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Samsung Electro-Mechanics to Raise MLCC Prices by 30% Amid AI Server Demand Surge Samsung Electro-Mechanics will increase the prices of multilayer ceramic capacitors (MLCC) by 30% starting next month. This decision comes in response to a growing shortage of high-performance MLCCs due to increased investments in artificial intelligence (AI) servers and data centers.According to industry sources on July 29, Samsung Electro-Mechanics recently informed its sales partners of the price hike. All MLCC products supplied through its Shenzhen, China, subsidiary will be affected. The new prices will take effect for shipments made after August 1.In a notice sent to partners, Samsung Electro-Mechanics stated, "In recent months, there has been a structural surge in demand within the global electronics industry. We have continuously invested in optimizing production efficiency and expanding production lines, but supply chain pressures have exceeded manageable levels for the company." The notice further explained, "We are implementing this price adjustment to maintain the high quality standards expected by our customers."MLCCs are essential components that store electricity and supply it reliably to semiconductors, reducing voltage fluctuations and signal interference in circuits.The price increase is largely driven by the rapidly growing demand for high-capacity MLCCs for AI servers. Cloud service providers (CSPs) like Google, with its Tensor Processing Units (TPUs), and Amazon Web Services (AWS), with its Trainium chips, are expanding the adoption of their own AI accelerators, leading to a surge in MLCC orders for use around these accelerators and power management circuits.MLCC shipments are also on the rise. According to market research firm TrendForce, Samsung Electro-Mechanics shipped 98 billion MLCCs in June, while Japan's Murata shipped 140 billion and Daiyo Yuden shipped 40 billion. The monthly shipments of the top three companies from South Korea and Japan have reached their highest levels in the past five years.Additionally, Samsung Electro-Mechanics recently secured a supply contract for AI server MLCCs worth 453.99 billion won with a global tech giant last month, followed by another contract worth 295.12 billion won this month. The total new orders for AI server MLCCs announced this year amount to 749.11 billion won.Both contracts are for supply in 2027, establishing a solid long-term sales foundation. With the price increase effective in August, both sales volume and average selling price (ASP) are expected to rise simultaneously.Financial information provider FnGuide projects Samsung Electro-Mechanics' annual performance for this year to reach 13.565 trillion won in revenue and 1.6676 trillion won in operating profit, representing increases of 19.9% and 82.6%, respectively, compared to the previous year.* This article has been translated by AI. 2026-07-29 14:35:00 -
Editorial: The chip party isn't over. Seoul's party is. Only weeks ago, Seoul looked unstoppable. The KOSPI had nearly doubled this year, turning into one of the world's hottest equity markets. AI had become less an investment theme than a national obsession. Retail investors borrowed aggressively to buy leveraged ETFs tied to SK hynix, Samsung Electronics and the index itself. Every dip was bought. Every earnings beat was assumed. Every valuation looked justified because artificial intelligence was rewriting the rules. Then came two days that rewrote something else: expectations. On the surface, the market appears to have concluded that the AI chip party has peaked. SK hynix, after all, delivered the strongest profitability ever recorded by a major semiconductor company—a 76 percent operating margin—only to suffer one of the largest single-day selloffs in its history after narrowly missing consensus. Investors did not reward the world's most profitable chipmaker. They punished it. That has fueled an easy narrative: AI has peaked. It probably hasn't. The company's own guidance remains bullish. High-bandwidth memory demand is still expected to outstrip supply through at least next year. Hyperscale cloud providers continue to expand AI infrastructure. Nvidia is not ordering fewer chips. The chip story has barely changed. The market story has. For months, Seoul stopped behaving like a stock market and began behaving like a momentum machine. Retail investors piled into leveraged ETFs, often with borrowed money, chasing the same handful of AI winners. Institutions happily supplied the liquidity—until they didn't. Now the psychology has flipped. Fear of missing out has become fear of losing out. Retail investors are buying what institutions are selling, convinced every decline is another temporary dip. Institutions, meanwhile, are doing what professionals usually do after a historic rally: taking money off the table. Neither side is irrational. They simply operate on different clocks. The irony is that this correction may ultimately be the healthiest development Korean equities have seen in years. Markets are not supposed to double without interruption. They are supposed to pause, consolidate and force investors to distinguish between companies whose earnings justify their valuations and those merely lifted by enthusiasm. That process has finally begun. For years, the KOSPI was trapped around the 3,000 level. Investors complained it could never escape the so-called Korea discount. When it finally did, many assumed every new high would become permanent. History suggests otherwise. Bull markets do not move in straight lines. They build new floors through corrections, not celebrations. Perhaps 3,000 was merely the old box. Perhaps 6,000 becomes the next one. If so, this week's selloff may look less like the end of an AI boom than the painful construction of a higher base. That is how durable bull markets are usually built—not through uninterrupted euphoria, but through repeated tests of conviction. That is cold comfort for investors who bought leveraged ETFs at the peak or chased SK hynix after its spectacular run. For them, this is expensive tuition in one of the oldest lessons on Wall Street: the better a story becomes, the more likely it has already been priced in. The AI revolution has not ended. What ended, at least for now, was the belief that every AI stock could only go one way. The chip party may continue for years. The Seoul party simply became too crowded. 2026-07-29 14:32:55 -
Increased Market Volatility Drives Demand for Stable Investments in Real Estate As uncertainty in domestic and international financial markets grows, demand for stable investment options is increasing. With financial assets like stocks showing significant volatility depending on market conditions, there is a noticeable shift towards preserving asset value through real estate.In the real estate market, apartments with strong location and brand competitiveness are being viewed as relatively stable assets amid economic fluctuations. Their tangible nature, along with factors such as transportation networks, living infrastructure, and supply scarcity, contributes to their long-term value.For instance, an 84.28 square meter unit at 'Nature & Hillstate' near Gwanggyo Central Station in Suwon, Gyeonggi Province, was sold for 645 million won in January 2016 and has seen a continuous price increase. By January 2021, it was sold for 1.335 billion won, and as of May 2026, the price had risen to 1.865 billion won, marking an increase of approximately 2.9 times over the past decade.Amid growing interest in apartments with excellent locations and brands, new supply developments are also gaining attention. Analysts suggest that demand is continuing for brand-name complexes that offer both accessibility to Seoul and convenience in daily living, especially as new apartment supply is limited.'Hillstate Siheung The Class,' being developed by Hyundai Engineering in Daeya-dong, Siheung City, is attracting interest in this context. The complex will consist of five buildings with 430 units, featuring floor areas of 74 square meters and 84 square meters, and will rise 27 stories above ground with two basement levels.The project's location is considered a strong advantage. Residents will have easy access to Daeya Station on the Seohae Line, which connects to major subway lines in Seoul. Additionally, the upcoming Shin-Ansan Line and Wolgot-Pangyo Line, centered around Siheung City Hall Station, are expected to enhance the regional transportation network.Road traffic conditions are also favorable. Nearby bus stops provide access to Siheung's city center as well as surrounding areas like Bucheon, Ansan, and Anyang. The Siheung IC allows for entry to the Gyeonggi 1st Circular Highway and the 2nd Gyeongin Expressway, ensuring excellent accessibility to key regions in the metropolitan area.The educational environment is noteworthy as well. Daeya Elementary School and Daehung Middle School are within walking distance, and the nearby Eungye District is set to welcome Siheung's first science-focused high school, Siheung Science High School, which is scheduled to open in March 2029, further enhancing educational infrastructure.Living conveniences are abundant. The area features Lotte Mart, Starfield City, CGV, Siheung ABC Happy Learning Town, and Shincheon United Hospital, providing ample shopping, cultural, and medical facilities. Its proximity to Bucheon and Gwangmyeong also allows residents to enjoy a variety of commercial and cultural amenities in neighboring regions.Sales conditions have been designed to ease the burden on actual buyers. Currently, discounts of up to 53 million won are being offered based on unit type, and the initial payment structure includes a 5% down payment and a fixed first payment of 10 million won to reduce upfront costs.'Hillstate Siheung The Class' is currently conducting a first-come, first-served contract for units. A model home is available in Daeya-dong, Siheung City, and a prize event for visitors will be held every Saturday and Sunday at 3 PM until August 9.* This article has been translated by AI. 2026-07-29 14:30:00
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Ruling Party Candidates Express Concerns Over Speaker's Comments on Presidential Term Limits Following comments made by National Assembly Speaker Cho Jung-sik on July 28 regarding the potential for an incumbent president to seek re-election, candidates for the leadership of the Democratic Party expressed their unease.Candidate Kim Min-seok stated on Facebook on July 29 that "amending the constitution to allow for the re-election of an incumbent president is unrealistic," adding that it is "constitutionally impossible and has been confirmed multiple times by President Lee Jae-myung. This has also been acknowledged by the National Assembly Speaker and the Chief of Staff to the President." He further noted, "The speaker has clarified that his comments were misunderstood, and it is neither appropriate nor necessary to escalate this issue while President Lee is abroad."Candidate Jung Cheong-rae appeared on CBS Radio's 'Park Seong-tae's News Show' that same day, saying, "It seems the speaker is weak on details. He should have responded that 'it is impossible according to Article 128 of the Constitution.'"Candidate Song Young-gil also commented on MBC's 'News Today,' stating, "The speaker's remarks are open to misinterpretation. President Lee has clearly stated that an incumbent president is not subject to constitutional amendments under Article 128, Section 2." He added, "We need to complete constitutional amendments, including provisions for the May 18 incident, strengthening the conditions for declaring a state of emergency, and relocating the Board of Audit and Inspection to the National Assembly, during President Lee's term to leave a legacy in our constitutional history. If the issue of presidential re-election is tied to this, will the opposition agree?"In response to the growing controversy, Speaker Cho expressed regret on Facebook the day before, stating, "I regret that my comments have caused misunderstanding and controversy. I intended to convey that for constitutional amendments, including restructuring power, there must be agreement among political actors and the choice of the people."* This article has been translated by AI. 2026-07-29 14:30:00
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Heatwave warning expanded across most of Seoul as scorching heat persists SEOUL, July 29 (AJP) - Another heatwave warning was issued in Seoul on Wednesday as scorching temperatures continued to grip the capital following the end of the monsoon season last week. The Korea Meteorological Administration (KMA) said the warning covers most of the capital, affecting 19 of the city's 25 districts, while an existing lower-level advisory remains in effect in northwestern Seoul. A heatwave advisory is issued when the daily maximum temperature is expected to reach at least 33 degrees Celsius for two or more consecutive days, while a higher-level heatwave warning is issued when the temperature is forecast to exceed 35 degrees. Health authorities warned that heat-related illnesses are likely to rise sharply in the coming weeks as sweltering heat sets in with the end of the monsoon season. According to the Korea Disease Control and Prevention Agency (KDCA), the cumulative number of heat-related illness cases this year reached 1,482 as of early this week, with nine deaths reported nationwide including three in South Gyeongsang Province, two each in Gangwon Province and Seoul, and one each in Jeju and North Jeolla Province. Heat-related illnesses have been on the rise since last week, averaging around 60 cases per day before climbing to around 80 cases over the weekend. Health officials have urged the public to avoid unnecessary outdoor activities, stay well hydrated, and take frequent breaks during periods of extreme heat. In response to the prolonged heatwave, the Seoul Metropolitan Government has also strengthened safety measures for outdoor workers and vulnerable residents. The city government is providing cooling shelters and heat-relief spaces while conducting regular checks on older residents living alone through phone calls and home visits. "We will make the safety and lives of citizens our top priority and take all necessary measures to prevent heatwave-related casualties," said Choi Jin-seok, a senior city official. 2026-07-29 14:29:50 -
Virtual Injection Service 'Maumjaro' Capitalizes on Popularity of Weight Loss Drug 'Mounjaro' A new virtual injection service has emerged, targeting the popularity of the weight loss drug 'Mounjaro.' Named 'Maumjaro,' this service offers users an experience of receiving an injection by simply placing their smartphone on their abdomen, without administering any actual medication.Doctor Now, a telemedicine platform, recently launched 'Maumjaro,' a virtual experience service parodying Mounjaro.The Maumjaro page is designed to resemble an actual pharmaceutical purchase screen. The price is displayed with a strikethrough at 350,000 won, now marked as 0 won.Users can select their desired dosage, ranging from 2.5 mg to 15 mg, and then place the on-screen syringe on their abdomen. The virtual medication in the syringe gradually decreases, simulating the injection process.The service's name is derived from Mounjaro, a weight loss and diabetes treatment developed by the American pharmaceutical company Eli Lilly. Mounjaro is an injectable medication containing tirzepatide, which works on both GLP-1 and GIP receptors to help reduce appetite and food intake, aiding in weight loss.Maumjaro's marketing strategy appears to target both the high recognition of Mounjaro and the cost concerns associated with it. By offering a free virtual experience, it aims to attract users who are interested in expensive weight loss treatments but hesitant to undergo actual injections.Mounjaro is a prescription medication that requires a doctor's consultation and prescription. Doctor Now also clarifies that Maumjaro does not advertise any specific medications or provide actual weight loss effects. The decision to use a weight loss drug and its dosage should be made in consultation with healthcare professionals, considering individual health conditions and potential side effects.* This article has been translated by AI. 2026-07-29 14:25:00
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Korea Tourism Organization Restructures After 11 Years The Korea Tourism Organization has undergone an organizational restructuring for the first time in 11 years. The changes, which will take effect on August 3, aim to enhance public-private collaboration, improve tourist experiences, and strengthen strategic marketing functions. This restructuring comes as the organization prepares for the '2027-2029 Visit Korea Year.'A key point of interest in this restructuring is how the organization will establish its presence through new initiatives.The organization connects the government, tourism industry, local governments, and private enterprises to enhance the competitiveness of Korean tourism. While the Korea Tourism Organization supports national tourism policies and oversees domestic and international tourism marketing, the Visit Korea Organization excels at integrating private sector ideas and capabilities into cohesive projects. The travel experience for tourists encompasses various industries, including airlines, accommodations, shopping, dining, performances, and transportation. The effectiveness of engaging these sectors and connecting them into a unified initiative is crucial for the Visit Korea Organization's competitiveness.Historically, the Korea Grand Sale has been the flagship initiative representing the organization. This event has successfully combined benefits in air travel, accommodation, shopping, dining, and experiences to boost demand and spending during the tourism off-season. While it has achieved significant results, the fact that the leading initiative of the organization has been limited to just one project highlights a clear limitation.Tourism is not merely about creating numerous events; it is about building a brand. Even with organizational changes, tourists remember the festivals, campaigns, and content they have experienced. This underscores the need for another flagship initiative that will evoke the Visit Korea Organization's identity alongside the Korea Grand Sale.The most notable change in this restructuring is the reorganization of the marketing team into a public-private collaboration team. This new direction aims to discover innovative projects that combine K-content, such as K-pop, gastronomy, cultural arts, and traditional culture, with tourism. Given the rapid expansion of interest in Korean tourism beyond shopping to include dining, performances, medical and wellness tourism, night tourism, and local experiences, this is a timely choice.The challenge lies not in merely creating another initiative but in consistently nurturing successful projects to establish them as representative brands of the Visit Korea Organization. It is essential to leave behind initiatives that can continue even after the Visit Korea Year concludes for this restructuring to hold significance.The change of the service improvement team to the tourism experience innovation team aligns with this goal. This team will work to reduce inconveniences faced by foreign tourists from arrival to departure, enhancing travel satisfaction and encouraging repeat visits. The strategic marketing team has also expanded its responsibilities beyond event promotion to include addressing key issues, external branding, and policy messaging.Another noteworthy change is the reorganization of the planning team into a management support team. This team will oversee partnerships with member organizations and diversify funding sources while implementing a project manager responsibility system and AI-based work innovations. The structure, where the responsible person oversees everything from planning to coordination with partners, execution, and evaluation, is expected to accelerate decision-making and enhance project quality. The value of AI will increase when it is used to support decision-making through tourist data analysis, identifying participating companies, and developing market-specific marketing strategies, rather than merely assisting with document preparation. Han Hae-ri, the Secretary-General, explained that this restructuring is intended to achieve substantial improvements rather than just a change in name.The role of the Ministry of Culture, Sports and Tourism is also crucial. To cultivate a sustainable brand, it is essential to provide the resources and authority necessary for designing medium- to long-term projects, rather than applying only short-term event budgets and evaluation cycles. There is a need for clearer coordination of the roles of related organizations, such as the Korea Tourism Organization and local tourism organizations and foundations. If public-private collaboration is required, the ministry should institutionally empower the Visit Korea Organization to lead these initiatives.The success of the organizational restructuring will not be measured by new team names alone. It will be evaluated when additional flagship initiatives emerge that evoke the Visit Korea Organization alongside the Korea Grand Sale.This task cannot be accomplished by the Visit Korea Organization alone. The Ministry must support policies and systems, the Korea Tourism Organization must establish nationwide tourism marketing and business foundations, and the Visit Korea Organization must drive private sector participation to create new tourism projects. Local governments and the tourism industry must also collaborate to ensure these initiatives operate effectively on the ground.Organizational charts are not long remembered. What tourists ultimately remember are the brands and experiences. The Visit Korea Organization must now respond with new flagship initiatives, and the government and tourism industry must work together to create those responses.* This article has been translated by AI. 2026-07-29 14:25:00
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Record 8.32 Million Foreign Tourists Visit Seoul in First Half of 2026 In the first half of 2026, Seoul welcomed a record 8.32 million foreign tourists, who also set a new high for credit card spending.According to the Seoul Metropolitan Government, the number of foreign visitors from January to June increased by 21.3% compared to the same period last year. Among them, the largest group was from China, totaling 2.47 million, followed by Japan with 1.5 million, Taiwan with 880,000, and the United States with 620,000.During the same period, foreign tourists' credit card spending reached 5.6172 trillion won, marking a 56.8% increase from the previous year. Both the number of visitors and credit card spending are at all-time highs. Monthly credit card spending surpassed 1 trillion won for the first time in April and continued to exceed that mark in May and June.Notably, the increase in spending outpaced the rise in visitor numbers. Officials attribute this trend to a growing number of tourists who are not only visiting major attractions but also experiencing Seoul's culture and daily life through K-content, festivals, the Han River, and culinary, beauty, and wellness activities, which has extended their stay and spending opportunities.In terms of spending by sector, shopping accounted for the largest share at 46.4%, followed by healthcare and wellness at 24.4%. Food and beverage services made up 13.1%, while accommodation represented 10.7%.Regionally, 65% of total spending occurred in three areas: Gangnam, Jung-gu, and Mapo. Gangnam accounted for 29.3% of foreign credit card spending, followed by Jung-gu at 28.4% and Mapo at 7.3%.The Han River is also evolving into a destination for experiential tourism, combining performances, festivals, and activities. The 'Seoul Spring Festival 2026' expanded its reach across the Han River, attracting 7.06 million visitors, including 1.17 million foreigners, during the event. Revenue for businesses at the Han River bus terminal increased by 257% compared to the previous year.In the second half of the year, the city plans to enhance 'night economy' initiatives, allowing foreign tourists to enjoy Seoul not just during the day but also in the evening and at night by expanding night tourism content in the Han River and urban areas. The goal is to connect major tourist attractions with nearby dining, shopping, and cultural experiences to increase tourists' mobility and length of stay.To translate the increase in visitor numbers into tangible tourism revenue and stimulate the local economy, the city is also accelerating the development of high-value tourism sectors such as medical tourism, MICE (Meetings, Incentives, Conferences, and Exhibitions), and premium tourism.In the medical tourism sector, the city plans to establish a one-stop platform that connects medical services, visas, accommodation, and tourism, and to increase the number of medical tourism interpreters from 108 to 1,000.In the MICE sector, the city aims to expand 'bleisure' tourism programs that combine business and leisure, allowing international conference participants to experience more of Seoul before and after their business schedules. The Seoul MICE Plaza will also enhance its role as a workation hub to encourage longer stays and repeat visits.Cho Seong-ho, head of the Seoul Tourism and Sports Bureau, stated, "We will continue to expand diverse tourism content to sustain the growth of tourism in Seoul. In the second half of the year, we will closely link experiential tourism content with local businesses, allowing tourists to enjoy various parts of Seoul and ensuring that the benefits extend to local economies and neighborhoods." 2026-07-29 14:25:00
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National Assembly Speaker's Comments on Presidential Term Limits Spark Controversy 조정식 국회의장의 현직 대통령 연임 관련 발언이 정치권에 커다란 파장을 일으키고 있다. 조 의장은 취임 후 첫 기자간담회에서 야권이 개헌에 반대하는 이유로 현직 대통령의 임기 연장 문제가 거론된다는 질문에 대해 “권력구조 개편에서 현직 대통령 연임 개헌 문제는 결국 주권자 국민의 선택 문제”라고 답했다. 국가의 최고 입법기관을 이끄는 수장이 헌정 질서의 근간을 흔들 수 있는 현직 대통령의 연임 가능성을 열어두는 듯한 취지의 발언을 한 것이다. 가뜩이나 여야 간 대립이 첨예한 상황에서 국회의장의 선을 넘은 언급은 즉각 정치적 유불리에 따른 거센 공방을 불렀고, 개헌 논의 전체를 정쟁의 늪으로 몰아넣었다. 논란이 확산하자 조 의장은 조급히 진화에 나섰다. 자신의 페이스북을 통해 “현직 대통령의 연임은 개헌 논의 대상이 아니다”며 “본의와 다르게 오해와 논란을 불러일으킨 점에 대해 유감스럽게 생각한다”고 사과 및 해명 성명을 발표했다. 그러면서 대한민국 헌법 제128조 제2항을 근거로 제시했다. 헌법 제128조 제2항은 ‘대통령의 임기 연장 또는 중임 변경을 위한 헌법 개정은 그 헌법 개정 제안 당시의 대통령에 대하여는 효력이 없다’고 명확히 규정하고 있다.이는 권력자가 자신을 위해 임기를 연장하거나 장기 집권을 도모하는 헌정사의 비극을 막기 위해 마련된 핵심 안전장치다. 조 의장은 뒤늦게 해당 조항을 존중하겠다고 밝혔지만 입법부 수장으로서 기본적 헌법 조항조차 미처 헤아리지 못한 채 경솔한 언행으로 혼란을 자초했다는 비판을 면하기 어렵다. 헌법 개정은 국가의 틀을 다시 짜는 중차대한 과업인 만큼 절차적 요건과 법적 기준 또한 엄격히 정해져 있다. 헌법 제128조부터 제130조에 명시된 개헌 절차에 따르면 개헌안은 국회 재적의원 과반수나 대통령의 발의로 제안된다. 제안된 개헌안은 대통령이 20일 이상의 기간 동안 이를 공고해야 하며, 공고된 날로부터 60일 이내에 국회에서 의결되어야 한다. 국회 의결은 국회 재적의원 3분의 2 이상의 찬성을 얻어야만 가결된다. 국회를 통과한 개헌안은 30일 이내에 국민투표에 부쳐져 국회의원 선거권자 과반수의 투표와 투표자 과반수의 찬성을 얻어야 최종 확정되며, 확정 시 대통령은 이를 즉시 공포해야 한다.이처럼 3단계 촘촘한 절차와 엄격한 정족수를 요구하는 까닭은 개헌이 특정 정파의 전유물이 되어서는 안 되며 오직 국민적 합의 속에서 신중하게 이루어져야 하기 때문이다. 87년 체제 이후 30년 넘게 유지되어 온 현행 헌법을 다듬는 작업은 단순한 권력 구조 개편을 넘어 시대적 변화에 부응하기 위한 국가적 과제다. 권력 구조 개편과 지방분권, 국민 기본권 확대 등 시대적 열망을 담아내기 위한 개헌 추진은 그 어느 때보다 높은 책임감과 신중함이 요구된다.그러나 입법부 수장의 경솔한 말 한마디로 인해 개헌 논의가 시작되기도 전에 ‘현직 대통령 임기 연장 논란’이라는 왜곡된 정쟁 프레임에 갇히고 말았다. 이는 개헌에 대한 국민적 신뢰를 스스로 떨어뜨리고 정치적 불신만 가중하는 무책임한 결과를 낳았다. 국회의장은 정파적 이해관계를 떠나 중립적 위치에서 여야 간 합의를 이끌어내고, 개헌 논의가 올바른 궤도에서 이뤄지도록 중심을 잡아주어야 한다.정치권 역시 헌법 개정을 정략적 도구나 지지층 결집용 소모품으로 악용하려는 시도를 즉각 중단해야 할 것이다. 권력의 셈법이나 정파적 이익이 앞선다면 개헌은 국민의 외면 속에 동력을 잃고 또다시 공염불에 그칠 수밖에 없다. 국가의 미래와 직결된 개헌의 취지와 명분과 당위성이 훼손되어선 안 된다. 2026-07-29 14:20:00
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Rising Check Default Rates Signal Crisis for Small Businesses Warnings are emerging that small businesses and self-employed individuals are reaching their breaking point. According to the Bank of Korea, the national check default rate in June hit 0.32%, the highest level recorded in over a year since May of last year. This figure represents an almost eightfold increase from December's rate of 0.04%. The rising default rate indicates that small and medium-sized enterprises (SMEs) and self-employed individuals are struggling to cope with worsening cash flow and increasing financial costs.The business environment for SMEs has deteriorated due to a combination of high interest rates, rising raw material prices, currency instability, and domestic economic stagnation. While large corporations can absorb shocks due to their ability to secure funding and high credit ratings, SMEs and self-employed individuals are not in the same position. Heavily reliant on bank loans, they bear the full brunt of interest rate hikes and increased spreads. This impact is far more severe for SMEs and self-employed individuals than for larger firms. While large corporations can weather crises, most SMEs and self-employed individuals depend on bank loans. As interest burdens grow and sales stagnate or decline, some businesses are finding their financial costs exceeding their operating profits.In a survey conducted by the Korea Federation of Small and Medium Businesses from July 7 to 15, which included 500 small and medium-sized enterprises, 26.4% of respondents reported feeling burdened by their current debt. Among them, 6.2% indicated that their situation was 'very difficult to endure,' while 20.2% said it was 'somewhat difficult to endure.'Notably, 28.1% of small businesses and self-employed individuals reported feeling debt pressure, which is 7 percentage points higher than the 21.1% reported by medium-sized enterprises. The burden of financial costs was more pronounced among those with lower sales. When asked about their experience with loan repayment delinquencies in the past year, 1.8% reported having actually defaulted, while 20.0% indicated they had faced a risk of default without actually defaulting. This suggests that one in five surveyed businesses is struggling with repayment, even if it has not yet led to actual defaults.More concerning is that this crisis is not limited to individual businesses. Increased financial costs can lead to reduced capital investment and research and development, delayed payments to suppliers, and a chain reaction of defaults among trading partners. The bankruptcy of a single SME can trigger a ripple effect impacting the local economy, suppliers, and financial institutions. The surge in check default rates serves as a leading indicator of the potential spread of credit risk across the broader economy, which should not be taken lightly.The gap between businesses that can secure funding and those that cannot is widening. As economic uncertainty rises, financial institutions are compelled to focus their lending on creditworthy borrowers, leaving SMEs with weak collateral and credit increasingly unable to secure necessary funds in a timely manner. If businesses are forced to close not due to a lack of competitiveness but because of temporary liquidity shortages, it represents a loss not just for those businesses but for the entire national economy.In this context, it is crucial to enhance the role of policy financing and guarantees to ensure that businesses experiencing temporary liquidity crises can continue their operations. Tailored financial support should be strengthened to prevent companies with technological capabilities and growth potential from abandoning investment and employment due to high financial costs.SMEs and self-employed individuals are the lifeblood of our economy. If they falter, employment, consumption, and even the foundation of the national economy will inevitably be shaken. The surge in check default rates is a structural warning reflecting the urgent reality faced by businesses that can no longer endure. It is imperative to implement proactive financial stability measures and effective support now, rather than waiting for the crisis to escalate, to create an environment where SMEs and self-employed individuals can recover. We must not forget that economic recovery begins with the survival of SMEs and self-employed individuals, not just the performance of large corporations.* This article has been translated by AI. 2026-07-29 14:20:00