Micron Sinks 17.5% After Report It Paused a $4.5 Billion Taiwan Fab Over a Labor Dispute

MU closed down 17.5% at $656.39 on Thursday, November 5, after Bloomberg reported that Micron had suspended plans for a $4.5 billion memory-chip plant in Taoyuan, Taiwan, because of a protracted labor dispute. The shares fell 5.21% in premarket trading on the report and were down 11.8% at $701.36 by 10:20 a.m. ET before the broader chip rout deepened the losses into the close. According to the report, Micron has all but halted construction, executives are worried that an agreement with a local labor union could be overturned, and the company has informed Taiwanese officials and a supplier of its plans.

The project, known as Fab 11E, had been expected to come online in 2028, according to a GuruFocus analysis published on Yahoo Finance. That analysis says the dispute centers on compensation: the Taoyuan union is pushing for a permanent profit-sharing framework and has demanded that 15% of operating profit be distributed to employees, and it secured strike authorization last month with support from 99% of nearly 2,000 voting members. Taiwan accounts for roughly 60% of Micron's global DRAM output and is home to about 15,000 of its employees, though Micron has said current Taiwan operations remain normal. Tom's Hardware reported that the company and the union are set to meet again on November 6.

The fab news hit a stock already under heavy pressure. Micron had fallen nearly 30% over six trading days amid concerns about Chinese competition, including CXMT's $1 billion in DRAM prepayments and its push into high-bandwidth memory, although CXMT's reported 20-30% yields on next-generation HBM3E suggest a limited near-term threat. Thursday's session also saw Democrats' midterm sweep fuel fears of slower AI data-center construction, which drove a sector-wide selloff in memory and storage names. Investors are now weighing all of this against Micron's own fiscal first-quarter guidance of $61.5 billion in revenue, plus or minus $1.5 billion, issued with its September 30 results.

The key distinction is that this is a future-capacity problem, not a current-production one: existing DRAM and HBM output has not been disrupted. What to watch: the outcome of the November 6 union talks, whether construction resumes or Micron reallocates capex elsewhere, and whether any delay to Fab 11E changes its supply outlook. In a market already short of memory, slower capacity additions could also support pricing, so the effect on earnings may cut both ways.