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Samsung Electronics September, 2001


Contents Company Overview

Q2 2001 Results

Divisional Highlights


Company Overview


Organizational Structure

Vice Chairman & CEO (Yun, Jong Yong) CTO (Yun, Jong Yong) ◀

Semiconductor Lee, Yoon Woo ▶ ▶ ▶

Memory System LSI TFT LCD

▶ CFO (Choi, Doh Seok)

Info. & Comm Lee, Ki Tae ▶ ▶ ▶

Handsets Network Fiber Optics

Digital Media Sys. Chin, Daeje ▶ ▶ ▶

Monitor PC / PC Peripherals DTV / DVDP

Living Appliances Han, Yong Oe ▶ ▶ ▶

Microwave Oven Refrigerator Air Conditioner


Leading Products (’00) Global Market Share Semiconductor

• DRAM • SRAM • TFT - LCD

21 % 23 % 21 %

No. 1 No. 1 No. 1

Telecommunication

• CDMA Handsets

26 %

No. 1

• Color Monitor • ODD • DVDP

19 % 15 % 14 %

No. 1

• Microwave Oven

23 %

No. 1

Digital Media

Home Appliances

No. 2 No. 3


Q2 2001 Results


Revenue and Earnings Sales by Quarter 9.1

8.6

7%

6%

9%

Trillion Won

8 31%

6 4 2

0

19% 43%

Q3 '00

35% 23% 36%

Q4 '00

34% 22% 35%

Q1 '01

2.2

8.0

2.5

17%

27% 29% 27%

Q2 '01

2.0 Trillion Won

10

8.8

Operating Incomes by Quarter

2%

8%

14%

14%

14%

89% 88%

0.5 0.0

1.6 8%

1.5 1.0

1.5

0.6 9%

64%

50% 43%

Q3 '00

Telecommunication

Digital Media

Semiconductor

Home Appliances

Q4 '00

Q1 '01

Q2 '01


Revenue and Earnings Operating Incomes by Quarter

10

2.5

8

2.0 Trillion Won

Trillion Won

Sales by Quarter

6 4 2

0

1.5 1.0 0.5

Q3 '00

Q4 '00

Q1 '01

Q2 '01

0.0

Q3 '00

Q4 '00

Q1 '01

Our Well-Balanced Business Portfolio is Paying-off

Q2 '01


Financial Analysis 1H ’01

2000

1999

Net Debt / Equity

10%

9%

32%

Debt / Capitalization

16%

20%

30%

94x

56x

14x

24%

41%

31%

Profitability (Net Income / Sales)

0.13

0.18

0.12

Asset Turnover (Sales / Asset)

1.23

1.33

1.15

Leverage (Asset / Equity)

1.56

1.75

2.24

Coverage Ratio* ROE**

* Coverage Ratio = EBITDA / Net Interest Expense. ’01

** Annualized for 1H


Cash Flow of 1H 2001 (Unit: Trillion, KRW)

Source of Fund Net Income Depreciation

Use of Fund Capex Increase in W/C

Others

2.1 1.5 0.5 0.7

Dividend Others

3.0 0.7 0.4 0.4 0.7

Total

4.8

Total

5.2

Sale of Marketable Securities

Debt Redemption

Cash Balance Beginning : 1.9

Net decrease : 0.4

End : 1.5

” Cash Balance = Cash&Cash Equivalent + Short-term Financial Instrument


Revised CAPEX for 2001 (Unit : Trillion, KRW) 8

7.3 6.1

7 6

5.1

5 Semiconductor

4

Telecommunication Others

3 2 1 0

Original

1st Revision

2nd Revision


CAPEX Plan - EBITDA vs. CAPEX (Unit : Trillion, KRW)

12

10.1

10 7.2

8 6 4

5.2 4.3

EBITDA

4.3 3.4 2.5

CAPEX

1.6

2 0

1997

1998

1999

2000

EBITDA has been always larger than CAPEX


Divisional Highlights - Semiconductor Division


DRAM Demand and Supply • Balance is delayed by one quarter : Q3 ’01 → Q4 ’01 • Expected demand drivers -XP, Brookdale, New applications (S-T Box, 3G Handsets, Game machines)

Original Forecast ( Unit : Million )

1700

8%

1600

6%

1500

4%

1400 1300

2%

Demand

1200

0%

Supply

-2%

Sufficiency rate

1100 1000 900

-4%

800

-6% Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02

( Source : Company Data )


DRAM Demand and Supply • Balance is delayed by one quarter : Q3 ’01 → Q4 ’01 • Expected demand drivers -XP, Brookdale, New applications (S-T Box, 3G Handsets, Game machines)

Revised Forecast ( Unit : Million )

1600

8%

1500

6%

1400

4%

1300 1200 1100 1000

2%

Demand

0%

Supply

-2%

Sufficiency rate

900

-4%

800

-6% Q1 '01 Q2 '01 Q3 '01 Q4 '01 Q1 '02

( Source : Company Data )


Outlook for TFT-LCD Market • Demand and Supply

- Oversupply of 10% for ’01 but expects shortage from Q3 ’02

(Unit : Brillion, Units)

25

15%

( Source : Company Data )

10%

20

5% 15 0% 10

-5%

5

-10%

Q1 ’01

Q2 ’01

Q3 ’01

Q4 ’01

Q1 ’02

Q2 ’02

Q3 ’02

Q3 ’02

Q1 ’03

Q2 ’03

Q3 ’03

Q4 ’03


Competitiveness • Flexible product mix

- Monitor portion ↑ : 17% in 2000 → 37% in 2001 - Niche market (Small size LTPS for HHP, PDA) : 1M in 2001 • Continual cost reduction

- Number of components : 120 ~ 150 vs. SEC under 100 - Mask steps : 5 ~ 6 vs. SEC 4 ~ 5 - Mother glass size : 680 x 880 vs. SEC 730 x 920 730x920 (Samsung)

680x880 (Others)

14”

9 panels

6 panels

15”

6 panels

6 panels

17”

6 panels

4 panels

Panel

Mother Glass


Divisional Highlights - Telecommunication Division


Global Handset Market • Revised global handset shipment in 2001 - Global economy slowdown, Lack of new applications and contents, Reduction of handset subsidies Previous Forecast (March ’01) China 14% Europe 38%

Asia 23% Americas 25%

480 M units

Revised Forecast (July ’01) China 16% Europe 36%

Asia 25% Americas 24%

410 M units


Achievements in 1H • Outstanding sales in the midst of deteriorating market

- Sustain ASP by targeting mid to high-end segment 1H 2001 - Timely introduction of new models

- Domestic sales growth of cdma2000 1x handset

GSM 47%

CDMA 53%

12.5million units


Business Outlook • Expect continuous growth in 2H ’01 - Increasing adoption rate of 1x handset in domestic market - Explore new business opportunities with new service providers

“Maintain original target sales of 28M units”

2001(F) TDMA 2%

GSM 43%

CDMA 55%

28million units


Wireless systems • Recent achievements in 1H ’01 - Strong presence in 1x system market - CDMA contracts in China and Puerto Rico

• 2H ’01 Outlook - Domestic: 2.5G System expansion and upgrade to 1x EV-DO - Overseas: Increasing adoption of CDMA technology * China, Japan, Brazil, India, Israel, etc.

“Current macro environment remains challenging”


Divisional Highlights - Digital Media Division


Digital Media Global Market Share Trends Product

1999

2000

2001 (F)

Rank

M/S

Rank

M/S

Rank

M/S

Monitors

1

15%

1

19%

1

19%

ODD

2

12%

2

15%

2

14%

DVD Players

6

13%

3

16%

2

15%

Color TVs

5

8%

4

9%

3

9%

VCRs

3

12%

2

15%

1

16%


Convergence Vision Establishing global competition  Extend P2P connectivity

Home solution based on DTV • DTV • DVDP • CDP • VCR • DVC • MP3

A/V Consumer

Computing

Network Convergence

• Broadcasting STB

• Home Gateway

New Business

• PDA • Web PAD

Networking Solutions

• PC • Server • Printer • Monitor • ODD


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