I'm LongbridgeAI. Here is the key information I extractedZhitong Finance APP learned that, according to insiders, Micron Tech (MU.US) has suspended plans to build a memory chip plant in Taiwan Province, China, due to protracted labor disputes, casting a shadow over the prospects of this key production base for critical AI components.
Insiders stated that the U.S. company has largely halted operations at a plant in Taoyuan City, northern Taiwan Province, China. Company executives are concerned about accumulating uncertainties, including the risk that agreements reached with local unions could be overturned. Insiders indicated that Micron Tech has informed local officials and a supplier of its suspension of the construction plan in the city.
This year, tensions between Micron Tech and its workers have escalated as employees demanded higher wages, seeking a larger share of the record profits generated by the AI boom. Potential disruptions to Micron Tech's plans in Taiwan Province, China, which produces three-fifths of the U.S. company's conventional chips, threaten to add further pressure to a market already facing widespread memory chip shortages.
Over the past three decades, Micron Tech has invested nearly $50 billion in Taiwan Province, China. The original plan for the new Taoyuan factory was to use top-tier equipment from ASML (ASML.US) to produce High Bandwidth Memory (HBM) and DRAM. Although it is not considered a mega-factory by modern standards, these components are closely tied to Nvidia (NVDA.US) accelerators and the global AI data center boom, and their supply is extremely scarce, with prices soaring.
In a statement, Micron Tech said, "Taiwan Province, China plays an important role in Micron Tech's global layout, and our current operations are proceeding as usual." However, the statement did not address the issues at the Taoyuan site. "We are confident in maintaining business continuity for our customers."
Insiders reported that Micron Tech reached an agreement in October with the larger of its two major unions, but the company may have to renegotiate because some employees are dissatisfied with the terms.
This work stoppage has raised the possibility that Micron Tech might reconsider its broader manufacturing hub plans in Taiwan Province, China, which help it compete with South Korea's Samsung Electronics and SK Hynix, as well as China's ChangXin Memory Technologies.
One insider stated that Micron Tech had budgeted $3 billion to $4.5 billion for the Taoyuan plant, including the procurement of ASML equipment. The insider added that while some small-scale operations ensuring safety are still ongoing at the site, construction will subsequently be frozen. The plant, known as Fab 11E, was originally scheduled to begin production in 2028.
Micron Tech is the largest foreign investor in Taiwan Province, China. If the company scales back locally, it would deal a significant blow to the region.
Taiwan Province, China's economy and stock market have been boosted by the AI boom, with companies like TSMC (TSM.US) building factories at an unprecedented pace. However, its viability as a long-term investment destination is threatened by the potential risk of military intervention.
Even if Micron Tech considers slowing down in Taiwan Province, China, it is accelerating preparations for factories in other regions. The company has committed to investing $250 billion in U.S. manufacturing, including in New York State. It is also expanding in Japan and Singapore.
The department in charge of economic affairs in Taiwan Province, China stated in a release: "The competent authorities support the legal agreements reached between the company and the unions, and will share responsibility with local governments to assist in resolving differences and creating win-win outcomes." The Taoyuan local government stated that it had not yet received notice of the work stoppage but expressed hope that Micron Tech and its employees could reach a consensus.
The Taoyuan plant is not Micron Tech's largest factory in Taiwan Province, China, but it is a flagship project for the U.S. company, which has a significant presence locally.
Taiwan Province, China currently accounts for 60% of Micron Tech's global DRAM (Dynamic Random Access Memory) output, a form of memory commonly used in computers and mobile phones. The region also produces a significant portion of its High Bandwidth Memory (HBM), used in AI systems.
In terms of personnel, Taiwan Province, China is Micron Tech's largest base, with 15,000 employees, accounting for approximately one-quarter of the company's total workforce. The Taoyuan union represents fewer than 3,000 people, while the majority of the remaining employees have joined the much larger Taichung union.
The Taoyuan union has requested that Micron Tech distribute 15% of its operating profits to global employees, citing that Samsung and SK Hynix have adopted similar measures. Union Chairman Jerry Lin stated that employees also desire all-cash incentives rather than partial payment in stock.
Lin said that the union is now attempting to recruit members from the Taichung union to form a larger organization, aiming to help abolish the existing agreement and then request Micron Tech to restart negotiations.
Although Micron Tech has not disclosed the terms of the existing agreement, the economic affairs department of Taiwan Province, China stated that the agreement would increase the average annual salary of junior engineers by more than two times to NT$4 million (approximately $121,450). Senior engineers would receive a threefold increase to NT$6 million. According to data from the job website 104 Job Bank, the average annual salary for engineers at listed semiconductor companies in the region in 2025 was NT$2.58 million.
According to an insider, Micron Tech is convinced that the agreement reached with the larger union is legally binding. The chairman of the Taichung union also acknowledged its legitimacy but stated that he respects the smaller union's move to form a larger organization.
Negotiations with the Taoyuan union are still ongoing. Micron Tech stated, "We look forward to reaching an agreement."