Taiwan's Employment Data Outperforms South Korea's Amid AI Boom, South Korean Media Cites Industrial Structure as Key

(CNA, Seoul, June 14 — Comprehensive foreign report) South Korean media point out that both Taiwan and South Korea are benefiting from the rapid development of the artificial intelligence (AI) semiconductor industry, yet their job markets are showing contrasting trends. South Korea has seen a decline in total employment and worsening youth employment conditions, underperforming compared to Taiwan, with the root cause attributed to differences in semiconductor industrial structure.

Chosun Biz, a media outlet under the Chosun Ilbo, reported that according to data from South Korea's Statistics Korea, the number of employed people in May reached 29.12 million, a decrease of 40,000 compared to the same period last year. Both the employment rate and labor force participation rate declined, while the unemployment rate rose.

However, South Korea's economic indicators are nearing prosperity levels. Real GDP grew by 1.8% quarter-on-quarter in the first quarter; exports in May surged by 53.2% year-on-year, hitting a record high; and nominal GDP increased by 10.5%, the highest level in 50 years.

Taiwan has also significantly revised its 2024 economic growth forecast upward from 7.71% to 9.64%, the highest since 10.25% in 2010. Unlike South Korea, Taiwan's job market remains stable. In April, Taiwan's employed population exceeded 11.63 million, an increase of 27,000 from the same period last year.

Notably, South Korea's labor force participation rate (including employed and unemployed) for ages 25–29 stands at 76.4%, with an employment rate of 71.4%. For ages 30–39, the participation rate is 83.8% and employment rate 81.2%—all figures lagging behind Taiwan.

Experts point to differences in semiconductor industrial structure as the key factor. Kim Ki-bong (Kim Gi-bong, transliterated), a senior researcher at the International Finance Center, stated: 'Taiwan has a deep ecosystem in system semiconductors, covering design, manufacturing, and back-end processes, while the market size of system semiconductors is larger than the memory chips that South Korea focuses on.'

Unlike memory chips such as DRAM and NAND Flash that store data, system semiconductors perform computing, control, and signal processing functions. Central Processing Units (CPUs) and Graphics Processing Units (GPUs) fall into this category.

Chosun Biz notes that Taiwan has a comprehensive ecosystem: fabless companies like MediaTek and Realtek handle chip design; foundries like TSMC and UMC manage manufacturing; and back-end firms like ASE handle packaging and testing.

In contrast, in South Korea, design, manufacturing, and back-end processes are mostly internalized within large conglomerates such as Samsung Electronics and SK hynix, primarily focused on memory semiconductors like DRAM, NAND, and High Bandwidth Memory (HBM). Even with massive export growth, jobs do not widely distribute to other companies.

Kim also highlighted differences in semiconductor export ratios. In 2023, South Korea's total exports accounted for 45% of GDP, lower than Taiwan's 73%. The share of semiconductor exports in total exports was 20% in South Korea, compared to 33% in Taiwan. (Translation: Yang Chao-yen) 1150614