A.I. Riches Fuel Economic Divide in Asias Chip Powerhouses

In South Korea and Taiwan, the world’s hunger for artificial intelligence has unleashed a boom unlike anything seen in years.The two economies are home to the small cluster of companies that produce the coveted chips A.I.

cannot run without.As exports climb to record highs and stock markets soar, the rush to cash in has reached a fever pitch.Seniors are opening brokerage accounts to funnel their savings into semiconductor stocks.

On social media, young people question the point of their jobs, saying they could earn as much — or more — trading stocks.Yet the windfall is masking a far bleaker picture across much of the rest of the economy.Industries outside chip making are struggling to navigate a turbulent landscape upended by energy and tariff shocks.

Household debt and real estate prices continue to rise.Both currencies remain weak despite repeated government interventions to prop them up.For both places, the skyrocketing growth springs from a narrow, highly specialized sector that employs only a sliver of the population.

Everybody else is left scrambling to find a way in.As investors pour money into chip stocks, chasing a share of the A.I.bonanza, they are amplifying the market’s wild swings.

Korean stocks plunged 10 percent on Tuesday, setting off a global tech sell-off, before rising over 3 percent a day later.Economists describe the phenomenon as a “K-shaped” divide, in which some industries and socioeconomic groups thrive while others stall or fall behind.Around the world, including in the United States, that divide has widened since the Covid-19 pandemic.

Now, the A.I.boom threatens to make it even more expansive.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.

If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscrib...