DB Hitek to Spin Off Non-Wafer Chip Business, Focusing on Wafer Foundry Services

DB Hitek, a major player in the South Korean semiconductor industry, has announced plans to spin off its non-wafer chip business. The company will focus on its core business of chip manufacturing operations, in response to a drop in demand caused by the global economic downturn. This decision comes as a way to improve its production efficiency and streamline its operations.

The non-wafer chip business of DB Hitek includes the design and production of chips that are not fabricated on silicon wafers, such as memory chips and microcontrollers. The new company formed from the spin-off will be solely focused on these types of chips, while DB Hitek will concentrate on wafer foundry services.

According to a report by The Elec, DB Hitek has stated that the newly-formed company will not be listed on the stock market. Instead, the company will operate as a subsidiary of DB Hitek. The proposal to split the business must be approved at a shareholder meeting later this month, which may face opposition from small shareholders.

DB Hitek has been considering becoming a pure wafer foundry enterprise in the chip industry for some time. The company cited examples such as Taiwan Semiconductor Manufacturing Company (TSMC), which focuses solely on wafer foundry services and does not compete with non-wafer fab customers. By spinning off its non-wafer chip business, DB Hitek hopes to improve its competitiveness and provide better services to its customers in the wafer foundry market.

Last year in August, DB Hitek announced plans to divest its own IC design department, with the aim of strengthening the professionalism of each business unit and carefully examining the conflicts of interest between the IC design and foundry businesses. Various strategic plans are still being considered, and specific details and timelines have not been determined yet.

This news is of significant interest to electronic components distributors who work with DB Hitek. However, the company has stated that it will continue to provide its customers with high-quality wafer foundry services, and the spin-off will not affect the existing wafer foundry operations of DB Hitek.