Taiwan's economy is doing well, but many of its workers are not

Effects of Al-related export boom are not being felt broadly by those in non-tech sectors

- Yip Wai Yee Taiwan Correspondent

Taiwan Semiconductor Manufacturing Company produces over 90 per cent of the world's most advanced chips necessary for complex AI workloads. However, while electronics manufacturing accounts for more than 15 per cent of Taiwan's GDP, it employs only around 6.5 per cent of the total workforce.

(PHOTO: LAM YIK FEI/NYTIMES)

After working full-time for four years, Taiwanese marketing specialist Sandy Chien decided to go freelance so that she can take on side gigs.

The 28-year-old wanted to supplement her income in other ways, as her salary at a local restaurant group had “barely moved”.

“1 did not feel like there would be good development opportunities for me if I stayed in that job for much longer,” she told The Straits Times.

“Is Taiwan’s economy really doing so well? I cannot tell.”

Taiwan’s technology-driven economy is booming, even amid global economic headwinds, as roaring demand for the island’s artificial intelligence (AI) products has driven record export growth and sharp upward revisions of gross domestic product (GDP) forecasts.

But the effects are not being felt broadly by Taiwanese working in non-tech sectors, as income gaps widen and wages remain stagnant.

“The proceeds of the export boom have largely flowed to firms in the tech sector, with few spillovers to the rest of the economy,” said Mr Jason Tuvey, deputy chief emerging markets economist at London-headquartered Capital Economics.

“Only a small proportion of workers that were already on relatively high incomes have benefited from faster wage increases on the back of the boom in Al-related exports,” he added.

While chip engineers have long earned salaries significantly higher than average in an industry where profit margins are high, they are now making even more through huge bonuses, thanks to record-breaking profits.