Taiwan Posts 13.69% Q1 Growth as AI Boom Deepens Inequality
Updated
Updated · Al Jazeera English · May 27
Taiwan Posts 13.69% Q1 Growth as AI Boom Deepens Inequality
5 articles · Updated · Al Jazeera English · May 27
Taiwan’s economy expanded 13.69% in the first quarter after 8.63% growth in 2025, but the gains are concentrating in semiconductors and other AI-linked industries.
Tech exports jumped 34.9% last year to $640.7 billion, semiconductors now account for more than 20% of GDP, and TSMC alone makes up over 40% of the stock market’s value.
That boom reaches relatively few workers: semiconductors employ about 300,000 people and broader electronics about 1 million, versus roughly 7 million in the service sector, feeding central bank warnings of a “K-shaped economy.”
Household strain is still visible as real average wages rose just 1.4% in 2025, 70% of workers earned below the average, and 40% of voters surveyed said rising living costs left them financially anxious.
Economists say Taiwan is shifting from its older SME-led growth model toward a more concentrated, tech-dominated economy, with housing costs, tariff pressure on non-tech exporters and a weaker currency widening the divide.
As Taiwan's economy soars, why do 70 percent of its workers feel left behind by the semiconductor boom?
Will the new US-Taiwan trade deal fix the island's economic divide or just enrich the tech sector further?
Is Taiwan's AI chip boom creating a 'Silicon Shield' abroad but a divided and anxious society at home?
In early 2026, Taiwan's economy surged to record highs, driven by booming global investment in Artificial Intelligence. This worldwide AI boom created unprecedented demand for advanced semiconductors, essential for AI infrastructure, placing Taiwan at the forefront of the technological revolution. Taiwan's growth is closely tied to this trend, with companies like TSMC projecting strong revenue increases thanks to intense and sustained demand for high-performance computing chips. As a result, Taiwan has become a key player in the global tech supply chain, with its economic success deeply connected to the rapid expansion of AI worldwide.