Micron Freezes a $4.5 Billion Taiwan Fab as a Union Demands a Slice of the AI Boom, Putting 2028 HBM Supply at Risk

Micron Technology has effectively halted construction of Fab 11E, its planned $3 billion to $4.5 billion memory plant in Taoyuan, Taiwan, after failing to reach an agreement with the local union over wages and performance bonuses, according to reports by Seoul Economic Daily and The Edge Malaysia. The facility, which broke ground in July, was slated to produce high-bandwidth memory and advanced DRAM for AI servers, with supply to Nvidia and other customers expected to begin in 2028.

People familiar with the matter told The Edge Malaysia that Micron informed Taiwanese authorities and at least one partner firm of the decision to pause construction, and that only minor work to secure the site would continue before the freeze. Micron has not confirmed a suspension: the company says its Taiwan operations are continuing as normal and that it is confident it can maintain business continuity for customers, while the Taoyuan city government said it had not been notified of any halt and hopes the two sides can reach a consensus.

The dispute centers on how Micron's record AI-era profits should be shared. The Taoyuan union is demanding that about 15 percent of operating profit be distributed to employees, pointing to the arrangements Samsung Electronics and SK hynix have with their workforces, and wants bonuses paid mainly in cash. Micron reached a wage agreement with its larger Taichung union in October, but the Taoyuan union is pressing for renegotiation, and executives are reportedly worried the October deal could be overturned and reopened.

Labor tension has been building for weeks. Union officers at Taoyuan held a 24-hour warning strike on October 22 after 88.3 percent of members voted to authorize industrial action, the first such strike in the island's semiconductor industry. Micron has invested close to $50 billion in Taiwan over three decades and employs about 15,000 people on the island, roughly a quarter of its global workforce. Taiwan accounts for about 60 percent of Micron's total DRAM output and a substantial share of its HBM production, which is why the standoff has supply-chain implications well beyond one construction site.

The timing is awkward. HBM is the tightest link in the AI hardware chain, and Micron remains the number three supplier behind SK hynix and Samsung, trying to close the gap by raising the share of its 12-layer HBM4 products and expanding capacity across Taoyuan, Taichung, Tongluo and Tainan. Fab 11E was expected to take delivery of advanced ASML lithography equipment and anchor the company's 2028 capacity ramp. If the dispute drags on, the pause could push back that timeline just as memory prices are climbing and AI customers are locking in multi-year supply agreements. Taiwan's Ministry of Economic Affairs said the government is helping Micron carry out its investment plans and would work with local authorities to resolve differences.

The episode is a reminder that the AI buildout's bottlenecks are no longer only lithography tools and substrates. Labor contracts, and the question of who captures the windfall from record memory margins, can move 2028 supply dates on their own. Watch whether the Taoyuan talks produce a Samsung-style profit-sharing formula in the coming weeks, and whether Micron starts publicly hedging its Taiwan-centered production strategy if they do not.