Earnings Release Q3 2010
Samsung Electronics S El t i

October 2010

Disclaimer
The financial information in this document are consolidated earnings results based on K-IFRS. Previous earnings results have also been restated in compliance with K-IFRS. 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 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.

Income Statement

(Unit: Trillion Won)

3Q 10 40.23

(% of sales)

Y-on-Y

12% 9% 17% 19% 19% 145% 15% 10% 16% 11% 17%

3Q 09 35.89

2Q 10 37.89

Cost of Sales

100.0% 64.7% 35.3% 5.8% 17.8% 0.3% 12.1% 1.4% 1 4% 0.0% 13.5% 2.4% 11.1% 11 1%
100.0% 66.2% 33.8% 5.4% 16.7% 0.1% 11.8% 1.4% 1 4% 0.1% 13.0% 2.4% 10.6% 10 6%
100.0% 64.7% 35.3% 6.1% 16.8% 0.8% 13.2% 1.5% 1 5% 0.7% 14.0% 2.7% 11.3% 11 3%

Gross Profit

R&D expenses SG&A expenses Other operating profits/losses

2.31 7.15 0.11

1.94 6.01 0.05

2.31 6.36 0.31

Operating Profit
Equity method gains/losses Finance incomes / expenses

0.56 0.001

0.50 0.04

0.55 0.25

Profit Before Income Tax

Income tax

Net profit
Key Profitability Indicators

(Unit: %)

3Q 10 22%

0.11 1.32 1.54

3Q 09 23%

0.11 1.41 1.52

2Q 10 22%

0.11 1.27 1.54 19%

Profitability (Net income/Sales) Asset turnover ( (Sales/Asset) / ) Leverage (Asset/Equity)

EBITDA Margin

3Q 09 2Q 10

ROE EBITDA Margin

Segment Information

Sales by Segment

Semiconductor

- Memory

3Q 10 10.66
Y-on-Y 43% 60% 4% 16% 15% 10% 2% % 25% 12%

3Q 09 7.46

2Q 10 9.53

LCD Telecom

- Mobile

8.10 11.12

7.76 9.57

7.76 8.78

Digital Media
-V VD - Appliances Others

8.05 3.15 3.78

8.18 2.52 1.80

8.59 3.17 2.72

* Sales include intersegment sales
Operating Profit by Segment
3Q 10 3.42 0.52 1.13 0.23

(Margin)

Y-on-Y 17.5%p 9.0%p 0.3%p 0.3%p
3Q 09 1.09 1.20 0.95 0.96
2Q 10 2.94 0.88 0.63 0.36
Semiconductor LCD Telecom Digital Media

Others*

32.1% 6.5% 10.2% 1.6% 12.1%
14.6% 15.5% 9.9% 7.4% 11.8%
* Other businesses & Other operating profits/losses

Cash Flow Statement

3Q 20.43
6.76 4.46 2.65 0.35 5.63 5.75 0.16 0.85

2Q 20.64

3.82 4.28 2.57 3.03 4.59 5.09 1.06 2.18
Cash (Beginning of period)*
Cash flow from Operation Net profit Depreciation Others Cash flow from Investment Increase in tangible assets Cash flow from Finance Increase in Debts

Net increase in cash

Cash (End of period)*
* Cash = Cash + Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Cash & Net Cash Position
20.88 17.06 11.49 8.67 12.39 10.06 10.78 20.64 20.43 21.79

Cash Net Cash

Statement of Financial Position
(Unit: T illi (U it Trillion W ) Won) Current assets Cash* Trade accounts and notes receivable Inventories Non-current assets Investments PP&E

3Q 10 10

63.30 21.79 19.29 15.46 68.93 11.48 49.41

2Q 10 10

60.69 20.43 19.67 13.82 64.99 10.49 47.07

3Q 09 09

50.94 17.06 16.94 11.43 56.20 8.90 43.40

Total assets

132.23

125.68

107.14
Total liabilities Total h h ld T t l shareholders equity it

46.67 85.56

43.98 81.70

36.87 70.27

Key Financial Indicators
(Unit : %) Current ratio* Liability/Equity Debt/Equity Net debt/Equity
* Current ratio= Current Assets/ Current Liabilities

156% 55% 13% 13%

160% 54% 13% 12%

159% 52% 12% 12%

PC Shipment

100 Desktop PC Netbook

Q3 Results

Memory

DRAM : Weaker-than-expected seasonal demand and
increase in supply led to market oversupply
- PC Shipment : low-10%(YoY), mid-single%(QoQ) GB/Sys : high-20%(YoY), Flat (QoQ)

('09.3Q vs '10.3Q)

Note PC GB/Sys

(GB/Sys)

SEC : Increased profitability by adjusting product mix and strengthened cost competitiveness by expanding 4Xnm portion & starting mass production of 3Xnm Continued to outperform market growth (mid-20% vs. mid-10%)

0 '09.3Q 10.3Q

(Source : SEC)
NAND : Strong demand for set/embedded products continued
- Demand for embedded products remained strong due to release of new products (e.g. smart phone, tablet PC) while card/channel demand weakness continued

Memory Spot Price Trends

SEC : Enhanced profitability by expanding set/embedded sales and strengthened cost competitiveness by ramping up 2Xnm

System LSI

(LHS) (RHS)
1Gb DDR3 1.3Ghz(Q3) : 15%(QoQ) 32Gb MLC(Q3) : 7% (QoQ)
M j product segment(i.e. AP & CIS) revenue grew with Major d t t(i ith
strong demand for mobile applications Significant improvement in revenue and profit QoQ and YoY
(Source : DRAM Exchange, SEC)

Memory in Smartphone

(100M Unit)

Business Outlook

Market
DRAM : Oversupply to continue with weak PC demand and

increase in supply

- Expect weakness in PC demand and GB/Sys growth to continue Server and Mobile application demand to remain stable - Supply increase to continue as competitors resolve issues with process migration
NAND : Strong demand for set/embedded products to continue

with seasonal effects

- Expect market tightness to continue with strong demand for smart phones, tablet PCs, and SSDs

NAND Applications

Samsung
Memory : Expand market dominance and secure profitability
via cost competitiveness and product differentiation
- DRAM : Increase 3Xnm portion and strengthen product differentiation (e.g. low power/green products for mobile/server applications) - NAND : Expand mass production of 2Xnm and focus on set/embedded market

System LSI

- Major product (e.g. AP, CIS) revenue growth to continue
with strong demand for mobile applications
Large Panel Shipment (Market)

(Unit : Million units)

Demand declined QoQ due to the economic slowdown
di t i b t YoY demand growth continued d th ti d and inventory issues, but Y Y d
- Shipment : 10.2Q 167 10.3Q 160 M units (7% YoY, 4% QoQ) TV IT 102 TV : Shipment increased slightly due to year-end demand in developed markets and National Day holiday sales in China IT : Demand weakened as notebook & monitor set products sales declined

167 55

149 46

Q '09.Q3

Q '10.Q2

Q '10.Q3

Total shipment increased low-single % YoY and
remained flat QoQ, but profitability decreased due to ASP decline. Expanded premium and differentiated products sales (e.g. LED, 3D/240Hz TV panels)
-TV : Sales of premium products increased due to National Day holiday sales in China and year-end demand in developed markets y p LED panels for low end models, etc. - IT : Notebook and monitor panel shipment decreased due to demand weakened 7
(Source : DisplaySearch, 10.3Q)

Panel ASP [Market]

( (Unit : US$, %) $, )

ASP Note PC Monitor TV

`10.2Q 260

`10.3Q 248

Change -13% -15% -5%
2010 Panel Demand (Market)
Weak panel demand to continue in Q4 due to
slow set sales expected amid the economic slowdown l t l t d id th i l d TV IT
- TV : Panel demand to decrease due to weak year-end sales in developed markets (i.e. US & EU) under economic slowdown, despite panel demand increase in China for New Years holidays - IT : Notebook panel demand to increase slightly due to the expectation of tablet PC market to grow

'10.Q1

'10.Q2

'10.Q3

'10.Q4
LED TV Penetration Rate (Market)

(Unit : %)

73% 57%
Focus on minimizing profitability decline by expanding premium and differentiated product sales TV : Increase portion of premium and differentiated products
- LED, 240Hz and low-end LED panels
IT : Emphasis on profitable product mix
'10 '11 '12 '13 '14 '15 8

Telecommunication

Shipment Trends

Shipment Smartphones

Handset

(Million units)

Shipment : 71.4 M units (QoQ 12%, YoY 19%)
- Outperformed industry shipment growth amid global demand recovery, recovery by increasing sales of smartphone including GalaxyS/Wave and strengthening touchphone competitiveness Smartphone : Strong sales of strategic models such as GalaxyS (7Mil.*) and Wave (2Mil *) and mass market line-up expansion (2Mil. ), mass-market line up * Accumulated basis Developed markets : Increased sales led by mid-to-high end models

63.8 60.2 5%

2% 09 3Q

ASP : $122 (QoQ 14%)

- Portion of high-end models increased due to strong smartphone sales

New Strategic Models

[Smartphone/Tablet] [Mass market models]

Network

Revenue increased with the expansion of domestic and overseas
M-WIMAX business, and entry into LTE market Telecommunication division achieved double-digit OP margin with improved performance of handset business
Galaxy Tab Omnia7 WaveII (Android) (WP7) (bada)
Galaxy580 Wave 525 (Android) (bada)

- Increased portion of mid-to-high end smartphones and efficient spending of marketing expenses

Handset market

(Unit : 100 Million Units) ( 00 ll )
Non-Smartphone Smartphone
Q4 : Smartphone demand growth to continue with

strong seasonality

- Developed markets : Competitors to launch new strategic smartphones and carriers to expand seasonal promotions - Emerging markets : Competition to intensify in the mass market smartphone and low-end full-touch phone segments

Approx. 6.9

10%+ 4.8
Q4 : Increase market share by enhancing product mix including Q y gp g
smartphones and tablet PC

20%+ 1.2 1.5+

- Developed markets : Meet seasonal demand with enhanced product line-up Increase sales of strategic smartphones such as Galaxy S/Wave 2 and Galaxy Tab Target mass market smartphone demand with various models launched in Q3

(Source: SA, Securities)

- Emerging markets : Strengthen mass market smartphones and full-touch phones and enhance distribution channel p g y g product mix and improving marketing p g g Improve OP margin by enhancing p efficiency
Network : Expect sales growth of M-WiMAX and LTE

FPTV Market

(Unit: Million units)

SEC(LHD)

10.0 8.0 6.0 4.0 2.0 -

Mkt(RHD)

50.0 40.0 30.0 20.0 10.0 -
FPTV Shipment : 9.07M units (YoY 17%, QoQ 1%)
- Increased in emerging markets, decreased in developed markets Developed markets : Demand declined in Europe after the World Cup events & US economy slowdown Emerging markets : Growth continued in all regions except Latin America Cumulative 3D-TV shipments as of end-September : 1M+ units
(Sou ce (Source : DisplaySearch Sep.10) sp aySea c Sep 0)
Profitability decreased due to decreased sales of premium products in developed markets (e.g. US, Europe) (e g US

FPTV M/S (Revenue)

Appliances
28% #2 #1 24% #1 20% #1 #1 #2
PDP TV PDP-TV LCD-TV TV Total
Revenue increased 25% YoY due to strong sales in developed markets and CIS
- Continued to gain M/S in premium refrigerators and drum W/M in US
(Source : DisplaySearch Sep. 10)
Profitability declined in digital appliances business due to increased raw material & shipping costs
FPTV : Q4 demand to grow by 20%YoY and 35%QoQ
- Expect LED-TV & 3D-TV demand growth to continue, but price competition to intensify LED TV portion in LCD-TV to increase (10.2Q 18% 3Q 22% 4Q 28%)

35% 44

- Emerging markets growth to continue : Q4 demand to rise by 32%YoY
Appliances : Q4 demand for major products (REF, W/M, and A/C)

Q1'10 Q2'10 Q3'10 Q4'10

to grow by 10% YoY
(Source : DisplaySearch Sep.10)

Sa su g Samsung

FPTV : Expand the sales of premium products (e.g. LED TV, 3D TV)

Increase sales and profitability
- LED TV : Strengthen market presence by expanding LED TV model line-up line up - 3D TV : Increase sales by expanding 3D TV line-up and 3D total solution
3D total solution : TV + BD Player + 3D glasses + contents + Home Theater Systems
Appliances Market Forecast

REF W/M A/C

5% 257
Appliances : Continue to launch differentiated products and expand
sales infrastructure Increase sales and profitability
- Continue to launch premium and eco-friendly low-power products 12
(Source: AHAM, GFK, SEC estimates)
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : 100 Million, KRW)
3Q '10 (A) Current Assets

- Cash

2Q '10 (B) 606,912

204,285

3Q '09 (C) 509,390

170,608

Q-on-Q (A - B) 26,093

13,609

Y-on-Y (A - C) 123,615

47,286

633,005

217,894

192,855

196,702

169,423

-3,847

23,432

- Inventories

154,554

138,249

114,280

16,305

40,274

- Other Current Assets

67,702

67,676

55,079

12,623

Non Current Assets

- Investment

689,294

114,808

649,855

104,875

561,965

89,019

39,439

127,329

25,789

- PP&E

494,074

470,665

434,028

23,409

60,046

- Intangible Assets

28,145

27,364

12,472

15,673

- Other Non Current Assets

52,267

46,951

26,446

25,821

Total Assets Liabilities

- Debts

1,322,299 466,714

110,138

1,256,767 439,801

103,669

1,071,355 368,632

83,910

65,532 26,913

250,944 98,082

26,228

- Trade Accounts and N/P - Other Accounts and N/P & Accrued Expenses - Income Tax Payable - Unearned Revenue & Other Advances - Other Liabilities

99,756

97,506

99,550

150,242

148,657

114,306

35,936

18,808

15,133

12,904

12,130

12,317

74,866

62,706

48,994

12,160

25,872

Shareholders' Equity
- Capital Stock Total Liabilities & Shareholder's Equity

855,585

816,966

702,723

38,619

152,862

1,322,299

1,256,767

1,071,355

65,532

250,944
Cash = Cash + Cash equivalent + Short-term financial instruments + Marketable securities
[Appendix 2] Income Statement (K-IFRS)

3Q '10 (A)

2Q '10 (B)

3Q '09 (C)

Q-on-Q (A - B)

Y-on-Y (A - C)

402,292

100% 378,919

100% 358,938

23,373

43,354

260,169

64.7% 245,256

64.7% 237,715

14,913

22,454

142,123

35.3% 133,663

35.3% 121,223

20,900

R&D

23,134

23,057

19,415

SG&A

71,475

63,557

60,051

11,424

- Wages & Fee

17,206

14,605

13,167

- Marketing Expenses

24,407

22,551

21,527

Other Operating Profits

-1,962

Operating Profits

48,645

50,142

42,218

-1,497

Gain(or Loss) on Equity Method Investment Finance Incomes / Expenses

-2,531

- Interest Gain (or Loss)

- F/X Gain (or Loss)

-2,548
Income Before Income Taxes

54,237

53,140

46,813

- Income Taxes

10,370

Net Income

44,554

42,770

38,061

Earnings Release Q4 2010
Samsung Electronics S El t i

January 2011

Disclaimer
The financial information in this document are consolidated earnings results based on K-IFRS. Previous earnings results have also been restated in compliance with K-IFRS. 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 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.

Income Statement

(Unit: Trillion Won)

41.87

100.0% 69.5% 30.5% 5.8% 17.2% 0.3% 7.2% 1.7% 0.2% 8.6% 0.5% 0 5% 8.2%

39.25

100.0% 66.5% 33.5% 5.3% 18.6% 0.8% 8.8% 1.1% 0.4% 9.5% 1.8% 1 8% 7.7%

40.23

154.63

102.67

100.0% 66.4% 33.6% 5.9% 17.0% 0.4% 11.2% 1.5% 0.2% 12.5% 2.1% 2 1% 10.4%

136.32

100.0% 69.4% 30.6% 5.4% 17.1% 0.04% 8.0% 1.3% 0.3% 8.9% 1.8% 1 8% 7.2%

Cost of Sales

Gross Profit
R&D expenses SG&A expenses Other operating profits/losses

2.43 7.20 0.12

2.08 7.32 0.32

2.31 7.15 0.11

9.10 26.24 0.68

7.39 23.36 0.05

Operating Profit
Equity method gains/losses Finance incomes / expenses

0.69 0.09

0.44 0.15

0.56 0.001

2.27 0.24

1.71 0.45

Profit Before Income Tax

Income tax

Net profit
Key Profitability Indicators

(Unit: %)

0.08 1.36 1.52

0.08 1.50 1.53

0.11 1.32 1.54

0.10 1.25 1.52

0.07 1.30 1.53 14% ROE EBITDA Margin 2Q 10 3Q 10 4Q 10 20% 19% 17%
Profitability (Net income/Sales) Asset turnover (Sales/Asset) Leverage (Asset/Equity)

EBITDA Margin

Segment Information

Sales by Segment

6.04 16% 20% 1% % 19% 20% 3% 4% 16% 7%

Semiconductor

- Memory

10.66

37.64
40% 54% 16% % 10% 10% 12% 3% 21% 13%

LCD Telecom

- Mobile

7.20 12.11

7.29 10.17

8.10 11.12

29.92 41.20

25.84 37.59

Digital Media

- VD - Appliances Others

9.92 2.97 2.66

10.32 2.55 1.75

8.05 3.15 3.78

33.95 11.76 11.39

32.83 9.68 5.18

154.63

136.32
* Sales include intersegment sales
Operating Profit by Segment

1.80 0.10 1.44 0.17

0.16 34% 81% 38% 12%

1.34 0.53 1.05 0.48

3.42 0.52 1.13 0.23

10.11 1.99 4.30 0.49

0.41 391% 17% 5% 84% 58%

2.06 1.71 4.09 3.06

Semiconductor LCD Telecom Digital Media

Others*

* Other businesses, etc

Cash Flow Statement

(Unit (Unit: Trillion Won)

21.79

8.02 3.42 2.87 1.73 7.33 6.64 0.27 0.18

20.88

23.83 16.15 10.85 3.17 22.03 21.62 0.15 1.70

11.46

18.52 9.76 10.88 2.12 8.00 8.07 1.36 0.62
Cash (Beginning of period)*
Cash flow from Operation Net profit Depreciation Others Cash flow from Investment Increase in tangible assets Cash flow from Finance Increase in Debts

Net increase in cash

Cash (End of period)*
* Cash = Cash + Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities

Cash Balance

20.88 11.49
- 2010 : 21.6 trillion won (executed) Semi. 12.7 trillion won (Memory 9.0, Sys-LSI 3.0) LCD 4.6 trillion won SMD 1.6 trillion won DM 1.9 trillion won - 2011 : 23 trillion won (planned) (p ) Semi. 10.3 trillion won (Memory 5.8, Sys-LSI 4.2) LCD 4.1 trillion won SMD 5.4 trillion won Subject to change based on market conditions 3

Net Cash

21.79 20.64 12.39

20.43 10.06 10.78 11.70

Statement of Financial Position
61.40 22.48 19.15 13.36 72.89 11.80 52.96
63.30 21.79 19.29 15.46 68.93 11.48 49.41
54.21 20.88 17.82 9.84 57.97 8.98 43.56
Current assets Cash* Trade accounts and notes receivable Inventories Non-current assets Investments PP&E

Total assets

134.29

132.23

112.18
Total liabilities Total shareholders equity shareholders

44.94 89.35

46.67 85.56

39.13 73.05

Key Financial Indicators

(Unit : %)

154% 50% 12% 13%

156% 55% 13% 13%

158% 54% 13% 16% 4
Current ratio* Liability/Equity Debt/Equity Net debt/Equity
* Current ratio= Current Assets/ Current Liabilities

PC shipment

(Mil.) 120 Desktop PC Netbook Note PC GB/Sys (GB/Sys) 6.0

Q4 results

Memory
DRAM : Price decline continued amid weak PC DRAM demand
- PC shipment : Low-single digit %(QoQ), low-single digit %(YoY) GB/Sys : Flat (QoQ), mid-20%(YoY)
while demand for mobile/server DRAM remained strong
Samsung: - Secured profitability by increasing portion of premium products (e.g. (e g server & mobile) - Strengthened tech. leadership by increasing 4Xnm & below portion

0.0 10.Q4 (Source: SEC)

NAND : Strong set/embedded demand amid weak channel demand
- Strong demand for embedded segment backed by demand increase from mobile applications (e.g. smart phones, tablet PCs) and new PC models adopting SSD li ti ( t h t bl t PC ) d d l d ti - Weak channel demand for memory card, USB continued throughout the quarter

Memory spot price trends

$2.50 $2 50

$6.00 $6 00

Samsung: - Enhanced differentiated competitiveness by focusing more on embedded/ set market and expanding the portion of 3Xnm & below geometries

1Gb DDR3 DRAM (LHS)

System LSI

32Gb MLC NAND (RHS)

1Gb DDR3 1.3Ghz (Q4) : 37%QoQ 32Gb MLC (Q4) : 20%QoQ
Revenue growth continued due to strong demand from
mobile devices (e.g. smart phones, tablet PCs)

$0.50 '10.Q1

- AP and CIS sales increased YoY and QoQ 5
'Q2 Q3 Q4 (Source: DRAM Exchange, SEC)
Memory contents in smart phone
(MB/Sys) DRAM (Left) NAND (Right) 4.0 200

(GB/Sys)

Business outlook

Market

DRAM : Demand outlook for 2011: Weak 1H, strong 2H
- Expect corporate PC replacement to drive PC demand but uncertainties remain PC shipment growth (excluding tablet PC) : approximately 10% (YoY) , PC MB/Sys growth : approximately 30% (YoY) - Expect weak demand in Q1 due to seasonality. However, MB/Sys may increase due to decreased memory BOM cost ratio in PC and impact from new CPU launches,etc.

8.0 400

2011 0.0

(Source: SEC)

NAND : Expect demand-supply tightness to continue throughout 2011 driven by strong demand for mobile applications
- Market growth of smart phone and new tablet PCs to drive demand increase - Q1 demand to remain solid with new mobile product launches despite seasonality,

NAND demand trend

Samsung

Memory

- DRAM: Secure profitability via product differentiation (low-power/green products for f mobile/server) & strengthen cost competitiveness and technology bil / ) t th t titi dt h l leadership by increasing production portion of 3Xnm & below geometries

Embedded Card & USB

- NAND: Strengthen differentiated competitiveness with set/embedded solutions & enhance cost competitiveness by increasing production portion of 2Xnm

S t LSI System

0% 2010
- Expand production capacity and accelerate leading-edge technology migration through increased investment Actively address increasing demand for mobile products (e.g. AP) 6

Large panel shipment (market)

(Million units) 172 58

Total shipment for large panels increased slightly
IT panel shipment was relatively strong, but TV panel demand was weak due to panel inventories in the TV set market
- Shipments: 10.3Q 159M 10.4Q 172M units (8% QoQ, 14% YoY) TV: Shipments remained flat QoQ and panel price continued to decline as TV set makers demand decreased due to inventories IT: Panel price stabilized as panel makers adjusted utilization amid worsened profitability. Shipments increased due to strong sales of tablet PC panels panels.

'09.Q4 Q

'10.Q3 Q

'10.Q4 Q

(Source: DisplaySearch, 10.Q4)

Panel ASP (market)

( USD, %) U ,
Shipments increased by low-10% QoQ and mid-10% YoY
-TV: Shipments for premium products decreased due to slow demand in developed markets

ASP Note PC Monitor TV

10.Q76 254

10.Q71 224

Change -3% -5% 5% -12%
- IT: Shipments for value-added products such as tablet PC panels increased significantly
2011 Panel demand outlook P ld d tl k

(Million units)

Expect normal demand pattern in 2011, weak 1H, strong 2H

TV 137 IT

Anticipate demand increase in 2H with economic recovery
Weak demand to continue in Q1 due to seasonality
Expect demand to pick up from Q2, led by economic recovery and inventory restocking by set makers di t t ki b t k

'11.1Q

'11.2Q

'11.3Q

'11.4Q
- TV: Expect overall demand to be weak largely due to slow demand in developed market despite Chinese new year and labor day-related demand - IT: Demand to remain at similar level QoQ due to low seasonality and economic uncertainties, while demand for tablet PC panels to increase
LED TV panel penetration rate

73% 57%

TV: Expand product line-up with new products such as entry-level LED panels in addition to differentiated LED 3D/240Hz TV panels
Actively address demand for LED TV panel, driving market growth

23% 2%

2009 '09

2010 '10

2011 '11

2012 '12

IT: Expand sales of tablet PC panels with strong growth potential

Telecommunication

Handset Shipment H d t Shi t
(Million units) Smartphone Portion 227 280

Handset

Shipment : 80.7 million units (17% YoY, 13% QoQ)
- Strong demand for handsets driven by smart phones under strong seasonality - Achieved record-high quarterly shipment with outstanding sales of strategic smart phones and Galaxy Tabs Developed markets : Strong sales of strategic models (e.g. Galaxy S, Wave II, and Galaxy Tab)
Emerging markets : Solid sales of mass market smart phones (e.g. Galaxy 550, Wave 525) and touch phones (e.g. Star, Champ) 3% 2009 9% 2010

11% 2010 Q3

14% 2010 Q4
Total shipment in 2010 : 280million units (23% YoY) Expect M/S gain by outperforming market growth p g y p g g

ASP and OP margin trends

($) $130 $120 $110 $100 $90 $80 09.1Q 2Q 3Q 4Q 10.1Q 2Q 3Q 4Q

Telecom OP Margin

(%) 6 4

Network

Revenue increased with expansion of M-WiMAX business and

entry into LTE market

- Sales increased in Korea and North America via new LTE contracts
Telecom segments revenue and margin improved QoQ and YoY due to strong handset performance

Global Handset Demand

Smart phone Non-Smart phone
Global demand to grow by high single digit % YoY in 2011
- Expect continuous growth of smart phone market amid intense competition Developed markets : Replacement demand for premium smart phones and demand for mass market smart phones to increase Emerging markets : Replacement demand for full-touch phones and demand for mass market smart phones to increase - Tablet : Expect strong market growth amid tough competition via new model launches l h

(Billion units) 1.4+

Approx. 1.3

Low 20%

High 20%
Q1 : Expect negative market growth QoQ due to seasonality,
but smart phones and tablet PC demand to grow continuously

Strategic models

[Smart Phone/Tablet] [Mass market models]

Samsung S

Expect handset shipments to outgrow the market in 2011 Smart phone shipment expected to more than double YoY
- Drive strong growth of smart phone sales with full line-up of smart phones H/W differentiation : Super AMOLED Plus, Dual Core AP, etc. Expansion of model line-up for mass market smart phones - Tablets : Actively address market demand with diversified product portfolio

Galaxy Tab (Android)

Galaxy S (Android)
GalaxyFit GalaxyAce GalaxyMini (Android) (Android) (Android)
Target : Continue to gain M/S and to sustain double digit OP margin
Expect stable revenue growth in Network business by actively addressing carriers demand from investments in N/W upgrades

FPTV market

SEC (Left) Mkt (Right)
FPTV shipment: 12.72 million units (17% YoY, 40% QoQ)
- Demand increased in both developed and emerging markets due to seasonality US/ Europe shipment outgrew the market amid solid sales in emerging markets (e.g. Asia/ Latin America) LED TV sales significantly increased mainly in developed markets Portion of LED TV sales grew continuously : 27%(Q3) 33%(Q4)
12.0 8.0 4.4Q'09 3Q'10 4Q'10

80.0 60.0 40.0 20.0 -

Digital Appliances
Revenue grew 16% YoY due to solid sales in developed markets and some emerging markets including CIS
- Continued to gain market share in premium refrig. and drum washing machine markets in US P fit bilit deteriorated due to increased cost of raw material & distribution Profitability d t i t d d t i d t f t i l di t ib ti and investment under tough price competition
(Source : DisplaySearch (Dec 2010))
Digital appliances (sales)

(Trillion won)

21% 13%
DM profitability improved slightly in Q4 - Volume of major products increased in developed markets, however, earnings improvement was marginal due to intensified price competition and underperformance of Digital Appliances11

11% 208 160

FPTV: Expect demand to grow 11% YoY in 2011
- Expect price competition to continue amid demand growth of LED/3D-TV LED/3D TV LED TV portion in LCD TVs: 20% (2010) 51% (2011) - Expect emerging market to continue growth Portion of Emerging market volume : 48% (2010) 55% (2011)
Appliances: Demand for 3 major products (e.g. Refrig., W/M, A/C)

PDP 2011

to grow approximately 5% YoY in 2011
FPTV: Expect revenue growth and improved profitability with
increased sales of premium products (LED, 3D, Smart TVs)
- Dev. mkt : Expand line-up of premium products and distribution channels - Emg. mkt: Expand strategic model line-up (e.g. localized models)

Digital appliance market

REF 100 2009
Appliances: Expect to increase revenue and improve profitability
by launching differentiated products amid continuing to strengthen business structure. - Expand & improve overseas operations and continue to launch premium,

2010 2011

eco-friendly, and low-power products 12
(source: AHAM, GFK, and SEC estimates)
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : 100 Million, KRW)
FY '10 (A) Current Assets

- Cash

3Q '10 (B) 633,005

217,894

FY '09 (C) 542,113

208,835

Q-on-Q (A - B) -18,979

Y-on-Y (A - C) 71,913

15,965

614,026

224,800

191,531

192,855

178,187

-1,324

13,344

- Inventories

133,645

154,554

98,393

-20,909

35,252

- Other Current Assets

64,050

67,702

56,698

-3,652

Non Current Assets

- Investment

728,861

118,007

689,294

114,808

579,685

89,846

39,567

149,176

28,161

- PP&E

529,646

494,074

435,603

35,572

94,043

- Intangible Assets

27,802

28,145

12,560

15,242
- Other Non Current Assets

53,406

52,267

41,676

11,730

Total Assets Liabilities

- Debts

1,342,887 449,397

107,754

1,322,299 466,714

110,138

1,121,798 391,346

93,946

20,588 -17,317

-2,384

221,089 58,051

13,808
- Trade Accounts and N/P - Other Accounts and N/P & Accrued Expenses - Income Tax Payable - Unearned Revenue & Other Advances - Other Liabilities

91,487

99,756

82,351

-8,269

150,494

150,242

146,312

20,515

18,808

11,242

13,988

12,904

17,468

-3,480

65,159

74,866

40,027

-9,707

25,132

Shareholders' Equity
- Capital Stock Total Liabilities & Shareholder's Equity

893,490

855,585

730,452

37,905

163,038

1,342,887

1,322,299

1,121,798

20,588

221,089
Cash = Cash + Cash equivalent + Short-term financial instruments + Marketable securities
[Appendix 2] Income Statement (K-IFRS)

FY '10 (A)

4Q '10 (B)

3Q '10 (C)

FY '09 (D)

FY '10 Y-on-Y (A - D)

4Q '10 Q-on-Q (B - C)

1,546,303

100% 418,711

100% 402,292

100% 1,363,237

183,066

16,419
1,026,668 66.4% 291,156 69.5% 260,169 64.7%

945,949 69.4%

80,719

30,987

519,635 33.6% 127,555 30.5% 142,123 35.3%

417,288 30.6%

102,347

-14,568

R&D

90,994

24,274

23,134

73,867

17,127

SG&A

262,431 17.0%

71,965 17.2%

71,475 17.8%

233,621 17.1%

28,810

- Wages & Fee

62,124

16,774

17,206

49,457

12,667

- Marketing Expenses

90,592

25,591

24,407

84,755

Other Operating Profits

-1,193

-2,324

Operating Profits

172,966 11.2%

30,123

48,645 12.1%

109,252

63,714

-18,522
Gain(or Loss) on Equity Method Investment Finance Incomes / Expenses

22,671

17,133

-2,350

-4,470
- Interest Gain (or Loss)

-2,044

- F/X Gain (or Loss)

-2,120

-2,426
Income Before Income Taxes

193,287 12.5%

36,180

54,237 13.5%

121,916

71,371

-18,057

- Income Taxes

31,822

24,310

-7,707

Net Income

161,465 10.4%

34,204

44,554 11.1%

97,606

63,859

-10,350