siltron, graduated from Seoul National University’s Department of Economics. It is said that they had no contact during their school days.

Although their paths differ, both share the trait of being 'multi-players.' CEO Jo is an 'engineering graduate turned salesperson.' He completed his bachelor's, master's, and doctorate all in metallurgical engineering. After entering the workforce, he reinvented himself as a salesperson who devoted his youth to turning the company profitable. CEO Jang is a 'liberal arts graduate turned semiconductor materials expert.' He mainly worked in mergers and acquisitions (M&A) at SK Inc., an investment company, before entering the semiconductor specialty gases business in 2015, becoming a key materials expert within the SK Group. Both share the commonality of not only knowing technology but also growing their companies through outstanding business capabilities.

Bold Salesman, 28 Years Dedicated to Foundry

"From my youth until now, I have run toward the goal of turning DB HiTek profitable."

This is how the DB Group introduced CEO Jo.

Summarizing opinions inside and outside the group about CEO Jo, he is described as a 'tough man' and a 'bulldozer.' His 'tough man DNA' was instilled by Vice Chairman Choi Chang-sik, who sent him to China as branch manager in 2013. According to insiders familiar with Samsung Electronics DS (semiconductor) division, where CEO Jo has about 30 years of experience, Vice Chairman Choi worked for 30 years at Samsung Electronics’ memory business unit and System LSI (high-density integrated circuits) business unit before becoming CEO of Dongbu HiTek, DB HiTek’s predecessor, in 2012. He was influenced by Kim Ki-nam, chairman of Samsung Electronics SAIT (formerly Comprehensive Technology Institute), known for encouraging subordinates to deliver results. CEO Jo was the 'sales expert' Vice Chairman Choi sent to China during DB Group’s management difficulties. In other words, he was the right person with tough man DNA sent to a challenging environment to deliver results.

During his time as China branch manager, CEO Jo reportedly ran the sales floor day and night, encouraging employees and increasing factory utilization rates. Although little is known about his hobbies such as drinking or sports, he is regarded as someone who got along well with partners and achieved sales results based on broad networking. Rather than recommending complacent rest, he encourages juniors to work actively for the company. This aligns with Vice Chairman Choi’s approach. An industry insider familiar with DB said, "CEO Jo has a hearty and straightforward personality," adding, "He often encourages juniors to work for the company based on strong loyalty."

Since joining DB HiTek in 1995, CEO Jo has focused solely on the foundry business for 28 years. He was one of three people who wrote the business plan when DB Group launched the 'S-Project' to start its semiconductor business in his first year.

The problem was that DB HiTek became a burden as DB Group collapsed. After starting the foundry business in 2001, it accumulated losses of 3 trillion won and debts of 2.3 trillion won over 13 years. It posted annual losses of about 200 to 300 billion won. Former group chairman Kim Jun-ki saved the company by investing 350 billion won of his own money, but within the group, it was labeled a "hard-to-sell affiliate." It was called a "sore spot" and "ugly duckling."

CEO Jo, who needed to create a turning point, reinvented himself as a salesperson. He is said to have encouraged colleagues like a commander leading the front lines. He said 2013 was the most impressive year in his 28 years at DB HiTek. In May of that year, he was appointed head of sales at the China branch. The company was in an emergency situation, undergoing restructuring by the Korea Development Bank and being listed for sale. Strange people came and went, and employees began to be unsettled.

To save the company, CEO Jo devoted himself throughout the year to increasing utilization rates by personally inspecting manufacturing lines. The following year, the company posted operating profits for the first time in 13 years since its establishment. CEO Jo said, "Even for customers with small volumes, I did my best for business success."

Meticulous Materials Expert, Foundation for SK Siltron’s Leap

CEO Jang is known for having very little publicly available information in the semiconductor and investment industries. However, he is evaluated as someone who values employee welfare and handles tasks meticulously. Employees remember him as the leader who declared 'Happy Management' at SK Siltron in 2020.

At the end of September 2020, when concluding wage and collective agreements, CEO Jang said, "This year is the first year of happy management." It was not just words. He supported young employees to receive comprehensive health checkups and increased medical expenses coverage for workers and their families to 100%. He expanded the scope of allowances for technician and industrial engineer certifications and extended housing finance benefits to unmarried members. At the time, CEO Jang said, "Happiness is not something created temporarily but continuously."

He started his career at Yukong (now SK Innovation) and has nine years of experience in the semiconductor industry. Although his CEO tenure is relatively short, he is said to have studied semiconductors intensely enough to be recognized as a semiconductor materials expert within SK Group. Last year, SK Siltron announced investments of 1.0495 trillion won in a 12-inch (300mm) wafer facility in the Gumi National Industrial Complex 3rd Industrial Zone and 1.236 trillion won in a new silicon wafer production facility in February. CEO Jang is credited with enabling SK Siltron to make such large-scale investment announcements.

In 2015, CEO Jang led the M&A of OCI Materials (now SK Materials), a specialty gas company for semiconductors. Around that time, SK Group acquired LG Siltron (now SK Siltron) along with OCI Materials. After serving as president of SK Materials for two years, he has led SK Siltron for over three years since 2020. Within nine years of entering the industry, he has been recognized for contributing to SK Group’s localization of semiconductor materials, parts, and equipment and strengthening advanced materials business.

Challenges: Increasing Corporate Value and Expanding Global Market Share

Both are regarded within their groups as figures who laid the foundation for becoming 'global companies.'

DB HiTek declared it will become the 'Korean version of TSMC' by spinning off its display-specialized fabless subsidiary DB Global Chip. The goal is to increase corporate value to about 6 trillion won, with DB HiTek growing to 4 trillion won and DB Global Chip to 2 trillion won. As of the closing price on the 30th, DB HiTek’s market capitalization was 2.7527 trillion won. It needs to increase its corporate value by 45.3% to enter the 4 trillion won range.

SK Siltron plans to become the world’s number one in 12-inch wafer market share. It is currently third with 18.1%. It trails the top Japanese semiconductor materials company Shin-Etsu Chemical, which holds 29.8%, by 11.7 percentage points. In the high value-added silicon carbide (SiC) wafer market, SK Siltron aims to achieve a 25% market share by 2025. As of 2021, SK Siltron’s share was about 9%, fluctuating between third and fourth place. SK Siltron acquired DuPont’s SiC wafer business in 2019. CEO Jang’s mission is to raise SK Siltron’s SiC share to 25% within three years and increase corporate value. Last December, SK Siltron renewed CEO Jang’s term, stating it strengthened the organization to focus on corporate value-centered management.