Taipei: Despite Taiwan’s per capita GDP forecast to top US$40,000 in 2026 amid the AI boom, an economist has warned of industrial “K-shaped” growth, which will result in low wages in certain domestic demand-oriented industries. Dachrahn Wu, director of National Central University’s Research Center for Taiwan Economic Development, explained that Taiwan’s economy is largely driven by exports in the current AI era, but the performance has diverged in a “K” shape.
According to Focus Taiwan, the Directorate General of Budget, Accounting and Statistics (DGBAS) predicts Taiwan’s GDP per capita will reach US$40,951 in 2026, up from an estimated US$38,748 in 2025. The local economy is expected to grow 7.37 percent in 2025, a 15-year high, fueled by robust exports, with an additional growth of 3.54 percent forecasted for 2026.
The report highlights that among Taiwan’s 11 million employed individuals, the services sector employs over 7 million in relatively low-paying jobs. In contrast, the electronics industry, a major AI beneficiary, employs only 1 million people, including 300,000 in the semiconductor segment, which tends to offer higher wages.
DGBAS data reveals that average aggregate earnings, encompassing regular and nonregular wages such as bonuses, in the electronics industry reached NT$1.12 million (US$35,443) during January-October 2025. Meanwhile, in the service sector, average aggregate earnings in the hospitality and food/beverage industry were NT$391,440, and NT$414,710 in the support services industry, which includes travel agencies.
Wu emphasized that as the service sector is the largest employer in Taiwan, the continuing “K” shaped development could have a deeper impact. He suggested that the government should prioritize turning the service sector around by boosting demand to address the low wage issue and improve Taiwan’s wage structure.
Kao Shien-quey, deputy head of the National Development Council (NDC), indicated in a recent legislative hearing that while the government aims to maintain Taiwan’s lead in the global AI and semiconductor competition, it also plans to leverage AI to upgrade operations in old economy industries and the service sector. Such efforts are necessary to strengthen domestic demand-oriented industries and achieve a balanced industrial development.