Taiwan is on track to surpass South Korea in GDP per capita this year, marking a major economic shift in Asia driven largely by the global semiconductor boom. The surge in demand for chips — critical for artificial intelligence (AI) and advanced technologies — has placed Taiwan’s economy in the spotlight.
According to the central bank’s latest forecasts, Taiwan’s GDP is expected to grow 4.55 percent this year, slightly higher than earlier estimates. This growth trajectory positions Taiwan to overtake South Korea’s per capita income one year earlier than predicted, with Taiwan’s figure expected to reach about US$38,000. While this still remains less than half of Singapore’s level, it highlights Taiwan’s rapid economic rise.
The pandemic-era chip shortages initially propelled Taiwan’s semiconductor firms into prominence as global leaders scrambled for supply. The AI boom, powered by technologies like ChatGPT, has further accelerated growth for companies such as TSMC and Foxconn. Taiwan’s exports, especially in advanced chips and servers, have now overtaken South Korea’s, despite its smaller population and economy.
South Korea, by contrast, faces stagnation. Its economy expanded less than 1 percent in the second quarter, weighed down by sectors like petrochemicals and structural challenges such as an aging population. The Bank of Korea projects only 0.9 percent growth this year, underscoring the widening gap between the two nations.
Another factor boosting Taiwan’s rise is the strong performance of the New Taiwan dollar, which has gained nearly 9 percent this year, making it the best-performing Asian currency. This appreciation has further accelerated Taiwan’s per capita income growth compared with South Korea, whose won has strengthened by about 6 percent.
The shift underscores how Taiwan’s concentration in advanced technology industries has enabled it to outpace South Korea and secure a stronger position in Asia’s economic hierarchy.
