Micron pauses Taiwan plant over union dispute, report says

Micron Technology ↘ 12.33% has suspended plans for a memory chip plant in Taoyuan, Taiwan, because of a long-running labor dispute, Bloomberg News reported on Thursday, citing people familiar with the matter. People briefed on the plans said the U.S. chipmaker has all but halted construction and has told Taiwanese officials and a supplier. Executives are worried that a pay agreement already reached with a local union could be overturned. Reuters said it could not immediately verify the report.reuters.com+1

The pause puts in doubt a major production base for AI memory components. Taiwan makes three-fifths of Micron's conventional chips, and the global memory market is already short of supply, according to Bloomberg's report as republished by The Edge Malaysia.theedgemalaysia.com

A fab in limbo

Micron had budgeted $3 billion to $4.5 billion for the Taoyuan complex, including purchases of ASML ↘ 6.69% equipment. The facility, called Fab 11E, had been scheduled to start production in 2028. Some minor safety work continues on the site, but construction will stop after that, the report said.theedgemalaysia.com

Micron did not address the Taoyuan complex directly. "Taiwan plays an important role in Micron's global footprint, and our operations today continue as normal," the company said, adding that it was confident it could keep supplying customers. Taiwan's Ministry of Economic Affairs said the government supports the legal agreement the company reached with its union and will work with local authorities "to help resolve the differences and create a win-win outcome." The Taoyuan city government said it had not been told of any suspension.

Two unions, one deal

Micron and the union representing its larger Taichung operations signed a labor-management agreement on October 21. The dispute with the separate Taoyuan union was not resolved, and that union went ahead with a one-day warning strike the next day. Taoyuan workers had voted to authorize a strike in early October. Their demands include a one-off bonus worth 83 months' salary and a permanent system that would pay 15% of operating profit to workers every quarter.theedgemalaysia.com+1

The Taoyuan union represents fewer than 3,000 of Micron's 15,000 employees in Taiwan. It wants the profit share to be paid entirely in cash and to cover employees worldwide, pointing to similar arrangements at Samsung Electronics and SK Hynix ↘ 11.03%, according to Bloomberg. Union chair Jerry Lin said the group is recruiting members from the Taichung union. The aim is to form a larger body that can annul the existing deal and force talks to restart.theedgemalaysia.com

The economy ministry said the current agreement would more than double the average annual pay of junior engineers, to NT$4 million, and triple senior engineers' pay to NT$6 million. Micron believes the agreement is legally binding, and Taichung union chair Mark Hsu also called it legal. Talks with the Taoyuan union are still going on. "We look forward to reaching an agreement," Micron said.