8-Inch Market Left by Samsung and TSMC... DB HiTek Runs Plants at Full Capacity

Major Players Reduce Legacy Foundry Share
AI Boom Drives Higher Demand Amid Shrinking Supply
Utilization Rate in the Mid-to-High 90% Range, Capacity Expansion Underway

DB HiTek is operating its production plants at virtually full capacity due to the surge in demand for power semiconductors driven by the proliferation of artificial intelligence (AI). In particular, as Samsung Electronics and Taiwan's TSMC are actively reducing their share of the 8-inch-based legacy foundry (semiconductor contract manufacturing) business, DB HiTek is expected to rapidly strengthen its position in the legacy market.

According to the semiconductor industry on January 20, DB HiTek has recently raised its factory utilization rate to the mid-to-high 90% range. The average utilization rate at the Bucheon and Sangwoo campuses remained at about 70% at the end of 2024, when the legacy foundry market began to recover, but rose to 92.6% in the third quarter of last year. DB HiTek has begun expanding capacity at the Sangwoo campus and is expected to maintain an average utilization rate exceeding 90% in the first half of this year as well.

DB HiTek Bucheon Campus view. DB HiTek

DB HiTek operates an 8-inch (200mm) foundry business. Compared to the latest 12-inch (300mm) process, this corresponds to a legacy process. As leading-edge processes require producing more chips on larger wafers, older processes have been pushed out. However, the spread of AI has rapidly increased demand for power semiconductors (power ICs) produced on 8-inch processes, which has driven up fab utilization rates.

In particular, as Samsung Electronics and TSMC focus on leading-edge processes based on 12-inch wafers, it is expected that DB HiTek will benefit even more. Samsung Electronics began reducing its 8-inch capacity last year, and TSMC also officially started reducing its production capacity from the same year. Both plan to completely close some fabs by next year. While Samsung, which already had low 8-inch utilization, and TSMC, which focuses on logic processes, do not directly overlap with DB HiTek in market position, the overall reduction in market capacity is generally expected to expand DB HiTek's opportunities.

In fact, according to market research firm TrendForce, global 8-inch semiconductor production capacity decreased by 0.3% last year compared to the previous year, and is expected to decline by an additional 2.4% this year. On the other hand, global 8-inch utilization rates are projected to rise significantly to 85-90%, compared to 75-80% last year. As supply decreases and demand increases, bargaining power in the 8-inch process is shifting to suppliers. Customers have placed orders earlier, anticipating possible production congestion, which has contributed to the rapid expansion of demand.

DB HiTek is rapidly improving its performance, recording an operating profit of 80.6 billion won in the third quarter of last year, a 71.1% increase compared to the same period the previous year. Its annual operating profit is expected to reach 280 billion won.

Additionally, DB HiTek plans to secure additional capacity of 35,000 wafers per month through the expansion of the Sangwoo campus. Although there have been reports of delays in obtaining permits for wastewater treatment facilities, the company explained that major schedules such as cleanroom construction are proceeding without setbacks. Full-scale mass production is expected to begin as early as the end of next year.

To counter the low-price offensive from Chinese companies, DB HiTek plans to rely on customer trust in areas such as delivery times and costs. An industry official stated, "While the market trend is quite favorable, there is not much technical differentiation from China in legacy processes. Delivery times, chip size reduction, and competitiveness in cost and yield are DB HiTek's strengths."