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 semiconductor boom is generating impressive headline growth, but the economic benefits are not being distributed evenly across the nation. The Bank of Korea (BOK) reported on Tuesday that the share of "zombie" companies has reached a record high. Nominal GDP has surged since the second half of 2025, driven by rising semiconductor prices and robust exports. In the second quarter of 2025, GDP jumped 26.4 percent year-over-year, the fastest growth in 47 years.
However, beyond the export sector, the economic landscape is less rosy. As of December 2024, 19.1 percent of nonfinancial companies were classified as zombie firms, up from 17.1 percent the previous year and the highest level since the BOK started tracking the data in 2010. Out of the total 29,468 companies, 5,632 were identified as zombie firms. These are firms that have been unable to generate enough operating profits to cover their interest expenses for three consecutive years.
The zombie firm problem affects both large and small and midsize enterprises, indicating a broader issue with corporate solvency. While the semiconductor industry shines brightly on the national stage, the underlying economic health of Korea's nonexport-driven firms remains a cause for concern.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Chip boom masks Korea's growing zombie firm problem koreatimes.co.kr
