Micron’s Taiwan workers threaten to escalate chip shortage over bonuses
- Two unions representing about 10,000 Micron workers in Taiwan are preparing for a possible strike over how bonuses are calculated.
- Roughly 80% of polled members support the strike action and a formal vote is possible in September if mediation fails.
- A strike at Micron would affect a memory supply already stretched thin by AI demand.
Two unions that together represent roughly 10,000 Micron workers in Taiwan are preparing to organize a strike vote over the way the company calculates bonuses.
A strike could make the current chip shortage even worse and lead to higher prices for phones, laptops, and other electronics.
80% of Micron employees support going on strike
Micron Technology (NASDAQ: MU) in Taiwan, which is one of only three companies that control about 94% of the global DRAM market, could be facing a potential workers’ strike following complaints about how employee bonuses are calculated.
Taoyuan Union and Taichung Union, which together represent about 10,000 workers, are currently in talks with the company, but if negotiations fail, a formal strike vote could happen in September.
A recent poll revealed that about 80% of workers support a strike.
The complaints regarding Micron’s bonus system, called the “Incentive Pay Plan,” include that the system is not clear and makes it hard for employees to reconstruct. Workers want a simpler profit-sharing plan, like the ones used by its main rivals, Samsung and SK Hynix. The system used by the company’s rivals also pays more.
Samsung ties employee bonuses in its chip division to 10.5% of profit, while SK Hynix earmarks 10% of annual operating profit. Both figures are published and pegged to a published result, so a worker can check the math against the company’s own earnings.
However, at Micron, annual performance bonuses for its Taiwan staff are capped at 200% of target, worth about five months of pay at the ceiling, yet the payouts have actually landed near 2.6 months on average. The plan asks employees to trust a calculation they cannot see, which is the heart of the grievance.
What would a strike mean for the current chip shortage?
Strikes are very uncommon in Taiwan’s chip factories because the work is highly specialized, and the workers who run the production lines are not easy to replace. A strike at Micron now would cause serious problems for the company’s large DRAM chip-making and advanced packaging operations in Taiwan.
Not only can the work not be moved to other countries quickly, but there is also very little spare production capacity available elsewhere in the world.
Demand from AI data centers has pushed memory prices up a lot, greatly increasing profits for chip makers. Semiconductor shipments in South Korea went up by 209% compared to the same month last year, reaching $46.65 billion.
DRAM prices reportedly went up by 80% to 90% in just one three-month period due to supply being moved toward high-bandwidth memory, which is used for AI computers.
SK Hynix chief Kwak Noh-Jung commented in late August that he expects the chip shortage to continue until the end of 2030.
Apple’s Tim Cook, on his final earnings call as CEO, warned that memory prices would keep rising and squeezing profits.
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FAQs
What are Micron's Taiwan unions demanding?
They want Micron to drop its Incentive Pay Plan and adopt a profit-sharing scheme, arguing the current bonus system is hard to understand and pays less than rivals; Micron's payouts have averaged about 2.6 months of salary against a cap worth roughly five months.
How do Micron's bonuses compare with Samsung and SK Hynix?
Samsung's chip division allocates 10.5% of its profits to employee bonuses and SK Hynix sets aside 10% of annual operating profit, both published figures tied to results, whereas Micron uses a discretionary plan whose methodology employees say they cannot fully see.
Why could a Micron strike affect memory prices?
Micron is one of three manufacturers controlling about 94% of the DRAM market, its Taiwan fabs cannot be relocated quickly, and the memory market is already among its tightest in years due to AI data-center demand, so a stoppage would further constrain supply.
Hannah Collymore
Hannah is a writer and editor with nearly a decade of blog writing and event reporting experience in the crypto space. At Cryptopolitan, Hannah contributes to the news page, reporting and analyzing the latest developments in DeFi, RWA, crypto regulation, AI and frontier tech industries. She graduated from Arcadia university with a degree in Business Administration.
