DB HiTek to spend more to swap aged 8-inch equipment with new ones

DB HiTek CEO and vice chairman Choi Chang-sik said on Tuesday that the company intends to spend more in 2022 to replace aged 8-inch wafer equipment with new ones.

The chip foundry company has been replacing aged 8-inch wafer equipment for the past five years but has so far only managed to replace 30% of its total equipment, Choi said at the company’s annual shareholders’ meeting.

The company is expected to spend more than the 115.2 billion won it spent last year on equipment this year to maintain yield rate and meet the high demand, people familiar with the matter said.

DB HiTek was aiming to expand its 8-inch foundry capacity from the current 138,000 wafers per month to 150,000 wafers per month, Choi also said.

The company has been recording record earnings for the past three years thanks to the high demand for its 8-inch foundry service to produce power management ICs and microcontroller units.

Last year, DB HiTek recorded 1.21 trillion won in revenue and 399.1 billion won in operating profit, an increase of 29.8% and 66.8%, respectively, from 2020

South Korean analysts expect the company to record 1.5 trillion won in revenue this year, which will be an over 20% jump from 2021.

However, DB HiTek will need to aggressively acquire 8-inch wafer equipment as the lead time for them has extended due to the ongoing global chip shortage.