Chip foundry DB Hitek reaches 46% operating margin rate in 2022

DB Hitek said on Wednesday that it recorded 1.67 trillion won in revenue and 768.7 billion won in operating profit for the entire year of 2022.

Revenue and operating profit jumped 38% and 93%, respectively, from the previous year.

Operating margin rate stood at an impressive 46% __ close to foundry market leader TSMC’s 52%.

DB Hitek that it secured competitiveness in cost and power management IC technologies for the strong earnings.

Demand for high-end products from the industrial and automobile sectors also helped the results, the South Korean chip company said.

However, it is likely that the company will face a more challenging year in 2023 due to the global economic downturn.

Foundries are seeing their operation rate nosedive from the lowered demand for chips.

DB Hitek’s operation rate for its fabs currently stands between 70% to 80%, sources said, a significant drop from last year’s 90%.

It has also lowered the unit prices for some of its products in response, they added.

DB Hitek also separated its display driver IC brand business unit and the foundry business unit.

DB Hitek vice chairman and CEO Choi Chang-sik also stepped down from his position; new CEOs Cho Gi-seok and Hwang Kyu-chul will each run the new business units.

The display driver IC unit faces a stiff challenge as the lowered demand for display panels has also caused demand for the chips to drop.

The company will also need to find new revenue growth from its GaN and SiC businesses.

Most vendors are shifting from 4-inch wafers to 6-inch wafers for the materials but DB Hitek is planning to migrate directly to 8-inch wafers, the most advanced phase.