98% of Taiwanese Entrepreneurs Are Confident About Business: HSBC

Ninety-eight percent of Taiwanese entrepreneurs are confident about their business prospects, HSBC Holdings PLC said in a report on Tuesday, a reading that beats the global average of 95 percent and ranks Taiwan among the world's most optimistic entrepreneurial markets.

The finding comes from HSBC's annual Global Entrepreneurial Wealth Report. Two forces drive the confidence: the artificial intelligence boom and Taiwan's pivotal role in global supply chains.

What is driving the optimism?

AI advances topped the list of reasons. Some 44 percent of Taiwanese respondents named AI as their leading source of optimism. Technological progress followed at 28 percent, and business opportunities and performance at 25 percent.

The numbers sit on a real industrial base. Taiwan supplied 14 percent of global AI-related exports in the first quarter of this year, the report said. AI-related exports accounted for almost half of the nation's GDP.

That confidence is turning into spending. Almost 80 percent of Taiwanese entrepreneurs plan to increase AI investment over the next 12 months. The report described their approach as measured: many intend to allocate 11 to 30 percent of business revenue to AI-related initiatives.

Why do business owners play defense with personal wealth?

The optimism stops at the boundary between the company and the owner's own money. Many Taiwanese entrepreneurs prioritize capital preservation and protection against inflation over higher investment returns.

Family history shapes this split. The report found that 75 percent of Taiwanese respondents came from multigenerational family businesses, placing Taiwan among the markets with the highest concentrations of family-owned enterprises in the survey.

Their investment priorities show the defensive tilt:

• 41 percent cited protecting wealth against inflation as a key investment objective.
• 34 percent prioritized protecting their assets against losses.
• Only 28 percent aimed to beat market benchmarks.

HSBC calls this the "barbell strategy." Entrepreneurs pursue growth through their operating businesses while adopting a more defensive posture on personal investments.

How does the barbell strategy work in practice?

The mechanism is straightforward. Taiwan's high concentration of family businesses means entrepreneurs' personal wealth is often closely intertwined with their business assets, the report said.

Business owners chase expansion and higher returns through their companies, where they control operations and can leverage their competitive advantages. They keep personal portfolios focused on capital preservation, lower volatility and liquidity.

Personal wealth also serves a functional role. It acts as a financial buffer for the business, allowing entrepreneurs to respond quickly to external market changes or unexpected funding needs, the report added.

In effect, the company is the growth engine and the private portfolio is the shock absorber — one bet on risk, one hedge against it.

The report lands as Taiwan's AI supply chain faces near-term market noise. TSMC's American depositary receipts fell 5.95 percent on Friday amid a broader Wall Street sell-off over massive AI spending concerns, with the Philadelphia Semiconductor Index down 7.20 percent and the NASDAQ Composite off 2.86 percent. Chip packaging leader ASE Technology Holding, meanwhile, raised its annual capital expenditure budget for the third time to US$11.5 billion, adding US$1 billion on expectations that demand for its leading-edge advanced packaging technologies will keep outpacing capacity — a signal that suppliers, at least, still see the AI build-out accelerating rather than stalling.