By Key Points
Micron’s Taiwan unions want a one-off bonus for fiscal 2026 that they size at about 83 months of salary per employee.
From fiscal 2027, the unions want bonuses set at 15% of operating profit, paid quarterly.
A majority of Micron’s DRAM production comes from its fabrication facilities in Taiwan.
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Micron Technology’s (NASDAQ:MU) labor unions in Taiwan said Tuesday they are moving toward a possible strike unless the memory maker overhauls how it pays bonuses. For fiscal 2026, they want a one-off bonus the unions size at about 83 months of salary per Taiwan-based employee — nearly seven years of pay, delivered at once. And starting in fiscal 2027, they want Micron’s incentive plan replaced with a system that sets bonuses at 15% of operating profit, paid quarterly rather than annually.
Both numbers sound impossible. But Micron is earning profits in this artificial intelligence (AI) memory cycle that make even demands like these payable.
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The question for investors, I’d argue, is what a strike at the company’s largest manufacturing base could do to the supply of memory feeding the AI build-out. And a lot rides on the answer: the growth stock trades around $933 as of this writing, and the company’s market value is about $1.05 trillion.
Image source: Micron.
The gap behind the demand
The two unions, based in Taoyuan and Taichung, have about 10,000 members between them. More than 80% of members who took part in an internal survey in August backed strike action. A formal strike vote could follow as early as this month if mediation fails.
The workers’ case leans on precedent. Samsung Electronics’ (OTC:SSNLF) semiconductor division and rival SK Hynix reportedly pay bonuses worth 10.5% and 10% of operating profit, respectively. Samsung’s arrangement grew out of a deal in May that averted a strike of its own.
Micron’s Taiwan bonuses, by contrast, have reportedly run about 2.6 months of salary, under a plan capped near five months. That gap is what the unions want closed.
For its part, Micron’s Taiwan office has said this year’s performance-bonus payout will be the highest in the company’s history.
What would the demands cost?
The one-off bonus is hard to size from outside the company, since it turns on each worker’s salary. The recurring demand is easier. Micron’s fiscal third quarter of 2026 (the period ended May 28, 2026) produced operating income of $33.3 billion on revenue of $41.5 billion — an 80% operating margin.
That profit line has been climbing at an extraordinary rate. After all, revenue in the quarter more than quadrupled year over year. Operating income was just $2.2 billion in the year-ago period, at a 23% operating margin, and $16.1 billion in the fiscal second quarter, at a 68% margin.
So 15% of the latest quarter’s operating profit works out to about $5 billion — for a single quarter. That’s more than double the operating profit the whole company generated in the same period a year ago.
And the base the unions want a share of is still growing. Micron’s guidance for the fiscal fourth quarter (the current period) calls for revenue of about $50 billion at a gross margin around 86%. At profitability like that, the union formula would produce a quarterly bonus pool of more than $6 billion.
Sure, those are staggering sums. But even paying the full 15%, Micron would keep 85% of an operating profit line that ran $33 billion last quarter. The money, arguably, is there.
Taiwan is the base the boom runs on
A majority of Micron’s DRAM output in fiscal 2025 came from the company’s fabrication facilities in Taiwan. Micron’s own annual filing says any loss of that output could have a material adverse effect on the business.
Taiwan also holds about $19 billion of Micron’s long-lived assets, such as plants and equipment — more than any other country — and it’s where the tech company is modernizing DRAM and high-bandwidth memory capacity to meet rising demand.
In other words, the workers weighing a strike sit at the center of a business running an 80% operating margin. At margins like these, almost every dollar of lost revenue would come straight out of profit.
Of course, the dispute is headed to mediation for now, not a walkout. Mediation sessions were reportedly expected in late August and mid-September, and a strike vote could follow as early as this month if the talks fail. No vote has been scheduled yet.
And fiscal 2026, the year whose bonus is in dispute, ends this week. So the profit behind that bonus is almost fully earned.
Ultimately, I don’t think the 83-month figure is the number that matters most for Micron’s valuation. Samsung’s standoff ended in a deal, and that seems the more likely ending here, too. Micron has already signaled a record payout is on the way, and it can close much of the bonus gap with money it is already generating.
What the company can’t replace is lost output from the fabs that make most of its DRAM. A deal, even an expensive one, looks like the better outcome for shareholders.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology. The Motley Fool has a disclosure policy.
