TradingKey - Micron Technology (MU) Taoyuan plant union in Taiwan plans to launch a solidarity strike on October 22 to support the Taichung plant union, which is currently undergoing labor mediation with the company, and demand that Micron propose a concrete employee profit-sharing plan.

Previously, a total of 1,994 members of the Taoyuan union voted in favor of the strike, accounting for 88.3% of all 2,258 eligible voting members; based on the 2,012 members who actually voted, the approval rate was approximately 99.1%.

On October 22, the Taichung union will hold its second labor mediation session with Micron. If the two sides fail to reach a consensus, the labor dispute may escalate further, increasing market focus on Micron's production scheduling and compensation costs.

Taiwan's labor authority stated that it respects the union's strike vote results and called on Micron to propose a concrete and feasible plan to continue negotiations with the union.

According to a Reuters report, the Taiwanese government had also previously called on both labor and management to communicate in good faith and seek consensus. As of October 20, Micron has yet to publicly disclose a concrete plan to respond to the union's demands.

Employees Demand 15% Share of Operating Profit, Putting Bonus Costs in Focus

The central issue in the labor dispute at Micron's Taiwan operations is the employee profit-sharing system. The union is demanding that, starting from fiscal year 2027, 15% of annual operating profit be allocated to employee bonuses and distributed quarterly to replace the existing incentive bonus system.

In September, Micron announced a fiscal year 2026 compensation plan for its Taiwan employees, which included a one-time cash bonus of NT$1 million (approximately $31,000) for eligible staff, along with performance incentives and stock awards.

The union estimates that the proposed additional compensation is equivalent to approximately 4.4% of operating profit, arguing that it remains insufficient to replace a long-term profit-sharing mechanism.

The union also cited South Korean peers as benchmarks. Samsung's semiconductor division bases its special bonus pool on 10.5% of operating profit, subject to profitability conditions, while SK Hynix has committed to distributing bonuses equal to 10% of annual operating profit to employees over a 10-year period.

Micron previously stated that it had prepared multiple compensation options to submit to its board of directors for discussion. As of October 20, public disclosures have not confirmed whether the board has approved a new plan.

If Micron ultimately raises the employee profit-sharing ratio, bonus expenses could increase, putting pressure on operating profit and net income. The actual impact remains dependent on the final agreement and accounting treatment.

Risk of Strike Expansion Draws Attention as HBM Delivery Becomes Focus

Taiwan, China is an important memory chip production base for Micron. The Taoyuan plant is mainly involved in DRAM manufacturing, while the Taichung plant handles DRAM production as well as HBM advanced packaging and testing operations.

If the strike impacts key positions, it could disrupt production schedules and product delivery, but the actual impact will depend on the scope and duration of the work stoppage.

Micron has stated that its 2027 HBM capacity has received customer commitments. If production continues to be hindered, delivery pressure may increase, but there is currently no sufficient evidence indicating that the strike has caused a work stoppage or supply disruption.

On October 22, the Taoyuan union plans to hold a one-day solidarity strike, and the Taichung union will also conduct a second labor-management mediation session.

If the two sides reach an agreement, the dispute is expected to ease; if the strike expands and affects key production steps, the market may reevaluate Micron's delivery capabilities and earnings expectations.

Going forward, key areas to monitor include the progress of labor negotiations, the actual impact of the strike on production and delivery, and whether Micron adjusts its earnings expectations as a result.

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