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Photo courtesy of Yonhap News |
[Alpha Biz= Kim Jisun] For the first time in 22 years, South Korea’s per capita gross domestic product (GDP) is expected to be overtaken by Taiwan, according to projections released on September 14 by South Korea’s Ministry of Economy and Finance and Taiwan’s Directorate General of Budget, Accounting and Statistics.
South Korea’s per capita GDP is forecast to reach $37,430 in 2025, while Taiwan’s is estimated at $38,066, putting Taiwan ahead. This follows a long period during which South Korea maintained the lead since first surpassing Taiwan in 2003. At its peak in 2018, the gap widened to nearly $10,000, but it has since narrowed quickly. Last year, the difference shrank to just $1,600, with South Korea at $35,129 and Taiwan at $33,437.
Analysts attribute Taiwan’s surge to the semiconductor boom and strategic government support, while South Korea has been hampered by sluggish economic growth and less effective industrial policies. Taiwan’s economy expanded by 8.01% year-on-year in the second quarter, the fastest pace since 2021, prompting its statistics bureau to raise its annual growth forecast from 3.10% to 4.45%.
At the heart of Taiwan’s growth lies the AI semiconductor boom. Exports from leading chipmakers, including global foundry giant TSMC, have benefited directly from soaring global investments in artificial intelligence.
Experts warn that South Korea must act quickly to reinforce its competitiveness in the semiconductor sector. Recommendations include strengthening talent development, expanding infrastructure, and making strategic investments in AI semiconductors.
알파경제 Kim Jisun (stockmk2020@alphabiz.co.kr)
