Micron's Taiwan Plant Frozen Over Pay Dispute

Micron Technology has halted construction on its planned $3-4.5 billion Fab 11E chip plant in Taoyuan, Taiwan. This decision stems from a labor dispute where a smaller union is challenging a pay agreement that Micron believed was settled on October 21. The Taoyuan union seeks a 15% share of global operating profits in cash, citing benchmarks set by Samsung and SK Hynix.

This labor unrest poses a significant risk, as Taiwan is responsible for 60% of Micron's DRAM production. While the paused plant was scheduled for completion in 2028, a potential strike could disrupt current operations and impact investor confidence, which already doubts Micron's ability to maintain its current profit margins. Micron has also highlighted its significant investments in other global manufacturing locations.

The dispute centers on the profit-sharing formula, not just the amount of pay. Micron reported record fiscal 2026 revenues of $133.2 billion and operating income of $99.3 billion. A 15% profit share could amount to approximately $15 billion annually, a recurring cost far exceeding the plant's one-time budget. This situation underscores the ongoing tension between labor demands for profit sharing and corporate financial strategies.