Taiwan's economy is attracting global attention. The island nation, with a population of just over 23 million, has become a key production hub in the age of artificial intelligence (AI), with TSMC emerging as the heart of the global advanced semiconductor supply chain. Major companies like NVIDIA, Apple, AMD, Qualcomm, Microsoft, and Amazon rely on Taiwan's semiconductor production capabilities to sustain the pace of the AI revolution.
Taiwan is no longer just a manufacturing powerhouse; it has become a strategic nation supporting AI civilization. The world refers to this as the "Silicon Shield." Even amid military pressure from China, Taiwan maintains its strategic value in the international community due to its semiconductor competitiveness.
On the surface, Taiwan's economy appears dazzling. In the first quarter of 2026, Taiwan's economic growth rate reached 13.69%, an explosive growth rarely seen in advanced economies. The annual growth rate for 2025 also recorded over 8%. Exports surged, driven by demand for AI semiconductors, servers, and cloud infrastructure, while the stock market continued to hit record highs.
Per capita GDP has surpassed $40,000, reportedly outpacing South Korea. From an external perspective, Taiwan seems to be the biggest beneficiary of the AI era. The national economy is thriving, corporate profits are increasing, and global investors are once again focusing on Taiwan.
However, the economy cannot be defined by numbers alone. High growth rates do not guarantee happiness for all citizens, and increased exports do not necessarily improve the living conditions of every household. The real issue within Taiwan's economy lies here. While the national economy is experiencing unprecedented prosperity, the majority of the population does not feel the benefits.
Although TSMC has become the world's leading company, many young people in Taiwan claim they cannot afford to buy homes. While stock prices rise, wages have not significantly increased. Despite the high per capita GDP, the living conditions for average workers remain challenging. While the world envies Taiwan, many citizens view their economic reality with anxiety.
This paradox defines Taiwan's economy today. Semiconductors can save the nation, but they cannot make all citizens wealthy. While advanced industries create immense added value, their job creation potential is limited. The semiconductor industry constitutes a significant portion of Taiwan's GDP, yet it directly employs only a small fraction of the total workforce.
A small number of highly skilled workers and major corporate shareholders reap substantial benefits, while those in general service jobs, small business employees, rural residents, and youth are left distanced from the fruits of this growth. The engine of growth is powerful, but the warmth of that growth does not spread throughout society.
The frustrations felt by Taiwan's youth vividly illustrate this structural imbalance. While the semiconductor industry has reached world-class levels, wages in non-semiconductor sectors remain low. Starting salaries for college graduates are insufficient to cope with high housing prices and rents. The cost of living in metropolitan areas like Taipei and New Taipei City pressures the future of young people.
After spending a significant portion of their salaries on rent, saving for marriage, childbirth, or home ownership becomes a distant dream. Surveys indicating that many young people consider themselves "failures in life" resonate shockingly due to this reality. The success of the national economy is not translating into individual hopes.
The term "beggar Superman," which emerged in Taiwan, symbolically reflects this reality. It refers to young people rushing to convenience stores at closing time to buy discounted food nearing its expiration date. They move as quickly as Superman, yet their reality is one of poverty. This expression is not just a trend; it serves as a social metaphor illustrating how difficult life is for youth under the glamorous national brand of an AI semiconductor powerhouse. While the nation appears wealthy, many citizens endure daily life relying on discounted meals and near-expiration products.
The housing crisis in Taiwan is even more severe. The ratio of housing prices to median income in the capital, Taipei, is among the highest in Asia. Young people find it nearly impossible to purchase homes on normal wages. Rising housing costs delay marriage and reduce birth rates. Taiwan's extremely low birth rate is not merely a result of changing values.
It is a complex outcome of low wages, high housing prices, an uncertain future, and excessive working hours. In a society where economic growth occurs but children are not being born, it is difficult to claim that such growth is sustainable.
A deeper examination reveals issues with policy. Taiwanese economists and foreign analysts point to the long-standing low exchange rate and low-interest rate structure as one of the causes of economic polarization. Maintaining a low value for the New Taiwan Dollar benefits large exporting companies, enhancing their price competitiveness and increasing the local currency value of overseas earnings.
However, the same policies present a different face to the general public. A low currency value raises import prices, increasing the burden of living expenses. While it acts like a subsidy for export companies, it functions as an invisible tax for consumers.
Similarly, ultra-low interest rates benefit corporate investment but, if prolonged, supply excessive liquidity to the real estate market. When money flows not only into productive investments but also into housing, land, and financial assets, asset prices soar. Those who own assets become wealthier, while youth and the working class without assets drift further from opportunities for wealth accumulation.
This has significantly contributed to the polarization of Taiwan's real estate market. Ultimately, monetary and industrial policies have combined to favor large exporting companies and asset holders while disadvantaging wage earners and youth.
Some foreign media have criticized this contradiction in Taiwan as "Formosa Flu," referencing Taiwan's historical name. It highlights a pathological structure where the nation as a whole grows in advanced industries, yet the living conditions of its citizens do not improve. While large corporations succeed in the global market, ordinary workers suffer from low wages and high housing costs. This describes an economy that appears healthy on the surface but is burdened by deep fatigue internally, representing the greatest risk facing Taiwan's economy.
Of course, Taiwan's semiconductor success should not be downplayed. TSMC is a remarkable company that will be remembered in the history of human industry. Without the long-term strategies and dedication of the Taiwanese government, businesses, and engineers, today's Taiwan would not exist. Taiwan exemplifies how a small country can create a significant global advantage in a specific field.
South Korea can learn much from Taiwan's strategic focus, talent development, and ability to secure global customer trust. The issue lies not in the success itself but in the distribution and diffusion that follow. If the achievements of advanced industries do not connect to the lives of the entire population, that success will breed social tension.
This is why South Korea must pay attention to Taiwan. South Korea is also betting its future on the semiconductor and AI industries. Samsung Electronics and SK Hynix are key players in the global memory semiconductor market, and as demand for AI servers and data centers grows, the strategic value of South Korean semiconductors will increase. However, South Korea cannot avoid the same questions faced by Taiwan.
When semiconductor companies make significant profits, does that mean all citizens will prosper? When stock prices rise, does that reduce the rent burden for young people? When exports increase, do jobs in rural areas revive? When large corporations profit, do wages for small business employees also rise?
To conclude, the answer is not automatic. The fruits of growth must be widely distributed through systems, policies, industrial ecosystems, and social consensus. Even if a few large semiconductor companies achieve record profits, if that wealth does not translate into small businesses, local economies, service industries, youth employment, and housing stability, citizens will not feel the economic boom. Taiwan's experience serves as a sobering reminder of this point. Becoming a semiconductor powerhouse does not equate to a prosperous nation for the majority of its citizens.
Therefore, South Korea's strategy in the AI era should not stop at merely increasing semiconductor production capacity. The added value generated from semiconductors must be expanded into physical AI, robotics, smart factories, autonomous driving, biotechnology, energy, agricultural life, logistics, and content industries. Semiconductors are the brain of AI, but a brain alone cannot move a body. AI must integrate into factories, farms, hospitals, schools, ports, logistics centers, cars, and robots to create jobs and income that citizens can feel. This is where South Korea must differentiate itself from Taiwan.
Particularly, connecting with local economies is crucial. Taiwan's hyper-concentrated model may boost growth rates but could exacerbate regional disparities. South Korea must guard against a structure where the achievements of AI semiconductors are concentrated only in the capital region and select industrial complexes. The agricultural life and physical AI in North Jeolla, automotive and robotics in Ulsan, mobility in Gwangju, electronics and materials in North Gyeongsang, semiconductors and biotechnology in Chungcheong, and shipbuilding and logistics in Busan and Gyeongnam must organically connect with AI. Only then can the semiconductor boom transform into a boom for the entire national economy.
True national competitiveness in the AI era does not end with possessing a few world-class companies. It depends on how much opportunity the technologies and wealth created by those companies provide to the populace. While TSMC has made Taiwan a strategic nation, if it has not sufficiently changed the lives of Taiwan's youth, it serves as a critical warning for South Korea. While the support of Samsung Electronics and SK Hynix is a blessing for the South Korean economy, if their achievements do not spread to the lives of citizens, South Korea too could follow Taiwan's path of polarization.
Confucius said, "The people worry more about inequality than about scarcity," and Mencius stated, "Without a stable livelihood, there can be no stable heart." This means that a stable means of living and livelihood is essential for peace of mind. This wisdom from classical texts remains unchanged even in the AI era. If citizens lack stable income, housing, healthy working conditions, and future hopes, it is difficult to claim that a country is good, no matter how high its GDP.
Taiwan is now the most glamorous success story of the AI era and also the deepest cautionary tale. Semiconductors can make a nation wealthy, but to make citizens wealthy, a broader industrial ecosystem, a fairer distribution structure, more stable housing policies, more quality jobs, and more balanced regional development are necessary. Semiconductors are a starting point, not an endpoint. AI is a tool, not a goal. Technology must exist for humanity, and the economy must exist for the people.
South Korea must learn from Taiwan's success, but it must also recognize the shadows it casts. It should not only see the glory of TSMC but also acknowledge the self-deprecation of the "beggar Superman" among the youth. It should not only celebrate record growth rates but also recognize the world's lowest birth rates. It should not only hear the cheers from the stock market but also listen to the sighs of young people burdened by rent and living costs.
South Korea's goal in the AI era should not merely be to become a semiconductor powerhouse. It must become an AI powerhouse that citizens can feel, a semiconductor powerhouse where youth can dream of the future, and a physical AI powerhouse that grows alongside local economies. This is the path for the economy in the AI era viewed through the lens of truth, justice, and freedom. The truth of growth lies in technology, the justice of distribution lies in people, and the freedom of life arises from economic stability that citizens can feel.
A nation where citizens feel poor despite semiconductor success should not exist. A country with the world's best companies should not become a place that produces the most anxious youth. South Korea must ask itself in front of the mirror of Taiwan: Who will we enrich with AI semiconductors? A few companies or the entire population? The answer to this question will determine the fate of South Korea's economy over the next decade.
* This article has been translated by AI.
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