SEOUL, KOREA - Dongbu Group will sell off its core unit Dongbu HiTek, a silicon foundry that makes integrated circuits for other companies under contract, as a way to quell market concerns about the group's financial future.
For the group's founder and chairman Kim Junki, this must have been a painful decision as the semiconductor unit has been his pet project for such a long time.
The first time he entered the chipmaking business was March 1983 when he joined hands with Monsanto to create a wafer-making company called Kosil (today's LG Siltron). He followed up with the establishment of Dongbu Electronics (today's Dongbu HiTek) in 1997 to begin the system semiconductor business. The company in 2002 surprised the market by acquiring Anam Semiconductor, the company 50 times bigger than Dongbu at the time.
Still, Mr. Kim's foray in chipmaking business proved more difficult than expected. For the 15 years until 2012, his semiconductor company has not made a dime of profit, with more than 2 trillion won in investment. In September 2009, he even chipped in 350 billion won out of his own pocket. Finally the company turned to the black this year, the first time in 16 years after founding. That's why the chairman's decision to dispose of Dongbu HiTek was seen by most as extraordinary.
Earlier on the 17th, Dongbu Group announced that it would sell 3-trillion-won assets including Dongbu Metal and Dongbu HiTek by 2015 and pay down its debt to 2.9 trillion won from current 6.3 trillion won.
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