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Micron's Taiwan, China Unions Want 15 Percent of Operating Profit. One Plant Settled, One Walked Out

Business · By: AIReport Admin · 1 hour ago · 👁 10
Micron's Taiwan, China Unions Want 15 Percent of Operating Profit. One Plant Settled, One Walked Out

Eleven union officers at Micron's Taoyuan site in Taiwan, China held a 24-hour warning strike on October 22, the island's first in semiconductors, after 88.3 percent of members voted to authorize one. The union wants a permanent quarterly pool of 15 percent of operating profit; the larger Taichung union settled a day earlier.

The AI memory boom has reached the bargaining table. On the morning of October 22, eleven union officers at Micron's Taoyuan plant in Taiwan, China stopped work for 24 hours, a warning strike that Nikkei Asia described as the first in the island's semiconductor industry and one that left the production lines running while putting a number on the table.

The number is 15 percent of operating profit, paid quarterly and written into a permanent system from fiscal 2027, on the model Samsung Electronics and SK Hynix already use. Rank-and-file members backed the pressure: 1,994 of 2,258 eligible voters approved industrial action, 88.3 percent of the membership and about 99 percent of the ballots cast.

The dispute is split by plant, and the split favours the company. The Taichung union, representing about 12,300 workers at the DRAM and advanced-packaging site, signed a labor agreement on October 21 and cancelled the mediation session planned for the next day. Micron Taiwan chairman Lu Donghui described a new quarterly profit-sharing bonus layered on top of the existing incentive plan, structural salary adjustments, shift allowances raised from NT1,500 to NT4,500 a month, three extra paid days and a pension contribution rate lifted from 8 percent to 10 percent. The quarterly pool starts in fiscal 2027 and pays half in cash, half in stock.

The Taoyuan union, roughly 3,000 members, rejected the offer it was given. After the strike ended, about 70 percent of its members voted down the company's package, according to DigiTimes, and talks resumed with Taiwan's Ministry of Labor and the Taoyuan city government in the room.

Micron has reasons to negotiate carefully. It is the third-largest DRAM maker with 23.3 percent of revenue, and its operations in Taiwan, China account for 50 to 60 percent of total output, including the high-bandwidth memory that AI servers need. The company has invested more than NT1.6 trillion there and employs about 15,000 people. At the October 15 opening of a new HBM packaging plant in Taichung, chief operating officer Manish Bhatia said the plant's entire 2027 output was already sold out, a reminder of how little slack exists in memory supply.

The financial backdrop explains the militancy. Micron's fiscal 2026 fourth quarter revenue reached $54.23 billion, up 379 percent from $11.32 billion a year earlier, and the company guided to $61.5 billion for the current quarter. When profit rises that fast on the back of AI demand, a bonus formula tied to operating profit becomes worth arguing over.

The union's opening ask was expensive by any measure: a one-time fiscal 2026 bonus equal to 15 percent of operating profit, which the union itself estimated at roughly 83 months of pay per employee. That arithmetic is the union's own and has not been audited; the company's counter was a package worth at least NT1.7 million per worker, which the Taoyuan membership rejected.

The precedent that matters most is regional. Samsung averted a strike this year by setting aside 10.5 percent of its chip division's operating profit for bonuses, and SK Hynix committed 10 percent of annual operating profit to profit sharing last year. A permanent 15 percent formula at Micron would raise the floor for every memory contract negotiated next, which is why a walkout involving eleven people is being watched by three companies and two labour ministries.

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