According to South Korean media,DB HiTek’s subsidiaryDB Global Chip is advancing its power management integrated circuit (PMIC) business as a new venture, but has not yet made significant progress. As competition in the display driver IC (DDI) sector intensifies,PMIC is under scrutiny to see if it can become a variable for performance improvement, with industry insiders suggesting a need to accelerate development.
DB Global Chip reported revenue of328.69 billion Korean won in the first quarter of this year, but incurred a net loss of15.53 billion Korean won during the same period. This figure represents a significant decline from the557 billion won revenue in the fourth quarter of last year. The company explained that since the fourth quarter of last year, the liquid crystal display (LCD) division experienced a “pull-in” effect, leading to poor performance in the first quarter of this year. Unlike the general early procurement effect seen in the semiconductor industry due to the US-China tariff dispute,DB Global Chip was affected earlier.
The company has recently entered the small and medium-sized organic light-emitting diode (OLED) DDI business with Samsung Display, expecting revenue related to OLED to increase starting in the second quarter.DB Global Chip has recently begun mass production of the “TED” (TCON embedded driver chip) for mobile phones, supplying it to Samsung Display, which is used in theGalaxy A26 model.
However, the company is currently facing an unfavorable situation. AlthoughDB Global Chip has supplied DDI to companies such as Samsung Display and BOE, competition among domestic companies in South Korea has intensified, leading to opinions that it is difficult for them to secure a stable position in theDDI industry. Magnachip, which was once a major DDI supplier for Samsung Display, has decided to liquidate its DDI business this year due to a sharp decline in market share caused by domestic competitors entering the supply chain. In the Chinese market, which is a major production area forLCD, Chinese companies are also targeting the DDI business with the goal of “domestic semiconductor production.”
Insiders have previously stated: “In theDDI field, competition intensity with domestic Chinese competitors continues to escalate,” and pointed out that “althoughDDI is a core business, there are long-term risks.” Market research firm Omdia predicts that the globalDDI market size will shrink from9.5 billion USD (approximately13.264 trillion Korean won) in 2023 to7.5 billion USD in 2030.
It is reported that to overcome the competitive challenges in theDDI business,DB Global Chip has been promoting the development of displayPMIC (power management integrated circuit) since last year. DB HiTek stated during its fourth-quarter earnings announcement last year that it would position displayPMIC as a future business and initiate preparatory work. To this end,DB Global Chip has continued to release recruitment announcements forPMIC design talent this year, following last year. There are also reports that the company is collaborating with Samsung Display on related projects. However, as of now, the mass production plan remains unclear.
PMIC is a chip that efficiently distributes power to various components of electronic devices. In recent years, as smartphone screen sizes have increased, the importance of displayPMIC for efficiently using power to enhance brightness and picture quality has grown significantly. According to data from market research firm Future Market Insights, the globalPMIC market size is expected to grow rapidly from31.2 billion USD in 2023 to57.9 billion USD in 2034.
Despite the significant growth potential in the market, considering that the parent company DB HiTek is one of the core businesses ofPMIC production, there are opinions thatDB Global Chip’sPMIC business could become a key opportunity for improving overall performance. Since thePMIC designed byDB Global Chip is likely to be produced byDB HiTek, this layout is expected to enhance the equipment utilization ofDB HiTek which has a wafer fab.
Industry insiders have stated: “DB Global Chip’s new businessPMIC is very likely to become an important turning point for improving performance, while also being necessary to mitigate risks in theDDI industry competition, it is also essential to advance thePMIC business. However, at present, it seems that there has been no significant progress to report.”
Source:Dealsite
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