Micron stock falls 3% as Taiwan unions threaten strike over bonuses

Micron Technology MU stock fell 3% on Tuesday as concerns over a potential strike by its Taiwan-based workforce added pressure to the memory-chip maker’s shares.

Labor unions representing Micron employees in Taoyuan and Taichung said they were moving toward possible strike action unless the company overhauls its bonus system and increases profit-sharing with employees.

The unions told Reuters that they have nearly 10,000 members among Micron’s roughly 15,000 employees in the two cities.

More than 80% of participating union members backed strike action in an internal online survey conducted in August, according to the unions.

The labor dispute comes as Micron faces strong demand for memory chips used in artificial intelligence hardware and as Taiwan remains a critical manufacturing base for the company.

Taiwan unions push for profit-linked bonuses

The unions are seeking changes to Micron’s Incentive Pay Plan, arguing that the existing system does not adequately reflect the company’s profitability.

For fiscal 2026, the unions are seeking an additional one-off bonus payment that they estimate would amount to about 83 months of salary for each Taiwan-based employee.

From fiscal 2027, the unions want Micron to replace the existing system with one that allocates 15% of operating profit to employee bonuses. They are also seeking quarterly rather than annual bonus payments.

Micron’s current Incentive Pay Plan calculates annual bonuses using company and individual performance measures.

The unions have questioned how the company-performance component is calculated, arguing that it appears to track revenue growth more closely than profitability.

Micron said its compensation structure differs from the profit-sharing model proposed by the unions.

The company said employee compensation includes base salary, annual performance incentives, operational bonuses and equity programs such as stock-purchase and restricted-stock plans.

Micron’s Taiwan office also 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 applicable legal processes.

Potential strike could disrupt key operations

Taiwan is Micron’s largest manufacturing base, according to authorities in Taipei. The company has invested NT$1.4 trillion, or about $43.9 billion, on the island and produces DRAM and high-bandwidth memory chips there.

The Central Taiwan Science Park administration said it was monitoring the dispute and had assigned staff to facilitate communication between Micron and the unions.

It also said a strike could affect workers, Micron’s operations and potentially Taiwan’s semiconductor supply chain and wider economy.

The dispute comes as global demand for memory chips used in AI hardware has tightened supply and supported strong sector profits.

Micron reported record fiscal third-quarter revenue of $41.46 billion and net income of $28.24 billion for the quarter ended May 28.

Micron dispute follows wider chip labor tensions

Micron’s labor dispute echoes developments at other major Asian semiconductor manufacturers.

At Samsung Electronics in South Korea, a planned strike involving as many as 48,000 union members was called off in May following last-minute negotiations.

That agreement established a special bonus pool worth 10.5% of the chip division’s operating profit, subject to profitability targets.

Micron’s Taiwan unions said profit-sharing arrangements at Samsung and SK Hynix had widened the gap between Micron employees and their South Korean counterparts.

The dispute also comes as Taiwan seeks to reinforce its position as a reliable global semiconductor production hub.

Taiwan President Lai Ching-te said the island’s semiconductor industry had been built through specialization and long-term cooperation and that Taiwan had consistently supplied global markets and honored its commitments.