ITM Semiconductor’s Vietnam unit hit by fraud and widening losses

ITM Semiconductor, a South Korean battery components manufacturer, faces mounting challenges at its Vietnam subsidiary, which recently came under investigation for a reported embezzlement case. The company disclosed that it had recovered approximately US$2.47 million from a fraudulent scheme worth roughly US$9.3 million, but the remaining US$6.8 million remains uncollected and is being written down as a loss due to concerns over its recoverability.

The embezzlement case is just one symptom of a broader financial deterioration at ITM Semiconductor's Vietnam operation. The subsidiary reported a net loss of about US$60.4 million in 2025, a fourfold increase from the previous year's loss of roughly US$14.7 million. ITM Semiconductor's decision to write down the outstanding receivable reflects a cautious approach, acknowledging the likelihood of the funds being unrecoverable.

The company stated that it reported the embezzlement case to Vietnamese authorities in January 2026, and a police investigation is currently underway. While the fraud case alone may not be existential for the company, it highlights concerns over internal controls and governance within the struggling Vietnam business. The incident underscores the complexities that South Korean electronics companies face as they navigate Asia's evolving electronics supply chain, where managing local subsidiaries, labor markets, procurement, and finance teams becomes increasingly challenging.