Global semiconductor foundry No. 1 TSMC of Taiwan said on Jan. 15 that its 2025 net profit was 1.72 trillion New Taiwan dollars (about 77 trillion won), a 46% increase from the previous year. Annual revenue rose 32% to 3.81 trillion New Taiwan dollars (about 171 trillion won). TSMC Chairman Wei Zhejia said the company posted record results thanks to a surge in demand for artificial intelligence (AI) semiconductors. TSMC's 2025 gross margin was 59.9%, up 3.8 percentage points from a year earlier.
Memory semiconductor (hereafter memory) world No. 1 Samsung Electronics' 2025 revenue and operating profit were 333.6 trillion won and 43.2 trillion won, respectively, increases of 11% and 33% from the previous year. Of this, the semiconductor institutional sector recorded revenue of 130.1 trillion won and operating profit of 24.9 trillion won. High Bandwidth Memory (HBM) leader SK hynix posted 2025 revenue of 97.1467 trillion won and net profit of 42.9479 trillion won, surging 47% and 117% year on year, respectively.
Amid the AI semiconductor boom and memory shortages, leading corporations in Korea and Taiwan are enjoying an unprecedented boom. But the macroeconomic report cards of the two countries are the exact opposite. After the global semiconductor downturn pushed both countries' gross domestic product (GDP) growth rates into the 1% range in 2023, they have taken divergent paths since 2024. Taiwan, riding the AI wave, saw GDP growth soar to 5.25% in 2024 and 8.68% in 2025, while Korea's recovery of 2.0% in 2024 slowed to 1.0% in 2025. Although semiconductor corporate performance improved in both countries, the strength of economic recovery went in different directions. As a result, Taiwan's per capita GDP in 2025 was $39,477, surpassing Korea for the first time in 22 years since 2003. If the projected 7.71% growth rate for 2026 materializes, per capita GDP is likely to exceed $40,000. By contrast, Korea is expected to remain around 2.0% growth, keeping per capita GDP stuck in the $30,000 range for the 13th year since 2014.
Export is similar, but investment divided them
Korea and Taiwan are similar in that exports centered on semiconductors are the engine of growth. In 2025 GDP growth, semiconductors' contribution from exports is analyzed at about 70% for Taiwan and 30% for Korea.
What separated growth speeds was investment. Looking at gross fixed capital formation, which shows capital goods investment such as factories, equipment and infrastructure, the two countries' directions diverged sharply. In 2023, when the global semiconductor industry was weak, both countries recorded negative figures year on year. But Taiwan rebounded to 7.5% in the second quarter of 2024, when the AI revolution began in earnest, and then showed strong growth with double-digit increases for four consecutive quarters from the fourth quarter of that year through the third quarter of 2025. The manufacturing investment goods production index, a leading indicator of corporate facility investment, also showed double-digit growth in most quarters of 2024–2025 in Taiwan. In particular, it surged 47.1% and 68.1% in the second and fourth quarters of last year, respectively. Capital goods imports (dollar basis), which show the flow of equipment introduced from abroad, also maintained double-digit growth since the second quarter of 2024, and the average annual growth rate in 2025 reached 51%. This shows that AI equipment investment is rapidly leading to expanded production capacity.
Korea recorded negative gross fixed capital formation growth rates for seven consecutive quarters starting in the second quarter of 2024. Construction investment was constrained by a real estate downturn, and equipment investment recovery was limited. Equipment investment, which was negative from the third quarter of 2023 through the second quarter of 2024, rebounded to 6.6% in the third quarter of 2024, but the subsequent increase slowed and returned to decline in the fourth quarter of 2025 (−1.7%). With both construction and equipment investment losing momentum, the Korean economy entered a phase of prolonged investment gaps. If investment weakness continues, delays in expanding production capacity could lower potential growth. Economist Kwon Hyoseong of Bloomberg Economics noted, "Taiwan showed a strong virtuous cycle of 'export growth → investment expansion → GDP growth,' while Korea's link between exports and investment appears to have weakened."
Industrial structure separated the investment trajectories
Why did Korea and Taiwan have different investment trajectories amid the semiconductor boom? The background lies in the differences in the two countries' industrial structures.
Although Korea, led by Samsung Electronics and SK hynix, dominates the memory market such as DRAM and NAND flash, its share in the nonmemory sector, which accounts for most global semiconductor sales, is only about 2%. A structure concentrated on the production of memory, a general-purpose technology, entails high volatility with production and investment expanding and contracting sharply depending on the industry cycle. In particular, memory has large price volatility and short inventory adjustment cycles, so in a demand slowdown phase, facility investment quickly contracts. In fact, Samsung Electronics, which posted about an 11 trillion won loss due to a global IT demand slump and a sharp drop in memory prices in 2023, cut production and reduced facility investment, which immediately led to a shrinkage in Korea's overall gross fixed capital formation. Slowing the process schedule and investment execution speed for the new P4 line in Pyeongtaek is a striking example of the investment cycle. Analysts say the current sharp rise in DRAM and NAND flash prices is the result of the earlier production and investment cuts leading to supply constraints.
Taiwan, centered on TSMC, has built an ecosystem covering all semiconductor processes with global No. 1 OSAT (outsourced packaging and testing) ASE, fabless top-10 companies such as MediaTek and Realtek. In the AI server manufacturing sector, Foxconn ranks first with more than a 40% share, and four Taiwanese companies are in the top 10. This industrial ecosystem links AI demand expansion directly to equipment expansion and production capacity increases.
Major Taiwanese semiconductor corporations reinvest 7–10% of sales into research and development to strengthen advanced process technology competitiveness. TSMC has been leading AI semiconductor chip production for big tech companies such as Nvidia and Google with overwhelming market share by advancing cutting-edge fine processes that underpin high-performance computing (HPC) and 3D Packaging technologies (CoWoS, InFO, etc.). This technological edge underpins large-scale facility investment expansion. Taiwan's ratio of total investment to GDP is about 27%, well above the Organisation for Economic Co-operation and Development (OECD) average (22%).
The AI era changed the conditions for growth
Some expect it will be difficult to narrow the growth rate gap between Korea and Taiwan since 2023 in a short period. The contrasting results stem from different technology and investment trajectories rooted in industrial structure differences. The International Finance Center said in a recent report, "Korea, a memory powerhouse, dominates the HBM market, but its low share in the nonmemory field means it will be difficult to narrow the gap with Taiwan in a short time."
The AI boom presents an opportunity for economic reacceleration for semiconductor powerhouses Korea and Taiwan, but Taiwan, which has secured technological superiority across various process fields rather than relying on memory, is taking the lead in economic gains from the AI revolution. The era has opened in which having a technology platform able to make various products that implement AI technological advances in everyday life determines GDP growth. Qualitative factors such as technological competitiveness are becoming the structure that determines economic growth speed more than export volume.
Economist Kwon said, "Taiwan has developed a flexible production system that can respond to diverse customer needs through horizontally organized collaboration between large and small and medium-sized enterprises," and added, "The question facing the Korean economy now is how quickly it adapts to the growth mechanism changed by the AI era."