Taiwan's economy is experiencing a boom, with GDP growth projected to reach 10.16% in 2026, a significant increase from the previous projection. This growth is largely attributed to the semiconductor industry, which has seen a surge in demand for advanced chips and servers. However, this growth is not being felt by the average Taiwanese citizen. While the average monthly wage has increased by 2.69%, the majority of wage earners are still earning less than the average, and the wealth gap is widening. The semiconductor industry's success has created a K-shaped economic structure, with high-paid workers in the semiconductor sector and stagnant or declining wages in other sectors. The wealth gap is even more stark, with the wealthiest 20% of households having an average net worth of NT$51.33 million, while the poorest 20% have an average net worth of just NT$770,000. This disparity is further exacerbated by the high cost of housing, with the median home price in Taipei being 14.62 times the median household's annual disposable income. The situation is so dire that some people are living in makeshift rooms on rooftops, while others are sharing living spaces with strangers to reduce costs. Taiwan's economy is also vulnerable due to its heavy dependence on electronics and information and communications technology (ICT) products, particularly semiconductors, for its exports. The government is trying to encourage machinery companies to produce semiconductor manufacturing equipment to spread the semiconductor industry's success to other sectors, but the disparities between industries and society are likely to persist. Taiwan's experience serves as a warning to Korea, which is also experiencing a semiconductor upcycle, to beware of the 'average trap' - the illusion of strong headline growth that diverges sharply from economic conditions on the ground.
