Micron Suspends $4.5 Billion Taoyuan Plant Construction Plan as Labor Dispute Threatens AI Memory Chip Expansion

BlockBeats news, November 5 - According to Bloomberg, due to ongoing labor disputes with the employee union, Micron Technology has largely suspended its plan to build a new memory chip factory in Taoyuan, Taiwan, China, with a project investment budget of $3 billion to $4.5 billion, originally scheduled to start production in 2028. Sources familiar with the matter said Micron is concerned that previously reached agreements with the union may be overturned, and currently only a small amount of site safety maintenance work is being maintained, after which construction will be frozen.

The dispute stems from employees demanding a share of the profit growth brought by the AI boom. The Taoyuan union is asking Micron to distribute 15% of operating profit to global employees and wants all-cash rewards rather than partial stock issuance. Although Micron reached an agreement with the larger Taichung union in October, some employees are dissatisfied with the terms of the agreement, and the Taoyuan union is trying to expand its organizational scale to push for renegotiation.

The project was originally planned to produce high-bandwidth memory (HBM) and DRAM, using ASML advanced equipment. Taiwan, China currently contributes about 60% of Micron's DRAM output and is also an important HBM production base, with approximately 15,000 employees. The project suspension may affect Micron's long-term capacity expansion layout in Taiwan, China, and add uncertainty to the already supply-tight AI memory chip market.

Micron responded that its existing operations in Taiwan, China are all normal and it will ensure customer business continuity, but did not directly comment on the suspension of the Taoyuan project. The economic department of Taiwan, China stated that the government will assist Micron and the union in resolving differences and promote the implementation of the investment plan.