Chip Index Falls by Double Digits as Micron Suspends $4.5 Billion Taiwan Plant Plans
Key Facts
Micron suspended plans to build a memory chip plant in Taoyuan, Taiwan, in a project with a budget estimated at about $4.5 billion, amid a prolonged labor dispute, according to a Bloomberg report cited by the Taipei Times. A Reuters report said the agency had not been able to verify the news immediately. The announcement came as technology and chip stocks faced a sharp sell-off in the November 5 session, combining concerns specific to the company’s project with broader pressure on the sector. Micron said its Taiwan operations "continue to run normally" and that it was confident it would continue serving customers. The company added that it looked forward to reaching an agreement with the union. Taiwan’s Ministry of Labor confirmed that the union and the company had agreed to continue negotiations with the assistance of the ministry and the Taoyuan city government.
The decline extended beyond Micron: the semiconductor index temporarily fell by double digits during the sell-off, Reuters reported, while Micron and several major technology companies were among the stocks that posted losses of the same magnitude. In the U.S. market, the S&P 500 fell 4.4% on November 5, its worst performance since April 2025, according to the Associated Press. The drop erased gains from the previous session, which had been the index’s best in three months. The Nasdaq fell 5.5% and the Dow Jones 3.4% in the same session. The Nasdaq ended 11.9% below its record level set the previous month, the agency reported.
Nvidia was among the biggest sources of pressure on the market, falling 9.3% on November 5 and weighing the most on the S&P 500, according to AP. The stock was then down 2.6% year to date, after annual gains of about 39%, 171% and 239% in each of the previous three years, respectively. Advanced Micro Devices shares also fell 17.3% in the session, while South Korea’s Kospi index dropped 5.3%. Qualcomm fell 9% after smartphone chip sales came in below Wall Street estimates, Reuters reported. Mark Hackett, chief market strategist at Nationwide, said "disappointing earnings for investors and the possibility that a Democratic sweep could slow AI expansion are weighing on sentiment."
Concerns over Micron’s plant overlap with investor anxiety about the pace of investment in artificial intelligence infrastructure. AP linked caution over AI stocks to the possibility that Democratic victories in the U.S. midterm elections could prompt governments to halt the construction of new data centers. Against this backdrop, the Taoyuan dispute raised a separate question about Micron’s expansion and production plans, while the company affirmed that existing operations were continuing. Taiwan’s role extends beyond the suspended project: Micron said in its third-quarter 2026 filing that most of its DRAM chip production in 2025 came from its manufacturing facilities on the island. The company warned in the filing that a loss of production could have a material adverse effect on it.
The dispute stems from demands over compensation and the structure of incentives. Bloomberg reported that the Taoyuan union sought to distribute 15% of Micron’s operating profits to the company’s employees worldwide, and also wanted cash incentives rather than incentives paid partly in shares. In a vote held in October, 1,994 of the 2,012 members who participated backed a strike, according to Focus Taiwan, citing Taiwan’s Central News Agency. The union president said at the time that no strike date had been set. With both sides agreeing to resume negotiations and Taiwan’s authorities continuing to provide assistance, labor talks remained the next announced step in the dispute.