Taiwan’s economy is set to outpace South Korea’s in GDP per capita next year, and experts point to one big reason: the powerhouse performance of Taiwan Semiconductor Manufacturing Company (TSMC) and the exploding AI boom. Yeh Chun-hsien, head of Taiwan’s National Development Council (NDC), shared these insights while chatting with reporters in Taipei.
This comes after a recent report from The Korea Economic Daily highlighted that Taiwan could leapfrog South Korea in GDP per capita for the first time in 22 years, based on forecasts from agencies in both countries. For 2024, Taiwan’s GDP per capita is projected to hit USD 38,066, edging out South Korea’s USD 37,430. Yeh mentioned he saw this trend coming years ago, thanks to Taiwan’s strong edge in key tech areas.
At the heart of this success story is TSMC, the world’s top contract chipmaker. Yeh explained that TSMC’s dominance in the global pure foundry business—where it makes chips for other companies—gives Taiwan a clear lead over South Korea. This advantage looks set to last for the next five to 10 years. A fresh report from Taipei-based TrendForce Corp. backs this up: TSMC’s global market share jumped to a record 70.2% in the second quarter of 2024, up from 67.6% in the first quarter. That’s fueled by the rapid rise of artificial intelligence applications. Meanwhile, South Korea’s Samsung Foundry trails far behind with just 7.3% share.
What makes TSMC stand out? Yeh highlighted its smart business model—no competing with clients under its own brand, plus customized products that meet exact needs. The company’s innovative work culture also plays a huge role in keeping it ahead in the semiconductor industry.
Government policies have helped too. Strict tech export restrictions shield Taiwan’s tech giants like TSMC from fierce foreign rivals, letting them hold onto their global lead. Yeh noted that Taiwan’s firms are nailing price talks with clients in advanced semiconductors and AI devices. Even with the Taiwan dollar strengthening against the US dollar, the country’s specialized products give exporters solid leverage.
Looking ahead, Yeh is optimistic about the AI demand staying strong, which will boost TSMC and Taiwan’s overall economy. He even predicts local GDP growth could exceed 4% this year. The Directorate General of Budget, Accounting and Statistics (DGBAS) agrees, now forecasting a 4.45% rise—up from an earlier 3.10% estimate.
On the flip side, Yeh pointed out challenges for South Korea. Heavy investments in China and reliance on that market have backfired amid a supply overload from Chinese firms, hurting Korean companies and GDP. Plus, some South Korean products, especially in autos, are losing ground to cheaper Chinese alternatives. Taiwan’s export controls, however, have kept its semiconductor edge sharp and growth on track.
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