index released by the Research Center of Taiwan Economic Development<\/a>. Trump\u2019s trade war has also dampened sentiment, economists say, particularly as Taiwan has yet to finalize a trade agreement with Washington.\n <\/p>\n\n \u201cFrom my perspective as a salaried worker earning above the median income, I feel the economy isn\u2019t actually doing that well,\u201d said Vivian Chen, a nurse in the Southern port city of Kaohsiung.\n <\/p>\n
\n Chen\u2019s observations are echoed by many in the home of the global chip powerhouse. Taiwan\u2019s GDP per capita is forecast to exceed $38,000 this year, outpacing South Korea and Japan. But its average wage lags both countries by at least 30%, according to CNN\u2019s calculations of official data.\n <\/p>\n
\n Taiwan\u2019s tech prowess, built over decades in the chip and electronics industries, has positioned the island to benefit from the AI boom. As tech giants from Google and OpenAI to Microsoft rush to build data centers powered by graphics processing units designed by Nvidia and AMD, Taiwanese companies have been at the forefront, manufacturing the semiconductors and servers essential for training AI models.\n <\/p>\n
\n In one prominent example, TSMC, the world\u2019s largest contract chipmaker that supplies Nvidia and is known by locals as the \u201cprotector of the nation,\u201d has raised its full-year revenue growth forecast to the mid-30% range, driven by the explosive growth in AI, after surpassing sales expectations in previous quarters.\n <\/p>\n
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\n Meanwhile, Taiwan\u2019s outbound shipments to the US, where most of the AI data center expansions have occurred, have grown more than 63% in the first 10 months of this year, according to Taiwan\u2019s Ministry of Finance.\n <\/p>\n
\n But questions have mounted about the sustainability of this export-driven boom, especially amid concerns that the AI frenzy could cool.\n <\/p>\n
\n Taiwan\u2019s export growth \u201cwill definitely come down next year,\u201d said Wang Jiann-Chyuan, vice president of the semi-official thinktank Chung-Hua Institution for Economic Research. He expects growth to retreat from about 30% in recent quarters to single digits, as this year\u2019s surge makes further expansion harder.\n <\/p>\n
Trump\u2019s shadow<\/p>\n
\n Adding to the uncertainty is Trump, Wang said. Taiwan\u2019s trade surplus with the US hit a record this year, raising the risk of scrutiny from a president who has made reducing trade deficits a central goal of his tariff campaign.\n <\/p>\n
\n So far, chips and electronics, which made up more than 73% of Taiwan\u2019s exports, have been spared from the levy. While Trump has repeatedly threatened triple-digit tariffs on semiconductors, he has exempted companies, including TSMC, that build manufacturing facilities in the United States.\n <\/p>\n
\n Still, the heavy concentration of exports in the high-tech sector has amplified concerns about over-reliance on a single industry \u2014 or even a single company. While chips and electronics now account for nearly three-quarters of exports, up from roughly half five years ago, traditional sectors such as metals, machinery, and plastics have seen little growth or outright decline.\n <\/p>\n
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\n For Wu Jieh-min, a researcher at Taiwan\u2019s top research institute Academia Sinica, however, part of the concern about the island\u2019s economic future are associated with many Taiwanese people\u2019s deep-seated insecurity about its political status. China claims Taiwan as part of its territory, despite having never controlled it, and has vowed to absorb it by force, if necessary.\n <\/p>\n
\n \u201cI think the cautious, on-edge mindset you see across Taiwanese society is very obvious, and I actually see it as something positive,\u201d said Wu, whose research focuses on political economy and sociology.\n <\/p>\n
\n \u201cWe have to manage our own future very carefully, because even just surviving is already difficult for us,\u201d he said.\n <\/p>\n
\n On the ground, some Taiwanese say the rosy headline figures don\u2019t reflect their daily lives, like Chen, the nurse, who said salaries for health professionals feel stagnant.\n <\/p>\n
\n \u201cThat\u2019s why you hear doctors complaining about being underpaid, and why so many nurses are leaving the country or the industry altogether,\u201d Chen said.\n <\/p>\n
\n \u201cPeople in Taiwan keep hyping themselves up, saying things like \u2018We have TSMC,\u2019 or boasting about how high the stock market is. But for many living here, their monthly pay stayed much the same,\u201d she added.\n <\/p>\n
\n GT Lin, an AI engineer in Taipei, echoed that sentiment.\n <\/p>\n
\n \u201cThat\u2019s why I\u2019ve come to the conclusion that the country is strong, but the people aren\u2019t necessarily wealthy,\u201d he said.\n <\/p>\n
\n Taiwan\u2019s real wage growth, adjusted for inflation, began to slow in the late 1990s and has remained stagnant since the early 2000s. Labor\u2019s share of GDP peaked at about 50% in the 1990s and has since fallen to around 44%.\n <\/p>\n
\n Roy Ngerng, a Singaporean labor activist based in Taipei who has written extensively about the issue of wage stagnation in Taiwan, attributed the problem to long-term wage suppression \u2014 aimed at boosting export competitiveness.\n <\/p>\n
\n He said that while Taiwan\u2019s economy has seen exceptional growth in recent years \u2013 and booming profits among tech businesses \u2013 average workers and employees in other sectors have been mostly left out, widening the income disparity.\n <\/p>\n
\n Just five years ago, wages in the electronics sector were already 35% above the economy-wide average, according to Capital Economics. Now they are more than 70% higher.\n <\/p>\n
\n Ngerng added that the current government has been steadily increasing the minimum wage.\n <\/p>\n
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\n Wu Tsong-Min, an economist at National Taiwan University, however, notes that wage stagnation is \u201cnot unique to Taiwan,\u201d as many advanced economies face similar issues, particularly among low-skill workers.\n <\/p>\n
\n Wu, the author of \u201cA 400-Year History of Taiwan\u2019s Economy,\u201d also pointed out that Taiwan\u2019s GDP per capita, after adjusted for purchasing power, rises further thanks to lower domestic prices.\n <\/p>\n
\n Still, housing remains a major burden: Taipei\u2019s house price-to-income ratio has nearly tripled in the past two decades, surpassing London, New York and even Hong Kong, according to the Global Property Guide<\/a>.\n <\/p>\n\n For Wu of Academia Sinica, he remains optimistic, saying that the thriving tech industry could generate spillover effects that trickle down to other sectors.\n <\/p>\n
\n \u201cTaiwan\u2019s economy wasn\u2019t shaped by deliberate planning or an exceptionally capable government, but rather an evolutionary process,\u201d he said.\n <\/p>\n
\n While the size of Taiwan\u2019s economy is dwarfed by leading global powers, Wu added, its small and medium-sized enterprises are nimble, adaptable and attuned to global trends.\n <\/p>\n
\n \u201cThat\u2019s how its semiconductor industry became what it is today.\u201d\n <\/p>\n","protected":false},"excerpt":{"rendered":"For proof that an economy can thrive even under constant military threats from a powerful neighbor and amid…\n","protected":false},"author":2,"featured_media":287835,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55],"class_list":{"0":"post-287834","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom","12":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/287834","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=287834"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/287834\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/287835"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=287834"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=287834"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=287834"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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