<div id="readability-page-1"><div> By Kwanwoo Jun <pre></pre> Samsung Electronics' talks with its labor union failed to reach an agreement over how the company's massive profits are distributed, raising the likelihood of a strike next week. The world's largest memory-chip maker said its union declared negotiations had collapsed early Wednesday, after days of intensive talks supported by the South Korean government. Unionized Samsung workers in South Korea are planning to strike from May 21 to June 7. Samsung said it regretted the union's action, which it said causes concern and anxiety not only to the company but also to shareholders and the public. &#34;The company will continue its efforts to prevent the worst-case scenario through sincere dialogue until the very end,&#34; Samsung said. Union leaders said they would seek to remove legal obstacles to a strike, referring to management's attempt to halt the industrial action in a local court. Samsung's management and its union are at odds over how Samsung's booming profits are shared. Samsung's earnings have recently surged on strong demand for memory used in artificial intelligence applications. The company last month posted a nearly sixfold surge in first-quarter net profit while reporting record quarterly revenue and operating profit. The union wants the company to allocate 15% of its annual operating profit to employee bonuses. Management has rejected the union's demand, as it would exceed the company's bonus cap, currently set at 50% of annual salary. The union wants this cap removed. In 2024, unionized Samsung workers went on strike for the first time to press for higher wages and better working conditions but the action didn't disrupt operations at the company's heavily automated chip-making facilities in South Korea. The company shares were 0.2% higher in early Wednesday trading. <pre></pre> Write to Kwanwoo Jun at kwanwoo.jun@wsj.com <pre></pre> (END) Dow Jones Newswires May 13, 2026 00:31 ET (04:31 GMT)Copyright (c) 2026 Dow Jones &amp; Company, Inc.</div></div>

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Samsung Electronics' negotiations with its labor union have failed, increasing the likelihood of a strike from May 21 to June 7. The union demands 15% of annual operating profit for bonuses, while management has rejected this, citing a bonus cap of 50% of salary. Samsung expressed regret over the situation, which raises concerns for shareholders and the public. The company recently reported a significant profit surge due to strong demand for memory chips. Shares rose 0.2% in early trading.

Samsung Management, Union Fail to Reach Deal to Avoid Strike