Earnings Release Q2 2009

Samsung Electronics

July 2009

Disclaimer

This document is provided for the convenience of investors only, before our external audit on Qfinancial results of our headquarters is completed. The audit outcomes may cause some parts of this document to change. This document contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects, "anticipates, "intends, "plans, "believes, "seeks or "will ". Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect our future results include: the behavior of financial markets including fluctuations in exchange rates, interest rates and commodity prices; strategic actions including dispositions and acquisitions; unanticipated dramatic developments in our major businesses including semiconductor, LCD, telecommunication, digital media ; and numerous other matters at the national and international levels which could affect our future results These uncertainties may cause our actual results to be materially different from those expressed in this document.
<Consolidated Sales / Operating Profit>

2Q 09 Device Solution

(Margin)

Operating Profit

2Q 08 11.31

5.73 5.55

(Unit : Trillion KRW)

1Q 09 9.34

5.22 4.11

2Q 09 0.39

1Q 09 -0.98

(-10%)

2Q 08 1.36

6.14 5.10

Semiconductor

(-13%)

Digital Media & Communications

10.04 11.77

9.77 10.07

7.88 10.34

Telecom

Digital Media

Consolidated Income before Tax :
Sales and Profits (Parent Basis)
2Q 09 Sales Gross Profit SG&A Operating Profit

Non-operating income

Q-on-Q

1Q 09 18.57 2.98

2Q 08 18.14 5.11 3.21 1.89 0.68 2.57 0.43 2.14

Y-on-Y

21.02 4.46

50% 20%

-13% 6%

620% 173% 270% 330% 264%

-44% 115% -2% -37% 5%

Pre-Tax Income

Income Tax

Net Income

Sales 2Q 09 Semiconductor

- Memory - Sys.LSI

Operating Profit 2Q 08 4.58

3.21 0.77

1Q 09 3.74

2.47 0.65

2Q 09 0.15

1Q 09 -0.65

2Q 08 0.27

3.13 0.88

LCD Telecom

- Wireless

4.56 8.05

3.75 8.06

4.71 6.14

0.19 0.57

-0.31 0.94

1.00 0.79

- Appliances
Cash Flow & Financial Position (Parent Basis)

Cash Flow Statement

(Trillion KRW)

Financial Position (B/S)

Cash* (Beginning of period) Cash flow from Operation Net profit Depreciation Others Cash flow from Investment CAPEX Cash flow from Finance Dividend Repurchase of shares Proceeds from sales of shares under stock option plan Net increase in cash Cash* (End of period) 5.30 2.64

6.65 -0.06

2Q 09 Assets Current Assets Cash * A/R & Inventories Non Current Assets P.P.E. Liabilities Debts Shareholders Equity Capital Stock Retained Earnings

76.0 20.1

74.5 19.2

71.0 18.0

2.25 1.91 -1.52

0.62 1.97 -2.65

6.1 10.0

5.3 9.1

6.4 7.8

15.1 0.1 60.9 0.9 57.6

15.7 0.1 58.8 0.9 55.3

14.8 0.1 56.2 0.9 54.3

-0.74 0.01

0.81 6.11

-1.35 5.30
* Cash = Cash + Cash equivalent + Short-term financial instruments + Marketable securities

DS : Semiconductor

PC Shipment and GB/Sys

(Unit: Million units)

80 Desktop PC Netbook Note PC GB/Sys

2Q Results Analysis

Memory Memory

(GB/Sys)

Strengthened cost-competitiveness and profitability via geometry migration and differentiated products/technology despite weak seasonality turned profitable DRAM: Price increased due to growth in PC demand and limited supply growth - PC shipment: mid-single %, QoQ (Avg. 2Q PC shipment: -2%) GB/Sys growth: mid-single %,QoQ - Industry utilization rate increased, but supply increase limited due to delayed geometry migration

0 '09.Q1 Q2

(Source : SEC)

Memory Spot Price Trend

1Gb DDR2 DRAM (LHS) 16Gb MLC NAND (RHS)
SEC: Strengthened leadership in DDR3 for Server/High-end PCs and expanded sales of differentiated products (i.e. Mobile/ Graphic/Consumer) NAND: Price continued to increase due to strong demand for embedded products despite weak seasonality - Demand recovery led by launch of new smartphones, PMP models, and increased memory density - Supply shortage continued despite higher industry utilization rate SEC: Enhanced profitability by focusing on solutions for embedded products (moviNAND, OneNAND, etc.)
1Gb DDR2 800Mhz(Q2) : 23%(QoQ) 16Gb MLC(Q2) : 29%(QoQ)

$0.00 '09.Q1 Q2

(Source : DRAM Exchange, SEC)

System LSI System LSI

Sales and profitability improved due to demand recovery

DDR Products (Market)

Business Outlook

Market Market

DRAM : PC demand to increase due to seasonality - 3Q PC Shipment: high-single %,QoQ (Avg. 3Q PC shipment:10%) Low GB/Sys growth to continue (Low single %,QoQ) - DDR3 for Note-PCs and 8GB/16GB demand for servers to increase - Expect limited supply growth (i.e. limited DDR3 suppliers) NAND : Demand to increase due to seasonal effects - Expect new product launches (MP3/PMP) and demand for high-density memory for smart phones to increase Adoption of 16GB/32GB+ for smart phones/PMPs to increase - Expect supply to increase from competitors rising utilization and process migration

DDR1 50% DDR2 DDR3

0% '09.1Q 2Q 3Q 4Q

(Source: Gartner, SEC)

NAND Applications
100% 80% 60% 40% 20% 0% '07 '08 '09 (Source: SEC)
DSC MP3 USB EDP PMP Hands et

Samsung Samsung

Memory: Strengthen market leadership based on our leading-edge technology and competitiveness - DRAM: Expand portion of advanced process nodes (i.e. 50/40nm) and differentiation of next-generation DDR3s - NAND: Strengthen high-density embedded products and accelerate process migration for 40nm and below S.LSI : Revenue to increase due to strong seasonal demand and expanded applications

DS : LCD

Large Panel Shipment (Market)

(Unit : Million units)

Q2 Results Analysis
Large size panels Large size panels Market : Strong Panel demand, but limited supply increase
due to glass supply shortage
- Demand : Q1 90M units 125M units (40% QoQ, 8%YoY) - ASP : Increased from Q1

117 90

IT : Notebook panel price rebounded (4%QoQ), and Monitor panel price continue to increase (12%QoQ)
'08.2Q '09.1Q '09.2Q NOTE MONITOR TV
(Source : DisplaySearch, 09.2Q)
TV : Increase in under 32 panel price led to higher ASP (9%QoQ)
Samsung : Panel shipment increased (mid-30%), and

turned profitable

- IT : Shipments increased due to strong sales in emerging markets and higher demand for new products New products : 16:9, LED, mini notebook panels - TV : Shipments grew by high-50% QoQ due to expansion of customer base and successful ramp-up of the 8-2 line Successfully launched the slim edge-type LED TV panels, and actively responded to demand for under 32 panels

Panel ASP (Market)

$200 $150 $100 $50 $0
(Source : DisplaySearch, 09.Jun)

(Unit : US$)

Note 15.6"W Monitor 20.1"W TV 32.0"HD
09 Large Panel Demand (Market)
Market Market Panel demand continues to grow in Q3 due to seasonality
- IT : Demand to increase due to strong seasonality and glass supply shortage to limit supply growth - TV : Emerging market demand to increase Risk factors, including weak seasonal demand expected in Q4 and demand slow down led by panel price increase, still remain
SEC to increase market dominance by strengthening product leadership and enhancing SCM IT : Increase sales through expanding product line-up and Mini notebook panels
- Strengthen line-up of eco-friendly products (low-power LED panels), multimedia (16:9) panels, and over 20+ monitor panels
09 16:9 Panel Portion (Market)

(Unit : %)

50% 40% 30% 20% 10% 0% 1Q 2Q 3Q 4Q
TV : Strengthen market dominance through product differentiation and increased capacity

Note Monitor

- Increase sales of under 32 panels and strengthen differentiated products (240Hz/Slim/LED) Expand markets by strengthening line-up of LED products - Support seasonally strong demand by maximizing operation of 8-2 line

DMC : Telecommunication

Revenue & OP Margin
Revenue (Parent) Revenue (Consolidated) (Unit: Trillion Won)

Handsets Handsets

Shipment : 52.3 million units (QoQ 14%, YoY 14%)
- Sales increase in both developed and emerging markets due to enhanced product line-up Europe/ US : Strong sales of touch-phones and messaging-phones Emerging markets : Steady sales increase of strategic models Slim design and differentiated functions (color screen, camera)

9.77 8.06 8.05

Continued to outperform market growth

Q109 Q209

Expect steady M/S growth ASP : $124 (QoQ 2%) Maintained double-digit OP margin, due to strong

(Approx. 20%)

M/S Trends

(Source: SA, Company)

mid/high-end sales and cost saving despite increased marketing expenses

(16.7%) (14.4%)

Network Network
Sustained revenue contributions from the expansion of overseas Mobile WiMAX equipment sales

(11.3%)

09.2Q(E)

Handset Market

(Unit: Billion units)
Market Market Q3 Demand : QoQ +5% range increase
- Developed market : Strong seasonal demand & Carrier promotion - Emerging market : Seasonal demand and expand 3G service in China

Approx. 1.2

Approx. 1.1

53% 2H 1H

Expect continued demand increase in smart-phone and

touch-phone

Samsung Samsung Handsets : Expect steady M/S growth through strengthened
product line-up 09 shipment target : 200 million plus units
- Expansion of current strategic products in the global market & Launching of 2H flagship models Jet, Galaxy, Star, Omnia II - Growth expected in developed market (US, Europe) and emerging market where 3G service is expanding
(Source: SA, Analyst reports)
Touch-phone flagship models

Galaxy

Omnia II
Network : Expand overseas Mobile WiMAX business and
increase PC (netbook, etc.) shipments

DMC : Digital Media

FPTV Shipment

Including overseas sales

Digital Media Digital Media
Consolidated revenue continued to increase due to strong
sales of FPTV and Home Appliance products (17% QoQ) - FPTV: Market demand increased 6% QoQ while SEC outperformed the market with a 10%+ increase in shipment

1Q09 2Q09

Strong sales of differentiated new products (i.e. LED TVs, New designed LCD TVs) Cumulative LED-TV shipments as of end-June: 500K+ units

DisplaySearch (09.Jun)

FPTV Market Share
- Monitor : Increased sales in line with market growth (3%QoQ) and maintained no.1 M/S
Strengthened leadership in the 20+ large-size monitor market Sales portion of 20+ monitor segment: mid-40% vs. high-30% (market)

PDP-TV

#1 #1 #1 #1

LCD-TV TV Total 2Q09(E)

- Appliances: Revenue growth continued (mid-20% QoQ) and profitability improved as premium products increased
Strong sales of premium refrigerators and drum w/m gain M/S Premium refrigerator sales increased by 40% QoQ

16% 4Q08 1Q09

TV Market Forecast

(Unit: Million)

FPTV : Q3 market demand to continue to rise (mid-10% QoQ), but price competition to intensify
- Demand drivers : Strong seasonality, Chinas National holidays, and attractive price range Emerging market growth to lead global market growth (30%+ QoQ)
1Q09 CRT LCD PDP Total 19.6 26.8 2.8 43.3

2Q'09 QoQ

3Q'09 QoQ
17.8 -9% 15.5 -13% 28.1 5% 32.3 15% 3.6 11%

3.2 16% 45.1

Price competition to intensify with new TV model launches

4% 51.7 15%

(Source: DisplaySearch 09.Jun)
FPTV : Samsung to outperform the market growth through strengthened line-up of differentiated premium products
- Increase dominance in the premium segment through differentiated LED-TV (full line-up/ high-definition/ design) - Improve cost competitiveness and strengthen SCM to address market changes
Appliances Market Forecast

Air-con.

Appliances : Strengthen dominance in the premium market by expanding line-up
- Continue to launch differentiated products (e.g., energy-saving products)

(Source: AHAM, GFK, SEC)

[Appendix 1] Proforma Balance Sheet (Parent Basis)
(Unit : 100 Million, KRW)
2Q '09 (A) Current Assets

- Cash & Cash Equivalents - Marketable Securities - A/R - Inventories - Other Current Asset

1Q '09 (B) 192,139

47,250 5,769 52,106 38,926 48,088

2Q '08 (C) 180,301

53,562 10,269 39,246 38,570 38,654

Q-on-Q (A - B) 9,176

8,281 -221 10,614 -1,243 -8,255

Y-on-Y (A - C) 21,014

1,969 -4,721 23,474 -887 1,179

201,315

55,531 5,548 62,720 37,683 39,833

Non Current Assets

- Investment - PPE - Intangible Assets - Other Non Current Asset

558,626

252,811 285,439 6,408 13,968

552,787

239,537 295,471 6,631 11,149

529,275

197,892 314,942 6,068 10,373
13,274 -10,032 -223 2,819

29,351

54,919 -29,3,595

Total Assets Liabilities

- Debts - Trade Accounts and N/P - Other Accounts and N/P - Accrued Expenses - Income Tax Payable - Other Liabilities

759,941 150,942

1,169 40,140 29,661 40,38,817

744,926 156,567

1,252 40,086 26,042 37,754 1,901 49,534

709,576 148,053

998 27,814 33,092 39,421 6,816 39,913

15,015 -5,625

-3,619 5,689 -1,538 -13,368

50,365 2,889

171 12,326 -3,431 4,022 -6,453 -3,747

Shareholders' Equity

- Capital Stock - Capital Surplus - Capital Adjustments - Accumulated Other Comprehensive Income - Retained Earnings Total Liabilities & Shareholder's Equity

608,999

8,975 66,159 -85,696 44,028 575,533

588,360

8,975 66,182 -85,662 45,866 552,998

561,523

8,975 65,908 -86,041 29,751 542,930

20,639

0 -23 -34 -1,838 22,535

47,476

345 14,277 32,603

759,941

744,926

709,576

15,015

50,365

[Appendix 2] Proforma Income Statement (Parent Basis)

2Q '09 (A)

1Q '09 (B)

2Q '08 (C)

Q-on-Q (A - B)

Y-on-Y (A - C)

210,197

185,662

181,391

24,535

28,806

- Domestic

39,507

31,017

36,726

- Export

170,690

154,645

144,665

16,045

26,025

Cost of Sales

165,576

155,899

130,337

35,239

Gross Profit

44,621

29,763

51,054

14,858

-6,433

SG&A

33,985

28,287

32,116

- Wages & Fee

- Marketing Expenses

13,454

10,397

- R&D / Royalty Expenses

10,548

11,118

10,891

Operating Profits Non OP Income & Expenses

- F/X Gain (or Loss)

10,636

18,938

-8,302

14,628

-4,176

-5,911

-3,675
- Gain (or Loss) on Foreign Currency Translation - Gain (or Loss) on Equity Investment

-2,733

14,497

10,143

Income before Income Taxes

- Income Taxes

25,263

25,742

18,435

-1,595

22,535

21,419

16,342