Capture of Zinitix homepage

This article was published on June 27, 2025, at 3:53 p.m. on the ChosunBiz MoneyMove website.

The management rights dispute between Halo Electronics International Corporation (Halo), the largest shareholder of Zinitix, a semiconductor design (fabless) company listed on the KOSDAQ, and the current management is intensifying. The current management sent a notice demanding the 'cessation of false information dissemination,' while it has been confirmed that the largest shareholder had previously filed for an injunction in a California court to prohibit the misappropriation of trade secrets and to prevent further destruction of evidence.

According to the investment banking (IB) industry on the 27th, Halo submitted an injunction application to the Santa Clara County court in California on the 20th (local time). The application requests the prohibition of misappropriation of trade secrets regarding 'Elevation Microsystems,' a U.S. fabless semiconductor company established by the current Zinitix management, and the cessation of unfair competition practices, including the prevention of further destruction of evidence.

According to the injunction application materials obtained by ChosunBiz, Halo claims that the current Zinitix management, including David In-kyun Nam, a managing director, and Kwon Seok-man, the representative, established a separate competitor by misappropriating the company's key technologies and business opportunities while working at Halo. It is alleged that they planned to secretly steal new integrated circuit products under development at Halo and sell them through their newly founded company, Elevation, merely by changing the product names.

Nam, who is embroiled in a management rights dispute with Halo, previously served as the CEO of Halo, while Kwon Seok-man served as the head of the Korean branch. Last August, Halo became the largest shareholder by acquiring 30.93% of Zinitix's shares for about 21 billion won. Although they were later appointed to the board, Halo is pushing for their dismissal, alleging recent misconduct. Halo is the international corporation of Halo Microelectronics, a semiconductor company listed on the Shanghai Stock Exchange.

One of the key pieces of evidence presented by Halo is internal emails and messenger records. According to Halo, Nam and others directed to 'erase the project from Halo's weekly report as if it never happened,' and there is evidence indicating that Halo's core engineers were instructed in August 2024 to proceed with the 'tape-out' of the integrated circuit products under the name Elevation. The tape-out phase signifies that semiconductor design has been completed and the blueprint is handed over to the factory for initial prototype production.

Illustration by JUNGDAWN

Halo also commissioned a forensic analysis, and the investigation revealed that Nam and others deleted data amounting to about 220 gigabytes (GB) from company-issued laptops and email servers. Halo alleges that Nam began destroying evidence around March of this year, shortly before his resignation.

Additionally, among the list of files deleted by Nam, an Excel document titled 'Zinitix Income Statement Analysis 2019-2026' was discovered. Halo claims this indicates that Nam had been analyzing Zinitix's financial status in detail and planning the current management rights dispute since his time at Halo.

Furthermore, Halo emphasized that the current Zinitix management intercepted business opportunities at Halo and provided them to the company they created. A partner company of Halo proposed a $15 million (about 20 billion won) investment to Halo, but it is alleged that Nam did not report this to the company and brought it into Elevation. Halo stressed that such actions are a clear violation of fiduciary duty and loyalty under California corporate law.

The current management is strongly opposing the contents of the injunction application from Halo. A representative from the management team stated, 'Regarding Zinitix's accounting data, I understand it was officially obtained during the financial due diligence (FDD) in early 2024 prior to the acquisition,' and rebutted, 'It is natural for a CEO to have financial files for review.' They also emphasized, 'We detailed the new design products of Elevation in the response submitted to the court.'

Zinitix is set to hold an extraordinary shareholders' meeting on July 9, where Halo plans to dismiss all current board members. Halo intends to appoint three new directors and begin restructuring the company. The current management opposes this, arguing that 'some of the proposed new board members are Chinese nationals, making it difficult to perform the role of executive director in Korea,' and 'it cannot be ruled out that this action is an attempt to access Zinitix's core semiconductor technology.' Both sides are preparing for additional legal disputes.