Micron and SK Hynix face strategic shifts in semiconductor expansion

Micron is reportedly halting most construction of its new Fab 11E semiconductor plant in Taoyuan, Taiwan. The facility, intended to produce high-bandwidth memory (HBM) and DRAM with an investment of up to $4.5 billion, faces delays due to labor disputes. The Taoyuan union is demanding that 15% of operating profits be distributed to global employees and that bonuses be paid in cash rather than stock. While Micron stated that its Taiwan operations remain normal, the potential delay in the plant, which was slated for a 2028 launch, could impact its ability to compete with Samsung Electronics and SK Hynix in the AI memory market.

Meanwhile, SK Hynix has halted plans for an initial public offering (IPO) of its subsidiary, Solidigm. This decision requires the company to redesign its investment funding for US business expansion amid rising demand for AI memory. To mitigate investment burdens, SK Hynix is leveraging long-term supply agreements (LTA) with major customers, which cover over 50% of its total memory production capacity for 2027 and 2028. The company has also reorganized its US operations, appointing a new president to lead a division focused on integrating R&D with sales to better meet the technical requirements of US big tech clients.