Knowledge clustered to grow Taiwan; pooled capital is dividing it - 경향신문

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“TSMC is xxx.”What is TSMC to you? We asked people in Taiwan. A variety of answers came back. Some highlighted its role as a diplomatic weapon; others emphasized numbers such as its share of gross domestic product (GDP). There were also those who called it “the prime culprit that drove people away from nature” and spoke of the scars the semiconductor ecosystem has left. The semiconductor cycle sparked by artificial intelligence (AI) is bringing enormous money into Korea. The government plans to concentrate all resources to further expand this industry. Can Samsung Electronics and SK hynix become economic saviors? If so, to whom will the gains accrue? Will there be people who are left behind or harmed? Seeking answers, the Kyunghyang Shinmun YouTube channel <Studio Kyunghyang> visited Taipei, Hsinchu, and Kaohsiung in Taiwan from August 23 to 27. We cover this ‘Island Swallowed by Chips,’ where excitement and anxiety coexist, in two installments. ▶You can watch the full interview via the QR code.

Located in northwestern Taiwan, Hsinchu has an area of 14.67 km², about the size of the Dongdaemun District of Seoul, yet it is packed with the companies that top students from Taiwan’s elite universities most want to join. Last month, we met In Kaixi (23), a master’s student at Yang Ming Chiao Tung University, and Lin Zai (23), a student at Tsing Hua University, both interning at TSMC, the world’s largest semiconductor foundry based in Hsinchu. In Kaixi said, “I am satisfied to be working at the largest company in Taiwan,” adding, “I would like to work here even after I graduate.” Lin Zai likewise said, “Many of my friends are applying to the school. You need a bit of luck to land a job (in Hsinchu).”

Hsinchu is Taiwan’s first science parka cluster modeled after Silicon Valley in the United States in 1980. Knowledge, talent, and firms are spatially ultra-concentrated here. Within a radius of 3 to 5 km, you will find the TSMC headquarters as well as companies such as MediaTek (semiconductor design), GUC (a semiconductor design house), and GlobalWafers (semiconductor materials). Some 170,000 people work in the park. It is the world’s densest division-of-labor ecosystem linking design, fabrication, and back-end processes, and in itself a formidable barrier to entry built by TSMC and Taiwan’s semiconductor firms.

Having companies gathered in one place is advantageous for “knowledge spillovers.” Knowledge spillovers mean that knowledge created in one firm raises the productivity and innovation of othersan approach often chosen by latecomer countries in technology. In Taiwan, science parks stretching from Hsinchu down to the southern city of Kaohsiung were created to foster such spillovers. In Korea, Yongin, Pyeongtaek, Icheon, Hwaseong, and Suwon in the southern Gyeonggi area are representative semiconductor clusters.

Knowledge, talent, and capital drawn into the ‘semiconductor ecosystem’Taiwan faces the task of ‘polarization’Ultra-dense concentration of highly educated, high-wage workersProfits created → flow into local consumptionHome prices rising twice as fast as TaipeiWhen prices climbed to 386.7 million KRW per 3.3㎡ ($29,003 (38,670,000 KRW))Median annual wage stuck at 23.6 million KRW ($17,700 (23,600,000 KRW))Experts: “If the semiconductor boom continues,Taiwan’s regional and spatial gaps will widen further.”

Colley Hwang (黃欽勇), chairman of the Taiwan IT outlet ‘Digitimes,’ helped establish the Hsinchu science park in 1976 at the direction of Premier Chiang Ching-kuo. When NVIDIA CEO Jensen Huang visits Taiwan, he meets Hwang one-on-one, and TSMC founder Morris Chang even invested in himtestament to their closeness. In short, Hwang is an architect of Taiwan’s semiconductor supply chain and the “invisible hand” connecting global big-tech heavyweights. He describes Hsinchu this way: “No matter what subsidies you use, you cannot succeed (in replicating the Hsinchu ecosystem).”

Behind this remark lies the divergent industrial histories of Korea and TaiwanKorea developing around large conglomerates and Taiwan around small and medium-sized enterprises. Hwang said, “Clusters in Korea such as Suwon were built around large corporations. Taiwan’s science parks are different. Companies with diverse technologies and formseven very small firms with sales around $400,000are included in the ecosystem if they have specialized technologies.” In short, Hsinchu’s strength is that no single company can do everything, and no single company needs to do everything.

From planning to completion, Hsinchu followed a process different from Korea’s Yongin semiconductor cluster. The Yongin cluster now underway is being directly developed by SK hynix and Samsung Electronics, which bought industrial-complex land from Korea Land and Housing Corporation (LH). The Taiwanese government, by contrast, had companies lease land in the science parks. Hwang said, “To prevent semiconductor firms from buying land outright, the state first expropriated land and then only offered ‘leases.’ As a result, companies could save money and focus on attracting talent and increasing investment in technology.”

In fact, the cluster drew talent from Silicon Valley in the 1980s and has continued to absorb high-end talent within Taiwan. Many who work in Hsinchu hold advanced degrees. According to the Hsinchu Science Park Administration, master’s and doctoral degree holders account for 41%the largest sharefollowed by bachelor’s degree holders (33.40%) and high school graduates (13.20%). Industryacademia cooperation is also strong: Tsing Hua University and Yang Ming Chiao Tung University supply R&D talent to companies in Hsinchu.

The personnel composition of the Yongin cluster led by SK hynix is expected to differ in this respect. Unlike design (fabless)-centered Hsinchu, which is led by highly educated talent, Yongin is an ultra-large production line based on manufacturing plants such as those of SK hynix. Professor Park Sang-in of Seoul National University said, “Given the nature of large-scale mass-production plants in Yongin, many bachelor-level engineers who operate and manage equipment 24/7 will be needed, as well as production technicians with high-school or junior-college backgrounds. The jobs differ from fabless-centered Taiwan.”

This is not to say that jobs for high-school graduates are bad and jobs for master’s and doctoral degree holders are good. The crux is what knowledge is created inside the industrial park, and how widely and efficiently that knowledge spreads to firms and people. The question is whether knowledge spillover in Yongin can be as broad and efficient as in Hsinchu.

A view of Zhubei City, the northern residential hub near TSMC in Hsinchu. Hsinchu | Yang Da-young·Son Da-hyun, PD

High-wage engineers gathered in Hsinchu created corporate value, and some launched startups and ventures, expanding the ecosystem. According to the Taiwan Institute of Economic Research’s 2026 report on Hsinchu’s startup ecosystem, as of October 2025 there were 678 startups in the Hsinchu area. In the expanded cluster, profits were generated, paid to workers, and then flowed into local consumption. According to the Directorate General of Budget, Accounting and Statistics of the Executive Yuan, the average disposable income per household in Hsinchu City in 2025 was 1,604,000 TWD, roughly 70,000,000 KRW ($52,500 (70,000,000 KRW))the highest level in Taiwan.

High disposable incomes have fueled surging home prices. In Zhubei City, a northern residential center near the Hsinchu Science Park, luxury apartment complexes line the main roads for dozens of kilometers, reminiscent of Seoul’s Gangnam “One Bailey.” The highest-end finisheslike gardens seeming to hang from every floorare eye-popping. Prices for luxury apartments are among the highest in Taiwan. According to the United Daily News Network on the 16th, prices for newly built large apartments in Zhubei City rose to 899,900 TWD per 3.3㎡ (1 pyeong), which is $29,003 (38,670,000 KRW). Hsinchu City’s average home price jumped 113.3%, from 173,000 TWD (per pyeong) in 2016equivalent to $5,573 (7,430,000 KRW)to 369,000 TWD in 2025equivalent to $11,888 (15,850,000 KRW). That far outpaces the rise in the capital, Taipei, roughly by a factor of two over the same period.

사진 크게보기 The exterior of TSMC, the world’s largest foundry, in Hsinchu, Taiwan, visited by Studio Kyunghyang on August 23. Hsinchu | Yang Da-young·Son Da-hyun, PD

The taxi driver JK, who drove the reporter from Taipei to Zhubei in Hsinchu, looked at the luxury apartment complexes in Zhubei City and said, “It is a wonderful place, but it is not somewhere I can afford to live in my lifetime.” It is hard to dismiss his “cannot afford to live” remark as mere grumbling. According to the Directorate General of Budget, Accounting and Statistics, the median annual total wage income (the midpoint when all wage earners are lined up by income) for all wage earners in Taiwan was 546,000 TWD in 2024about $17,700 (23,600,000 KRW).

Just a few days before the reporter’s visit to Taiwan, President Lai Ching-te announced that, buoyed by the AI-driven boom, the fruits of this year’s expected 11%-range economic growth would be distributed to all citizens. The payment amounts to roughly $330 (440,000 KRW) per person in Korean won. Although President Lai said the aim was for all citizens to “feel” the growth, the amount is far from enough to assuage non-IT workers suffering from severe wage disparities.

Dr. Lin Tsung-hung (林宗弘) of Academia Sinica is a sociologist who has long studied Taiwan’s class polarization, generational polarization, and political/identity polarization. Recently, he has been watching the gaps created by TSMC. The wage gap between semiconductor jobsepitomized by TSMCand non-semiconductor jobs has been reported by numerous outlets. In addition, Dr. Lin points to generational disparities. “Taiwan has a ‘lost generation’those who first stepped into society between 1997 and 2016,” he said.

In the 1990s, companies in Hsinchu enjoyed a dazzling run fueled by the personal-computer (PC) boom. But as China pursued reform and opening during this period, there was a large outflow of capital from general manufacturingmoney for building factories and making goods rushed to China. Hsinchu’s electronics industry grew in this process, but it was not enough to offset the collapse of the broader manufacturing labor market caused by capital flight. Then came another reversal: the AI boom that took off in earnest after 2024.

“Now capital is returning to Taiwan. The job market for younger generations has heated up. But the earlier generationnow middle-agedhas been left as a ‘sandwiched generation’ that bore the sacrifice. Today’s middle-aged have lower wage growth than the young, and their average wages are lower than those of their Korean counterparts,” Dr. Lin said.

Assuming the semiconductor boom lasts more than five years, we asked what social problems might emerge over the next 20 to 30 years. He warned, “The division of Taiwan into two worldspolarization directly reflected as regional and spatial disparitieswill become a far more serious issue.”

We asked him what TSMC is to Taiwan. “If Taiwan were a sports team, TSMC would be its most outstanding ace. But a dilemma has arisen because too much influence and attention are concentrated on this one player: whether to support a single ace, or to develop the entire team.”

On the island swallowed by chips, what we need to look at is not just the chips. It is the people left outside the cities the chips have created.