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Island of riches: Taiwan reaps benefits of AI boom

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Island of riches: Taiwan reaps benefits of AI boom

Peter was part of the crowd that piled into Fuyu Fuyu, a development of high-rise apartments in the northern Taiwan municipality of Taoyuan, one Sunday this month. By day’s end the young engineer, who does not want to be fully identified, had signed up to spend NT$20mn (US$630,000) on a 120 square-metre apartment — his second.

“It is the best way to invest. My income will grow even faster in the next few years, and it is the same for so many others, so the value of the property will go up,” said Peter, who works at Quanta Computer, a contract electronics manufacturer based just a stone’s throw away.

Fuyu Fuyu sounds like a phrase meaning “bestow wealth upon you” — and Quanta is doing exactly that. Long the world’s largest contract laptop maker, Quanta is getting a huge boost from the global AI boom because it also makes high-end servers needed to crunch data for large language models. Its shares and profits have jumped, and employees are reaping the benefits.

Founder and chair Barry Lam has become Taiwan’s richest man, topping the billionaires’ list for the country published by Forbes in April, while lower down company employees such as Peter are sharing NT$3.9bn in cash bonuses paid to staff this year — up 30 per cent from 2023.

Quanta is just one of the companies reinforcing Taiwan’s reputation as a global epicentre for creating tech wealth. UBS last week forecast that Taiwan will have 47 per cent more millionaires by 2028 than today — the largest increase of any country, mainly driven by growth in its semiconductor industry.

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Investors, economists and HR professionals say the benefits are spreading beyond the senior managers and engineers at Taiwan’s largest technology companies, who benefited from stock awards in the chip sector’s early days, and reaching a broader swath of society.

“There is a broadening wealth effect, and new groups and younger talent are benefiting,” says Mark Duh, chair of Fuh Hwa Investment Trust, one of the largest domestic fund managers.

The titan of the sector — and one of the main drivers of wealth creation — is Taiwan Semiconductor Manufacturing Company, the world’s largest chipmaker that is now Asia’s most valuable listed company. TSMC reports its latest earnings on Thursday after revealing a 40 per cent jump in second-quarter revenue last week.

But hundreds of other Taiwanese companies that dominate the AI supply chain, from chip design houses and server makers to suppliers of chip testing gear and component manufacturers, are also part of the boom.  

Many senior and mid-level employees at AI supply chain companies received bonuses worth more than two annual salaries last year.

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Winway, a supplier of chip testing products, handed out employee bonuses equivalent to 30 monthly salaries last year. Median salaries for non-executive staff at semiconductor design house Global Unichip rose by one-fifth last year, the third straight annual increase, and the company’s total salary spend has been growing by double-digit margins for three straight years, according to statistics published by the Taiwan Stock Exchange this month. At AI server company Chaintech Computer, median pay was up more than a quarter last year.

The AI windfall is just the latest boost to Taiwan’s wealth. During the pandemic, its massive electronics hardware industry benefited from the semiconductor and IT boom triggered by demand for homeworking. The rise of electric vehicles has been another boon for demand.

At the same time, the country’s first generation of postwar entrepreneurs are passing on their riches to their children. Last but not least, many wealthy Taiwanese who previously spent most of their time in China, where they used to concentrate manufacturing investment, have returned home as the investment environment in China has worsened and their companies have come under pressure from customers to de-risk.

Ferrari’s Taiwan sales doubled over the previous four years, highlighting a boom in high-end consumption.

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The wealth tide is lifting domestic sectors where incomes have long lagged far behind technology exporters.  

“People pour their rising pay into property. The real estate market is growing a lot and that in turn helps other industries too,” Duh said.

Some building materials and construction companies were among those with the steepest increases in non-executive pay at listed companies last year, according to the TSE figures.

Adding to the AI boost is a growing shortage of workers at all levels as Taiwan’s population has started to shrink. Those bottlenecks have triggered sharp wage rises even in low-end service sector jobs where pay has been stagnating at a low level for many years.

Wages in the hotel and restaurant sector are up 5.5 per cent this year, outpacing the cross-industry average and the largest increase in at least a decade, according to survey figures provided by 104 Job Bank, a local job broker.

According to the TSE figures, mean salaries at listed tourism and hospitality companies rose by 13.6 per cent last year, catapulting the sector to the top rank among more than 30 industries in terms of pay growth from 27th place four years ago. Average salaries in the trade and consumer goods sector grew at the fourth-highest pace among industries last year, up from rank 23 four years ago.

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“I believe the main reasons for the rise in salaries in the tourism sector are the post-pandemic travel boom and the labour shortage,” said Lai Wei-wen, a labour economist at the Chung Hwa Institution for Economic Research, a government think-tank.

Still, the wealth effect has limits and swaths of Taiwanese society are not benefiting.

In Taiwan’s January election, young people disaffected over low pay for fresh graduates and the growing gap between top tech industry earners and the domestic service sector abandoned the ruling Democratic Progressive party in droves, leading it to lose its legislative majority.

Money flowing into real estate from high-earning tech workers is also driving up house prices, putting them out of reach for younger workers in other industries even as salaries there rise, too. A residential property now costs the equivalent of almost 10 years of salary on average, according to the ministry of the interior, up from 8.6 years four years ago.

But some officials hope that wealth will spread further. “At least we see some change,” said one cabinet official. “The AI boom is our best hope that it can deepen.”

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It Could Take Weeks Before Displaced L.A. Residents Can Go Home

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It Could Take Weeks Before Displaced L.A. Residents Can Go Home

The tens of thousands of people displaced by the devastating wildfires in the Los Angeles area are increasingly anxious to know when they can return home — or to what remains of their properties.

Officials say crews are working to reopen closed areas, snuffing out hot spots and clearing hazardous debris, but no timeline has been announced for lifting the evacuation orders.

Experts have warned that it could take weeks before people can return to the hardest-hit neighborhoods because of the amount of work needed to ensure the safety of residents.

Firefighters are still trying to contain the Palisades and Eaton fires, the biggest ones in the Los Angeles region, a prerequisite to allowing people to return. Both remained largely out of control on Wednesday evening, though their growth had slowed.

Captain Erik Scott of the Los Angeles Fire Department said the timeline for people returning to their neighborhoods can vary. It depends on the extent of the damage, which needs to be mapped and carefully assessed in every impacted community, he added. There is also the threat of hazardous materials, such as asbestos and chemicals.

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“We want people to have realistic expectations,” Mr. Scott said.

It took weeks in the aftermath of some previous destructive blazes for people to return. In 2018, the Camp fire destroyed most of Paradise in Northern California and killed 85 people. The final evacuation orders in that town were lifted more than a month after the fire started.

Similarly, after a devastating fire in Lahaina on the island of Maui killed more than 100 people in 2023, it was nearly two months before the first of the thousands of displaced residents could return to their properties.

The suppression of the fire is only one step in the process, according to fire officials. There are yet more safety and infrastructure issues to tackle. Workers need to clear and replace downed power lines, stabilize partially collapsed buildings and remove toxic ash from the ground.

“That’s why the orders are still in place,” said David Acuna, a battalion chief with Cal Fire. “It’s not just about the fire. There are all these other elements to address.”

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The grim search for human remains has further complicated efforts to clear neighborhoods. Officials are using cadaver dogs to comb through the thousands of structures damaged or destroyed in the fires to locate remains.

“We have people literally looking for the remains of your neighbors,” Sheriff Robert Luna of Los Angeles County said at a news conference on Monday. “Please be patient with us.”

Even for those whose homes survive, the lifting of evacuation orders does not necessarily mean they can return to live in them right away, warned Michael Wara, a climate policy expert at Stanford University.

“There’s going to be smoke damage,” he said. “There’s going to be the fact that you don’t have utilities.”

In Pacific Palisades, the recovery process was underway in its incinerated downtown. The air buzzed with the sound of jackhammers, bulldozers and tree shredders. Workers cleared debris, pulled down charred utility poles and ground up the skeletal limbs of burned eucalyptus trees.

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Ali Sharifi managed to inspect his lower Palisades home on Tuesday. Aside from a burned backyard fence, it was intact. Yet the destruction around it, including charred schools, churches and grocery stores, gave him second thoughts about returning.

“Who wants to live in a ghost town?” Mr. Sharifi said.

Erica Fischer, an associate professor at Oregon State University who studied the aftermath of the Camp fire, said that a fast recovery is not always a good one, especially if it means rebuilding in ways that contributed to the disaster.

Of the ongoing evacuation orders in California, she said, “I know it’s not convenient, and it’s disruptive, but it keeps people out of harm’s way.”

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Joe Biden says ‘oligarchy’ emerging in US in final White House address

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Joe Biden says ‘oligarchy’ emerging in US in final White House address

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US President Joe Biden has warned that an “oligarchy is taking shape in America” that risks damaging democracy, as he blasted an emerging “tech industrial complex” for delivering a dangerous concentration of wealth and power in the country.

Biden’s comments during a farewell address to Americans from the Oval Office on Wednesday night amount to a veiled attack on Donald Trump’s closest allies in corporate America, including tech billionaire Elon Musk, just five days before he transfers power to the Republican.

Biden said he wanted to warn the country of the “dangerous concentration of power in the hands of a very few ultra-wealthy people” and the danger that their “abuse of power is left unchecked”.

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He cited late president Dwight Eisenhower’s warning in his 1961 farewell address of a military-industrial complex and said the interaction between government and technology risked being similarly pernicious.

“I’m equally concerned about the potential rise of a tech-industrial complex that could pose real dangers for our country as well. Americans are being buried under an avalanche of misinformation and disinformation, enabling the abuse of power. The free press is crumbling. Editors are disappearing. Social media is giving up on fact checking,” Biden said.

Biden’s words were a reference to the world’s richest man, Musk, the owner of social media platform X and the founder of electric-vehicle maker Tesla, who gave massive financial backing to Trump’s campaign and has become one of his closest allies during the transition to Trump’s new administration.

Some of Silicon Valley’s top executives, from Jeff Bezos of Amazon to Mark Zuckerberg of Meta, have also embraced Trump since his electoral victory and are expected to have prime spots at the inauguration ceremony in Washington on Monday.

Biden also used his remarks to cast a positive light on his one-term presidency, which ended with the big political failure of him dropping his re-election bid belatedly in late July, passing the torch of the campaign against Trump to vice-president Kamala Harris — an effort that ended in a bitter defeat.

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Biden’s approval ratings have hit new lows as he bows out from the presidency and a political career in Washington that has spanned more than five decades. Just 36.7 per cent of Americans approve of his performance on the job, and 55.8 per cent disapprove, according to the FiveThirtyEight polling average.

Biden said he hoped his accomplishments would be judged more favourably in the future.

“It will take time to feel the full impact of all we’ve done together, but the seeds are planted, and they’ll grow and they’ll bloom for decades to come,” he said.

Biden has not only faced seething criticism from Republicans, but also rebukes from Democrats who blame him for seeking re-election despite his advanced age. He is now 82.

Biden’s presidency was defined by a record-breaking jobs market and a robust recovery from the Covid-19 pandemic, as well as a series of legislative accomplishments on the economy. But the pain of high inflation became a massive political vulnerability for him.

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In foreign affairs, he took credit for western support for Ukraine after Russia’s full-scale invasion of the country in 2022, but his response to conflict in the Middle East, including staunch support for Israel’s war in Gaza, drew a strong backlash from progressive Democrats, undermining the unity of his political coalition.

It was not until Wednesday, with five days to go before he left office, that Biden — with help from Trump aides — was able to broker a ceasefire deal to free hostages held by Hamas. 

“This plan was developed and negotiated by my team and will be largely implemented by the incoming administration. That’s why I told my team to keep the incoming administration fully informed, because that’s how it should be, working together as Americans,” he said at the start of his address.

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Biden touts major wins in farewell address

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Biden touts major wins in farewell address
Biden touts major wins in farewell address – CBS Texas

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In his farewell address, President Biden warned an “oligarch” of “ultrarich” threatens America’s future.

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