The workers who make the chips powering artificial intelligence want a larger share of the value created by the AI boom — and they have the leverage to demand it.

Two labour unions representing about 10,000 workers at Micron Technology's facilities in Taoyuan and Taichung, Taiwan, announced a strike threat on September 1. They said they were moving towards strike action unless Micron overhauled its bonus system and linked employee pay more directly to the company's surging profits.

The announcement came as Micron reported one of the most profitable quarters in semiconductor-industry history. Revenue in the third quarter of fiscal 2026 reached US$41.46 billion, up 346% year on year, while gross margin stood at 84.9% and net income reached US$28.24 billion. Every unit of the high-bandwidth memory (HBM) produced by the workers had already been committed to customers before leaving the production line.

An internal survey conducted in August found that 80% of participating members supported strike action. Mediation sessions are scheduled through mid-September. If the talks fail, a formal strike vote could follow later in the month.

Approval would require the support of more than half of all union members — a higher threshold than the survey result suggests — in a direct and secret ballot under Taiwan's labour-dispute law.

Why HBM's Architecture Gives Workers Leverage

Most semiconductor-production disruptions can eventually be managed by shifting orders to alternative facilities. This one cannot easily be handled that way.

Micron's Taiwan operations produce DRAM and HBM. HBM, in particular, cannot simply be substituted with output from another fabrication plant. It is made by stacking multiple DRAM dies vertically using through-silicon vias, or TSVs — narrow channels etched through silicon wafers and filled with conductive material. The dies are then bonded layer by layer with micro-bumps before being integrated onto a silicon interposer alongside the processor.

The TSV process requires specialised equipment, years of calibration and production expertise held by particular workers operating specific tools at specific fabs. It cannot be reproduced on a standard DRAM production line, nor transferred to another manufacturer quickly enough to protect customers from disruption.

Micron's current HBM4 is a 12-layer stack delivering more than 2.8 terabytes per second of bandwidth for Nvidia's Vera Rubin AI accelerator platform. It entered volume production in the first quarter of calendar 2026, with output rising at roughly twice the pace of its predecessor.

HBM supply through 2027 is fully contracted under binding customer agreements. Micron has disclosed that some key customers can currently meet only half of their demand or less.

In short, workers in Taoyuan and Taichung are producing a component that cannot be obtained elsewhere in sufficient quantities and on short notice. That gives this dispute an unusual level of importance.

What the Workers Are Demanding

The dispute centres on a specific payment mechanism. Micron's current Incentive Pay Plan, or IPP, calculates annual bonuses using a combination of company and individual performance measures. The unions say the formula is opaque, tracks profit less closely than revenue and produces payouts well below those offered by competitors.

According to the unions' calculations, citing figures from Taiwan's Commercial Times and Liberty Times, actual IPP payouts have amounted to about 2.6 months of salary, against a theoretical ceiling of roughly five months, or 200% of target.

That compares with an average projected bonus approaching 700 million Korean won, or about US$510,000, per employee at SK Hynix in 2026 under that company's formula allocating 10% of operating profit. Samsung employees could receive the equivalent of up to about US$400,000 under a newly agreed arrangement providing 10.5% of the chip division's profit.

SK Hynix's proposal was rejected by union members over concerns about its share-based payment structure, and negotiations have resumed. Samsung's agreement, which produced an average payment of US$340,000 per chip worker, was ratified.

For fiscal 2026, the unions are seeking a one-off supplemental payment that they calculate would equal about 83 months of salary per employee. From fiscal 2027, they want the IPP abolished and replaced with a system allocating 15% of annual operating profit to bonuses, paid quarterly rather than annually.

That formula would place Micron above Samsung at 10.5%, SK Hynix at 10% and TSMC, which distributes 4.7% of net profit, but below Macronix, which allocates 15% of net profit rather than operating profit.

Lin Jer-ray, president of the Micron Wafer Technology Enterprise Union, summarised the unions' main complaint by saying the company was enjoying strong profits while employee compensation had increased only modestly.

In a response to Reuters, Micron's Taiwan office said this year's performance bonus would be the company's highest ever. It said it would continue engaging with employees through existing channels while respecting applicable legal procedures.

Micron also said its compensation package extended beyond the IPP to include base pay, operational bonuses and equity programmes such as employee stock-purchase and restricted-stock plans. The unions dispute that this is sufficient given the scale of the company's profitability in 2026.

Why Taiwan Is Micron's Critical Location

Taiwan is Micron's largest manufacturing base worldwide. The company has invested approximately NT$1.4 trillion, or about US$44.2 billion at current exchange rates, on the island and produces both DRAM and HBM there. Micron's regulatory filings show that most of its DRAM output in 2025 came from Taiwan facilities.

In March 2026, Micron completed its acquisition of the Tongluo fab, a former PSMC site in Miaoli County about 15 miles, or 24 kilometres, from its Taichung campus. The deal added approximately 300,000 square feet, or 27,870 square metres, of existing 300mm cleanroom space. Micron plans to expand leading-edge DRAM and HBM production there, with initial shipments targeted for mid-2027.

The company had planned for its Taiwan workforce to reach 15,000 employees by the end of 2026 — roughly the number now divided between employees working for Micron and those who could potentially strike against it.

The Central Taiwan Science Park Administration said in August that it was closely monitoring the dispute and had assigned staff to facilitate contact between Micron and the unions. The agency warned that a strike could affect workers' livelihoods, Micron's operations, Taiwan's semiconductor supply chain and the wider economy. It said it was prepared to begin formal mediation if the sides could not reach an agreement independently.

Taiwan President Lai Ching-te addressed the situation publicly on September 1, saying the island's semiconductor sector had been built through "specialisation and long-term cooperation". Taiwan, he said, had consistently supplied global markets and honoured its commitments — remarks understood as a sign that the government is concerned about possible supply-chain disruption.

What Happened at Samsung and SK Hynix

The unions have openly pointed to developments at Samsung and SK Hynix as they set out their demands. Those cases offer an indication of how the dispute could develop.

At Samsung Electronics, a planned 18-day strike involving 48,000 chip workers was prevented on May 20 after last-minute negotiations brokered by South Korea's labour minister. The settlement created a special bonus pool equivalent to 10.5% of the chip division's operating profit, to remain in place for at least 10 years.

For 2026, with Samsung's chip division reporting record profits, the formula translates into projected bonuses that would have been unthinkable a year earlier.

At SK Hynix, the labour dispute remained unresolved as of the time of writing. Union members rejected a tentative agreement on August 25 by just 25 votes out of 15,045 cast, a margin of 0.16 percentage points.

The main disagreement concerned a proposal to pay 60% of the profit-sharing bonus in company shares rather than cash. Workers opposed the arrangement because of concerns about share-price volatility. Negotiations resumed immediately after the failed vote.

The pattern across all three memory-chip giants is similar: workers whose output is driving the AI infrastructure boom are seeking structural guarantees — formulas rather than discretionary payments — to ensure their share of the gains is proportional and predictable. Micron is now at the front of that queue.

Do HBM Workers Have Grounds to Demand a Structural Formula?

The unions' economic argument is straightforward. Micron's HBM production for 2026 and 2027 was sold out before the fiscal year was halfway over, not because of marketing or pricing strategy, but because TSV-qualified fabs with trained workers are scarce worldwide.

Workers who qualify the processes, maintain TSV equipment, manage yield problems and oversee die stacking cannot be readily replaced by a general DRAM workforce. Micron's Tongluo expansion also confirms that the company needs more workers with those skills.

A stoppage in Taoyuan and Taichung would not simply reduce Micron's output. It would remove part of the global HBM supply for which there is no near-term substitute. Samsung and SK Hynix are also operating at full HBM capacity under long-term customer agreements, using their own equipment calibrations and workforce expertise.

A Micron customer losing its allocation during a strike could not meaningfully redirect orders to a rival fab within a short period.

Analysts have been cautious but clear about the risk. Bernstein analyst Mark Li maintains a Buy rating on Micron and a 12-month price target of US$1,300, while the consensus among 31 tracked analysts is close to US$1,556. Both views cite AI demand as the company's structural growth driver.

However, analysts also note that a prolonged strike would test whether the US$100 billion in Strategic Customer Agreements announced by Micron in the third quarter could withstand a physical disruption that contract language cannot prevent.

What Happens Next

No strike has been called. Under Taiwan's Act for Settlement of Labor-Management Disputes, mediation must fail before workers can legally hold a strike vote. Mediation sessions are scheduled through mid-September.

If the sessions end without agreement, the unions may petition for a formal strike vote. Passing the vote would require support from a majority of all union members in a secret ballot, rather than merely a majority of those who participate.

The 80% survey result is a strong indication of worker sentiment, but it covers only those who took part in the preliminary survey, not all 10,000 members. A formal vote involving the full membership could produce a different result. The unions have held information sessions since July to encourage participation and narrow that gap.

Micron is due to report fiscal fourth-quarter 2026 earnings on September 30. It has guided for fourth-quarter revenue of US$50 billion and a gross margin of about 86%.

The results will come as the mediation process reaches its next stage. What executives say about the labour dispute during the earnings call could tell investors more than the news reports published beforehand.

The dispute places Micron in an unusually difficult position. Its Taiwan operations are driving a record financial year, and every day of idle fab capacity during an HBM sell-out represents revenue that cannot be recovered.

At the same time, agreeing to a permanent formula allocating 15% of operating profit would fundamentally change Micron's compensation system in its most important manufacturing location. It would also inevitably become a benchmark for workers at the company's operations elsewhere.

Workers in Taoyuan and Taichung are not asking to share in an ordinary boom. They are asking to share in the boom they make possible.

Exchange rates as of September 2, 2026; conversions are approximate.

Frequently Asked Questions

What is Micron's Incentive Pay Plan, and why do workers say it is unfair?

The IPP is Micron's annual performance-bonus system. It is calculated using a combination of company and individual performance measures.

The unions' specific objection is that the formula appears to track revenue more closely than profit. As a result, even when Micron's operating margins reach record levels — including an 84.9% gross margin in fiscal third-quarter 2026 — IPP payments do not reflect that profitability proportionally.

According to the unions, the result is a payout of about 2.6 months of salary in a year when Samsung memory workers are in line for bonuses approaching US$400,000 and SK Hynix workers were offered an average of about US$510,000, although that offer was rejected in August.

The unions want the IPP replaced with a transparent formula allocating 15% of annual operating profit to bonuses paid quarterly.

How would a Micron Taiwan strike affect AI-chip supply?

Unlike most manufacturing disruptions, a work stoppage at Micron's Taiwan facilities could not be offset simply by redirecting orders. HBM is produced using a specialised through-silicon-via process, which etches vertical channels through silicon dies and bonds multiple layers into a single stack.

The process requires specific equipment, specialised worker expertise and years of optimisation. It cannot be transferred between manufacturers quickly. Micron's HBM and DRAM capacity is already sold out through 2027, while Samsung and SK Hynix face similar commitments to their customers.

There is no spare HBM capacity in the global market to absorb a major disruption. AI accelerators that rely on Micron HBM, including Nvidia's Vera Rubin platform, could face production delays if Taiwan output stops.

When could a formal strike vote take place, and what would be needed for it to pass?

Taiwan's Act for Settlement of Labor-Management Disputes requires mediation to fail before workers can legally hold a strike vote. Mediation sessions are scheduled through mid-September.

If the talks end without agreement, the unions can petition for a vote. Approval would require more than half of all union members to support it in a direct and secret ballot, rather than simply a majority of those who vote.

The preliminary survey showing 80% support is encouraging for the unions, but it does not automatically translate into a successful formal vote among all 10,000 members.

What does the dispute show about who captures value from the AI-chip supply chain?

The AI memory supercycle has generated enormous wealth. Micron's market capitalisation crossed US$1.1 trillion on September 1, but much of that value has flowed to capital — including shareholders and executives — rather than to the workers whose specialised TSV skills are essential to producing HBM at Micron's current margins.

The labour settlements at Samsung and the negotiations at SK Hynix earlier in 2026 established a precedent for memory workers seeking structured profit-sharing formulas from the AI boom.

The Micron Taiwan dispute will show whether that precedent extends from South Korea to Taiwan — and potentially to other jurisdictions where critical AI infrastructure depends on specialised workers who cannot be sourced elsewhere.

Originally published on Tech Times