Taiwan Surpasses South Korea in Per Capita Wealth—A Turning Point Fueled by TSMC and the A.I. Boom

For the first time since 2003, Taiwan will surpass South Korea in per capita GDP, a key measure of average wealth.

The Central Bank of Taiwan forecasts 4.55 percent economic growth in 2025, lifting Taiwan’s per person output to about US$38,000—just ahead of South Korea’s US$37,400.

Behind this shift is TSMC, the world’s leading contract chipmaker, which now controls roughly 70 percent of the advanced foundry market.

When the pandemic sparked a global semiconductor shortage, governments and tech giants turned to Taiwan’s factories to keep everything from cars to smartphones running.

Then came the AI boom: the introduction of tools like ChatGPT drove unprecedented demand for high-performance chips, sending Taiwan’s GDP surging 8 percent in Q2 2025, compared with just 0.6 percent growth in South Korea.

But there’s more to the story. Decades ago, many Taiwanese manufacturers moved production to China for lower costs, slowing the island’s growth to around 2–3 percent annually.

Yet Taiwan’s focused investment in pure-play foundries—facilities dedicated solely to chip fabrication—paid off when the world needed semiconductors most.

A stronger New Taiwan dollar, up 9 percent against the US dollar this year, further boosts its dollar-denominated GDP figures. The result is a dramatic reversal: Taiwan’s tiny, export-dependent economy has overtaken its larger neighbor in average living standards.

Yet Taiwan still trails Japan and is less than half as wealthy per person as Singapore. The island now faces fresh tests: can it turn its chip success into broader wage gains, diversify beyond semiconductors, and manage a currency that can both empower consumers and strain traditional industries?

For readers outside Asia, Taiwan’s rise makes one thing clear: in an era defined by chip shortages and AI, strategic focus on critical technologies can transform national fortunes—fast.

And with semiconductors at the heart of everything from electric cars to data centers, Taiwan’s story matters to us all.