BusinessKorea: DB HiTek in dilemma over foundry expansion

According to Business Korea, the foundry DB HiTek recently received a request from corporate customers to expand its wafer line in Encheng, Chungcheongbuk-do, South Korea. Although DB HiTek stated that it would consider expanding its production capacity, it is not willing to make a decision on this for the time being.

Eight-inch foundries have been in short supply since 2020. In particular, automotive semiconductors have been in a serious shortage, and foundry prices have soared. According to a report by DB HiTek, the price of high-end 0.13 micron products was US$5,511 in the first quarter, a 2.6 times increase from the US$1,500 in 2020.

As the world’s top ten wafer foundries, DB HiTek’s wafer fabs have been operating continuously since 2020 to meet urgent orders. Its capacity utilization rate in the first quarter reached 98.9%, and a total of 377,244 wafers were processed, an increase of 58% from the first quarter of 2019.

Business Korea pointed out that although it is natural to expand more factories when demand exceeds supply, DB HiTek cannot hastily expand its facilities. Although the shortage is expected to continue until 2023, the construction of new production lines will not be completed until 2024. In other words, when the new production line stabilizes and mass production of products begins, the wafer market may enter a down cycle.