diff --git a/crates/oxc_formatter/src/write/union_type.rs b/crates/oxc_formatter/src/write/union_type.rs
index 2fa97f64aa103..8f88e7965b734 100644
--- a/crates/oxc_formatter/src/write/union_type.rs
+++ b/crates/oxc_formatter/src/write/union_type.rs
@@ -52,7 +52,7 @@ impl<'a> FormatWrite<'a> for AstNode<'a, TSUnionType<'a>> {
             union_type_at_top = parent;
         }
 
-        let should_indent = !has_leading_comments && {
+        let should_indent = {
             let parent = union_type_at_top.parent;
 
             // These parents have indent for their content, so we don't need to indent here
@@ -120,14 +120,12 @@ impl<'a> FormatWrite<'a> for AstNode<'a, TSUnionType<'a>> {
                         if_group_breaks(&token(")"))
                     ]
                 );
-            } else if should_indent {
-                write!(f, [indent(&types)]);
             } else {
                 write!(f, [types]);
             }
         });
 
-        if has_leading_comments {
+        let format_inner_content = format_with(|f| {
             let only_type = union_type_at_top.types.len() == 1;
             let (has_own_line_comment, has_end_of_line_comment) =
                 leading_comments.iter().fold((false, false), |(own_line, end_of_line), comment| {
@@ -136,10 +134,9 @@ impl<'a> FormatWrite<'a> for AstNode<'a, TSUnionType<'a>> {
                         end_of_line || comment.followed_by_newline(),
                     )
                 });
-
             write!(
                 f,
-                [group(&indent(&format_args!(
+                [
                     ((has_own_line_comment && !only_type)
                         || (has_end_of_line_comment && only_type))
                         .then(soft_line_break),
@@ -147,10 +144,14 @@ impl<'a> FormatWrite<'a> for AstNode<'a, TSUnionType<'a>> {
                     (!has_end_of_line_comment && has_own_line_comment && only_type)
                         .then(soft_line_break),
                     group(&content)
-                )))]
+                ]
             );
+        });
+
+        if should_indent && !self.needs_parentheses(f) {
+            write!(f, [group(&indent(&format_inner_content))]);
         } else {
-            write!(f, [group(&content)]);
+            write!(f, [group(&format_inner_content)]);
         }
     }
 }
diff --git a/crates/oxc_formatter/tests/fixtures/ts/union/issue-16902.ts b/crates/oxc_formatter/tests/fixtures/ts/union/issue-16902.ts
new file mode 100644
index 0000000000000..19703577f8bf8
--- /dev/null
+++ b/crates/oxc_formatter/tests/fixtures/ts/union/issue-16902.ts
@@ -0,0 +1,30 @@
+// TSTypeParameterInstantiation
+export class ClassTest extends Modal<
+  // comment
+  string | number | undefined
+> {
+}
+
+Math.random<
+  // comment
+  string | number | undefined
+>;
+
+Math.random<
+  // comment
+  string | number | undefined
+>();
+
+
+// TypeAssertion
+<
+  // comment
+  string | number | undefined
+>0;
+
+console.log(
+  <
+    // comment
+    string | number | undefined
+  >0
+);
diff --git a/crates/oxc_formatter/tests/fixtures/ts/union/issue-16902.ts.snap b/crates/oxc_formatter/tests/fixtures/ts/union/issue-16902.ts.snap
new file mode 100644
index 0000000000000..313d9e0b3d03f
--- /dev/null
+++ b/crates/oxc_formatter/tests/fixtures/ts/union/issue-16902.ts.snap
@@ -0,0 +1,97 @@
+---
+source: crates/oxc_formatter/tests/fixtures/mod.rs
+---
+==================== Input ====================
+// TSTypeParameterInstantiation
+export class ClassTest extends Modal<
+  // comment
+  string | number | undefined
+> {
+}
+
+Math.random<
+  // comment
+  string | number | undefined
+>;
+
+Math.random<
+  // comment
+  string | number | undefined
+>();
+
+
+// TypeAssertion
+<
+  // comment
+  string | number | undefined
+>0;
+
+console.log(
+  <
+    // comment
+    string | number | undefined
+  >0
+);
+
+==================== Output ====================
+------------------
+{ printWidth: 80 }
+------------------
+// TSTypeParameterInstantiation
+export class ClassTest extends Modal<
+  // comment
+  string | number | undefined
+> {}
+
+Math.random<
+  // comment
+  string | number | undefined
+>;
+
+Math.random<
+  // comment
+  string | number | undefined
+>();
+
+// TypeAssertion
+<
+  // comment
+  string | number | undefined
+>0;
+
+console.log(<
+    // comment
+    string | number | undefined
+  >0);
+
+-------------------
+{ printWidth: 100 }
+-------------------
+// TSTypeParameterInstantiation
+export class ClassTest extends Modal<
+  // comment
+  string | number | undefined
+> {}
+
+Math.random<
+  // comment
+  string | number | undefined
+>;
+
+Math.random<
+  // comment
+  string | number | undefined
+>();
+
+// TypeAssertion
+<
+  // comment
+  string | number | undefined
+>0;
+
+console.log(<
+    // comment
+    string | number | undefined
+  >0);
+
+===================== End =====================