Micron Technology (NASDAQ: MU) shares declined 3% on Tuesday as labor unions representing its Taiwan workforce moved closer to a potential strike over compensation, adding to pressure on the memory-chip maker's stock.
The unions, based in Taoyuan and Taichung, said they are prepared to strike unless the company revises its bonus system to better reflect profitability. They represent nearly 10,000 of Micron's roughly 15,000 employees in those two cities, according to a Reuters report.
An internal online survey conducted in August found that more than 80% of participating union members backed strike action, the unions said.
Unions demand profit-sharing overhaul
The unions are pushing for changes to Micron's Incentive Pay Plan, arguing that the current structure does not adequately tie bonuses to the company's financial performance. For fiscal 2026, they are seeking a one-off bonus that they estimate would amount to about 83 months of salary per Taiwan-based employee.
Starting in fiscal 2027, the unions want Micron to replace the existing system with one that allocates 15% of operating profit to employee bonuses, paid quarterly rather than annually. They have also questioned how the company-performance component is calculated, suggesting 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 noted that employee pay includes base salary, annual performance incentives, operational bonuses, and equity programs such as stock-purchase and restricted-stock plans.
In a statement, Micron's Taiwan office said this year's performance-bonus payout will be the highest in the company's history and that it will continue engaging with employees through existing channels while respecting legal processes.
Taiwan's critical role in Micron's operations
Taiwan is Micron's largest manufacturing base, according to Taipei authorities. The company has invested NT$1.4 trillion (approximately $43.9 billion) on the island, producing DRAM and high-bandwidth memory chips used in AI hardware.
The Central Taiwan Science Park administration said it is monitoring the dispute and has assigned staff to facilitate communication between Micron and the unions. It warned that a strike could affect workers, Micron's operations, and potentially Taiwan's semiconductor supply chain and broader economy.
The labor tensions come amid strong global demand for memory chips used in AI applications, which has tightened supply and supported robust 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.
Wider chip labor tensions
Micron's dispute echoes developments at other major Asian semiconductor manufacturers. At Samsung Electronics in South Korea, a planned strike involving up to 48,000 union members was called off in May after 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 have 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 was built through specialization and long-term cooperation, and that Taiwan has consistently supplied global markets and honored its commitments.
Investors have been closely watching Micron's stock amid broader memory-chip volatility. Recent reports have highlighted rising competition from Chinese memory makers, while analysts have noted positioning shakeouts rather than demand slumps in the sector. The company's AI-driven growth prospects remain a key focus, with some analysts setting aggressive price targets tied to Nvidia's earnings.
This article is for informational purposes only and does not constitute financial advice.
