Micron suspends its $4.5 billion factory construction plan in Taoyuan, with labor disputes threatening the expansion of AI storage chip production.

According to Bloomberg, Micron Technology has largely suspended plans to build a new memory chip plant in Taoyuan, Taiwan, due to ongoing labor disputes with employee unions. The project carries an investment budget of $3 billion to $4.5 billion and was originally slated to begin operations in 2028. Sources familiar with the matter noted Micron fears the prior union agreement could be overturned, with only minimal site security maintenance work ongoing and construction set to freeze shortly. The dispute arises from employees’ demands to share profit growth driven by the AI boom: the Taoyuan union is pushing for Micron to allocate 15% of its operating profit to global staff, and wants all-cash bonuses instead of a portion in stock. While Micron struck a deal with the larger Taichung union in October, some employees are unhappy with the terms, and the Taoyuan union is seeking to expand its membership to push for renegotiations. The planned facility was set to produce high-bandwidth memory (HBM) and DRAM, using advanced equipment from ASML. Taiwan currently accounts for around 60% of Micron’s DRAM output, serves as a key HBM production base, and employs about 15,000 people there. The suspension could disrupt Micron’s long-term expansion plans in Taiwan and add uncertainty to the already tight AI memory chip market. Micron stated its existing operations in Taiwan are normal and it will ensure customer business continuity, but did not directly comment on the Taoyuan project halt. Taiwan’s economic affairs department said the government will assist Micron in resolving differences with the union and advance the investment plan.