KOSPISemiconductors000990

DB HiTek

₩141,200▼ 0.91%2026-10-02 close

Market Cap

₩6.1T

Turnover

₩44.6B

Volume

320K

Shares out.

43.5M

PER

10.8×

PBR

1.6×

EPS

₩8,313

Dividend Yield

0.90%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩810 per share · Prices as of the 2026-10-02 close

Report overview

Full 8-Inch Utilization, Price Hikes and a Capex Crossroad

DB HiTek lifted its first-half 2026 margins through near-full utilization and price hikes in the 8-inch supply gap left by Samsung Electronics and TSMC, while simultaneously carrying the burden of a large capacity build-out and unresolved governance questions.

1
Confirmed second-quarter 2026 revenue of 399.4 billion won and operating profit of 108.4 billion won lifted the operating margin to around 27%, the highest of the five quarters provided.
2
On an annual basis, 2025 revenue of 1,397.2 billion won and operating profit of 277.3 billion won (19.8% margin) marked a recovery in both scale and margin from 2024 (1,131.2 billion won, 190.8 billion won, 16.9%).
3
The company guided for utilization above 98% and said it began raising power-semiconductor prices for China-bound products from the second quarter (Herald Business, May 2026).
4
The company says completion of the Sangwoo campus cleanroom expansion will raise 8-inch monthly capacity by 23%, from 154,000 wafers to about 190,000.
5
Governance items, including how treasury shares are used and the holding-company conversion requirements facing DB Inc., remain unsettled variables.

Business structure

DB HiTek is a system-semiconductor foundry centered on 8-inch (200mm) wafers, and it is a top-ten global foundry with roughly 400 customers worldwide.

Its core competitiveness lies in high-voltage BCD (Bipolar-CMOS-DMOS) power-semiconductor technology, with power management ICs, display driver ICs and image sensors representing the main product families made on 8-inch lines.

The business splits into a foundry division handling contract manufacturing and a fabless division doing in-house chip design.

Based on the company's second-quarter 2026 announcement, foundry revenue rose 16% year on year and the design (fabless) division grew 35%; the sum of the two is before elimination of intercompany transactions, so it differs from confirmed consolidated revenue.

In the product mix, power semiconductors (BCD) accounted for 69% of total revenue, while by application the industrial and automotive share rose to 31% from 29% a year earlier, up 2 percentage points.

Manufacturing runs from two sites, the Bucheon campus in Gyeonggi and the Sangwoo campus in Eumseong, Chungbuk, with Bucheon at 91,000 wafers per month and Sangwoo at 63,000, for a combined 8-inch capacity of 154,000 wafers per month.

Competitors include China's SMIC and Hua Hong plus domestic peers such as SK keyfoundry, while Samsung Electronics and TSMC focus on 12-inch leading-edge nodes even as power semiconductors, image sensors and display driver ICs are still built on 8-inch lines.

The company is also broadening its process portfolio into next-generation compound semiconductors such as SiC and GaN, targeting electric-vehicle and AI data-center applications.

Earnings trend

Quarterly revenue · Operating profit

₩337.4B₩73.8B25Q2₩374.6B₩80.6B25Q3₩387.8B₩70.4B25Q4₩374.6B₩63.7B26Q1₩399.4B₩108.4B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩1.7T₩768.7B2022₩1.2T₩265.4B2023₩1.1T₩190.8B2024₩1.4T₩277.3B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩337.4B	₩73.8B	21.9%
2025Q3	₩374.6B	₩80.6B	21.5%
2025Q4	₩387.8B	₩70.4B	18.1%
2026Q1	₩374.6B	₩63.7B	17.0%
2026Q2	₩399.4B	₩108.4B	27.1%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩1.7T	₩768.7B	₩558.8B	45.9%	34.1%	29.6%
2023	₩1.2T	₩265.4B	₩264.1B	23.0%	15.2%	17.4%
2024	₩1.1T	₩190.8B	₩229.5B	16.9%	11.8%	19.8%
2025	₩1.4T	₩277.3B	₩256.1B	19.8%	12.0%	33.4%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

On confirmed numbers, 2025 consolidated revenue was 1,397.2 billion won with operating profit of 277.3 billion won, a 19.8% operating margin, improving on both scale and margin versus 2024 revenue of 1,131.2 billion won and operating profit of 190.8 billion won (16.9% margin).

Still, against 2022 revenue of 1,675.3 billion won and operating profit of 768.7 billion won (45.9% margin), profit remains well below half that peak, reflecting a recovery phase after the downturn through 2023 (1,154.2 billion won and 265.4 billion won, 23.0%) and 2024.

Net profit attributable to owners fell from 264.1 billion won in 2023 to 229.5 billion won in 2024 before rising to 256.1 billion won in 2025.

Quarterly, revenue climbed from 337.4 billion won with 73.8 billion won operating profit in the second quarter of 2025 to 374.6 billion won and 80.6 billion won in the third and 387.8 billion won and 70.4 billion won in the fourth, yet the margin slipped to around 18%.

First-quarter 2026 revenue of 374.6 billion won came with operating profit of 63.7 billion won, compressing the margin to about 17%; Sangsangin Investment and Securities noted in a May 2026 report that a 22.1 billion won treasury-share disposal for an employee welfare fund contribution was booked as a one-off cost.

In the second quarter of 2026, revenue of 399.4 billion won and operating profit of 108.4 billion won pushed the operating margin to roughly 27%, the highest of the five quarters supplied, while net profit attributable to owners widened to 108.0 billion won.

The company attributed this to rising automotive and industrial power-semiconductor demand plus added volume from new growth areas such as AI data centers and robotics, improving the product mix and lifting the share of high-value products.

On the balance sheet, 2025 operating cash flow of 356.97 billion won was slightly below 2024's 382.63 billion won, while total liabilities rose from 396.2 billion won to 748.6 billion won, taking the debt-to-equity ratio from 19.8% to 33.4%.

Within total equity of 2,244.0 billion won, non-controlling interests stood at 101.6 billion won, up from zero in 2023, another marker of change in the consolidation structure.

Industry analysis

The 8-inch foundry market is in a phase of structurally shrinking supply.

According to TrendForce, as Samsung Electronics and TSMC rapidly cut 8-inch capacity from the second half of 2025, average 8-inch utilization among the top ten foundries is set to move from about 80% in 2025 to near 90% in 2026, and Omdia projects global 8-inch monthly capacity declining from 3.04 million wafers in 2026 to 3.02 million in 2028.

On pricing, TrendForce expects average 8-inch foundry prices to rise 5-20% year on year in 2026, and DB HiTek said it has been implementing power-semiconductor price increases in China from the second quarter.

On the demand side, power semiconductors are spreading beyond mobile and appliances into power-hungry sectors such as AI data centers, robotics and automobiles, and Mordor Intelligence projects the global power-semiconductor market growing from about 59.98 billion dollars in 2026 to 78.25 billion dollars in 2031, a 5.46% annual rate.

Cases such as Texas Instruments raising power-management IC prices by 15% to as much as 85% in 2026 and Infineon lifting flagship product prices by around 15% are cited as evidence of tight power-semiconductor supply.

Conversely, the pattern in which orders that China's SMIC and Hua Hong cannot absorb flow through to DB HiTek cuts both ways should Chinese capacity additions and localization policy advance.

Sangsangin Investment and Securities, in a May 2026 report, flagged China's BCD self-sufficiency policy alongside moves by SMIC and Nexchip.

In addition, analyst Lee Su-rim of DS Investment and Securities projected global 8-inch foundry output falling 2.4% year on year in 2026, noting that uncertain second-half electronics demand could differentiate utilization and pricing by player, but that this company is more exposed to power, appliance, industrial and automotive cycles and can therefore benefit from an improving environment.

Outlook

Management's stated direction pairs sustained utilization with capacity expansion. DB HiTek guided for utilization staying above 98% this year, with expectations that rising power-semiconductor orders keep the fabs effectively full through the year.

Expansion centers on the Sangwoo campus cleanroom: the new cleanroom adds about 35,000 8-inch wafers per month and will produce GaN, BCDMOS and SiC, taking capacity 23% higher from 154,000 to 190,000 wafers on completion.

On spending, the Sangwoo cleanroom expansion is disclosed at 271.5 billion won with 165.9 billion won executed in 2025, and the company formalized a 1.5 trillion won five-year investment plan at a national semiconductor strategy briefing in December 2025.

On shareholder returns, it filed a corporate value-up plan on April 30, 2026, citing a 2025 total return ratio of 31.4%, targeting a 20% payout ratio and total shareholder return above 25%, and earmarking 2 trillion won over five years for future investment, while planning to cancel an additional 592,000 treasury shares, equal to 1.4% of stock.

On next-generation processes, technology development head Lee Sang-ki said at a Semicon Korea seminar in February 2026 that GaN would enter volume production around year-end with a process design kit due in April 2027.

The company ran SiC and GaN multi-project wafers in December 2025, producing designs for more than ten customers each, with customer evaluation under way and full production planned for 2027.

On pricing, reports indicate a second round of increases in the second half extending to display-driver-IC process products after first-half hikes, and Sangsangin Investment and Securities projected 2026 consolidated revenue of 1,602.2 billion won and operating profit of 355.3 billion won (22.2% margin) in a May 2026 report.

Valuation

PER

10.8×

PBR

1.6×

ROE

15.9%

EPS

₩8,313

BPS

₩56,788

Dividend per share

₩810

Based on the last four quarters of earnings, the shares trade on a price-to-earnings multiple in the low double digits, sitting between the higher multiple of the depressed 2024 earnings phase and the lower multiple of the outsized 2022 profit phase.

Relative to book value the stock carries a premium, and because the resulting book multiple varies with whether owners' equity or total equity is used and how treasury shares are treated in the share count, the on-screen metric and the exchange-published figure should be read side by side.

The dividend yield sits below the market average, reflecting a structure in which earnings are allocated first to capacity expansion and treasury-share policy rather than dividends.

The company disclosed a 31.4% total shareholder return ratio for 2025 while targeting a 20% payout ratio and total shareholder return above 25%, so actual execution of that policy is one axis of the valuation debate.

The earnings direction has moved from contraction in 2024 to recovery in 2025 and margin improvement in the first half of 2026, but foundry profit is sensitive to utilization and pricing, and that quarter-to-quarter volatility belongs in any reading of the multiple.

Added depreciation from the expansion and the early-stage cost burden of compound semiconductors are further variables shaping the future earnings base.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

A structural gap created by shrinking 8-inch supply

TrendForce expects average 8-inch utilization among the top ten foundries to move from about 80% in 2025 toward nearly 90% in 2026 as Samsung Electronics and TSMC cut 8-inch capacity. Omdia likewise sees global 8-inch monthly capacity slipping from 3.04 million wafers in 2026 to 3.02 million in 2028.

In a market where supply is not growing, the company guided for utilization above 98%, a condition that supports margins through fixed-cost absorption. Analysis also suggests the two majors' shift toward leading-edge nodes leaves trickle-down benefits for 8-inch specialists.

Price increases and mix improvement moving together

The company said it has been raising power-semiconductor prices in China since the second quarter, and TrendForce expects average 8-inch prices to rise 5-20% year on year in 2026.

On mix, the industrial and automotive revenue share rose 2 percentage points year on year to 31%, while power semiconductors (BCD) made up 69% of total revenue. That combination aligns with the confirmed second-quarter 2026 operating margin reaching roughly 27%.

Reports also point to a second round of increases in the second half extending to display-driver-IC process products.

Expansion, next-generation processes and formalized returns

The new Sangwoo cleanroom adds roughly 35,000 8-inch wafers per month for GaN, BCDMOS and SiC, lifting capacity 23% from 154,000 to 190,000 wafers when complete.

SiC and GaN multi-project wafers produced designs for more than ten customers each and are under customer evaluation, with full production planned for 2027, leaving room to broaden applications. Financially, 2025 operating cash flow of 356.97 billion won underpins the investment program.

The value-up plan filed in April 2026 includes 2 trillion won of investment over five years and the cancellation of an additional 1.4% of shares held in treasury.

Bear factors

Legacy cycle and uncertain end demand

Because 8-inch foundry profit is tied directly to utilization and pricing, margins can retrace quickly if end demand weakens. DS Investment and Securities noted that uncertain second-half electronics demand could differentiate utilization and pricing across players.

Confirmed results already show such a case: fourth-quarter 2025 revenue rose to 387.8 billion won while operating profit fell to 70.4 billion won, taking the margin down to about 18%. Whether price increases trigger customer pushback or volume adjustments also needs monitoring.

The double edge of Chinese competition and localization

Today, orders that SMIC and Hua Hong cannot absorb flow to DB HiTek, but that same channel can reverse as Chinese capacity additions progress. Sangsangin Investment and Securities cited China's BCD localization policy alongside moves by SMIC and Nexchip in a May 2026 report.

Given that much of the price increase began with China-bound volume, shifts in policy and competition feed straight into pricing power. Trade and export-control variables between the United States and China could also reshape customer allocation.

Capex burden and governance questions

On confirmed figures, 2025 total liabilities rose to 748.6 billion won from 396.2 billion won and the debt-to-equity ratio moved from 19.8% to 33.4%, while depreciation charges build as the expansion proceeds.

The company disclosed a plan to use its 4.16 million treasury shares through cancellation, exchangeable-bond issuance and employee compensation, with 2.22 million shares (54%) to be disposed via exchangeable bonds to fund the Sangwoo fab expansion and power-semiconductor production investment.

In response, commentary noted that with cancellation covering less than a third of treasury stock, the practical shareholder-return effect is limited. There is also a history of governance disputes, including a minority-shareholder coalition formed during the 2022 attempt to spin off the fabless business.

Risk factors

Demand and pricing cycle

Demand for 8-inch capacity tracks end-set demand for power semiconductors, display driver ICs and image sensors, so utilization and pricing can wobble together during inventory corrections.

DS Investment and Securities expects global 8-inch foundry output to fall 2.4% year on year in 2026 and flags scope for divergence among players. Confirmed results show quarterly operating margins swinging across a wide band from the 17% area to roughly 27%, so a single quarter's margin should not be read as a trend. It also bears noting that AI data-center and robotics volumes are still early in their share expansion.

Execution and investment risk

If the expansion and commercialization of next-generation processes slip, costs land ahead of revenue recognition.

NH Investment and Securities said in a December 2025 report that while both GaN and SiC are planned for initial volumes from the fourth quarter of 2026, GaN should progress faster because SiC requires added investment such as epitaxy.

With SiC and GaN customer evaluations under way and full production planned for 2027, yield and the pace of customer adoption are the crux. Legacy-specific equipment constraints, including the difficulty of sourcing 8-inch-dedicated tools, remain an execution variable.

Governance and capital allocation

The possibility of group-level governance restructuring has repeatedly been contentious from a minority-shareholder standpoint.

Reporting (Ilyo Shinmun, January 2026) noted that a rising share price revived discussion of DB Inc. meeting holding-company conversion thresholds and that concrete group preparation might be required, and fair-trade law requires a converting holding company to hold at least 30% of a listed subsidiary within two years.

DB Inc. disclosed open-market purchases of 200,000 shares for about 12.4 billion won across September-October and December 2025, equal to roughly 0.45% of shares outstanding, citing stable management control and medium-to-long-term investment returns.

The terms of any treasury-share exchangeable bond and follow-through on cancellation remain variables determining the substance of shareholder returns.

What to watch next

Early November 2026
Third-quarter preliminary results and the institutional briefing. Key checks are whether utilization holds above 98%, how much of the second-half price increase extended to display-driver-IC processes actually lands, and whether the roughly 27% operating margin of the second quarter persists.
Fourth quarter of 2026
Whether next-generation power semiconductors enter volume production. The head of technology development said GaN would reach volume production around year-end, and NH Investment and Securities projected initial volumes for both GaN and SiC in the fourth quarter, so schedule adherence and initial volume size are the checks.
Late 2026 to early 2027
Execution of treasury-share policy. The company said it plans to cancel a further 592,000 shares, or 1.4% of stock, while also disclosing a plan to dispose of 2.22 million shares via exchangeable bonds to fund the Sangwoo fab expansion, so the actual disposal and cancellation filings will determine the substance of returns.
February 2027
Confirmation of full-year 2026 results and the cash-dividend decision. This is the point to compare actual returns against the stated targets of a 20% payout ratio and total shareholder return above 25%, alongside changes in depreciation and leverage from the capex build.
First half of 2027
Progress on the Sangwoo expansion and governance-related filings. Watch the timeline under which completion lifts capacity 23% to 190,000 wafers, the GaN process design kit slated for April 2027, and any group-level decision on holding-company conversion.

Overall view

DB HiTek's recent results improved in step with a structurally shrinking 8-inch foundry supply base.

On confirmed figures, 2025 revenue of 1,397.2 billion won and operating profit of 277.3 billion won (19.8% margin) bettered 2024 (1,131.2 billion won, 190.8 billion won, 16.9%), and second-quarter 2026 revenue of 399.4 billion won with 108.4 billion won of operating profit lifted the margin to about 27%.

Even so, profit remains far below the 45.9% margin phase of 2022, and cases such as the first quarter of 2026, when a one-off cost sharply moved the quarterly margin, show that volatility persists.

TrendForce's outlook for rising 8-inch utilization and 5-20% price increases and the company's guidance for utilization above 98% are cited on the positive side, while Chinese localization and capacity additions, uncertain end demand, and higher depreciation and liabilities from the build-out sit on the other.

The 2 trillion won five-year investment and 1.4% treasury-share cancellation in the April 2026 value-up filing, together with the plan to dispose of 2.22 million treasury shares via exchangeable bonds, offer a lens on both capital allocation and governance.

What matters from here is whether price increases and mix improvement carry into the next quarter, whether the Sangwoo expansion and GaN and SiC production schedules hold, and whether the return policy is executed as disclosed. This report is for informational purposes and contains no buy or sell recommendation.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.