Hsinchu City remains the richest and Hsinchu County the second-richest in Taiwan in terms of average annual household income, the Ministry of Finance’s recently released 2022 tax return data for 6.63 million households showed. Taipei ranked third, while four boroughs in Hsinchu city and county were also in the top five with the highest household incomes among the nation’s boroughs. The data suggest that the many technology professionals who reside in Hsinchu city or county and work in the nearby Hsinchu Science Park — the cradle of the nation’s high-tech ecosystem and home to Taiwan’s semiconductor industry — are becoming part of the burgeoning ranks of wealth in Taiwan in the past few years.
Residents of Hsinchu City’s Guanxin Borough (關新) reported an average annual household income of NT$4.611 million (US$143,877), up 23 percent from NT$3.747 million in 2021 and topping all other boroughs in Taiwan for the fifth consecutive year. The Guanxin borough warden told local media that of its more than 6,000 residents, about 90 percent work in the Hsinchu Science Park, mostly at Taiwan Semiconductor Manufacturing Co, the world’s largest contract chipmaker, or MediaTek Inc, the nation’s largest IC designer.
The rising household income in Hsinchu city and county reflects the effect of the reshoring of many Taiwanese tech firms leaving China amid persistent US-China trade tensions and a global supply chain realignment. It also comes as Taiwan’s semiconductor industry has gained a strong foothold over the years, leading the world in the wafer foundry, and IC packaging and testing segments, while ranking second only to the US in the IC design market.
The household income data show that the Hsinchu Science Park has for years created many of the nation’s tech upstarts, and it is fair to say many more would come from the Central Taiwan Science Park and the Southern Taiwan Science Park if firms continue investments in the parks.
The data also reveal hidden concerns for Taiwan’s economy: income inequality and imbalanced regional development. For example, the wealth gap between Hsinchu city and county and other areas in the country has been widening. In 2022, the average annual household income in Taitung County was only NT$834,000, nearly half of Hsinchu City’s NT$1.505 million and about two-thirds of Hsinchu County’s NT$1.34 million.
The data show uneven industrial development in the nation, with a few tech firms in the information technology and electronics sectors taking center stage, while non-tech manufacturers take a back seat due to price competition from Chinese companies, a weaker yen and the lukewarm recovery in the global economy. At the same time, the services sector (excluding financial firms), which accounts for more than 60 percent of the nation’s employment, contributed to economic inequality and relative deprivation due to limited wage growth for many years.
Based on regulatory filings in the past few years by publicly listed companies, employees with higher salaries tend to be employed by high-tech firms and financial institutions, while those with lower salaries tend to be employed in traditional industries. An overconcentration in any industry is always a risk, and Taiwan cannot rely solely on the high-tech industry. Not everyone can be an engineer.
The government should pay attention to the risks of overconcentration in industries, and implement policies to improve the uneven development of domestic industries and the uneven distribution of income. If a country only focuses on its tech industry, it would be like a stock market focusing solely on shares in electronics companies, which would not be good for the market’s development. Change is not easy in the short term, but not changing means fewer options in the future.
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