Foundry DB HiTek Wants to Double Display Driver IC Business Through New Spin-Off

As part of the growing focus on South Korea’s technology industry on OLED display manufacturing, DB HiTek, a South Korean semiconductor company, is still on track, this month, with its plans to spin off its semiconductor design business and develop it into an entity comparable to its flagship foundry business. The ‘brand division,’ an offshoot of what was an internal division that, among its many strengths, developed display driver ICs (DDIs), is set to become an independent corporation within this year. Currently, the division has 150 employees and generates sales between KRW 300 to 400 billion ($227-303 million).

The design division is anticipated to expand its product portfolio with TV, mobile, and IT OLED DDI, as well as strengthen its offerings with power management semiconductors (PMIC) and image sensors. The company plans to increase its design staff from 70 to over 100 and may relocate the brand division from the Bucheon plant to Pangyo. DB HiTek is also hiring staff for various fields, such as DDI application and device design, to enhance the competitiveness of both the brand and foundry divisions.

Gyu-cheol Hwang, former managing director of Samsung Electronics, has been appointed as the head of the brand division. Having worked at Samsung for over 30 years, Hwang will reportedly serve his first CEO position after the spin-off. DB Group aims to reorganize its semiconductor business with foundry and semiconductor design as the two major axes, and grow the design business to match its KRW 900 billion ($682 million) foundry business. Last year, DB HiTek won Samsung as a client for its DDIs for mobile computers and TVs. Samsung had been looking to diversify away from Magnachip because of supply chain concerns.

Some years ago, Synaptics sold its Asia-based mobile LCD TDDI (touch and display driver integration) business to Hua Capital for $120 million in cash. The decision was in line with Synaptics’ strategy to focus on differentiated franchises and invest in areas that could deliver more profitable long-term growth, leading to greater shareholder value. Synaptics continued to invest in technologies for the premium segments of the mobile market, where its advanced touch controllers and DDICs (Display Driver ICs) delivered the best performance. In this instance, DB HiTek faced a little uncertainty when it initially stated its plans to create the spinoff last year because of a shareholder revolt. It seems like DB HiTek has assuaged the fears, and while it will not be listing the company on the stock exchange in South Korea, it has hopes of a future IPO.