Micron’s Taiwan workers threaten to escalate chip shortage over bonuses

A strike could make the current chip shortage even worse and lead to higher prices for phones, laptops, and other electronics.

80% of Micron employees support going on strike

Micron Technology (NASDAQ: MU) in Taiwan, which is one of only three companies that control about 94% of the global DRAM market, could be facing a potential workers’ strike following complaints about how employee bonuses are calculated. 

Taoyuan Union and Taichung Union, which together represent about 10,000 workers, are currently in talks with the company, but if negotiations fail, a formal strike vote could happen in September. 

A recent poll revealed that about 80% of workers support a strike.

The complaints regarding Micron’s bonus system, called the “Incentive Pay Plan,” include that the system is not clear and makes it hard for employees to reconstruct. Workers want a simpler profit-sharing plan, like the ones used by its main rivals, Samsung and SK Hynix. The system used by the company’s rivals also pays more. 

Samsung ties employee bonuses in its chip division to 10.5% of profit, while SK Hynix earmarks 10% of annual operating profit. Both figures are published and pegged to a published result, so a worker can check the math against the company’s own earnings.

However, at Micron, annual performance bonuses for its Taiwan staff are capped at 200% of target, worth about five months of pay at the ceiling, yet the payouts have actually landed near 2.6 months on average. The plan asks employees to trust a calculation they cannot see, which is the heart of the grievance. 

What would a strike mean for the current chip shortage? 

Strikes are very uncommon in Taiwan’s chip factories because the work is highly specialized, and the workers who run the production lines are not easy to replace. A strike at Micron now would cause serious problems for the company’s large DRAM chip-making and advanced packaging operations in Taiwan. 

Not only can the work not be moved to other countries quickly, but there is also very little spare production capacity available elsewhere in the world.

Demand from AI data centers has pushed memory prices up a lot, greatly increasing profits for chip makers. Semiconductor shipments in South Korea went up by 209% compared to the same month last year, reaching $46.65 billion. 

DRAM prices reportedly went up by 80% to 90% in just one three-month period due to supply being moved toward high-bandwidth memory, which is used for AI computers.

SK Hynix chief Kwak Noh-Jung commented in late August that he expects the chip shortage to continue until the end of 2030.

Apple’s Tim Cook, on his final earnings call as CEO, warned that memory prices would keep rising and squeezing profits.