Peter was part of the crowd that gathered at Fuyu Fuyu, a high-rise apartment development in the northern Taiwan municipality of Taoyuan, on a Sunday this month. By the end of the day, the young engineer, who does not want to be fully identified, had signed up to spend NT$20 million (US$630,000) on a 120 square meter apartment – his second.
“It’s the best way to invest. My income will increase even faster in the coming years, and it’s the same for many others, so property values will increase,” said Peter, who works at Quanta Computer, an electronics contract manufacturer. based on only one stone. throw it away.
Fuyu Fuyu sounds like a phrase that means “bestow wealth” – and Quanta is doing just that. Long the world’s largest contract laptop maker, Quanta is getting a big boost from the global AI boom because it also builds the high-end servers needed to gather data for large models of languages. Its stock and earnings are up, and employees are reaping the benefits.
Founder and chairman Barry Lam has become Taiwan’s richest man, topping Forbes’ list of billionaires for the country published in April, while the company’s lowest-ranking employees like Peter are sharing NT$3.9 billion in cash bonuses paid to staff this year – up to 30 percent by 2023.
Quanta is just one of the companies reinforcing Taiwan’s reputation as a global epicenter for the creation of technological wealth. UBS last week predicted that Taiwan will have 47 percent more millionaires by 2028 than today — the largest increase of any country, driven largely by growth in its semiconductor industry.
Investors, economists and human resources professionals say the benefits are spreading beyond the top managers and engineers at Taiwan’s biggest tech companies, who benefited from share prices in the early days of the chip sector and are gaining a larger share wider society.
“There is a rising wealth effect and new groups and younger talents are taking advantage,” says Mark Duh, chairman of Fuh Hwa Investment Trust, one of the largest local fund managers.
The titan of the sector – and one of the main drivers of wealth creation – is Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker that is now the most valuable listed company in Asia. TSMC reports its latest earnings on Thursday after revealing a 40 percent jump in second-quarter revenue last week.
But hundreds of other Taiwanese companies that dominate the AI supply chain, from chip design houses and server manufacturers to chip test equipment suppliers and component makers, are also part of the boom.
Many senior and mid-level employees at AI supply chain companies received bonuses worth more than two annual salaries last year.
Winway, a supplier of chip test products, distributed employee bonuses equivalent to 30 monthly salaries last year. Average salaries for non-executive staff at semiconductor design house Global Unichip rose by a fifth last year, the third consecutive annual increase, and the company’s total salary expenses have risen by double-digit margins for three consecutive years, according to published statistics. from the Taiwan Stock Exchange this month. At AI server company Chaintech Computer, average pay rose by more than a quarter last year.
Artificial intelligence windfalls are just the latest boost to Taiwan’s fortunes. During the pandemic, its massive electronics industry benefited from a semiconductor and IT boom fueled by demand for homework. The rise of electric vehicles has been another help to demand.
At the same time, the country’s first generation of post-war entrepreneurs are passing their wealth on to their children. Last but not least, many wealthy Taiwanese who previously spent most of their time in China, where they previously concentrated investment in manufacturing, have returned home as China’s investment environment has deteriorated and companies they are under pressure from customers to de-risk. .
Ferrari sales in Taiwan doubled over the previous four years, highlighting a boom in high-end consumption.
The tide of wealth is boosting domestic sectors where revenues have long lagged behind technology exporters.
“People pour their rising wages into property. The real estate market is growing a lot and that in turn helps other industries as well,” Duh said.
Several building and construction materials companies were among those with the largest increase in non-executive pay in listed companies last year, according to TSE figures.
Adding to AI’s growth is a growing shortage of workers at all levels as Taiwan’s population begins to shrink. These obstacles have caused sharp increases in wages even in low-level service sector jobs, where wages have been at a low level for many years.
Wages in the hotel and restaurant sector have risen 5.5 percent this year, outpacing the industry average and the biggest increase in at least a decade, according to survey figures provided by 104 Job Bank, a local job broker.
According to TSE figures, average wages at listed tourism and hospitality companies rose by 13.6 percent last year, catapulting the sector to the top rank among more than 30 industries in terms of wage growth from the 27- four years ago. Average wages in the trade and consumer goods sector rose at the fourth-fastest pace among industries last year, up from 23 four years ago.
“I believe the main reasons for rising wages in the tourism sector are the post-pandemic travel boom and labor shortages,” said Lai Wei-wen, a labor economist at the Chung Hwa Institute for Economic Research, a government think tank. tank.
However, the wealth effect has limits and parts of Taiwanese society are not benefiting.
In Taiwan’s January election, young people unhappy about low wages for fresh graduates and the widening gap between top earners in the tech industry and the domestic service sector abandoned the ruling Democratic Progressive Party in droves, leading that in the loss of the legislative majority.
The money flowing into real estate from high-income tech workers is also driving up home prices, putting them out of reach for young workers in other industries, even as wages there also rise. A residential property now costs the equivalent of almost 10 years’ wages on average, according to the Home Office, up from 8.6 four years ago.
But some officials hope the wealth will spread further. “At least we see some changes,” a cabinet official said. “The AI boom is our best hope that it can deepen.”
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Image Source : www.ft.com