Demand surge and Samsung–TSMC capacity gap... DB HiTek jumps 23% this month

[Financial News] DB HiTek has continued to gain strength amid expectations for expansion in the 8-inch foundry market. With Samsung Electronics and TSMC having pulled back, demand from China is surging, raising expectations that DB HiTek will fully benefit.
DB HiTek shares closed at 116,700 won on the 15th, up 5,400 won, or 4.85%, from the previous trading session. Amid institutional investors’ buying streak, which has continued for eight consecutive trading days, the stock has surged 22.84% this month alone.
While shares of major global semiconductor companies have fluctuated as concerns grow that artificial intelligence (AI) development is slowing, DB HiTek’s stock has been driven higher by positive outlooks for its core business, 8-inch foundry operations.
The recent correction in semiconductor stocks has centered on cutting-edge memory and foundry products used for AI training and inference. By contrast, demand for 8-inch products, including power semiconductors, is rapidly increasing as China’s AI data center and robotics markets expand.
Samsung Electronics and Taiwan Semiconductor Manufacturing Company Limited (TSMC) are reducing the share of their 8-inch businesses as they focus their capabilities on advanced 12-inch processes, leading to a decline in supply capacity. Market researcher TrendForce forecasts that production capacity for 8-inch foundry processes will decrease 2.4% this year from the previous year. Capacity increased by 3.9% in 2023 and 0.8% in 2024, while it declined by only 0.3% last year.
As a result, earnings expectations are also rising. According to financial information provider FnGuide, DB HiTek’s earnings forecast for the third quarter is revenue of 418 billion won and operating profit of 117 billion won. These figures represent increases of 11.6% and 45.2%, respectively, from the same period a year earlier. The operating profit forecast has been raised by 16.4% over the past three months.
Prices are also expected to rise successively as demand increases. DB HiTek has implemented two price increases this year, and analysts widely expect further increases.
Surim Lee, an equity research analyst at DS Investment & Securities, said, "Following a 5% price increase in the first half of the year, we understand that an additional 10% increase was implemented for Chinese customers on products entering production from July 1." Lee forecast, "The increase will begin to be reflected in revenue from October and contribute to a gradual rise in the average selling price (ASP) in the second half." Lee added, "Supply and demand for 8-inch products are rapidly tightening across all product categories, and DB HiTek’s excess orders are greater than those of its competitors." Lee continued, "With a minimum 15% increase secured within the year, the possibility of another increase around December also appears to have grown."
[email protected] Minji Seo Reporter