Micron has paused construction at its $4.5 billion memory fab in Taiwan following an on-going labor dispute.

According to a report from Bloomberg, activity at the Fab 11E site in Taoyuan, northwestern Taiwan, was halted due to “mounting uncertainties,” including Micron’s concern that an agreement it struck with the Taoyuan labor union may get overturned.

The fab was originally expected to come online in 2028, with Micron having already purchased tools from ASML for the facility, the report said.

While Micron hasn’t provided a statement regarding the stoppage, Bloomberg noted the company had informed local officials and suppliers of its plan to suspend construction at the site.

The disruption follows a tense few months for Micron as it became the latest memory chip company to see its workers fight for increased compensation in the wake of record-breaking profits as a result of growing memory demands to support the AI build-out.

Unionized workers at Samsung’s South Korean facilities called off a proposed strike in May of this year after reaching an agreement with the company regarding issues over bonuses and wage increases. Meanwhile, in August of this year, SK Hynix reached a tentative agreement with workers that is set to significantly change how the memory giant’s profit-sharing bonuses will be distributed.

Last month, Micron agreed to a deal with two of its biggest unions; however, citing sources familiar with the situation, Bloomberg said Micron may have to reopen negotiations as not all employees are happy with the outcome.

However, almost 70 percent of union members at the Taoyuan site rejected the offer put forward by management, calling for clearer profit-sharing arrangements and terms for bonuses. The two sides were expected to meet again today (November 6) to further negotiate.

Micron has invested around $50bn in Taiwan over the last three decades and plans to manufacture high-bandwidth memory (HBM) and DRAM chips at the Taoyuan fab. The country currently accounts for around 60 percent of the company’s global DRAM output and the majority of its HBM production.

In January 2026, Micron signed a Letter of Intent (LOI) to acquire Powerchip Semiconductor Manufacturing Corporation’s (PSMC) P5 fabrication site in Tongluo, Taiwan, for $1.8bn. At the time, the company said the agreement would see it take ownership and control of the P5 site, allowing it to increase DRAM production in phases and meet long-term demand from its customers.

Memory companies have warned that the memory chip shortage is likely to persist into 2027 and beyond, with consumer electronics the most likely to suffer in the face of ongoing shortages, as capacity will increasingly become allocated to AI infrastructure projects.

In January 2025, the Wall Street Journal reported that data from TrendForce shows that up to 70 percent of the memory produced worldwide in 2026 will be consumed by data centers.