INVENTORIES OF HOME ELECTRONICS PILING UP

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Large conglomerates are also facing difficulties amid high interest rates and inflation. It has been found that manufacturing inventories of major companies have piled up rapidly as of the 3rd quarter of 2022. While businesses' earnings are declining, they also have to bare the burden of having to pay more in productions costs, leading them to cut their investment plans and operate in emergency mode.

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A TV section of a retail shop. This store's sales of television sets shrank about 8 percent on-year as of November. The global television market has declined more than 10 percent on-year. The reason lies in the global economic slump. With product sales plummeting, manufacturers' inventories are piling up rapidly. As of the third quarter of 2022, inventories of the top-30 listed domestic companies surpassed 180 trillion won, hitting an all-time high and surging more than 50 percent from the end of 2021. Samsung Electronics' inventories surpassed 50 trillion won for the first time ever in H1, and just three months later surged 10 percent. The increase is particularly rapid in the semiconductor sector. Samsung says it's not considering cutting production for now. However, the company has cut the operation rate of production lines manufacturing home appliances and mobile phones to keep inventories under control. While businesses' earnings are declining, they have to pay more now for raw materials and in interest payments. SK Hynix and Hyundai Motor have decided to cut their investment plans for 2023. Other major corporations are also operating in emergency mode.

[Soundbite] Joo Won(Hyundai Research Institute) : "Prices of raw materials are soaring amid the economic slump. It's a double whammy for businesses. They cannot afford to raise wages and may even need to restructure."

The economic stagnation is predicted to last through next year. Manufacturers of home electronics are scrambling to reduce inventories by offering large discounts on products during the year-end sale season.