The southern Gyeonggi region, known as the heart of Korea's industry, is shaking. Amid an economic slowdown and a credit squeeze, bankruptcies among small and midsize businesses are rising quickly across sectors and company ages. With high interest rates, weak domestic demand and subdued investment overlapping, the view that corporations' cash flow has deteriorated is gaining traction.
According to the Monthly Judicial Statistics on the 14th, only 39 corporate bankruptcies fell under the Suwon District Court's jurisdiction from January to March 2022, but during the same period this year, 155 corporations were declared bankrupt at the Suwon Bankruptcy Court. The annual totals are also continuing to rise. They have increased from 186 cases in 2022 to 320 in 2023, 379 in 2024 and 495 in 2025.
Until 2022, corporate rehabilitation and bankruptcy cases in southern Gyeonggi were handled by the Suwon District Court. The following year, with the launch of the Suwon Bankruptcy Court, it began exclusively handling insolvency cases. The Suwon Bankruptcy Court takes cases involving corporations in southern Gyeonggi, including Suwon, Yongin, Hwaseong, Pyeongtaek, Ansan and Seongnam. Typically, when a corporation cannot repay debt or normal operations become difficult, the corporation files for bankruptcy with the court, and the court decides on bankruptcy after a hearing.
Rising bankruptcy counts are a problem, but concern in the market is mounting because they cut across sectors and company ages. A sense of crisis is being detected broadly in bio, manufacturing and IT.
BioPharmSolutions, which develops an epilepsy treatment, was recently declared bankrupt. Founded in 2008, BioPharmSolutions even exported technology related to one of its own candidate substances to a Chinese pharmaceutical company in 2021 in a deal worth tens of billions of won. A candidate substance is a promising compound under study for development into a new drug.
Hwasong, which has engaged in manufacturing plastic thermoformed containers for packaging since 2009, is also undergoing bankruptcy proceedings. It recorded sales of 5 billion–7.7 billion won from 2019 to 2022, but net income in 2022 was 151.91 million won, down about 76% from 2020's 625.51 million won. Storm Games, which operated its own massively multiplayer online role-playing games (MMORPGs) such as "The Finder" and "Sasin," is also proceeding with bankruptcy.
Some analysts say the recent increase in cases reflects the launch of the Suwon Bankruptcy Court. Cases from corporations in southern Gyeonggi that used to be filed with courts such as the Seoul Bankruptcy Court are now being filed with the Suwon Bankruptcy Court, increasing the total number. Some also view the ratio of corporations turning to the bankruptcy court as low compared with the total number of corporations.
However, on the ground, attention is on the fact that the increase in bankruptcies is appearing across diverse industries, not just in a single weak sector. There is also analysis that marginal corporations, which endured during COVID-19 thanks to maturity extensions and policy finance, are being exposed all at once amid prolonged high interest rates and subdued investment.
An official at the Korea Federation of Small and Medium Business Convergence said, "Recently, rather than declining sales, it appears that worsening cash flow and a tighter funding environment are having a bigger impact," adding, "If the economic slowdown persists, liquidity pressures on small and midsize businesses are likely to continue for the time being."