DB Hitek is planning to split off its fabless chip business to better focus on its main chip foundry business, the company said on Tuesday,
This is a reversion of its statements made six months ago where the company said it will not split off its fabless chip business unit after small shareholders voiced their opposition to the move.
In its announcement on Tuesday, DB Hitek said it will not list the newly formed company. The motion must pass a shareholders' meeting this month which will likely see many small shareholders oppose the move.
The newly formed company will be a wholly owned subsidiary of DB Hitek, which will become a pure-play foundry company after the split.
DB Hitek explained that it must split off the business unit to focus on “saving” its foundry business.
The chipmaker is suffering from low operation rates due to the steep drop in demand from the global economic downturn.
DB Hitek said it had for a long time considered becoming a pure foundry player in the chip industry, and cited TSMC’s example of not competing with its fabless customers.
Meanwhile, the company said it will aim to make its newly formed subsidiary, tentatively called DB Fabless, the second Mediatek.
This means it will diversify its offering from the current display driver IC to other chips such as OLED and MiniLED TV power chips.