Micron's Taiwan union eyes strike, demands bonus overhaul modeled on Samsung, SK Hynix

As the semiconductor industry rides an unprecedented boom, bonus disputes are spreading beyond South Korea's borders. The Taiwan union of US chipmaker Micron Technology is considering a strike, demanding that the company pay bonuses on par with Samsung Electronics and SK Hynix, according to industry sources.

According to industry sources and Taiwanese financial outlet Liberty Times Economy, Micron's Taiwan union held a "strike briefing" on July 30 to discuss bonus grievances amid the AI boom and share information about potential strike action.

At the briefing, the union shared details of Samsung Electronics' and SK Hynix's bonus structures and their labor disputes, arguing that Micron's current incentive regime was deepening a sense of relative deprivation among workers. The union also discussed possible courses of action to demand a fairer distribution of profits, sources said.

The union has taken particular note of the two Korean chipmakers' decisions to scrap bonus caps and set aside a fixed percentage of operating profit as the funding source for performance bonuses.

According to the union, Micron pays bonuses through its Incentive Pay Plan, an annual cash incentive system that applies the company's, the division's and the individual employee's performance achievement rates to a preset target bonus for each worker. However, payouts are capped at 200 percent of the target bonus, meaning actual take-home bonuses rarely exceed the equivalent of about five months' salary, the union said.

Micron also offers RSUs as equity-based compensation, but the program is limited to a small number of key employees, fueling further discontent over the overall incentive structure.

Micron's Taiwan union has called for the company's Incentive Pay Plan to be revised by referencing SK Hynix's and TSMC's profit- and performance-sharing models, and for the annual bonus cap to be abolished as Samsung Electronics in South Korea has done. [Screenshot from Taiwanese online community]

Expressing dissatisfaction with the current system, the union said the Incentive Pay Plan "should be revised by referencing SK Hynix's and TSMC's profit- and performance-sharing models, and the annual bonus cap should be abolished as Samsung Electronics in South Korea has done." The union wants the cap removed and total bonus payouts increased.

SK Hynix and its union agreed last year to allocate 10 percent of annual operating profit as the funding source for its excess profit-sharing bonus and to eliminate the bonus ceiling. Samsung Electronics similarly introduced a special management performance bonus system for its semiconductor division, setting aside 10.5 percent of operating profit as the funding base and agreeing to waive the bonus cap when certain conditions are met.

Micron employees have rallied behind the union's position. "Micron is making enormous profits, but employees are not seeing any of the benefits," workers have said. As more employees voiced similar frustrations, Micron's Taiwan union membership surged from about 500 last year to 4,000 in less than 12 months — nearly a tenfold increase.

A table comparing bonus structures at Samsung Electronics, SK Hynix, Micron and TSMC. SK Hynix and Samsung Electronics allocate 10 percent and 10.5 percent of operating profit, respectively, as bonuses, while TSMC sets aside 10.6 percent. Micron, by contrast, is said to allocate just 2.2 percent of operating profit. [Screenshot from Taiwanese online community]

News of the two Korean chipmakers' nine-figure bonus agreements also triggered a bonus dispute at TSMC, the world's largest foundry, in May. Despite TSMC posting first-quarter operating profit of about 27 trillion won ($18.8 billion), rumors circulated internally that bonuses could be cut by as much as 15 percent, stoking widespread employee discontent.

Workers openly raised the possibility of a strike, citing Samsung Electronics' union, which had secured a bonus agreement after pushing through what had been an effectively taboo subject inside the company — forming a union and threatening industrial action.

As internal frustration mounted, TSMC Chairman Wei Che-chia canceled overseas travel plans and held an all-hands town hall, announcing that bonuses this year would rise 30 percent from the previous year.

Addressing the Samsung Electronics labor dispute, Wei said: "Samsung's memory chip division ran at a loss for four of the past five years, with only one profitable year — what kind of bonus could employees expect? TSMC, by contrast, focuses on long-term sustainable management and raises employee bonuses every year."

For years, Taiwan's semiconductor industry maintained a strong cultural resistance to openly discussing union formation or strikes, despite long hours and intense workloads. Analysts say this stems from the conflation of labor activism with left-wing or communist activity following the Chinese Civil War, a perception reinforced by deep wariness toward the Chinese Communist Party that made workers reluctant to organize.

That atmosphere left Taiwan's semiconductor workers calling themselves "slaves" in private while hesitating to take any public action. TSMC engineers, for instance, routinely work 12 to 16 hours a day and are expected to report to the office on weekends whenever a customer requests it.

The mood is shifting, however, as workers at TSMC and Micron's Taiwan operations watch Samsung Electronics' and SK Hynix's unions successfully push through bonus reforms. Calls are growing among employees at both companies to organize and, if necessary, strike to claim a larger share of the industry's record profits.

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