Hot Exports, Cold Domestic Demand: Taiwan’s Rapidly Widening Wealth Gap

Over the past three to five years, Taiwan’s exports have boomed while domestic demand has remained weak. The gap between rich and poor is widening rapidly. Over the past five years, the world has faced a once-in-a-century pandemic, an AI boom, and U.S.–China confrontation. Taiwan certainly ranks among the top three countries benefiting from these developments. The pandemic caused demand for electronics used remotely to surge. The AI boom generated overwhelming semiconductor and server orders, with even frantic factory expansion unable to keep up. Amid U.S.–China confrontation, many electronics orders gradually shifted from China to Taiwan. Export-related technology stocks—including semiconductors, servers, and components such as thermal-management products—boomed, and people working in those industries earned handsomely. Domestic demand is under pressure from weak tourism, labor shortages with rising wages, and inflation with higher water and electricity costs. Some traditional manufacturers, such as machinery companies, also face particularly intense competition. At present, a minority positioned to benefit from these trends has seen incomes soar, simultaneously pushing up housing and goods prices. The majority who have not caught these waves instead face greater economic pressure. Personally, I believe declining birth rates are actually the larger and more irreversible crisis.