Micron reaches deal with Taiwan union amid bonus dispute; October 22 strike still looms

Micron Technology said on Wednesday that it had reached a labour-management agreement with its Taichung union in Taiwan, ending a scheduled mediation process amid a wider dispute over employee bonuses and profit-sharing. The development comes as a separate union representing workers at the US chipmaker's Taoyuan operations prepares for a one-day warning strike on October 22 over demands for a clearer compensation framework.Micron said both management and the Taichung union had agreed to withdraw from mediation scheduled for Wednesday. The company did not disclose the settlement's financial terms or indicate whether it would influence negotiations with its Taoyuan workforce.The Idaho-based semiconductor manufacturer employs approximately 15,000 people in Taiwan and has invested more than T$1.6 trillion ($50 billion) on the island.Why Micron's Taoyuan union threatened an October 22 strikeThe Taoyuan union announced its planned walkout on Tuesday, accusing management of failing to provide a concrete response to demands concerning employee bonuses and profit-sharing.Workers are seeking clarity on the percentage and amount of a one-off bonus for 2026, alongside a transparent framework for distributing future profits.According to the union, Micron had asked workers to await an October 9 board meeting at its US headquarters but subsequently failed to present a substantive counterproposal.The union secured the legal right to strike on October 7 after mediation ended without an agreement in September. Although it initially considered an unannounced walkout, it later opted to provide advance notice, describing the planned action as a warning rather than an end to negotiations.It has indicated that it remains willing to sign an agreement if Micron presents acceptable terms.The Taichung union, meanwhile, had not held a strike authorisation vote before Wednesday's settlement.Micron bonus dispute: Why workers want a profit-sharing formulaThe Taoyuan union has also questioned how Micron calculates employee bonuses.It cited the company's 2025 Incentive Pay Plan (IPP), under which the performance factor stood at 93.9%. This initially translated into a bonus equivalent to approximately 2.3 months' salary, before being increased to 2.6 months.Workers have urged Micron to adopt compensation practices comparable to those of Samsung Electronics, SK Hynix, Winbond Electronics and TSMC.In May, Samsung averted a strike by agreeing to allocate 10.5% of its semiconductor division's operating profit towards special employee bonuses, subject to profitability targets.SK Hynix separately agreed last year to distribute 10% of annual operating profit through its employee profit-sharing programme, removing an existing cap on payouts.The Taoyuan union wants a similarly predictable system that gives employees greater clarity over their share of Micron's earnings.Why Micron's Taiwan labour dispute matters for AI chip productionMicron's Taiwanese facilities manufacture dynamic random-access memory (DRAM) and high-bandwidth memory (HBM), essential components used in artificial intelligence servers and data centres.Taichung is Micron's largest manufacturing site in Taiwan. While the immediate production impact of the proposed Taoyuan stoppage remains uncertain, prolonged disruption could place additional pressure on memory chip supplies amid strong demand from AI infrastructure providers. Taiwanese President Lai Ching-te last week urged Micron and its employees to negotiate "sincerely" while attending the opening of the company's second advanced packaging and testing facility in Taichung.Lai called for stronger communication and mutual trust between management and workers, encouraging both sides to pursue a consensus through constructive negotiations.Micron has maintained that it respects employees' legal rights and remains committed to discussions aimed at reaching mutually acceptable solutions.Wednesday's agreement resolves the scheduled Taichung mediation, but the separate Taoyuan union's planned industrial action remains the next development to watch.