Taipei, Taiwan – For Lee, an engineer at Taiwanese computer giant ASUS, the AI boom sweeping the country makes it an exciting time to work in the technology industry.
Taiwan is a semiconductor powerhouse, producing about 90% of the cutting-edge chips used to power major AI models such as ChatGPT and Claude.
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“I feel that Taiwan’s technology and computer industry is becoming more vibrant,” Lee, who asked not to be identified by his real name, told Al Jazeera, citing events such as the Computex Technology and AI Exhibition, which will be held from June 2 to 6.
Still, Li is concerned that the windfall benefits from Taiwan’s AI are not being shared equally.
“Most non-tech industries don’t seem to be feeling the benefits, and it doesn’t feel like it’s evenly distributed at the moment,” Lee said, explaining that many of his former classmates working outside of technology don’t seem to be seeing similar gains either.
“It is primarily the industries that are at the forefront of this technology wave that are benefiting.”
Taiwan’s economy is growing at a pace that is the envy of any country.
Gross domestic product (GDP) grew by 8.63% in 2025, followed by an impressive 13.69% expansion in the first three months of this year.
Last year’s export value increased by 34.9% to $640.7 billion, with more than two-thirds of the total being technology-related goods and services.
Semiconductors alone account for more than 20% of Taiwan’s GDP, according to U.S. trade statistics, and most of the production is done by Taiwan Semiconductor Manufacturing Company (TSMC), whose top customers include Nvidia and Apple.
TSMC itself accounts for more than 40% of the value of the island’s stock market.
While impressive, rapid economic growth has raised concerns about over-reliance on AI growth.
Taiwan Central Bank Governor Yang Chin-loung warned of the emergence of a “K-shaped economy,” where certain sectors grow rapidly while others stagnate.
Although the semiconductor industry is important to Taiwan’s economy, it is far from the largest source of employment.
The sector employs only about 300,000 people out of 11 million, according to data compiled by Daclan Wu, director of the Taiwan Economic Development Research Center at National Central University.
The broader electronics and IT manufacturing industry employs about 1 million people, compared with about 7 million people in the services sector, according to Wu’s data.
James Lin, a historian who specializes in Taiwan’s postwar economic transformation, said the heavy reliance on a single industry for growth marks a transition from the Asian Tiger era of the 1960s to 1990s, when Taiwan’s economy was driven by hundreds of thousands of small and medium-sized enterprises (SMEs).
“From the 1970s to the 1990s, economic growth was concentrated in the hands of small and medium-sized family businesses that embodied the ‘living room factory’ model, where family businesses focused on producing one component of a consumer product,” Lin told Al Jazeera.
“In this way, the benefits of this period were spread more widely throughout Taiwanese society,” Lin said.
“In contrast, wealth inequality is currently widening in Taiwan as land prices soar and large companies like TSMC attract a larger proportion of foreign investment than smaller companies.”
Alicia García Herrero, chief economist for Asia-Pacific at French investment bank Natixis, said Taiwan’s economic model risks becoming a “dual society” where technology steals talent, capital and resources at the expense of other industries.
“It would be difficult if it wasn’t included. [the semiconductor] García Herrero told Al Jazeera that workers in non-technical jobs are underpaid, raising costs for companies.
Chao-Ssi Huang, vice dean of the Taipei Institute of Economics and a former board member of Taiwan’s central bank, said some of Taiwan’s challenges are beyond its own control.
Those challenges also include U.S. President Donald Trump’s tariffs, which partially exempted semiconductors but hit exporters in non-tech industries.
“Traditional [manufacturing] “This sector suffers from higher tariffs than other competitors such as South Korea and Japan, as well as Southeast Asian countries, due to the fact that we cannot sign free trade agreements,” Hwang told Al Jazeera.
“We’re being treated differently and that’s the challenge we’re facing.”
Critics blame other problems on the government’s shoulders, such as a weak currency that makes exports more competitive but reduces consumer purchasing power.
Taiwan’s government denies currency manipulation, but admits it intervened in the market to smooth out “volatility” when the new Taiwan dollar plummeted or rose sharply against other currencies.
After two decades of stagnation through the 2010s, wages are rising again, albeit unevenly.
According to the Directorate General of Budget, Accounting and Statistics (DGBAS), the real average wage increased by 1.4% in 2025, and the median wage increased by 1.35%.
Still, 70% of Taiwanese earn less than the average, a statistic due to the distorting effect of much higher salaries in the tech industry, where salaries are nearly twice the national average.
For Taiwanese frustrated by stagnant salaries, the soaring stock market has provided some solace.
Riding the AI boom, the value of the Taiwan Stock Exchange (TWSE) more than doubled to $2.2 trillion between 2019 and 2025, according to HSBC.
Regulatory changes introduced in 2020 made it easier for small investors to buy individual stocks, encouraging everyday Taiwanese to flood the market.
TWSE reported in January that the number of trading accounts reached 13.77 million, representing 60% of Taiwan’s population, and hailed the exchange as “a cornerstone of inclusive prosperity and shared growth.”
Although more egalitarian than neighboring countries such as Singapore, Hong Kong and China, Taiwan’s wealth gap has widened for decades.
According to DGBAS, Taiwan’s Gini coefficient in 1980 was 0.308 (a measure of wealth distribution, with 0 indicating perfect equality), comparable to modern-day Norway.
By 2024, Taiwan’s Gini coefficient had increased to 0.341. Although this is lower than in many countries, it is still a significant increase.
“I feel that the benefits of economic growth are not being distributed evenly,” Ryan, an engineer in the local technology sector, told Al Jazeera on condition that his real name not be used.
“While some industries and asset owners will benefit greatly, ordinary office workers often experience higher prices and housing costs, rather than an easier life,” he said.
Wei-Ting Yen, an associate researcher at research institute Academia Sinica, said the semiconductor and stock market booms are helping some Taiwanese while raising anxiety for others.
In a survey of 1,195 Taiwanese voters conducted last month, 40% said their households were “insecure” or “very uncertain” financially due to rising living costs, especially housing costs.
“Subjectively, I think they are worried that they are not accumulating wealth and that it is not enough to help them buy a house or an apartment,” Yen told Al Jazeera.
“House prices around the world are in an abnormal situation, and stock markets are also in an abnormal situation. [but] For people who don’t have extra money to invest in these two options, it creates even more frustration and anxiety around them,” she said.
