Micron Halts Taiwan Fab 11E Construction Over Bonus Dispute

Union demands tied to Korean bonus schemes

The Taoyuan union argues that employees should share in the earnings jump driven by the AI chip boom. Citing the payout systems at Samsung Electronics and SK hynix, it has demanded that 15% of operating profit be distributed to employees worldwide, paid in cash rather than stock.

Micron settled a wage deal with the Taiwanese union last month, but some employees objected to its terms, raising the prospect of renegotiation. As the dispute looked set to drag on, the company reportedly told Taiwanese authorities and key equipment and component suppliers that construction would stop.

Taiwan is central to Micron's operations. The company has invested about $50 billion (roughly 70 trillion won) there over 30 years, makes around 60% of its global DRAM output on the island and employs about 15,000 people locally.

Possible gain for Korean rivals

Industry watchers say the delay could help Samsung and SK hynix. If Micron's capacity expansion slips, customers worried about securing supply may sign more long-term contracts with the Korean makers. Samsung said last month it had long-term supply deals with 10 companies, and SK hynix said it had 14.

Counterpoint Research puts third-quarter DRAM revenue share at 38% for Samsung, 29% for SK hynix and 21% for Micron. Analysts say a prolonged standoff could even prompt Micron to rethink its global manufacturing strategy, given its heavy reliance on Taiwan.

Micron said its existing Taiwan sites are running normally and that customer demand will not be disrupted.