Opinion Piece: Campaigning Is Not Stock Trading – The Hidden Concerns Behind the DPP Government's Impressive Numbers

In recent years, the ruling party's proudest achievements have been the repeatedly record-breaking Taiwan Stock Index and impressive economic growth rates. Officially, Taiwan appears to have boarded the express train of AI development, heading toward future prosperity. However, peeling back the glossy data propped up by semiconductors and AI servers reveals a fragile Taiwan riddled with massive systemic risks and severe internal wealth imbalances.

To understand Taiwan's potential economic crisis, one must first grasp the distorted reality of the global AI supply chain. Economists have recently issued warnings: the current AI economic model is fundamentally unsustainable. In standard technology business models (such as the smartphone and personal computer era), software applications and ecosystem providers at the top of the value chain—those directly facing consumers—should enjoy the highest profitability. Yet, in today's AI frenzy, a fatal 'inversion' has occurred: only the 'shovel sellers'—AI chip and hardware infrastructure providers—are truly profiting, while those investing astronomical sums into developing AI models and applications are deeply mired in monetization difficulties.

When software-side players cannot generate sufficient commercial profits to cover massive computing costs, how long can this hardware arms race last? This distorted development of global AI value is precisely Taiwan's greatest economic concern!

Taiwan's current impressive export figures and stock market performance are almost entirely built on AI chips and hardware contract manufacturing. Should U.S. AI model companies find their capital spending unsustainable and reduce investments, hardware orders could plummet. At that point, Taiwan—which has concentrated most of its resources, talent, water, and electricity on AI and semiconductors—will face an economic hard landing with no buffer space.

Ironically, even before the AI bubble bursts, this technological celebration has failed to benefit the majority of Taiwanese people. While the government constantly touts the 'average wage' inflated by high-tech industries as an achievement, it deliberately ignores Taiwan's plunge into an extreme K-shaped society. Less than 10% of Taiwan's workforce may benefit from the AI boom, while over 60% employed in traditional industries and domestic services have not shared in the technological dividends, yet must endure skyrocketing prices and high rents.

The vast salaried class faces the harsh reality of 'declining real purchasing power' and an increasingly intense sense of 'relative deprivation.' This is not economic prosperity—it is statistical wealth redistribution from the poor to the rich. Healthy economic development should be built on balanced growth across all industries and shared prosperity between labor and capital, not on the狂欢 of a few tech nobles and capitalists.

The Lai administration must immediately abandon the illusion of 'governing by numbers,' prepare defensive measures against the potential reversal of AI hardware demand, and redirect policy resources substantially toward upgrading traditional industries and improving wealth distribution through tax reform. Only by confronting the dual crises of 'external industrial risks' and 'structural imbalances in economic development' can Taiwan pass the test amid possible future global economic shocks.

*Author is a financial analyst