Micron’s Workers Are Threatening to Strike. What It Means for the Stock.

Micron Technology shares have risen more than 700% over the past 12 months. (David Paul Morris/Bloomberg)

Key Points

• Micron Technology workers in Taiwan are moving toward strike action unless the company agrees to a profit-sharing agreement.
• The Taiwanese union wants to replace the current incentive scheme with a plan allocating 15% of operating profit to bonuses from fiscal 2027.
• Micron said its performance bonus for this year is already set to be the highest in the company’s history.

Micron’s booming memory-chip business has pushed its stock higher and higher over the past year, but workers are now demanding a larger share of the profits.

The company’s employees in Taiwan are moving toward a strike unless Micron agrees to a profit-sharing agreement comparable to those of rivals SK Hynix and Samsung Electronics , according to reports from Reuters and local Taiwanese media.

Micron didn’t immediately respond to a request for comment early Tuesday. Its shares were down 2.4% in Tuesday’s premarket.

Although it’s an American company and proud of its Idaho headquarters, much of Micron’s manufacturing actually happens in Taiwan. A strike could have a significant effect on its operations, although such action would have to be preceded by mediation under Taiwanese law.

Recent history suggests the company is likely to have to make some concessions. Samsung averted a strike in South Korea in May by promising a new bonus pool for employees in the semiconductor division, equivalent to 10.5% of the division’s operating profit, to be paid in stock. SK Hynix is still negotiating with its own unions, having previously promised to allocate 10% of its annual operating profit to employee bonuses last year.

Obviously this is all part of a negotiation. Micron’s Taiwanese union would like to scrap the existing incentive scheme and replace it with a plan allocating 15% of operating profit to bonuses from fiscal 2027, according to Reuters. Micron said this year’s performance-bonus is already set to be the highest in the company’s history.

There shouldn’t be any immediate shock to Micron stock, with plenty to be negotiated on amounts, conditions, the manner of payment, etc. But labor demands come on top of other big spending commitments such as Micron’s promised $250 billion investment in U.S. manufacturing through 2035.

Micron is making a lot of money but it won’t be able to keep it all for itself.

Write to Adam Clark at adam.clark@barrons.com

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