South Korea Struggles With Rising Number Of Zombie Firms Amid Chip Boom
· Business · The Korea Times, koreatimes.co.kr
South Korea faces a growing concentration of financially distressed zombie firms despite a booming semiconductor sector. These unproductive companies survive primarily through continuous debt rollovers and government support rather than operational profitability. The stark contrast underscores a widening divide between high-performing export giants like Samsung and SK Hynix and smaller domestic enterprises. Economists warn that prolonged financial life support for unviable businesses could stifle overall market dynamism and resource allocation. Financial authorities have not yet announced specific restructuring measures to address the rising corporate debt.
Why it matters
The rise of zombie firms threatens South Korea's broader financial stability by locking up capital that could otherwise fund productive industrial sectors.
Read the original report — The Korea Times
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