Peter was among the crowds that flocked to Fuyu Fuyu, a high-rise apartment development in the northern Taiwanese city of Taoyuan on a Sunday this month. By the end of the day, the young engineer, who did not want to be identified, had signed a contract to spend NT$20 million (US$630,000) on a 120-square-meter apartment, his second.
“This is a great way to invest – my income is set to grow much more rapidly over the next few years and so will many other people’s, so property values will rise,” said Peter, who works for electronics contract manufacturer Quanta Computer, based nearby.
“Fuyu Fuyu” sounds like a phrase that means “I will bestow wealth on you,” and that’s exactly what Quanta is doing. Quanta, the world’s largest contract laptop maker for many years, is a huge beneficiary of the global AI boom because it also makes the high-end servers needed to crunch data for large language models. The company’s stock price and profits have soared, and its employees are reaping the rewards.
Founder and Chairman Barry Lam has become Taiwan’s richest man, topping Forbes magazine’s list of the country’s richest people published in April, while lower-level staff like Peter are sharing in NT$3.9 billion in employee cash bonuses this year, a 30% increase over 2023.
Quanta is just one of the companies bolstering Taiwan’s reputation as a global center for tech-driven wealth creation: UBS predicted last week that the number of billionaires in Taiwan will rise 47% by 2028, the biggest increase of any country, driven mainly by the growth of the semiconductor industry.
Investors, economists and human resources experts say the benefits extend beyond the senior executives and engineers at Taiwan’s largest technology companies who benefited from stock compensation in the industry’s early days. They also extend to a broader segment of society.
“The wealth effect is growing, with new groups and younger talent benefiting,” said Mark Dou, chairman of Fuhua Investment Trust, one of the country’s largest asset managers.
The sector’s giant and main driver of wealth creation is Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest chipmaker and currently Asia’s most valuable public company. The company said last week that its second-quarter revenue rose 40 percent and will report its latest earnings on Thursday.
But hundreds of other Taiwanese companies that dominate the AI supply chain, from chip design firms and server makers to chip-test equipment suppliers and component makers, are also part of the boom.
Many senior and mid-level employees at AI supply chain companies received bonuses that were more than double their annual salary last year.
Winway, a supplier of chip-testing products, gave employees bonuses equal to 30 times their monthly salary last year.The average salary of non-managerial staff at semiconductor design company Global Unichip rose by a fifth last year, the third consecutive year of increases, and the company’s total salary expenses have grown by double digits for three consecutive years, according to statistics released by the Taiwan Stock Exchange this month.At AI server company Chaintech Computer, average salaries increased by more than a quarter last year.
The AI boom is just the latest boost to Taiwan’s wealth. During the pandemic, the island’s giant electronic hardware industry benefited from a semiconductor and IT boom sparked by work-from-home demand. The rise of electric vehicles has also provided an additional boost to demand.
At the same time, the first generation of postwar Taiwanese entrepreneurs are passing on their wealth to their children. Finally, many wealthy Taiwanese who once spent most of their time in China, where they focused their investments in manufacturing, are returning home as the investment climate in China deteriorates and their companies come under pressure from customers to avert risks.
Ferrari’s sales in Taiwan have doubled in the past four years, highlighting a boom in luxury consumption.
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The wave of wealth is boosting domestic sectors whose incomes have long lagged far behind those of technology exporters.
“People are putting their ever-increasing salaries into real estate. The real estate market is growing a lot, which is helping other industries as well,” Dow said.
According to Tokyo Stock Exchange statistics, some building materials and construction companies were among the listed companies that saw the biggest increases in non-executive compensation last year.
The rise of AI is being spurred by Taiwan’s population beginning to shrink, exacerbating labor shortages at all levels — a bottleneck that is causing wages to soar, even in low-level service-sector jobs where wages have remained stagnant for years.
Wages in the hotel and restaurant sector rose 5.5 percent this year, above the industry average and the biggest increase in at least the past decade, according to survey data provided by local recruitment agency 104 Job Bank.
Tokyo Stock Exchange figures show that average salaries at listed tourism and hospitality companies rose 13.6 percent last year, propelling the industry to the top of salary growth among more than 30 industries, up from 27th place four years ago. Average salaries in the commercial and consumer goods industry saw the fourth-highest growth among industries last year, up from 23rd place four years ago.
“We believe the main reasons for the tourism industry salary increase are the post-pandemic travel boom and labour shortages,” said Lai Wei-wen, a labour economist at the China Institute of Economic Research, a government think tank.
Still, the wealth effect has its limits, and large segments of Taiwanese society do not benefit.
In Taiwan’s January elections, young people, dissatisfied with low wages for new graduates and the widening income gap between the top tech workers and the domestic service sector, defected in droves to the ruling Democratic Progressive Party, causing the party to lose its majority in the legislature.
Money flowing into real estate from high-earning tech workers is also pushing up house prices, putting them out of reach even as wages rise for younger workers in other sectors. On average, a home costs about 10 years’ salary, up from 8.6 years’ salary four years ago, according to the Interior Ministry.
But some government officials are hopeful the wealth will spread even further. “We’re seeing at least some change,” one government official said. “The AI boom is the biggest reason we hope it will get even deeper.”
