What Is KNOB

According to Bloomberg, Micron Technology has largely suspended its plans to build a new memory chip factory in Taoyuan, Taiwan, due to ongoing labor disputes with employee unions. The project, with an investment budget of $3 billion to $4.5 billion, was originally scheduled to begin production in 2028. Sources indicate that Micron is concerned that a previous agreement with the union may be overturned, and currently only minimal site safety maintenance work is being retained, with construction set to be frozen thereafter. The dispute stems from employee demands to share the profit growth resulting from the AI boom. The Taoyuan union is requesting that Micron distribute 15% of its operating profits to global employees and is seeking a full cash bonus instead of a portion in stock. Although Micron reached an agreement with the larger Taichung union in October, some employees are dissatisfied with the terms, and the Taoyuan union is attempting to expand its organization to push for renegotiation. The project was intended to produce high-bandwidth memory (HBM) and DRAM using advanced ASML equipment. Taiwan currently contributes approximately 60% of Micron's DRAM output and is also a key production base for HBM, employing around 15,000 workers. Micron responded that its existing operations in Taiwan are functioning normally and will ensure business continuity for customers, but did not directly comment on the suspension of the Taoyuan project. The Taiwanese economic department stated that the government will assist Micron in resolving differences with the union to promote the implementation of the investment plan.

On November 5, concerns over tightened regulations on AI data centers triggered by the results of the US midterm elections led to a significant decline in the Korean stock market. Both the KOSPI and KOSDAQ indices activated market stabilization mechanisms on the same day, with semiconductor and AI infrastructure-related stocks experiencing severe losses. By the close, the KOSPI fell by 5.28% to 5,383.8 points, while the KOSDAQ dropped by 5.11%. Among individual stocks, SK Hynix fell by 9.46% and Samsung Electronics by 7.57%. The market is worried that the Democratic Party's significant victory in the US midterm elections may lead to stricter regulations on data center approvals, grid access, and electricity cost oversight, potentially delaying some AI data center projects. This could impact the capital expenditure plans of major cloud service providers and lower demand expectations for HBM and DRAM storage chips. Some analysts point out that delays in data center construction may postpone the revenue realization timeline for large tech companies' cloud services and increase financing pressure on highly leveraged AI infrastructure firms. However, there are also views suggesting that even if the Democrats control Congress, it may be difficult to easily change the overall direction of US AI investment, and the actual impact may be limited.

On November 5, continuing the decline from the previous day, U.S. optical communication stocks collectively fell in pre-market trading. Among them, AXT Inc dropped over 5%, MaxLinear, Astera Labs, Credo Technology, and Mavenir Technologies fell over 4%, while Lumentum, Corning, and Fabrinet declined over 3%.