Micron's $4.5 billion Taoyuan plant construction halted amidst labor dispute

Micron has paused construction on its Fab 11E site at Taoyuan as the company and its Taoyuan labor union have failed to reach an agreement regarding clearer profit-sharing terms. Bloomberg reports that activity on the site has all but halted, except for minor safety work, with some sources saying that executives are concerned about uncertainties regarding negotiations with its workers. The company hasn’t released a statement about the move but has already informed local officials about the suspension.

“Taiwan plays an important role in Micron’s global footprint, and our operations today continue as normal,” Micron said. “We are confident in maintaining business continuity for our customers.” The company has recently announced a bonus that could give as much as five times the annual salary of some eligible workers, and has also wrapped up a deal with the bigger Taichung union, although some members say they were dissatisfied with the outcome. On the other hand, the Taoyuan union is still holding out for better terms, with the two parties set to meet again on November 6. It even launched a one-day strike last month to show the chipmaker its resolve and how its operations could be disrupted if it does not meet their demands.

Workers from the big three memory chip manufacturers — Micron, Samsung, and SK hynix — have been protesting recently and demanding a bigger slice of the massive profits that these companies are currently making from the AI memory chip boom. SK hynix has recently agreed to pay staff $50,00 apiece, with each employee set to receive $477,000 in bonuses this year and up to $900,000 next year. Samsung Foundry workers also fought for a $340,000 average bonus, which received approval at the last minute and averted a massive strike that would have disrupted the company’s operations. Employees from these South Korean companies expect to nab performance bonuses of up to $400,000 and are rejecting coveted overseas training programs in favor of cold, hard cash.

While the company hasn’t made a statement regarding the suspension of work on its Taoyuan site, it’s hard to believe that the move happening so close to its next meeting with the Taoyuan union is a coincidence. It should be noted that Micron is also developing other sites across the world, with plans for an HBM fab in Japan, a $24-billion development on the way in Singapore, plus facilities across the U.S. Nevertheless, the company says it is looking forward to reaching an agreement with the workers, with the Taiwan government hoping for a win-win outcome for both parties.

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