A Micron labor union staged Taiwan's first-ever strike in the semiconductor industry on Thursday, demanding a regular profit-sharing scheme for its employees (Nikkei Asia)

Micron Technology's production facility in Taiwan is at risk of a strike on October 22, following a labor dispute over profit-sharing arrangements. The union at Micron's Taoyuan plant has called for a one-day warning strike to coincide with a mediation session, aiming to pressure the company. The dispute centers around a demand for a permanent profit-sharing system, modeled after compensation practices at South Korean semiconductor firms.

Micron's proposed bonuses amounted to 35 to 68 months of base salary, but the union rejected this offer, insisting on a one-time bonus equivalent to 83 months of pay, along with a long-term profit-sharing system allocating 15% of the company's operating profit. The union's demands have been bolstered by comparisons to performance bonus structures at Samsung Electronics and SK hynix.

The Taoyuan plant, responsible for roughly 22% of Micron's DRAM production, is a strategic manufacturing hub that accounts for 50% to 60% of Micron's total semiconductor output. Taiwan's semiconductor industry is seeing a potential spill-over effect, as the outcome of the dispute could impact the Taichung plant, a key production base for high-bandwidth memory crucial in AI server manufacturing.

With more than 80% of Micron's local workforce represented by the unions at Taoyuan and Taichung plants, a prolonged strike or escalation could significantly disrupt global memory supply chains. Market analysts anticipate that such disruptions could benefit South Korean competitors, as tighter memory supply could strengthen their pricing power and negotiating position.

Micron has affirmed its commitment to constructive discussions, stressing respect for employees' rights and relevant procedures.