Samsung Semiconductor, Inc.

Enabling an Unlimited Future of Advanced Electronic Products

corporate overview Summer 2007

Introduction

Samsung Electronics is a world leader in semiconductors and other electronic components, maintaining the top position in important markets such as flash memory, DRAM and TFT-LCD panels and storage. Advanced Samsung components undergo continual innovation and are a critical enabler in todays world of high-performance mobile computing and ever-more-sophisticated handheld consumer electronics.
Samsung Semiconductor, Inc., is a U.S.based unit of Samsung Electronics Company, Ltd., South Koreas largest company and Asias top electronics company. The company has more than 120 offices in 57 countries and 138,000 employees. Samsung is a leading supplier of a range of electronic products while maintaining one of the fastest-growing global brands. Samsung has five business units: LCD, telecom, digital media, digital appliances and semiconductor. The semiconductor unit designs and manufactures flash, DRAM, graphics memory and other memory components for the computer, mobile and entertainment markets. Samsung Semiconductor also offers logic components such as ASICs, mobile processors and MP3 chipsets to a variety of markets. In addition, Samsung makes optical and hard disk drives for

storage applications. See page 8 for a listing of key Samsung components and markets.

SamSung Brand equIty Samsung has become one of the most valuable and recognized brands in the world. In the latest global Interbrand ranking, Samsung is 20th, just behind Honda, with a brand value pegged at $16.2 billion. Samsung has gained significant ground during the past six years, with an increase in brand value approaching 200% since 2001, when it was ranked just 42nd. In another recent global brand value ranking this one published by Financial Times Samsung was the only Korean company in the top 100. Samsung also remained on Fortunes most admired companies list for 2007, ranking as #5 among worldwide electronics manufacturers. Samsung became the first Korean company to join this coveted list in 2005. SamSung Brand vaLue

About SSI
Samsung Semiconductor, Inc. (SSI) is a wholly owned subsidiary of Samsung Electronics. Established in 1983 as a California corporation, SSI has approximately 300 employees in the Americas and is headquartered in San Jose, Calif. Regional OEMs and ODMs are supported by SSI, which also conducts primary market and product research for Samsung, thus enabling regional customers to influence the direction of the companys future technologies and products. The United States and the Americas are Samsungs biggest market, accounting for approximately 27% of the companys semiconductor revenues.

SSI Executive & Product Management Team

Jon Kang President
Kevin Lee Memory Vice President SH Hong System LSI Director ana molnar Hunter VP Technology, Strategic Foundry Business Scott Birnbaum LCD Vice President

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2005 Samsung Semiconductor, Inc.

2 Corporate Overview

Enabling an Unlimited Future of Advanced Electronic Products

Advanced Devices Defined by Core Components
Modern society has come to expect an ongoing parade of ever-smaller, feature-rich electronic devices like the multi-function mobile phones and miniscule MP3 players holding gigabytes of music files that are so popular today. The appeal of these products is defined by the technology inside and Samsung supplies a greater breadth of that technology than any other company in the world. For example, Samsung has created a new generation of flash-based storage solutions such as the Solid State Drive that offer quiet, reliable, low-heat storage for PCs. Samsung flash memory is also the key enabler of the award-winning Hybrid Hard Drive developed jointly by Samsung and Microsoft, which is being used in Windows Vista portable PCs. In fact, Samsung memory and display technologies are important in realizing Vistas enhanced user experience, enabling greater responsiveness, faster graphics and better resolution. widely used in mobile phones and other portable devices.

Samsungs Core Components

memory is a key enabling technology in virtually every digital system today, from the massive DRAM main memory of a server system to NAND flash chips contained in USB drives, MP3 players and other portable products. Samsung maintains its strong leadership in all key memory markets by ongoing technology innovation and advanced manufacturing. Logic & aSIc technology from Samsung combines the worlds fastest mobile processors, multimedia co-processors, mobile display drivers, and CMOS image sensors with advanced wireless ASIC IP in spacesaving System-on-Chip packages. Samsung also fabricates logic products for fabless semiconductor companies at its dedicated foundry in Korea and is part of the Common Platform technology alliance, a unique collaboration between IBM, Chartered Semiconductor Manufacturing and Samsung. Lcd displays enable crisp, bright, color viewing of games, text messaging, photos, and live video on screens that fit in the palm of your hand or cover one of your walls, in the case of large HDTVs. Samsung makes continual LCD breakthroughs, such as the first double-sided mobile panels, super-slim panels and displays that can be easily read in bright sunlight. Storage Solutions from Samsung include optical and hard disk drives, as well as a wide range of flash memory-based products like the Solid State Drive, Hybrid Hard Drive and embedded or removable storage. Portable electronic products like cellphones, digital cameras, camcorders, portable music and media players like Apples iPod depend on flash storage while the technology is also making its way into areas like GPS.
Corporate Overview 3

Total Solutions for Advanced Digital Products

Samsung offers the key components for computing systems and mobile consumer products, from memory and mobile logic chips to storage systems and LCD displays. In recent years, Samsung has pioneered new fusion semiconductors that combine different technologies in a single chip and are designed to accelerate the technological evolution of mobile consumer electronics. These include the popular OneNAND Flash, providing the functions of NAND and NOR flash; Flex-OneNAND, a complex memory solution employing both single-level cell NAND and multi-level cell NAND; OneDRAM, which combines DRAM and SRAM; and a new chip fusing an application processor with a OneDRAM memory chip. In addition, Samsung is the longtime leader in Multi-Chip Packages, which combine several memory types in a single package and are
2007 Samsung Semiconductor, Inc.

Financial Performance

Samsung Financial Performance

In the up-and-down year of 2006, Samsung Electronics generated growth and profits. In fact, fourth-quarter net income rose 40% from the previous year, beating analyst estimates. Sales reached $63.4 billion, almost 12% above 2005. North American sales in 2006 increased 15% driven by strong demand for flatpanel TVs. Samsung has continued its cost-cutting efforts while also transitioning to higher-density semiconductor technologies that deliver greater margins. Such moves have helped the company report a positive outlook for its entire memory business. SamSung SaLeS
$55.2B $38.1B $41.8B $56.7B $63.4B

Samsung R&D
Samsung has 16 R&D centers and 36,000 researchers throughout the world. In 2006, the company increased its R&D expenditures from the previous year to $6.01 billion 9.5% of sales. According to IFI Patent Intelligence, Samsung received 2,453 U.S. patents in 2006, ranking it second behind IBM, which has held the leading spot for 14 years. Last year, Samsung was in fifth place, with 1,645 patents. In North America, Samsung conducts hard disk drive, digital TV, printer and telecom R&D in addition to ongoing semiconductor research. SamSung reSearcH and deveLoPment
(% of SaleS)

CapEx
Samsung Electronics continued to make key capital investments in 2006 but has reduced its pace as part of an overall cost-cutting effort. However, in the memory area, Samsung reported in early 2007 that it would invest approximately $1.9 billion to boost chip output to meet expected demand for memory chips. In a technology-driven market like semiconductors, Samsung is investing in areas like higher-density process technologies and moving some remaining eight-inch wafer fabs to 12-inch. Such efforts will help impact cost leadership in 2007. In the LCD area, Samsung has reduced its capex spending for 2007 from the previous year. caPex
$9.9B $6.00B
$5.34B

$10.8B $7.4B $5.6B

$2.7B

$4.59B $2.9B (9.2%) (8.0%) $2.42B

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Semiconductor Memory

SamSung 5-year fInancIaL Performance

Sec Sales Y-Y Growth Gross Profit Y-Y Growth Percent of Sales Operating Profit Y-Y Growth Percent of Sales Net Income Y-Y Growth Percent of Sales
Source: SEC. $M USD

2006 63,435.9 12% 17,867.9 5% 28% 7,454.8 -6% 12% 8,530.5 13% 13%

2005 56,722.6 2.6% 17,077.9 -12% 30% 7,956.5 -31% 14% 7,541.9 -27% 13%

2004 55,201.1 32% 19,492.3 45% 35% 11,496.1 61% 21% 10,335.2 -1% 19%

2003 41,762.5 10% 13,476.2 4% 32% 7,165.9 0% 17% 5,710.2 -15% 14%

2002 38,122.6 23% 12,938.8 72% 34% 7,160.6 225% 19% 6,752.4 139% 18%

5-year cumm 255,244.7 80,853.1

5-year cagr 13.6% 8.4%

41,233.9

1.0%

38,870.2

6.0%

Manufacturing

Semiconductor Facilities
Samsung has 15 production facilities around the world. The company also has five operating R&D lines. Semiconductor fabs are located in Giheung and Hwaseong in South Korea, and in Austin, Texas. IC assembly plants are operating in Onyang, South Korea and Suzhou, China. A key benefit of Samsungs semiconductor strategy is the flexibility to shift production between product families in anticipation of changing market demands. This helps insulate Samsung from market dynamics and stabilize operating margins. Leveraging its manufacturing and engineering prowess, Samsung launched a fullservice dedicated logic foundry in 2005 in Giheung to make leading-edge products on 300mm wafers for fabless semiconductor companies. Among the many strengths of Samsungs foundry operation is a world-

class mask shop, extensive portfolio of IP and libraries, broad services and support and proven yield-enhancement programs. In addition, there is capacity assurance through Samsungs collaboration in the Common Platform initiative with IBM and Chartered Semiconductor.

LCD Facilities
Samsungs LCD Business has fabs in Giheung, Chonan and Asan, South Korea. LCD panel assembly plants are located in Chonan, Tangjeong and Asan, South Korea, and Suzhou, China. Samsung Corning Precision Glass, a joint venture between Samsung and Corning, is a vertically integrated supplier of mother glass, located in Asan, South Korea. Together with its partner Sony, Samsung opened the worlds first Generation-7 LCD fab in 2005 and the companies collaborated on a new Gen-8 facility in Tangjeong that is

opening ahead of schedule in the summer of 2007. This plant will add another 50,000 mother-glass substrates (measuring approximately 6 feet by 7 feet) to the overall monthly production capacity, making the Samsung/Sony collaboration the worlds largest producer of large-screen LCD TV panels. The Gen-8 line will mainly be used to produce LCD panels for 52-inch or larger LCD TVs.

Storage Device Facilities

Samsung operates state-of-the-art Class-10 hard-disk drive facilities and logistics centers in Gumi, South Korea, and Manaus, Brazil. With investments of nearly $200 million, these facilities are the worlds most automated factories for producing hard drives. The Gumi Works produces at the highest quality levels with automation that enables rapid adaptations to future technologies.

Corporate Overview 5

Samsung Components

SamSung marKet LeaderSHIP 1992 2006

memory: #1 Position for 14 years 11% 28% dram: #1 Position for 15 years 29% Sram: #1 Position for 12 years 11% 24% nand: #1 Position for 5 years 60% 47% fLaSH: #1 Position for 4 years 16% 45% mcP: 3 years 38% Lcd: #1 Position for 5 years 16% 21%

Memory Leadership
Samsung continued to run away with the memory market in 2006, according to Databeans, with a 26% share that was more than twice larger than the nearest competitor. New players in the NAND flash market caused prices to fall, but Samsung held onto its overwhelming leadership, helped by its continual introduction of high-density, high-performance products like Flex-OneNAND. Samsung also retained its strong leadership in DRAM, where mobile DRAM and specialty DRAM retained higher margins than the large main memory market, in which Samsung still saw significant growth. As shipments of Windows Vista PCs increase throughout 2007, high-density DRAM segments will be positively impacted. Samsungs multi-segment strategy in DRAM enables it to benefit from strong segments like graphics DRAM, a key component in the next-generation video consoles that remain in high demand. nand fLaSH marKet SHare and ranKIngS rank 2006 1 2 3 4 5
IDC ($M)

14%

rank 2005 1 2 3 4 5

Worldwide Supplier Samsung Toshiba Hynix Renesas Micron

revenues revenues 2006 2005 $5,406 $2,541 $2,170 $631 $360 $5,918 $2,366 $1,308 $507 $191

market Share 47% 22% 19% 5% 3%

y/y growth -8.7% 7.4% 65.9% 24.4% 88.6%

a contributing factor to Samsungs sustained success is the direct control of core component manufacturing. By investing in and operating its own semiconductor, Lcd, and storage device factories, Sec can more effectively manage operating margins and ensure consistent quality. In addition to significant capital and human resource investments in plants and equipment, Samsung has implemented highly effective supply-chain-management systems that control both materials flow and supplier relationships.

dram marKet SHare and ranKIng rank 2006 1 2 3 4 5 rank 2005 1 2 4 3 5 Worldwide Supplier Samsung Hynix Infineon* Micron Elpida revenues 2006 $9,834 $5,644 $5,370 $3,697 $3,489 revenues 2005 $8,020 $4,111 $3,181 $3,867 $1,784 market Share 29% 16% 16% 11% 10% y/y growth 23% 37% 68.8% -4.4% 95.6%
Gartner ($M)

* including Qimonda

Sram marKet SHare and ranKIng rank 2006 1 2 3 4 5

Gartner ($M)

rank 2005 1 3 2 5 6

Worldwide Supplier Samsung Spansion Intel Cypress ST Microelectronics

revenue 2006 $790 $450 $360 $304 $250

revenues market 2005 Share $848 $356 $427 $279 $188 24% 14% 11% 9% 8%

y/y growth -7% 26% -16% 9% 33%

2007 Samsung Semiconductor, Inc.

Semiconductor Leadership
Samsung gained further ground among worldwide semiconductor suppliers in 2006, achieving growth in its diverse IC markets. As the semiconductor content of consumer products continues to increase it represented 21.6% of total costs in 2006, according to the Semiconductor Industry Association Samsung is well positioned to broaden its market share by leveraging its top position in all memory products and its large portfolio of system logic ICs. 2006 WorLdWIde SemIconductor ranKIng rank 2006 1 2 3 4 5 rank 2005 1 2 3 6 5 Worldwide Supplier Intel Samsung Texas Instrument Infineon* ST Microelectronics 2006 revenues $30,437 $20,138 $11,984 $10,533 $9,854 2005 revenues $34,590 $18,347 $10,119 $8,205 $8,882 growth 2005-2006 -12% 10% 18% 28% 11% 2006 market Share 12% 8% 5% 4% 4%
Gartner ($M)

* including Qimonda

TFT-LCD Leadership
Samsung increased its leadership in the TFT-LCD market in 2006, helped by the blistering pace of consumer demand for large-size TVs. The company makes a wide range of panels used in LCD TVs, notebooks, monitors, industrial applications, information displays, and mobile products. Samsung continually rolls out new breakthrough products to solidify its market and technology leadership, such as a mobile panel that automatically adjusts brightness for readability under any lighting conditions. Lcd 2006 WorLdWIde revenueS and ranKIng 2006 ranking 1 2 3 4 5
iSuppli ($M)

2005 ranking 1 2 3 5 4

Worldwide Supplier Samsung LG Philips AUO Sharp CMO

2006 revenues $12,467 $10,789 $8,965 $5,673 $5,720

2005 revenues $9,548 $9,412 $6,804 $4,142 $4,785

y/y growth 13% 9.5% 13.1% 13.6% 11.9%

Logic and Storage Products

Highly complementary to Samsungs memory and LCD components are its storage solutions and its growing line of logic products in the System LSI division, including ASICs, mobile processors, LCD display drivers, CMOS image sensors and MP3 chipsets. Samsung launched a dedicated logic foundry in 2006 aimed at serving fabless semiconductor companies. Samsungs optical and hard disk storage lines have had significant growth. The company leads in optical storage while its hard disk line moved into fourth place worldwide in 2006.

2007 Samsung Semiconductor, Inc.

Corporate Overview 7

SamSung Product offerIngS markets mobile/Wireless

dram Sram fLaSH aSIc LogIc tft/Lcd odd/Hdd

notebook Pcs

desktop Pcs/Workstations

Servers

networking/ communications consumer electronics

For more information about Samsung Semiconductor, visit our website at www.samsung.com/us/Products/Semiconductor.

Samsung Semiconductor, Inc. 3655 North First Street San Jose CA 95134-1713 www.samsung.com/us/products/semiconductor
2007. The appearance of all products, dates, figures and tables are subject to change at any time without notice. Samsung, Samsung Semiconductor, Inc., OneNAND Flash, OneDRAM and Flex-OneNAND are trademarks of Samsung Electronics Co., Ltd. The Common Platform name and logo are trademarks of International Business Machines Corporation in the United States, other countries, or both. All other names and brands are the property of their respective owners. BR-07-BKG-001 Printed 6/07