Micron has all but halted construction of a planned $4.5 billion (£3.3bn) manufacturing plant in Taoyuan, northern Taiwan, amid a protracted labour dispute, Bloomberg reported, citing unnamed people familiar with the matter.

Executives are concerned about uncertainties including that an agreement it recently reached with the union representing workers at its Taichung plant could be overturned, and has informed Taiwanese authorities and a supplier of its intention to suspend construction in Taoyuan, the report said.

Micron is Taiwan’s largest foreign investor, and the island accounts for 60 percent of the company’s global production of DRAM memory, as well as a large proportion of its high-bandwidth memory, a key component in AI systems.

Memory shortage

The company had reportedly budgeted $3bn to $4.5bn for the Taoyuan complex, called Fab 11E, where it has intended to use high-end equipment from the Netherlands’ ASML to manufacture DRAM and HBM memory, beginning in 2028.

Some minor work is being done to ensure safety, after which work on the site of Fab 11E is planned to cease, the Bloomberg report said.

Micron is also building facilities in New York state, Japan and Singapore, at a time of memory shortages due to the build-out of AI data centres.

The company declined to directly comment on the report, saying only that its operations were currently proceeding as normal.

Record profits

The company is involved in an ongoing dispute with workers at its existing facilities in Taoyuan, who are demanding a deal enabling workers to have larger share of Micron’s record profits, after similar deals were reached in South Korea with workers for Samsung Electronics and SK Hynix.

Staff at the far larger union representing workers at another Taiwan facility, in Taichung, reached a deal with Micron last month.

But the company reportedly fears the Taoyuan union could recruit members from the Taichung plant, form a bigger group, annul the existing agreement there, and force Micron to restart negotiations.