Micron's Taiwan unions threaten strike over bonus dispute

By Wen-Yee Lee

TAIPEI, Sept 1 (Reuters) - Micron Technology's labour ‌unions in Taiwan said ​on Tuesday they ​were moving towards possible strike action unless the U.S. memory-chip maker overhauls its bonus system and shares more of its profits with employees.

The unions, representing Micron workers in Taoyuan and Taichung, said in a written response to Reuters that they ‌had nearly 10,000 members among Micron's roughly 15,000 employees in the two cities.

More than 80% of members who took ⁠part in an internal online survey in August backed strike action, they said.

Micron's Taiwan office said in response to a request for comment that this year's performance-bonus payout would ‌be the highest in the company's history.

It ‌said it would continue to engage with employees through existing channels while respecting applicable legal processes.

The strike threat comes as booming demand for memory chips used in artificial intelligence hardware has tightened global supply and lifted profits across the sector.

Micron, the world's third-largest memory-chip maker, reported record ​revenue of $41.46 billion and net income of $28.24 billion for its fiscal third quarter ended May 28, as demand for its products surged. The company's market value was about $1.10 trillion on Tuesday.

A strike at Micron would be highly disruptive because Taiwan is the company's largest manufacturing base, ⁠according to authorities in Taipei. They say Micron has invested NT$1.4 trillion ($43.9 billion) in the island and produces DRAM and high-bandwidth memory chips there.

The government-run Central Taiwan Science Park administration said last ​month it was closely monitoring the dispute and had assigned staff to help facilitate contacts between Micron and the unions.

It said a strike could affect workers' livelihoods, Micron's operations and potentially Taiwan's semiconductor supply chain and ​wider economy, adding that it could launch labour-management negotiations or mediation if needed.

The ‌dispute echoes a showdown at Samsung Electronics in South Korea, where a planned 18-day strike involving as many as 48,000 union members was called off in May after last-minute negotiations.

That deal created a special bonus pool worth ⁠10.5% of the chip division's operating profit, subject to profitability targets.

Micron's Taiwanese unions said profit-sharing arrangements at Samsung and SK Hynix had widened the gap between Micron workers and their South Korean counterparts.

UNIONS SEEK PROFIT-LINKED BONUSES

For fiscal 2026, the unions are seeking an additional one-off bonus payment, arguing that Micron's existing Incentive Pay Plan (IPP) does ⁠not adequately reflect the company's profitability.

The unions said their proposal would amount to about 83 months' salary for each Taiwan-based employee.

From fiscal 2027, they want the IPP ​replaced with a system that allocates 15% of operating profit to bonuses and distributes payments quarterly rather than annually.

Micron's IPP determines annual bonuses using company and individual performance measures. The unions said the company had not fully explained how its company-performance metric was calculated and argued that it appeared to track revenue growth more ‌closely than profit.

The unions said Micron had indicated it would keep the existing IPP for this year's bonus payments while delaying negotiations.

Micron said its compensation structure differs from the profit-sharing model sought by the unions. According ‌to the company, employee pay packages include base salary, annual performance incentives, operational bonuses and equity programmes, including stock-purchase and restricted-stock plans.

The dispute comes as Taiwan seeks ⁠to reinforce its reputation as a reliable hub for global ‌chip production.

President Lai Ching-te said on Tuesday ​that the island's semiconductor sector had been built through specialisation and long-term cooperation, and that Taiwan had consistently supplied the global market and honoured its commitments.

(Reporting by Wen-Yee Lee in Taipei. Writing by Eduardo Baptista. Editing by Muralikumar Anantharaman ‌and Mark Potter)

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