Taiwan's Semiconductor Boom Drives Mega Surge in Home Prices

While sector's highly paid staff can afford pricey homes, others are being priced out

- Yip Wai Yee

TAIPEI - Taipei-based banking officer Stanley Kuo's aspirations are, in his own words, typical: work in the bustling capital in northern Taiwan for some years, then return to his native Kaohsiung in the south to buy his first home.

But property prices have soared so much, even in Taiwan's traditionally cheaper south, that this dream feels increasingly out of reach for the 36-year-old.

In Kaohsiung's Nanzih district, for instance, housing prices have jumped by 89 per cent since 2020, according to data from local real estate company H&B Housing.

The booming property market in Kaohsiung - the largest city in southern Taiwan - can be attributed to the burgeoning semiconductor industry there, whose highly paid engineers have the ability to afford eye-watering home prices.

It is not just in Kaohsiung.

Across the island, wherever major chip fabrication plants, or fabs, are located or being built, data shows that the prices of housing projects in their vicinity shoot up.

This trend applies to even the more remote areas of the cities and counties of Hsinchu, Taichung, Tainan and Chiayi, where many of Taiwan's high-tech industrial parks are located.

There was a surge in growth in the semiconductor industry during the Covid-19 pandemic from 2020 to 2023, when there was a sudden rise in demand for chips worldwide to power remote workforces.

More recently, the global semiconductor sector is experiencing robust growth again, driven by soaring demand for cutting-edge chips that are crucial for applications such as artificial intelligence (AI), internet of things, 5G and autonomous vehicles.

Housing prices in Taiwan's newer fab sites began soaring in 2022, and realtors expect them to rise further in the near future amid sustained demand for AI chips.

But this surge has also contributed to Taiwan's widening wealth gap, causing growing unhappiness among those outside the chip sector as they are priced out.