Chip boom masks Korea's growing zombie firm problem
Korea’s semiconductor boom is producing extraordinary headline growth, but its benefits are not being felt evenly across the economy. While strong chip exports have pushed nominal gross domestic product (GDP) sharply higher, the share of “zombie” companies has climbed to a record, the Bank of Korea (BOK) said Tuesday. The country’s nominal GDP has accelerated since the second half of 2025, fueled…
Korea's chip industry is booming, but the country is grappling with a growing problem of "zombie" firms, according to the Bank of Korea (BOK). The semiconductor sector has driven a sharp increase in nominal GDP, with Q2 2025 seeing a 26.4 percent jump from the previous year. However, this success is not evenly distributed across the economy.
As of December 2024, 19.1 percent of non-financial companies were classified as zombie firms, up from 17.1 percent in the prior year and the highest level since 2010. A zombie firm is one that cannot generate enough operating profits to cover its interest expenses for three consecutive years. This issue affects both large and small to medium-sized enterprises.
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- Chip boom masks Korea's growing zombie firm problem koreatimes.co.kr
