The trickle-down economics of the AI boom

The article asks whether AI data-centre investment benefits spread beyond tech plutocrats, using South Korea (advanced memory chips) and Taiwan (other AI silicon) as test cases. Swelling exports have lifted annual GDP growth to about 4% in South Korea and about 12% in Taiwan, with private consumption accelerating. TSMC's output rose from 10m standard wafers in 2019 to 15m last year, while its capex rose from $15bn to $41bn, helping push Taiwanese real fixed capital formation up nearly 40% since late 2023. Electronics employment share in Taiwan is nearly 11%, the highest since 2016; average nominal wages grow ~3% a year versus a ~1.9% pre-pandemic trend. President Lai Ching-te proposed an AI dividend of around $300 per citizen (~$7bn, ~6% of projected revenue). South Korea's picture is murkier: Samsung earlier trimmed capex while SK Hynix tripled spending from a lower base; a government-backed $500bn investment plan is not yet fully visible in outlays.