But the benefits of that growth are not spreading evenly. Taiwan's Central Bank Governor Yang Chin-long has warned publicly of an emerging "K-shaped economy" — one where certain sectors accelerate rapidly while others stagnate. The semiconductor industry, despite its outsized economic contribution, employs only around 300,000 people in a workforce of 11 million. The broader electronics and IT manufacturing sector employs roughly one million, compared to seven million working in services.
Wages are growing again after two decades of stagnation, but unevenly. Real average wages rose 1.4% in 2025, while median wages gained 1.35%. Yet 70% of Taiwanese still earned below the national average — a figure distorted by the much higher salaries concentrated in the tech sector, where pay runs nearly double the national median.
Taiwan's stock market has offered some compensation. The Taiwan Stock Exchange more than doubled in value between 2019 and 2025 to $2.2 trillion, and regulatory changes have drawn in retail investors: 13.77 million trading accounts now exist, equivalent to 60% of the population. But for households without savings to invest, rising asset prices have deepened anxiety rather than relieved it. In a survey of 1,195 Taiwanese voters conducted last month, 40% described their household finances as "anxious" or "very anxious," citing rising housing and living costs.
Economists point to structural risks beyond inequality. Taiwan's near-total reliance on one industry for growth marks a departure from the "living room factory" model of the 1970s to 1990s, when hundreds of thousands of small and medium enterprises distributed prosperity more broadly. Non-tech exporters also face the additional pressure of U.S. tariffs under the Trump administration, which have partially exempted semiconductors while hitting traditional manufacturing sectors that compete against South Korea, Japan, and Southeast Asia without the benefit of free trade agreements.
Taiwan's Gini coefficient — a measure of wealth inequality — has risen from 0.308 in 1980 to 0.341 in 2024, a trend economists say is likely to continue as the AI economy consolidates gains in fewer hands.
This analysis is based on reporting from Al Jazeera.
Image courtesy of Timo Volz.
This article was generated with AI assistance and reviewed for accuracy and quality.
