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Micron's Taoyuan union rejects profit-share offer before 27 Oct talks

Workers at Micron's Taoyuan DRAM and HBM plant voted down a new profit-sharing offer after a one-day strike, the first in Taiwan's chip industry. They want 15% of operating profit. Talks resume 27 October.

Sean

— 5 min read
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Workers want 15% of Micron's profit. Cleanroom workers walk along a covered walkway toward a lit memory chip plant at dusk.
Illustration generated for Second Order. Not a photo of Micron's Taoyuan plant.

WIRE · SEMICONDUCTORS · MEMORY · Data as at 26 Oct 2026

The memory boom has reached the pay talks. Workers at Micron's DRAM and HBM plant in Taoyuan, Taiwan, rejected the company's new profit-sharing offer on 23 October 2026: the union said 1,633 of 1,637 members who voted said no, about 70% of its membership. That came a day after a 24-hour warning strike, the first strike Taiwan's chip industry has had. Talks resume on 27 October. The union wants a permanent scheme that pays workers 15% of operating profit. On the semiconductors layer, the question is how much of memory's record margin stays with shareholders.

What happened

22 to 23 October 2026 · Taoyuan

A 24-hour warning strike, then a near-unanimous no

The strike ran from 9am on 22 October. Only a handful of workers walked out and the union said it did not aim to stop production. Talks set for 23 October were pushed to 27 October by a typhoon

Micron's offer

A quarterly profit-sharing bonus from fiscal 2027, plus pay and pension

Structural pay rises, higher shift allowances, three extra days of paid leave and a pension contribution of 10%, up from 8%. The share of profit in the new bonus was not made public

The other union

Taichung, Micron's biggest Taiwan site, signed on 21 October

Taichung employs about 12,300 of Micron's roughly 15,000 staff on the island. Taoyuan's union has about 2,335 members among some 3,000 workers

The demand

15% of operating profit, paid every quarter

Both unions had also sought a one-off bonus of 83 months' salary. In September workers turned down a one-off payment of up to 68 months' pay

Why cash cares

Micron makes around half to 60% of its chips in Taiwan, and Taoyuan is one of the sites that makes HBM, the stacked memory that sits beside AI processors. A one-day walkout by a few workers does not move supply; an industry source told Taiwanese press that inventory could cover a one-day stoppage. What matters for investors is the formula, because it decides how much of a very large profit stays with the company.

Micron earned $99.3 billion of operating income in fiscal 2026, which ended on 3 September, on $133.2 billion of revenue. Its operating margin in the last quarter was 81%. The union points to its rivals. Samsung Electronics agreed in May to set aside 10.5% of its chip division's operating profit for bonuses, and SK hynix allocates 10% of annual operating profit. Reports do not say whether the Taoyuan demand means Micron's global profit or only the Taiwan business, so treat the next figures as an upper limit on scale, not a bill. Applied to fiscal 2026 group operating income, 15% would be about $14.9 billion, against about $10 billion at the 10% and 10.5% rates rivals use (our arithmetic).

That is real money even for Micron. Its net capital spending in fiscal 2026 was $27.4 billion, so a 15% payout on group profit would equal more than half of it. Total operating expenses for the year were $8.2 billion. Micron also guided to $61.5 billion of revenue for the quarter to November, so the profit pool the formula applies to is still growing. We covered how Micron has already sold most of its 2027 memory output, which is why its customers care about any risk at its plants.

Chart comparing profit-sharing formulas in memory: SK hynix 10% of annual operating profit, Samsung 10.5% of chip division operating profit, the Taoyuan union's 15% demand, and Micron's offer with an undisclosed rate, with bars showing what each rate would equal on Micron's fiscal 2026 operating income of 99.3 billion dollars

Figure: the gap between 10% and 15% of a memory boom is about $5 billion a year at Micron's scale. Rates from company and union statements reported on 22 and 23 October 2026; Micron's operating income from its fiscal 2026 results of 30 September 2026. Dollar values are our arithmetic and an upper limit, since the profit base in the demand is not defined.

The second-order read

Who gets paid. Micron's Taiwan staff, already. The Taichung deal and the offer to Taoyuan add a quarterly profit share on top of the annual bonus, a higher pension rate and better shift pay. Whatever the final rate, labour's share of the memory cycle has gone up.

Who pays. Micron shareholders, at the margin. Each point of operating profit paid out is about $1 billion a year at fiscal 2026 levels. With SK hynix and Samsung reporting this week, investors will also see whether bonus provisions are lifting costs across all three memory makers.

Who carries the risk. AI server makers and the chip designers that buy HBM. Supply is already tight. The union has said more workers could join if talks fail, and a longer stoppage at an HBM site would land on buyers who have no spare source.

Stuck step. The bargaining table in Taoyuan. The tools and wafers are in place. What could slow output now is a pay formula that 70% of a plant's union has rejected, with a second round of talks and the threat of further action.

Two cautions

The strike was small and short. Only a handful of workers walked out, the union said it did not intend to stop production, and there is no report of lost output.

The numbers are not like for like. Micron has not published the rate in its new quarterly bonus, the Taichung terms were signed under a confidentiality agreement, and the union's 15% may apply to a smaller Taiwan profit base than the group figures used above.

What would change the view

  • A deal on 27 October close to the Taichung terms, which would close the dispute without a fixed profit formula.
  • Taichung staff reopening their agreement, which the Taoyuan union says some are unhappy with.
  • Micron putting a bonus rate in its results, which would let investors size the cost directly.

What to watch

  • The Taoyuan talks on 27 October, and whether the union calls a longer strike.
  • SK hynix results on 28 October and Samsung Electronics on 29 October, for bonus provisions and HBM sales.
  • Micron's next quarterly results in December, for any jump in operating expenses from the new profit share.

Read: the semiconductors layer, how HBM works and our Wire on Micron's plan to stack HBM on top of AI chips

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Not investment advice. Do your own research.

References

  1. Central News Agency, "Micron Taoyuan union holds to profit-sharing demand; talks delayed to 27th by typhoon", 23 Oct 2026
  2. DigiTimes, "Taiwan's inaugural semiconductor strike pauses as nearly 70% of Micron Taoyuan Union rejects new bonus offer", 23 Oct 2026
  3. AFP, "Taiwan union says Micron workers reject bonus proposal", 23 Oct 2026
  4. HedgeWeekly, "Micron's Taoyuan union rejects pay offer as 1,633 members vote no", 23 Oct 2026
  5. Micron, "Record fiscal fourth-quarter and full-year 2026 results", 30 Sep 2026

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