Earnings of Semes, the fab equipment-making subsidiary of Samsung, show that the South Korean tech giant is drastically reducing its spending in China.
The development is likely due to restrictions being imposed on China by the US.
Semes recorded 2.88 trillion won in revenue and 219.3 billion won in operating income last year.
This is a dip of 7.6% and 38%, respectively, compared to 2021.
The significant drops seem to be caused by the chip downturn but also a dip in revenue from China.
Semes’ revenue from Samsung’s Chinese subsidiary dipped 59.1% year-on-year from 541.2 billion won to 221.4 billion won.
The revenue figure is Semes’ lowest to date from Samsung’s China business since 2018.
The overall revenue drop likely comes from Samsung intentionally delaying the delivery of equipment in light of the downturn of the chip market.
Semes manufactures fab and display production equipment. Samsung owns 91.5% shares in the company.
The main product of Semes, while it supplies all equipment used in wafer fabrication, is etching equipment, which accounts for 30% of its total revenue.