Micron pauses work on US$4.5bn Taiwan plant after labor spat

Micron Technology has halted construction of a new memory chip plant in Taoyuan, Taiwan, a decision that could affect the future supply of critical AI components. The facility was planned to manufacture high-bandwidth memory (HBM) and DRAM, both of which are reported to be in short supply and experiencing skyrocketing prices due to demand from Nvidia Corp accelerators and the global AI data center boom.

The suspension stems from a labor dispute where employees demanded higher compensation, seeking a share of the record profits generated by the AI build-out. While Micron secured a deal with one union, some employees are reportedly balking at the terms, raising concerns for executives about the agreement's stability. Taiwan is a significant production base for Micron, accounting for three-fifths of its conventional chip output.

The Taoyuan complex, budgeted between US$3 billion and US$4.5 billion and equipped with ASML Holding NV gear, was scheduled to come online in 2028. Its pause suggests a potential delay in adding new capacity for these advanced memory types. Micron maintains that its existing operations in Taiwan continue normally and that it is confident in business continuity for customers. Taiwanese officials have indicated support for resolving the labor differences, even as Micron expands manufacturing elsewhere, including the US, Japan, and Singapore.