DB HiTek Co., a South Korean specialty chip foundry, has been swiftly filling the gap left in the legacy foundry market as Samsung Electronics Co. and TSMC pivot toward high-performing chips for artificial intelligence.
TSMC, the world’s largest contract chipmaker and Samsung Electronics are scaling back production of 200 millimeter (8-inch) wafers, which served as the backbone of semiconductor manufacturing from the 1980s through the early 2000s.
The two foundry leaders are now shifting toward 300 mm wafer fabrication for high-performance chips used in AI servers, smartphones and electric vehicles.
DB HiTek, the second-largest foundry operator in South Korea, has capitalized on the shift.
The company specializes in 200 mm wafer fabrication, used to produce legacy chips such as display driver ICs (DDIs) for TVs and power management ICs (PMICs) that regulate and distribute electrical power in electronic devices.
Rising demand for power semiconductors is proving a tailwind to DB HiTek, driving its operating profit 71% higher on-year to 47.1 billion won ($32 million) in the third quarter.
According to foundry industry sources, TSMC plans to cut its 200 mm capacity by up to 30% over the long term.
Samsung has already halved output at its Giheung campus in Gyeonggi Province and is considering further reductions. Both firms continue to serve existing customers, but are unlikely to expand legacy lines.
China’s aggressive pricing in the 200 mm segment, offering wafers for as little as $2,500, has also driven Samsung and TSMC to shift production to 300 mm nodes.
Advanced 300 mm wafer fabs produce graphic processing units and central processing units for AI servers, application processors for smart devices and autonomous driving semiconductors, using process nodes between 3 and 28 nanometers.
With demand for power semiconductor rising, DB HiTek plans to launch full-scale foundry operations for next-generation power semiconductors, including silicon carbide (SiC) and gallium nitride (GaN), using 200 mm wafers in the fourth quarter of next year.
