Seoul said Sunday 13 South Korean firms had been forced to suspend production at a joint industrial zone in the North and warned of a "critical" situation if Pyongyang continued to ban access to the site.
Pyongyang has barred South Koreans from entering the Seoul-funded Kaesong Industrial Complex just over the border since Wednesday as tensions have risen to their highest level in years.
With no additional personnel, fuel or other materials allowed into the estate, nine firms suspended production Sunday, joining four others that had already done so, according to Seoul's unification ministry which handles inter-Korea affairs.
Pyongyang has allowed South Koreans still in Kaesong to leave, and one worker who had fallen sick was permitted to cross the border Sunday with a driver, leaving a total of 514 South Koreans and four Chinese in the complex.
The ministry said about 40 others would return to Seoul Monday, further thinning out the presence of South Koreans in the complex who usually number at least 700.
"Every minute is a critical moment right now… there will be many situations involving food and raw material shortages this week," said one Seoul official quoted by Yonhap news agency.
"Things will only get worse," said the official.
About 53,000 North Korean workers produce goods ranging from shoes to watches at factories for some 120 South Korean firms at the complex, built in 2004 as a rare symbol of cross-border economic cooperation.
The complex, which lies 10 kilometres (six miles) inside the North, is a crucial hard currency source for the impoverished North.
Neither side has allowed previous crises to significantly affect the complex, which is the only surviving example of inter-Korean cooperation and seen as a bellwether for stability on the Korean peninsula.
Tensions have been running high after a recent series of apocalyptic threats from the North incensed by fresh UN sanctions imposed after its widely-condemned long-range rocket launch and a third nuclear test.
The impoverished but nuclear-armed state last week approved a nuclear attack on its "sworn enemy" the US and threatened to pull out all its workers from the Kaesong complex and even warned of a full shutdown