Micron shares fall 3% as Taiwan unions threaten strike over bonuses

Micron Technology's Taiwan unions moved toward a strike Tuesday, threatening output at the company's largest manufacturing base and sending shares down 3% as workers demanded a bigger share of record profits.

More than 80% of members who took part in an internal online survey in August backed strike action, the unions representing workers in Taoyuan and Taichung said in a written response to Reuters. The unions count nearly 10,000 members among Micron's roughly 15,000 employees at the two sites.

Micron, the world's third-largest memory-chip maker, reported record revenue of $41.46 billion and net income of $28.24 billion for its fiscal third quarter ended May 28, as demand for chips used in artificial-intelligence hardware tightened global supply. The company's market value was about $1.10 trillion on Tuesday. Micron's Taiwan office said this year's performance-bonus payout would be the highest in the company's history, and that it would continue engaging with employees through existing channels while respecting legal processes.

A strike would be highly disruptive because Taiwan is Micron's largest manufacturing base globally. Authorities in Taipei say Micron has invested NT$1.4 trillion ($43.9 billion) on the island, producing DRAM and high-bandwidth memory chips there.

Unions seek profit-linked bonuses

For fiscal 2026, the unions are seeking an additional one-off bonus payment, arguing that Micron's existing Incentive Pay Plan (IPP) does not adequately reflect the company's profitability. The unions said their proposal would amount to about 83 months' salary for each Taiwan-based employee. From fiscal 2027, they want the IPP replaced with a system that allocates 15% of operating profit to bonuses and distributes payments quarterly rather than annually.

Micron's IPP determines annual bonuses using company and individual performance measures. The unions said the company had not fully explained how its company-performance metric was calculated, arguing that it appeared to track revenue growth more closely than profit. Micron said its compensation structure differs from the profit-sharing model sought by the unions, with pay packages including base salary, annual performance incentives, operational bonuses and equity programs.

Samsung precedent looms

The dispute echoes a showdown at Samsung Electronics in South Korea, where a planned 18-day strike involving as many as 48,000 union members was called off in May after last-minute negotiations. That deal created a special bonus pool worth 10.5% of the chip division's operating profit, subject to profitability targets. Micron's Taiwanese unions said profit-sharing arrangements at Samsung and SK Hynix had widened the gap between Micron workers and their South Korean counterparts.

The government-run Central Taiwan Science Park administration said last month it was closely monitoring the dispute and had assigned staff to help facilitate contacts between Micron and the unions. It said a strike could affect workers' livelihoods, Micron's operations and potentially Taiwan's semiconductor supply chain and wider economy, adding that it could launch labor-management negotiations or mediation if needed.

President Lai Ching-te said Tuesday that Taiwan's semiconductor sector had been built through specialization and long-term cooperation, and that the island had consistently supplied the global market and honored its commitments.

A strike at Micron's Taiwan facilities could disrupt DRAM and high-bandwidth memory production, tightening global memory supply while pressuring Micron's near-term output and raising labor costs. That would benefit competitors Samsung and SK Hynix, which are already capturing the AI-driven memory boom. Micron shares, trading at a market value of about $1.10 trillion, face further downside if the dispute escalates into a work stoppage.

This article is for informational purposes only and does not constitute investment advice.