This article was published on the ChosunBiz MoneyMove site at 7:28 a.m. on Aug. 28, 2025.
DB Group's semiconductor foundry subsidiary DB HiTek has started financing using its own shares.
According to investment banking (IB) industry sources on the 28th, DB HiTek has recently decided to issue private exchangeable bonds (EB) based on its treasury stock and has begun demand surveys targeting institutional investors such as asset management firms.
The issuance scale has been set at 109.4 billion won. Although detailed terms have not been finalized, the company has prioritized offering a maturity of five years with a coupon rate of 0% using 2.22 million of its own shares as the exchange target.
The treasury stock subject to exchange is about half of the entire treasury stock held by DB HiTek, which is approximately 4.16 million shares. It has been reported that there is a condition of an exchange price premium of 110%.
This is the first time DB HiTek has utilized its own shares for EB issuance. The company chose EB issuance as a strategic means to secure cash while minimizing shareholder value dilution and market impact.
DB HiTek is expected to use the newly raised funds to expand production facilities. This is due to the increased number of Chinese fabless companies seeking DB HiTek as China accelerates its efforts for semiconductor self-sufficiency.
In fact, DB HiTek specializes in 200mm wafers for power semiconductors, not the 300mm wafers used in advanced semiconductor manufacturing, and its utilization rate jumped to 95% in the second quarter from an average of 72% last year.
A DB HiTek official said, 'We are reviewing various options such as stock buybacks to enhance shareholder value and EB issuance to secure investment funds,' but added, 'Nothing has been confirmed.'
Investor interest is reported to be relatively high. This is because DB HiTek has secured a strong position in the niche market of industrial semiconductor foundries, competing with TSMC and Samsung Electronics in the advanced semiconductor foundry market.
With the high utilization rate, performance has also improved. The consolidated revenue in the second quarter reached 337.4 billion won, up 13.1% compared to the same period last year. Operating profit increased from 67.5 billion won to 73.8 billion won, a rise of 9.5%.
An official in the securities industry noted, 'EBs guarantee the principal at maturity and can provide treasury stock through the exercise of exchange rights,' adding, 'With performance improvement coinciding, many institutional investors have begun reviewing investments.'
Meanwhile, DB HiTek is considered a key subsidiary supporting the manufacturing sector of DB Group. DB Group Inc. holds an 18.68% stake as the largest shareholder, and Kim Jun-gi, the founder and chairman of DB Group, owns a 3.61% stake.