Taiwan’s chip boom fuels inequality

Taiwan’s semiconductor boom has driven headline wealth while deepening social and regional inequalities, leaving many residents with stagnant living standards despite robust GDP growth. Per-capita wealth sits at NT$9.17 million (about US$299,300), yet the gap between the wealthiest and poorest has widened sharply: the ratio of net assets held by the top 20% versus the bottom 20% rose from 16.8 in 1991 to 66.9 in 2021. The middle class has contracted to roughly 30.4% of the population after three decades of polarization.

Household finances and family choices are changing under cost pressures. Middle-income workers earning NT$40,000–50,000 (US$1,305–1,632) monthly report cutting back on childbearing and saving for long-term care to avoid burdening relatives. Fertility decline tied to expensive childrearing and housing threatens future labor supply. Debt burdens weigh heavily on lower-income households—the bottom quintile holds average liabilities near NT$4.05 million—making many families vulnerable to income or interest-rate shocks.

Housing unaffordability is acute: Taipei’s house price-to-income ratio approaches 20, and property near semiconductor fabs has surged, pricing out non-tech households. The chip sector, led by TSMC and major suppliers, contributes roughly 20–25% of GDP and concentrates gains geographically in the north—especially Hsinchu and Taipei—exacerbating north–south disparities in wages, services and investment.

Wealth accumulation at the top has been pronounced: the island’s wealthiest individuals have seen combined fortunes climb substantially, while wage growth outside the tech ecosystem lags. This divergence is reshaping politics and social expectations, prompting calls for policy intervention.

Proposed responses span corporate and government action: flexible work arrangements and childcare subsidies to ease work–life balance; expanding affordable housing supply and rental supports; decentralizing incentives and infrastructure investment to spur southern growth; targeted retraining and wage-boost programs for non-tech sectors; and stronger social safety nets to shield indebted households. Analysts caution that without coordinated fiscal and industrial reforms the chip boom risks entrenching inequality and undermining social cohesion.