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Micron Workers Stage Taiwan's First Chip Strike Over AI Profits · DX Today | No-Hype Podcast & News About AI & DX

• 0:00
  SPEAKER_01: Welcome to the DX Today Podcast, your daily deep dive into the AI ecosystem.
• 0:05
  SPEAKER_01: I'm Brian, and joining me as always is Jessica.
• 0:09
  SPEAKER_00: Thanks, Brian.
• 0:10
  SPEAKER_00: Today we are talking about something that has never happened before in Taiwan.
• 0:13
  SPEAKER_00: On Thursday morning at 9 o'clock local time, workers at a micron memory plant in Taoyuan launched the first strike in the history of the Taiwanese semiconductor industry.
• 0:22
  SPEAKER_01: And I want to be upfront about the scale, because the headline sounds enormous, and the picture on the ground was a lot smaller.
• 0:29
  SPEAKER_01: Reporters on site counted somewhere between five workers and 11 union officers on the picket line.
• 0:34
  SPEAKER_01: Most people kept working.
• 0:36
  SPEAKER_00: That is true.
• 0:37
  SPEAKER_00: And I think it is the most interesting part of the story.
• 0:40
  SPEAKER_00: The walkout itself was tiny.
• 0:42
  SPEAKER_00: But the vote behind it was not.
• 0:44
  SPEAKER_00: And the fight it represents is about the single biggest pile of money in the AI hardware boom right now, which is memory.
• 0:51
  SPEAKER_01: Let's set the stage for people who do not follow chip plants.
• 0:55
  SPEAKER_01: Micron is an American company, one of the three big makers of memory chips in the world.
• 1:01
  SPEAKER_01: And it does somewhere between half and 60% of its manufacturing in Taiwan.
• 1:05
  SPEAKER_00: Right.
• 1:06
  SPEAKER_00: And the other two big players are Samsung and SK Heinex in South Korea.
• 1:11
  SPEAKER_00: By one recent count, Samsung holds about 39% of the DRAM market by revenue.
• 1:16
  SPEAKER_00: SK Heinex about 25%, and Micron about 23%.
• 1:20
  SPEAKER_01: And the reason this matters for AI specifically is high bandwidth memory.
• 1:25
  SPEAKER_01: Every AI accelerator in a data center needs stacks of very fast memory sitting right next to the processor, and there are only three companies on Earth that can make it at volume.
• 1:34
  SPEAKER_00: Which has turned memory from a famously boom and bust commodity into something closer to a gold mine.
• 1:40
  SPEAKER_00: Micron reported full-year revenue of roughly$133 billion with an operating margin of about 75%, according to figures cited by Trend Force.
• 1:50
  SPEAKER_01: 75% operating margin in a manufacturing business is a number I would have laughed at a few years ago.
• 1:56
  SPEAKER_01: That is software territory.
• 1:58
  SPEAKER_01: You do not usually see that when you are running clean rooms, chemicals, and very expensive machines around the clock.
• 2:04
  SPEAKER_00: And the stock reflects it.
• 2:05
  SPEAKER_00: Micron shares are up more than 300% over the past year.
• 2:09
  SPEAKER_00: The company has also said it has already committed more than three-quarters of its output for next year to customers, so the demand is locked in.
• 2:16
  SPEAKER_01: So now we get to the workers.
• 2:18
  SPEAKER_01: There are two unions at Micron in Taiwan.
• 2:21
  SPEAKER_01: One represents the big site in Taichung, roughly 12,300 employees, and the other represents Tao Yuan, which has about 3,000 employees and makes memory wafers.
• 2:33
  SPEAKER_00: Together, those two unions represent about 12,000 of the roughly 15,000 people Micron employs in Taiwan.
• 2:40
  SPEAKER_00: That is a very high share for a country where the chip industry has historically been almost entirely non-union and very proud of its work culture.
• 2:47
  SPEAKER_01: Tell me what the Tao Yuan Union is actually asking for, because I have seen the phrase 83 months of salary floating around, and I want to make sure our listeners understand that is not a typo.
• 2:58
  SPEAKER_00: It is not a typo.
• 3:00
  SPEAKER_00: The union wants a one-time bonus for this fiscal year equal to about 15% of the global operating profit of Micron, which they estimate works out to roughly 83 months of pay for each Taiwan employee.
• 3:12
  SPEAKER_00: That is almost seven years of salary.
• 3:15
  SPEAKER_01: Seven years of salary as a single bonus.
• 3:18
  SPEAKER_01: I understand the logic, the profits are real, but I can also picture every finance department in the world reading that sentence and quietly reaching for a glass of water.
• 3:27
  SPEAKER_00: And yet the company was not that far away on the one-time number.
• 3:31
  SPEAKER_00: In September, Micron offered rewards worth between 35 and 68 months of pay, including a minimum cash payout of 1.7 million new Taiwan dollars per employee and a separate bonus of 1 million new Taiwan dollars for longer-serving staff.
• 3:45
  SPEAKER_01: That is the part that surprised me.
• 3:48
  SPEAKER_01: 68 months of pay is already an extraordinary offer by any normal standard.
• 3:53
  SPEAKER_01: So why did the union say no to something that would change the lives of most of the people receiving it?
• 3:59
  SPEAKER_00: Because the second demand is the one they care about most.
• 4:02
  SPEAKER_00: Starting next fiscal year, they want a permanent formula that sends 15% of operating profit to workers every quarter, along with protections against retaliation and rules so that people who never joined the union do not get a free ride.
• 4:15
  SPEAKER_01: So the real fight is not about this year's check.
• 4:18
  SPEAKER_01: It is about whether the share of the profit is written down as a rule or whether management decides it each year based on how generous it feels.
• 4:26
  SPEAKER_00: Exactly.
• 4:27
  SPEAKER_00: The union secretary, Chen Yang Kai, said the strike vote showed deep distrust of the existing incentive pay plan.
• 4:34
  SPEAKER_00: In other words, workers do not believe the current formula is transparent, and a big one-time payment does not fix that problem.
• 4:41
  SPEAKER_01: Let's talk about the vote, because that is where the strength of this union really shows.
• 4:45
  SPEAKER_01: Between October 1st and October 6th, 1,994 members voted yes out of about 2,258 who were eligible.
• 4:54
  SPEAKER_00: That is about 88% of all eligible members, and some reports put it near 99% of the ballots actually cast.
• 5:02
  SPEAKER_00: Either way, it is a landslide.
• 5:04
  SPEAKER_00: And it gave the union legal cover to call a strike in a country where that is a big step.
• 5:09
  SPEAKER_01: Which brings us back to the gap between a landslide vote and 11 people with signs outside a fab.
• 5:14
  SPEAKER_01: If I'm running that plant on Thursday morning, what does it tell me that almost everyone showed up to work?
• 5:20
  SPEAKER_00: I would read it as a warning shot that was designed to be a warning shot.
• 5:24
  SPEAKER_00: The union itself said the point was to push the company toward a deal, not to end talks.
• 5:29
  SPEAKER_00: A tiny symbolic walkout lets them prove they are willing without costing members a day of pay.
• 5:34
  SPEAKER_01: That is fair.
• 5:36
  SPEAKER_01: And from an operations point of view, a memory fab is not like a factory line where you just stop the conveyor belt.
• 5:42
  SPEAKER_01: These plants run continuously, and if you have a few days of warning, you can plan staffing and protect the most sensitive steps.
• 5:49
  SPEAKER_00: Trend Force made exactly that point from the other direction.
• 5:52
  SPEAKER_00: They warned that a longer strike could disrupt equipment maintenance and process monitoring, which could quietly lower yields.
• 5:59
  SPEAKER_00: You might not see it in the headlines, but you would see it later in how many good chips come off each wafer.
• 6:04
  SPEAKER_01: And yields are the whole business.
• 6:06
  SPEAKER_01: A small drop in yield on the most advanced memory, when every unit is already sold, is real money and real delay for the companies building AI data centers who are waiting on those parts.
• 6:18
  SPEAKER_00: Now here is where the story gets more complicated.
• 6:21
  SPEAKER_00: The day before the strike, the much larger Taichung Union reached an agreement with Micron and called off its own mediation session.
• 6:28
  SPEAKER_00: The terms of that deal were not disclosed.
• 6:30
  SPEAKER_01: So the company split the two unions.
• 6:32
  SPEAKER_01: The bigger site settles, the smaller site walks out alone.
• 6:36
  SPEAKER_01: As a negotiating move that is pretty classic, and it probably explains why the picket line was so thin.
• 6:42
  SPEAKER_00: Then on Thursday, Micron Chairman Liu Donghui laid out a new offer.
• 6:46
  SPEAKER_00: It includes a quarterly profit sharing bonus for the global workforce starting next fiscal year.
• 6:51
  SPEAKER_00: On top of the existing annual bonus, plus larger pension contributions and higher shift allowances for Taiwan workers.
• 6:57
  SPEAKER_01: On paper, that sounds like the company moved a long way toward the union.
• 7:01
  SPEAKER_01: A quarterly bonus tied to profit is literally the structure they asked for.
• 7:06
  SPEAKER_01: So I assume the members accepted it and everybody went home happy.
• 7:09
  SPEAKER_00: You would think so.
• 7:10
  SPEAKER_00: But no.
• 7:11
  SPEAKER_00: About 70% of the Tao Yuan union members voted against the new proposal.
• 7:16
  SPEAKER_00: The key problem is that the company did not say what percentage of profit would go into that quarterly pool, and the union wants that number fixed at 15%.
• 7:24
  SPEAKER_01: So the structure is right, but the number is missing.
• 7:27
  SPEAKER_01: I can see why a union that already distrusts the formula would not sign a blank check, even if the blank check is shaped exactly the way they wanted.
• 7:37
  SPEAKER_00: The union said the fight is not over and that they have not given up.
• 7:40
  SPEAKER_00: They also claim there is dissatisfaction with the deal among employees at Taichung, even though that union signed.
• 7:48
  SPEAKER_00: The next round of talks is now set for October 27th, after a typhoon postponed Friday's meeting.
• 7:53
  SPEAKER_01: Let's widen the lens, because I think the Korean comparison is driving all of this.
• 7:58
  SPEAKER_01: The union keeps pointing at Samsung and S.K.
• 8:01
  SPEAKER_01: Henix, and you can see why when you look at what those workers won.
• 8:05
  SPEAKER_00: Samsung earlier this year averted a strike by agreeing to set aside 10.5% of the operating profit of its chip division for bonuses.
• 8:13
  SPEAKER_00: SK Heinox went even further and agreed to share 10% of annual operating profit with no cap at all.
• 8:20
  SPEAKER_01: So the Tao Yuan Union asking for 15% is not coming out of nowhere.
• 8:24
  SPEAKER_01: It is a bit above what the Korean workers got, but it is in the same family, and it is the same idea that profit sharing should be a formula rather than a gift.
• 8:34
  SPEAKER_00: And that is the second-order effect I keep thinking about.
• 8:36
  SPEAKER_00: The memory industry is basically three companies.
• 8:39
  SPEAKER_00: If workers at two of them have a written share of the AI windfall, the workers at the third one are going to ask why they do not, and they have the leverage to ask.
• 8:47
  SPEAKER_01: Leverage is the right word.
• 8:49
  SPEAKER_01: There is no other place for NVIDIA or the hyperscalers to buy this memory.
• 8:54
  SPEAKER_01: If you are a skilled technician at one of three companies that can make the most valuable component in the AI supply chain, you are in a very strong position.
• 9:03
  SPEAKER_00: Which is a really different story from the one we usually tell about AI and labor.
• 9:07
  SPEAKER_00: Most of the time we are talking about AI replacing workers or shrinking hiring.
• 9:11
  SPEAKER_00: Here we have workers whose bargaining power has gone up because of AI, and they are using it.
• 9:16
  SPEAKER_01: I want to push back a little on the idea that this is a simple story of greedy management and heroic workers.
• 9:22
  SPEAKER_01: Because memory has a very long history of brutal downturns.
• 9:26
  SPEAKER_01: Companies lose billions in the bad years, and a fixed 15% formula has to survive those years too.
• 9:32
  SPEAKER_00: That is a fair point.
• 9:33
  SPEAKER_00: And I think it is the strongest argument management has.
• 9:36
  SPEAKER_00: But notice that the union is asking for a share of operating profit, not a fixed payment.
• 9:42
  SPEAKER_00: In a bad year, 15% of a small or negative profit is small or nothing.
• 9:47
  SPEAKER_00: The formula shrinks on its own.
• 9:49
  SPEAKER_01: That is true, and it actually makes the company's resistance more interesting.
• 9:54
  SPEAKER_01: If the formula already flexes with the cycle, then the fight is really about control.
• 10:00
  SPEAKER_01: Management wants to keep the discretion to decide, and workers want to take it away.
• 10:05
  SPEAKER_00: And the chief executive, Sanjay Marotra, has said the company does not have line of sight to when supply and demand will return to balance.
• 10:13
  SPEAKER_00: That sentence cuts both ways.
• 10:14
  SPEAKER_00: It means the profits may last a long time, which makes workers want a permanent share even more.
• 10:19
  SPEAKER_01: Let's talk about Taiwan itself for a minute, because I think this matters beyond Micron.
• 10:25
  SPEAKER_01: The island has built its whole economy on chips, and the industry culture there has been famous for long hours, high loyalty, and very few labor disputes.
• 10:34
  SPEAKER_00: Right.
• 10:34
  SPEAKER_00: And that is why the political reaction has been so fast.
• 10:38
  SPEAKER_00: President Lai publicly called for sincere talks between the company and the union.
• 10:43
  SPEAKER_00: When the president is commenting on a strike that had 11 people on the picket line, you know the symbolism is much bigger than the headcount.
• 10:50
  SPEAKER_01: And I suspect every other chip company in Taiwan is watching very closely.
• 10:54
  SPEAKER_01: If a union at Micron gets a written profit-sharing formula, the question of why that does not exist elsewhere becomes a lot harder to avoid.
• 11:03
  SPEAKER_00: For investors, the analysts so far see minimal production impact.
• 11:06
  SPEAKER_00: Korean industry officials called the walkout partial and said its effect would likely be small.
• 11:12
  SPEAKER_00: Although some Korean securities analysts noted their own chipmakers could benefit if a dispute drags on while supply stays tight.
• 11:19
  SPEAKER_01: So what is the practical takeaway for someone listening who runs AI infrastructure, buys servers, or plans data center capacity?
• 11:27
  SPEAKER_01: Is this something that should change their plans on Monday morning?
• 11:30
  SPEAKER_01: Or is it just interesting background?
• 11:32
  SPEAKER_00: I would not change orders on Monday.
• 11:35
  SPEAKER_00: But I would add labor to the list of risks in the memory supply chain, right next to power, packaging capacity, and geopolitics.
• 11:43
  SPEAKER_00: Memory prices are already rising, and a long dispute at a supplier that holds a quarter of the market would push them higher.
• 11:50
  SPEAKER_01: That feels right to me.
• 11:51
  SPEAKER_01: The strike itself was a whisper, but the question underneath it is loud.
• 11:56
  SPEAKER_01: Who gets paid when AI makes a handful of companies extraordinarily profitable?
• 12:00
  SPEAKER_01: And does that answer get written into a contract or left to whoever is in charge that year?
• 12:05
  SPEAKER_00: And whatever happens on October 27th, I think this is the first of many of these fights.
• 12:10
  SPEAKER_00: The AI boom has created enormous profits in very concentrated places.
• 12:14
  SPEAKER_00: And the people doing the physical work in those places have just discovered how much leverage they have.
• 12:20
  SPEAKER_01: That's all for today's episode of the DX Today podcast.
• 12:23
  SPEAKER_01: Thanks for listening, and we'll see you next time.