Taiwan to Surpass South Korea in GDP Per Capita: TSMC and AI Boom Drive Growth

Taiwan's GDP per capita is poised to surpass South Korea's by 2025, driven by the prowess of TSMC and innovations in AI, reports suggest. Key strategic decisions and export restrictions have fortified Taiwan's economy, enabling significant growth amidst global economic challenges.

Yeh Chun-hsien, head of the National Development Council (NDC), highlighted Taiwan's projected lead over South Korea in GDP per capita by 2025, attributing this to the strategic success of Taiwan Semiconductor Manufacturing Co. (TSMC) and the thriving artificial intelligence sector, according to a Focus Taiwan report.

Yeh's observations follow a Korea Economic Daily projection that Taiwan will surpass South Korea in GDP per capita for the first time in over two decades, bolstered by figures from agencies in both Taipei and Seoul. Taiwan's GDP per capita is set to reach USD 38,066 this year, ahead of South Korea's USD 37,430, Yeh noted.

Yeh emphasized that TSMC's dominance in global markets, particularly in AI, has been crucial. TrendForce Corp. reports TSMC's market share soaring to a record 70.2 percent, making significant gains over Samsung's 7.3 percent. Government export restrictions have shielded Taiwan's tech industry, ensuring sustained global leadership.

The Directorate General of Budget, Accounting and Statistics (DGBAS) revised Taiwan's GDP growth forecast to 4.45 percent, up from 3.10 percent. Meanwhile, South Korea faces economic hurdles partly due to its reliance on the Chinese market, where a supply glut has impacted its GDP performance. In contrast, Taiwan's niche in technology exports offers competitive advantages.

Yeh highlighted the resilience of Taiwan's economy against currency fluctuations, indicating robust growth in sectors like advanced semiconductors and AI. This is set amidst South Korea's challenges in the auto industry, where Chinese products have begun to dominate.

(With inputs from agencies.)