2007
SAMSUNG
ELECTRONICS
ANNUAL
REPORT
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2007 financial highlights
01
performance summary by business
02
message from the CEO
04
message from the board
08
at-a-glance
10
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global performance
14
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brand marketing
22
sponsorship
24
R&D
26
product gallery
27
design
31
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digital media
34
telecommunication networks
38
digital appliance
42
semiconductor
46
LCD
50
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corporate citizenship
56
co-prosperity
58
green management
60
financial statements
63
investor information
130
global network
131
01
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SAMSUNG ELECTRONICS AND CONSOLIDATED SUBSIDIARIES
2007 FINANCIAL HIGHLIGHTS
Sales
Operating Profit
SALES AND OPERATING PROFIT
[
in trillions of KRW
]
80.6
7.6
2005
85.4
9.0
2006
98.5
9.0
2007 2005
13.3
-9.0
-11.1
15.1
2006
-12.0
14.8
2007
Cash Flow from Operating Activities
Cash Flow from Investing Activities
CASH FLOWS
[
in trillions of KRW
]
[
in billions of KRW
]
Income Statement
80,630 85,426 98,508
7,575 9,008 8,973
7,640 7,926 7,421
Balance Sheet
74,462 81,3 66 93,375
32,854 33,426 37,403
 41,607 47,940 55,972
Cash Flows
13,329 15,081 14,791
(
9,046
)
(
11,0 98
)
(
12,002
)
(
3,266
)
(
3,889
)
(
1,600
)
2005 2006 2007
Please Read the Following Cautionary Statement Regarding Forward-looking Statements:
This annual report includes “forward-looking statements” which relate to future events, and can be generally identified by phrases containing words
such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,” or other words or phrases of similar meaning. These forward-
looking statements are not guarantees of future performance and may involve known and unknown risks, uncertainties and other factors that may
affect Samsung Electronics Co., Ltd.
(
SEC
)
’s actual results, performance, achievements or financial position, making them materially different
from the actual future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Likewise,
statements relating to behavior of financial and consumer electronics markets, fluctuations in interest and exchange rates or commercial and
consumer credit environments, changes in regulation and regulatory and legal actions, future integration or acquisition of businesses are forward-
looking statements. Therefore, you should treat all future statements containing such aforementioned information as forward-looking statements.
Please understand that although SEC has been careful to ensure the accuracy of the contents of this annual report, the statements within are subject to a number of risks,
uncertainties, and assumptions, any of which could cause actual results to materially differ from the plans, objectives, expectations, estimates, and intentions expressed in this
annual report as described above. Therefore, SEC and any of its subsidiaries, affiliates, directors, officers, agents, or employees assume no liability caused by these forward-
looking statements, and shall not be liable to any third party, including investors, for any damages resulting from an investment or business decision based on the information
contained in forward-looking statements of this annual report. All risks in making an investment or business decision based on the information contained in the forward-looking
statements shall be entirely assumed by you.
All the financial data in this report comes from the consolidated financial statements.
Net Sales and Operating Profit
Digital Media
2005 2006 2007
Net sales 17,656,558 20,774,962 26,513,285
Operating profit
(
loss
)
247,700 744,178 1,061,601
[
in millions of KRW
]
2005 2006 2007
Net sales 20,914,815 20,249,759 23,767,268
Operating profit
(
loss
)
2,480,001 1,937,747 2,756,586
[
in millions of KRW
]
2005 2006 2007
Net sales 5,617,708 5,538,837 6,854,578
Operating profit
(
loss
)
(
29,102
)
(
71,213
)
159,835
[
in millions of KRW
]
2005 2006 2007
Net sales 20,332,235 22,827,624 22,331,501
Operating profit
(
loss
)
5,410,677 5,129,845 2,347,239
[
in millions of KRW
]
2005 2006 2007
Net sales 8,715,225 13,912,968 17,062,523
Operating profit
(
loss
)
598,773 857,180 2,115,629
[
in millions of KRW
]
Telecommunication
Networks
Digital Appliance
Semiconductor
LCD
Net sales Operating profit
(
loss
)
PERFORMANCE SUMMARY BY BUSINESS
[
in trillions of KRW
]
0.2
17.7
2005
0.7
20.8
2006
26.5
1.06
2007
[
in trillions of KRW
]
2.5
20.9
2005
1.9
20.2
2006
23.8
2.76
2007
[
in trillions of KRW
]
-0.03
5.6
2005
-0.07
5.5
2006
6.9
0.15
2007
[
in trillions of KRW
]
5.4
20.3
2005
5.1
22.8
2006
22.3
2.35
2007
[
in trillions of KRW
]
0.6
8.7
2005
0.9
13.9
2006
17.0
2.11
2007
03
I7CIKD=;B;9JHED?9I
7DDK7BH;FEHJ(&&-
Our Digital Media business leads the world’s digital media market by producing
a wide range of products including digital TVs, monitors, audio-visual devices,
printers and PCs. We hold the largest market share in flat-panel TVs and PC
monitors. Our innovative product lineup includes ‘Touch of Color’ TVs, all-in-one
color laser printers including the world’s smallest, and a 4th-generation Blu-ray
disc player. In May 2008, we reorganized our Digital Media unit to produce
greater business synergy and enhance our overall performance. We integrated
our Digital Appliance unit into our Digital Media operations and transferred our
PC, MP3 player and set-top box businesses to our Telecommunications Net-
work business.
In 2007, we achieved record-breaking business performance, boosted by high
growth in the flat panel TV market and a steady increase in the sale of our core
products, such as LCD monitors, digital audio-visual products, laser printers
and notebook PCs. The strength of our market leadership position in TVs
helped us to maintain the No. 1 market share position across all TV market seg-
ments, from conventional TVs to flat panel and LCD TVs. We also ranked first in
market share for monitors in 2007, widening our lead over our competitors. Our
printer business also showed enhanced market leadership by holding the No. 1
position in all-in-one mono laser printers and the No. 2 position in color laser
printers.
Description of Business 2007 Highlights
Our Telecommunication Network business leads the world’s telecommunications
industry with the widest range of mobile phones on the market today, such as
3G and multimedia phones, in addition to telecommunication systems. A premium
brand image and distinctive product designs have elevated Samsung very high
among the leaders of the world market.
We have also led the standardization of next-generation mobile phone technolo-
gies such as Mobile WiMAX and HSDPA. Through a business reorganization
completed in May 2008, we integrated our PC and MP3 player businesses into
our Telecommunication Network business to enhance our competitive edge in
digital convergence solutions.
In 2007, we achieved record-breaking sales of 160 million mobile phone units,
securing the second largest share of the global market. This achievement can be
attributed to the continued success of our very popular Ultra Edition series
and our wide range of premium phones, as well as aggressive expansion into
emerging markets. Our operating profit also registered a steady performance
gain, showing a two-digit rate of revenue increase. In addition, Samsung’s
Mobile WiMAX technology for broadband mobile services was adopted as
the 3G global standard to pave the way for further market expansion worldwide.
Our Digital Appliance business creates premium home appliances that meet the
needs of consumers and help to make Samsung an undisputed market leader.
Building on distinctive designs and innovative technologies, we continue to
develop new types of added-value products to offer our customers. Our lineup
of world-leading premium products include refrigerators, air conditioners, wash-
ers, ovens, vacuum cleaners and other appliances that are ubiquitous in today’s
households. Under a company-wide reorganization plan implemented in May
2008, our Digital Appliance business was folded into our new Digital Media
business to leverage its competitive edge.
Building on the world’s most innovative technology and product designs, we
made significant progress at the high end of the appliance market in 2007. Our
product lines were enhanced through such innovative products as our drum
washing machine with Vibration Reduction Technology
™
, providing the lowest
noise and vibration levels in the industry, our highly efficient system air condi-
tioners and our side-by-side refrigerator with twin-cooling systems. Such inno-
vations helped us achieve a 24% increase in sales over 2006, and build a firmer
foundation from which to lead the world’s home appliance market.
Our LCD business produces panels for TVs, digital information displays, note-
book PCs and desktop monitors, as well as various display panels for mobile prod-
ucts. By investing in next-generation production facilities, we have remained the
world’s top LCD producer for the past six years. Our position is particularly
dominant in the segment of LCD TVs 40 inches and larger. We also are expand-
ing our premium product lineup for the multimedia and digital broadcasting
environments, while focusing on new businesses such as next-generation
displays and thin film solar cells.
With the help of price increases triggered by product shortages and our contin-
ued cost-reduction efforts, our LCD business showed outstanding results in
2007. Our sales and operating profits have increased dramatically, maintaining
the industry’s best profit rate. Successful commercialization of our 7th- and
8th-generation production lines also made us the unrivaled top producer of 46-
and 52-inch LCD TV panels, ensuring our leadership in the global LCD industry
for a sixth consecutive year. In ongoing efforts to enhance our leadership, we
also have begun mass producing the world’s first touch-screen-enabled LCD.
Our Semiconductor business consists of three major divisions: Memory, System
LSI and Storage. With the world’s most advanced technology, we are leading
the DRAM, SRAM, NAND Flash memory and MCP markets while pioneering
developments in next-generation Solid State Drives
(
SSDs
)
and fusion memories.
We also are building a strong base for our System LSI business to become one
of our next-generation growth engines and for the launch of several major new
products within our storage division.
Despite fierce competition and continued weakness in memory chip pricing,
Samsung’s Semiconductor Division continued to show steady growth and
increased profits, backed by strong customer relationships and successful
cost-reducing efforts. In 2007, Our performance remained solid with continued
market dominance in most areas of the memory business, including sales in
DRAM, SRAM, MCPs, flash memory and fusion memory devices. World-leading
introductions, such as 60 nanometer
(
nm
)
-class 2 Gigabit
(
Gb
)
DRAM, 30nm-
class 64Gb NAND Flash memory, 65nm digital TV receiver chips and the indus-
try’s fastest
(
6Gbps
)
512 Megabit
(
Mb
)
GDDR5 memory further enhanced our
leadership in core technologies.
By increasing management prowess
and embracing innovation at every opportunity,
Samsung Electronics will become one of the
most profitable and most revered global companies.
MESSAGE FROM THE CEO
05
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We are determined to reach the highest echelon of global business leadership, even in the
face of today’s challenging global and domestic business conditions. Through our management’s
pursuit of innovative approaches, processes and product designs and accelerated
cost-reduction efforts, we achieved our highest-ever record for consolidated sales in 2007,
surpassing US$100 billion
(
KRW98 trillion
)
, and attaining a net profit of KRW7.4 trillion.
In 2008, we will continue to increase our competitiveness in key businesses, while
developing new markets and businesses and laying a firm foundation for sustainable growth
through the pursuit of greater operational efficiency. Moreover, by promoting innovative
management practices that optimize the speed, efficiency and creativity of our workforce,
we will generate additional value and establish ourselves as a true leader in the top tier
of the world’s electronics industry. In defining success, we are determined to transform ourselves
into one of the most respected, trusted and easily recognized global companies in the world.
Dear Customers, Business Partners and Shareholders:
I am extremely pleased to take this opportunity to discuss our 2007 achievements, as well as our future goals
and strategies. Samsung Electronics achieved its best ever business results in 2007, moving one step closer to
our dream of becoming one of only a handful of companies who are not only tremendously successful, but
also true global innovators. I would like to express my heartfelt gratitude to all of our customers, business
partners and shareholders who have supported us in accomplishing such excellent results.
2007 RESULTS AND ANALYSIS
We achieved our best-ever business results through a series of innovative management approaches
In 2007, at a time when the global economy was hampered by sharp increases in oil prices, as well as the
soaring cost of raw materials and unstable capital markets influenced by the U.S. subprime mortgage crisis.
Concurrently, the Korean economy continued to undergo difficulties caused by sluggish consumption, unstable
currency exchange rates and rising interest rates. Amidst these unfavorable business conditions, Samsung
Electronics achieved record-breaking consolidated sales of US$100 billion
(
KRW98 trillion
)
. We also achieved
solid earnings of KRW7.4 trillion in net profit thanks to an upward turn in profitability for our key strategic
businesses and steady progress in our efforts to diversify further.
Strengthening dominance in key strategic businesses
In 2007, our semiconductor business continued to yield substantial profits of over KRW2 trillion. This strong
showing was based on extensive cost reduction efforts, increased market differentiation in our areas of greatest
technological competence and concerted efforts to retain a stable customer base, despite aggravated conditions
in the memory market. Also, we maintained the highest profitability among LCD manufacturers around the
world by cutting production costs and improving production operations as favorable conditions continued to
support high LCD prices, further increasing our dominance in the large TV panel market. Meanwhile, in the
mobile phone segment, we launched a wide range of new products and have actively sought alternative markets,
thus achieving a sales increase of over 40 percent, compared to the previous year, allowing us to capture second
place in the global market. Our overall TV business has maintained its No. 1 position in global sales since
2006, widening the gap with our competition.
Reinforcing our core competence
Since 2004, when our company announced its vision of leaping into the top tier of global leadership, Samsung
Electronics has continued its unrelenting drive to differentiate the three main elements of our core competence:
human resources, technology and brand image. Last year, we focused on increasing our R&D workforce to
strengthen its future contribution to our company and, as a result, the number of R&D engineers reached 39,000.
Among them, 3200 hold PhDs, demonstrating that we have clearly elevated the degree of our R&D competence.
In addition, our brand value was said to have reached US$16.9 billion in the BusinessWeek/Interbrand survey
of “Best Global Brands,” as our aggressive marketing activities further enhanced the company’s brand.
2008 BUSINESS GOALS AND STRATEGIES
Maximizing business competitiveness and internalizing operational efficiency
This year, the instability of the global economy is expected to continue as financial markets absorb the impact of
the subprime mortgage crisis, oil prices rise further and the global economy slows down overall. The domestic
Korean market has been directly and indirectly influenced by these phenomena. Moreover, our business
environment has been beset with various new competitive challenges. Nevertheless, Samsung Electronics will
do its best to solidify its status as a top global company through its efforts to succeed in the face of adversity as
well as a seasoned understanding of the best ways to turn crisis into opportunity.
We will first increase our market dominance in such key businesses as memory chips, LCDs, mobile phones,
and flat panel TVs, building upon the unique design and operational efficiency of many leading-edge product
lines. We also will set the parameters for a successful incubation of promising growth engines that offer the
prospect of high added value in such segments as printers, System LSI, and Mobile WiMAX. To capitalize on
the rapid growth of emerging markets, we will develop locally customized products and implement a much
higher level of differentiated marketing. At the same time, we will generate more demand in new markets by
leveraging our competitive edge in digital electronics and by vigorously exploring new business areas that
enhance customer lifestyles. Furthermore, we will strengthen our means of collaboration with customers and
business partners and incorporate a more far-reaching managerial system that better address the needs and
demands of our customers, as well as the challenges of the overall marketplace.
REALIZING OUR VISION THROUGH INNOVATIVE MANAGEMENT TECHNIQUES
As part of our goal of becoming a true upper-echelon global leader, Samsung Electronics will concentrate on
further developing its innovative approaches to management with a focus on speed, efficiency and creativity,
and generating new values through the implementation of four key initiatives:
First, we will leverage the talents of our global workforce and revitalize our organizational culture
We will continue to secure and cultivate creative individuals throughout all fields of management so that their
ideas can positively influence change throughout our management structure.
07
I7CIKD=;B;9JHED?9I
7DDK7BH;FEHJ(&&-
Yoon-Woo Lee
Vice Chairman and Chief Executive Officer
Samsung Electronics Co., Ltd.
Second, we will explore new growth engines and reinforce our business structure
We will enhance our core businesses, which have been at the forefront of our determined move to achieve global
excellence, by upgrading our technologies and strengthening our market leadership, while concentrating a great
deal of attention on complimentary new businesses with high growth potential. In addition, we will continue to
explore, with a technologically skilled management team, new growth engines in other promising areas such as
advanced IT solutions and products, energy and the environment, and biotechnology and health.
Third, we will seize opportunities for future growth through a greater emphasis on market-focus from all
levels of management
We will strive to provide rewarding new experiences that enhance the lifestyles of our customers, while
leading markets in the developed world with the introduction of more innovative product offerings, greater
operational efficiencies and superior business models.
Lastly, we will continue our efforts to restructure a company respected and admired by people around the world
We will systematically implement our new management structure by emphasizing transparency, compliance
and greater sensitivity to customer needs, thereby fulfilling our social responsibilities as a company growing
hand-in-hand with shareholders, customers and business partners.
The ultimate goal of Samsung Electronics is to emerge as a global business leader of unparallel determination
and accomplishment, offering new values and a more prosperous future not only to our customers, shareholders
and regional communities, but also to humanity as a whole. All of us at Samsung Electronics stand together,
inseparably linked by a unified commitment to lead the growth of the global electronics industry as a truly
exemplary company, admired by customers worldwide. I would like to welcome the encouragement and
support of customers and shareholders alike in our tireless efforts to recreate ourselves into the most
promising model for becoming what I envision to be “the best of the best.”
SALES REVENUE BY DIVISION
[
AS OF THE END OF 2007
]
Digital Media
Telecommunication Networks
Digital Appliance / Others
Semiconductor
LCD
25% 23%
15%
21%
16%
Samsung Electronics has enthusiastically established a global standard of corporate governance, operating
within a structure whose focal point is the Board of Directors. This enables transparent and sound manage-
ment practices while encouraging creative and progressive entrepreneurship from our top management, which
maximizes shareholder and overall corporate value. We are also sustaining shareholder focused management
to ensure that our profitable earnings and corporate values benefit our shareholders.
In 2007, a record-breaking year for business performance, we returned about 40% of our net profits to share-
holders, paying out a dividend of KRW8,000 a share and buying back about KRW2 trillion of company stock.
We also organized our third Analyst Day to help our investors and shareholders better understand the core
competencies of each business division, as well as our efforts to enhance our corporate value on a mid- and
long-term basis.
Our brand value has been marked at US$16.9 billion in the BusinessWeek/Interbrand survey of “Best Global
Brands,” ranked 21st in the world in 2007, to consolidate our enhanced position worldwide. In addition, leading
business journals such as Finance Asia and Asset have rated Samsung again among the very best in terms of
investor relations and corporate governance.
In 2008, we will overcome any challenge to our concerted efforts to reinvent ourselves as a world leader. By
achieving outstanding business performance, we will also enhance shareholder value. Looking ahead, we will
become an unparalled global electronics leader, actively practicing creative management with consistent inno-
vation in our management practices.
BOARD OF DIRECTORS
The Board oversees the performance of senior managers, sets corporate management policies and formulates strategic decisions on business
execution. These activities are performed in strict accordance with relevant laws and regulations, the Samsung Electronics Articles of Incorporation
and resolutions passed at the general shareholders’ meeting. There are nine members on the Board of Directors, of which two are Samsung executive
directors and seven are outside of the company. In 2007, the Board met seven times to discuss major corporate agendas. During that time, the Board
resolved 30 agenda items.
Committees have been established within the Board of Directors in accordance with the Board bylaws, and empowered with certain Board responsi-
bilities. This way, the directors can draw upon their experience and expertise in specific fields to enhance and accelerate the deliberation and
decision-making processes. The Board currently has four such bodies: the Management Committee, Audit Committee, Outside Director
Recommendation Committee and Internal Transaction Committee.
Management committee
The Board of Directors delegates the authority to discuss and decide specific agenda items to the Management Committee, thereby elevating its man-
agerial professionalism and effectiveness. The committee reports its decisions back to the Board. This committee convened 28 meetings during 2007.
Audit Committee
The Audit Committee supervises and supports management in order to maximize corporate value through a set of checks and balances. The
Committee is composed of three outside directors and held six meetings during 2007.
Outside Director Recommendation Committee
The Outside Director Recommendation Committee was formed to recruit and appoint outside directors fairly and independently. The Committee has
four members: two executive directors and two outside directors. The Committee met on three occasions during 2007.
Internal Transaction Committee
The Internal Transaction Committee was established to enhance corporate governance by ensuring fair business transactions. All three members are
outside directors. This Committee convened five times in 2007.
MESSAGE FROM THE BOARD
We seek to maximize corporate value
through transparent
and sound management.
09
I7CIKD=;B;9JHED?9I
7DDK7BH;FEHJ(&&-
Yoon-Woo Lee
UÊ
Vice Chairman & CEO, Samsung Electronics Co., Ltd.
[
Present
]
U
Vice Chairman, Corporate CTO & Global Collaboration, Samsung
Electronics Co., Ltd., Vice Chairman, Samsung Advanced Institute of
Technology
[
2005-May 2008
]
U
Vice Chairman, Global Collaboration, Samsung Electronics Co., Ltd
CEO, Samsung Advanced Institute of Technology
[
2004-2005
]
U
President & CEO, Semiconductor Business,
Samsung Electronics Co., Ltd.
[
1996-2004
]
U
Executive Vice President & CEO, Semiconductor Business,
Samsung Electronics Co., Ltd.
[
1994-1995
]
U
Executive Vice President, Semiconductor Business
(
Memory
)
,
Samsung Electronics Co., Ltd.
[
1992-1993
]
Gwi-Ho Chung
UÊ
Outside Director
[
2003-Present
]
U
Attorney at law
[
2006-Present
]
U
Advisor, the Constitutional Court
[
2001-Present
]
U
Attorney at law, Barun Law Office
[
1999-2006
]
U
Justice, Supreme Court
[
1993-1999
]
Kap-Hyun Lee
UÊ
Outside Director
[
2001-Present
]
U
Advisor, Boston Consulting Group
[
2001-Present
]
U
CEO & President, Korea Exchange Bank
[
1999-2000
]
U
Vice Chairman, Korea Chamber of Commerce & Industry
[
1999-2000
]
Chae-Woong Lee
U
Outside Director
[
2006-Present
]
U
Professor, Faculty of Economics, Sungkyunkwan University
[
1982-Present
]
U
President, Korean Economic Association
[
2005-2006
]
U
Vice Chancellor, Sungkyunkwan Universiry
[
1999-2003
]
UÊ
Member, Council for Financial Industry Development Review to the Ministry
of Finance
[
1994-1998
]
Oh-Soo Park
UÊ
Outside Director
[
2006-Present
]
U
Professor, College of Business Administration, Seoul National University
[
1988-Present
]
U
Chairman, Leadership Institute
[
2003-2004
]
U
Dean of College of Business Administration, Seoul National University
[
2003-2005
]
U
Chairman, Korean Human Resources Management Institute
[
2002-2003
]
Doh-Seok Choi
U
Executive President & CFO, Samsung Electronics Co., Ltd.
[
2003-Present
]
U
President & CFO, Samsung Electronics Co., Ltd.
[
2001-2003
]
U
Executive Vice President & CFO, Samsung Electronics Co., Ltd.
[
2000-2001
]
UÊ
Vice President, Corporate Executive Staff, Samsung Electronics Co., Ltd.
[
1999
]
Jae-Sung Hwang
U
Outside Director
[
2000-Present
]
U
Senior Advisor, Kim & Chang Law Office
[
1999-Present
]
U
Director, Seoul Regional Tax Office
[
1998-1999
]
U
Director, Kyeong-in Regional Tax Office
[
1996-1998
]
U
Head of the Research Bureau, National Tax Office
[
1995-1996
]
Dong-Min Yoon
UÊ
Outside Director
[
2006-Present
]
U
Attorney at law, Kim & Chang Law Office
[
1999-Present
]
U
Director, Social Protection and Rehabilitation Bureau at the Ministry of
Justice
[
1998-1999
]
U
Chief, Planning Management Dept. at the Ministry of Justice
[
1997-1998
]
Goran S. Malm
UÊ
Outside Director
[
2001-Present
]
U
Chairman & CEO, Boathouse Ltd.
[
2000-Present
]
U
President, Dell Computer Asia Pacific & Senior VP, Dell Computer
[
1999-2000
]
U
President, GE Asia-Pacific & Senior VP, GE
[
1997-1999
]
In 2007, Samsung Electronics established a solid foundation from which to grow into
a top-tier global company. We achieved record-breaking business performance
and continued to introduce new products built with the most advanced technology available.
With strong customer recognition of our products and technologies,
we are within reach of our vision to become a premier global company.
AT-A-GLANCE
JANUARY
U
Developed the world’s first truly double-sided LCD
U
Launched a home air conditioner that uses system
air conditioning technology
U
Demonstrated mobile WiMAX technology with
Sprint-Nextel
U
Exported Mobile WiMAX equipment to Middle
Eastern countries
U
Ranked No. 2 in 2006 for the number of U.S.
patents registered
U
Achieved No. 1 market share for the sale of
mobile phones in France for the second year in a row
U
Attained No. 1 worldwide market share position
for LCD for the sixth year in a row
FEBRUARY
U
Developed the first thermally-enhanced chip-on-film
(
TECOF
)
package for the display driver IC
(
DDI
)
, used
in high-resolution LCD TVs
U
Introduced the Ultra Smart F700, the next model of
multimedia phones
U
Demonstrated Mobile WiMAX Wave 2, the next
generation of Mobile WiMAX technology
U
Ultra Edition 12.9 won the Best GSM Mobile
Handset Award at 2007 3GSM
U
Produced 100 million OneNAND Flash fusion
memory units to date
MARCH
U
First in the world to begin mass producing DRAM
using 60nm-class technology
U
Mass produced a power-saving 256-channel
display driver for Plasma screens
U
Exported 3G CDMA system to Indonesia
U
Launched the innovative Cullinan refrigerator
U
Developed super-high-capacity 8GB MobiNAND
memory chip
U
Launched piano-finish black-panel Full HD LCD TV
U
First printer certified as Blue Angel
(
EU Eco-label
)
U
Developed the world’s first 3G fusion memory:
Flex-OneNAND
U
Launched three Mobile WiMAX devices
U
BlackJack bestowed the Best Smart Phone award
at CTIA in the U.S.
APRIL
U
Attained No. 1 market share position for
mobile phones in Russia for third year in a row
U
Sold a cumulative 1 million HSDPA music phones
in the U.S.
U
Began IP Network business in Europe
U
Launched the first Ultra Edition II mobile phone
U
Launched the Q1 Ultra, a second-generation UMPC
U
Developed the world’s first all-DRAM stacked memory
package using “Through Silicon Via”
(
TSV
)
technology
U
Mass produced the world’s first 50nm-class
16Gb NAND Flash memory
U
Began LCD plant construction in Slovakia
MAY
U
Selected as the most favored mobile phone brand
in the U.S. for sixth year in a row
U
Developed the world’s first 65nm-class digital TV
receiver chip
U
Largest number of DDR3 memory components and
modules validated to work with Intel’s DDR3 chipsets
U
Launched the super-small, all-in-one, color laser printer,
nicknamed Lay
U
Developed the world’s largest-capacity memory card
for mobile phones
U
Partnered with IBM to co-develop 32nm node process
U
Launched home appliances designed by Jasper
Morrison in Europe
U
Introduced the world’s first 2.5-inch 250GB HDD
JUNE
U
Launched mobile phone designed by
Jasper Morrison
U
Printer rose to No. 2 position in the world market
U
Began TV plant construction in Russia
U
Launched the world’s largest (70-inch) Full HD LCD TV
U
Opened the largest 300mm NAND flash memory
wafer plant in Austin, Texas
U
Launched our innovative Vibration Reduction
Technology-enabled drum washing machine
U
Mass produced 1.8-inch, 64GB, MLC Solid
State Drive (SSD)
U
Developed the multi-standard, multiband mobile
TV chipset
U
Graphics DDR4 memory selected by AMD for its
next-generation graphic cards
No. 1 in the World, Six Years in a Row
Our LCD panel business posted record-breaking revenue of
US$17.06 billion in 2007, a 23% increase from the previous
year. We have continued our first-mover status in global
market share since we first achieved the world-leading sales
revenue mark in 2002.
The Best Smartphone of CTIA 2007
Samsung’s BlackJack II was honored as the “Best
Smartphone of the Year” in terms of design, menu, connec-
tivity, multimedia features and voice quality at CTIA 2007.
11
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JULY
U
I ndustry first 50nm-class 1Gb DDR2 memory
validated by Intel
U
LCD monitor received an IDEA 2007 Gold Award
AUGUST
U
Four products received an EISA Award
U
Reached cumulative sales of 5 million LCD TVs
U
Launched 120Hz Full HD LCD TV
U
Hosted 4G Forum 2007
U
Launched three Bluetooth-enabled video MP3 players
U
First LCD panels shipped from the world largest
8th-generation line
U
Monitor selected the best brand in the U.S. for
the fifth year in a row
U
Developed the world’s smallest and slimmest
color laser printer and all-in-one printer
SEPTEMBER
U
Monitor ranked No. 1 in customer satisfaction index
in China for the eighth year in a row
U
Developed the world’s first 60nm-class
2Gb DDR2 memory
U
Sold the industry’s first aggregate 200 million
LCD panels for IT
U
Announced a strategic alliance with Armani
U
Launched Giorgio Armani Samsung mobile
OCTOBER
U
Introduced the Serenata, a premium music phone,
co-developed by Bang & Olufsen
U
Selected the board of directors’ committee for
discussing candidate 4G technology
U
Announced PVC-free LCD panel production
U
Received Lowe’s “Provider of the Year” award
U
Introduced 10mm-thin, 40-inch super-slim
LCD panel for TVs
U
Developed the world’s first 30nm-class
64Gb NAND Flash memory
NOVEMBER
U
Launched the industry’s first high-speed
SATA II 64GB SSD
U
Launched the High Efficiency Combination
air conditioner
U
Mass produced 16-million-color DDI for
AMOLED for the first time
U
32 products won CES Innovations 2008 Awards
U
Commercialized single-chip RFID reader for
mobile devices for the first time
U
Surpassed monthly US$2 billion LCD panel
sales total for the first time
DECEMBER
U
Developed the world’s fastest
(
GDDR5
)
memory
U
Agreed on cross-license OneNAND rights
with Toshiba
U
Launched video MP3 player “P2” in the U.S.
U
No. 1 worldwide market share position for TVs
achieved for the seventh quarter in a row
30nm-class 64Gb NAND Flash memory
In October 2007, Samsung announced that it had devel-
oped the world’s first 30nm-class 64Gb NAND flash memory
chip. This high-density chip represents the future of flash
storage solutions as the demand for greater memory
capacity increases exponentially every year.
World’s No. 1 Market Share
DisplaySearch, the worldwide authority in display market
research, identified Samsung as the leader in unit share and
revenue for the entire TV market during Q3 2007. The
results have solidified Samsung’s position as a key global
leader in the Flat Panel TV category.
j^_da_d]
Understanding the consumer is
paramount to achieving preeminent market leadership.
In today’s competitive world, if a company remains stagnant, it can quickly become obsolete.
Consumers have many choices, so it is a constant struggle to maintain relevancy in today’s market.
To stay relevant in this ever-changing world, we must keep one step ahead of our customers.
That’s why we have dedicated ourselves to exceed the needs of our customers through the production
and sale of world-class products and, most importantly, by anticipating their every need.
13
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Sarah’s guitar is her most prized possession. Ever since she was
a little girl, Sarah’s dream was to be a world-famous rock star.
With Samsung’s LCD TV and Blu-ray DVD player, Sarah can
record and relive her performances. Plus, the P2 lets Sarah take
her music wherever she goes.
IWhW^J^ecWi
_ 15 years old _ High school student / Rock star
Dehj^7c[h_YW
_ Samsung Electronics’ premium prod-
ucts—all built with the latest in cutting-edge technology—
are loved by consumers across North America, especially in
the U.S. Our market-driven strategies contributed to the
development of popular products such as the digital TV,
smart phone, music phone, video MP3 player, side-by-side
refrigerator and drum washing machine. Supported by a
sound business plan, our innovative products have invariably
exceeded customer’s expectations. Now, we are intent upon
expanding our market presence in North America.
15
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LCD TV
(
LN 52A750
)
Let the clear, crisp images of our LCD TV bring
you closer to the action—and closer to the
things you love.
MP3 Player
(
YP-P2
)
Sound should be lower-cased or better yet,
it could be all upper-cased–as in SOUND.
Good effect for what we’re trying to get across.
Blu-ray Player (BD-P1500)
Complement the high image quality of our LCD TV
with the latest Blu-ray player. And, watch your favorite
movies for the first time as a completely new,
high definition experience.
j^_da_d]
As an architect, Thierry has the curiosity of a scientist
and the sensibility of an artist. He relies on our products
to help him succeed in his business while allowing him
to explore his creative side.
J^_[hho8[WkY^Wcf
_ 26 years old _ Architect / Artist
;khef[
_ Satisfying our European customers’ sophisticated
sensibilities is a top priority. Our premium products include
the TOC monitor, Armani TV, J-Series refrigerator by Jasper
Morrison, and a five-megapixel camera phone. Building on
advanced technology with versatile features and stylish
design, our innovative premium products will increase
customer loyalty and pave the way to a greater leadership
position in the European market.
17
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Color Laser Printer
(
CLX-3175
)
Our deluxe color laser printer is compact enough to
fit in any home office yet delivers outstanding
performance, allows for easy installation and
provides many convenient features.
X
Monitor
(
T260
)
Our beautifully designed monitors provide you with
the power and features to help drive your business
well into the future.
Y
BlackJack II
(
SGH-i617
)
Boost productivity whether you’re in the office
or on the road with the award-winning
BlackJack II.
j^_da_d]
Being a housewife is a full-time job. At Samsung, we
understand that and want to make everything as comfortable
as possible. Our products for the home are fully-equipped
with a long list of high-end features, providing the convenience
one would expect from a Samsung product.
P^Wd]B_
_ 30 years old _ Housewife / Home economics diva
;c[h]_d]CWha[ji
_ The dynamic growth in emerging
markets, including China, is a major opportunity for Samsung
Electronics. With aggressive marketing and locally custom-
ized products, including digital media, mobile phones and
home appliances, we are providing a more comfortable and
an enhanced lifestyle for customers within emerging markets.
We will continue to grow within these countries through
increased sales of creative, lifestyle-enhancing products.
19
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Electric Range
(
FTQ386LWUX
)
Cook like a professional chef with our newest
line of electric ranges. With more even cooking
and easy-to-clean surfaces, you’ll find more
pleasure being in the kitchen.
X
Refrigerator
(
RSJ1KSSV
)
Let the modern look of our stainless steel refrigerator
add style to your kitchen design. Its sophisticated
features and increased space have put this
refrigerator in a class by itself.
Y
Drum Washing Machine
(
WF-448 & DV-448 VRT Steam: Stainless Platinum
)
Leading the newest trend in washing machines is
our silent, but powerful, drum washing machine.
From an attractive design to top-notch performance,
this washing machine has it all.
j^_da_d]
j^_da_d]
21
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SCD5000 DuoCam
SEC develops the world’s first 70nm chip design
process. BusinessWeek ranks SEC the world’s
number one Info-Tech company in its annualInfo
Tech 100. the world’s number one Info-Tech
company in its annualInfo Tech 100.
SCD5000 DuoCam
SEC develops the world’s first 70nm chip design
process. BusinessWeek ranks SEC the world’s
number one Info-Tech company in its annualInfo
Tech 100. the world’s number one Info-Tech
company in its annualInfo Tech 100.
^_]^[h\ehoek
Becoming the most admired brand
in the world requires the unified vision
of an entire company.
Since day one, Samsung Electronics has committed itself to becoming a leader in every facet
of its market initiatives. The result is the growth of a brand that’s synonymous with impeccable standards,
high quality products and an unwavering dedication to the customer. Through continuous creativity
and the development of highly innovative products, Samsung has captured the hearts and
minds of customers worldwide, which will propel our company and our brand well into the future.
To become the brand most appreciated by people
all around the world, Samsung Electronics is carrying out consistent
and aggressive brand marketing. We will grow into a premium brand
that elicits exceptional pride from those who own our products,
through our commitment to innovative customer-focused marketing.
XhWdZcWha[j_d]
Growing Along with Global Enterprises in Electronics and IT
We have established solid partnerships and are
closely cooperating with major global leaders
in various industrial sectors, including Sony, IBM, Microsoft, EMC, Intel, TSMC and Time Warner.
In 2007, we partnered with Time Warner to provide bidirectional digital cable broadcasting
service in the U.S. We also aligned with major Internet portal sites such as Google and Yahoo
in launching phones that can utilize mobile Internet services through these portals. With IBM,
we began joint development of a 32-nm logic process. We also concluded a patent cross-
license agreement with Microsoft and agreed with EMC on establishing a global cooperative
system in the area of enterprise content management solutions. Looking ahead, we are con-
tinuing our efforts to create a solid foundation for future collaboration initiatives. In 2008, we
formed partnerships with Intel and TSMC to prepare a next-generation global standard for
semiconductor wafers. By establishing a consortium with LG Electronics, Hynix Semiconductor
and Sony-Ericsson, we will develop interface technology standards for mobile DRAM. Accord-
ingly, we will continue to strengthen partnerships with major global companies and improve our
brand position in the global market.
Enhancing Cooperation with Global Premium Brands
Our design and marketing alliances are another step toward becoming a premium brand. By
in
troducing unprecedented premium products and developing products with world-renowned
designers, we deliver new experiences to our customers—products they can be proud to own.
We collaborated with Giorgio Armani, one of the world’s top fashion designers, in launching
mobile phone and LCD TV lines, and worked with the world-famous industrial designer Jasper
Morrison in designing mobile phones, side-by-side refrigerators and electric ranges. In addition,
we jointly developed a premium music phone with Bang & Olufsen and launched a new concept
sports phone with Adidas. Our brand image was further upgraded thanks to our engagement in
cooperative marketing campaigns with a number of premium brands that promote quality living,
such as BMW and Cartier. We will continue to renew ourselves as a widely admired premium
brand by introducing innovative products and marketing activities through systematic coopera-
tion with leading global brands.
Strategic marketing and technology alliance with
Time Warner Samsung Electronics partnered with Time
Warner Cable, the second largest cable company in the
U.S., to sell its TVs and set-top box products with open-
cable-application platforms, allowing more customers to
use interactive broadcasting services.
_cW]_dWj_l[
US$16.9 Billion
BIGGEST GLOBAL
BRAND VALUE
BusinessWeek/Interbrand survey of “Best Global Brands”
21
st
23
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Presenting Unique Experiences with Cutting-Edge Digital Products
We understand the importance of our customers’ experiences with our products. To increase
p
roduct visibility, we operate showrooms where our customers can see, touch and experience
the newest digital products firsthand in a number of countries, including the U.S., Russia, Brazil,
China and Chile. Samsung Experience, a digital showcase at the Time Warner Center in New
York City, has become a new digital attraction, visited by more than a million customers since it
opened in 2004. The successful operation of Samsung Experience was evaluated as an exem-
plary case of experience marketing by major newspapers such as The New York Times and
academic institutions such as Columbia University. Gallery Samsung, our digital showroom in
Moscow, also is rapidly growing in popularity by providing the best digital experience in
Russia, with over 500,000 people already having viewed it. We will further expand our trend-
setting showrooms to share new and fascinating digital experiences with our customers.
Providing a Wide Range of Benefits for Worldwide Tourists
Outstanding displays by Samsung Electronics are at
tracting the eyes of tourists traveling
around the world. For the convenience of global travelers, we have installed LCDs and PDPs
in major international airports, including Dallas-Fort Worth International Airport in the U.S.,
Comodoro Arturo Merino Benitez International Airport in Santiago, Chile, Hong Kong Interna-
tional Airport in China, Murtala Muhammed International Airport in Lagos, Nigeria, London
Heathrow Airport in the U.K., Amsterdam Airport Schiphol in the Netherlands, and Mexico City
International Airport in Mexico. We also installed mobile phone sculptures in more than 20
international airports such as Charles de Gaulle International Airport in France, Sheremetyevo
International Airport in Moscow, Russia, Cairo International Airport in Egypt, Ataturk International
Airport in Istanbul, Turkey, and Toronto Pearson International Airport in Canada. In addition,
Samsung Mobile Stations are set up at New York’s JFK International Airport and L.A. Interna-
tional Airport to enable tourists to recharge their digital devices, including mobile phones and
notebook PCs, free of charge, where electrical receptacles are lacking. Actively promoting our
on-site marketing initiatives, we maintain our brand leadership position by being the brand
our customers think of first.
SHALINI SINGH, MANAGER
CUSTOMER STRATEGY TEAM, GLOBAL MARKETING OFFICE
Strategic design alliance with Giorgio Armani
Through a groundbreaking alliance with Giorgio Armani,
Samsung’s portable and home consumer electronics will
include a signature line of Armani-designed products. The
alliance will combine Armani’s iconic design aesthetic with
Samsung’s advanced technology.
Samsung Experience at Time Warner Center in
New York City Located in New York City’s Time Warner
Center, Samsung Experience is the ultimate showroom
for Samsung’s digital products. It has attracted more
than 1 million visitors since it opened in September 2004.
Entrepreneurship for the growth of mankind.
A vision to become a renowned global leader. A commitment
to our customers. These are the pillars in which Samsung Electronics’ has
built its brand value. We are pushing our limits to become
the most beloved brand in the world.
ifediehi^_f
[nY_j_d]
As a global corporate citizen, Samsung Electronics contributes
to worldwide sports, culture and academic development through a robust range
of programs. We will continue to share the dynamic energy of sporting activities
and the emotional experiences of cultural events with our customers,
thereby enhancing global harmony and our customers’ quality of life.
An Official Partner for the Olympic Games
With consistent sponsorship for the Olympic Games, we contribute to humanity while
p
romoting major sporting events. Since signing The Olympic Partner
(
TOP
)
agreement with the
International Olympic Committee
(
IOC
)
in 1997, Samsung Electronics has sponsored the 1998
Nagano Winter Games, the 2000 Sydney Summer Games, the 2002 Salt Lake City Winter
Games, the 2004 Athens Summer Games and the 2006 Turin
(
Torino
)
Winter Games as a
Worldwide Partner in the Wireless Communications category. We are also participating as an
official partner in the Beijing Olympic Games and Paralympic Games to be held in 2008.
As an official partner for the Olympic Games in the Wireless Communications category, we
supplied cutting-edge mobile devices, starting with the 2004 Athens Summer Games, to assist
successful management of the event. During the event, we provided our unique Wireless Olym-
pic Works
(
WOW
)
service, a communications system designed to bring the power of mobile
wireless technologies to the Games. The system enabled officials and staff to access critical
data and to transmit results and special information about the Olympic Games. We have also
set up Olympic Rendezvous @ Samsung
(
OR@S
)
since the 2000 Sydney Summer Games and
provided a resting space where athletes and fans can experience state-of-the-art wireless
telecommunications technologies. In addition, we have been an official partner for the Olympic
Torch Relay since the 2004 Athens Summer Games and have promoted the excitement of the
Olympic Games throughout the world. We concluded a long-term sponsorship agreement with
IOC in April 2007, to maintain our support for the event through the 2016 Summer Games.
Active Sponsorship for Local Sports
We have sponsored a wide range of sports reflecting regional characteristics and sentiments
a
round the world. Since 1998, we have been an official sponsor for the Asian Games, a sports
festival for all Asians. Recently, we participated in the 2006 Doha Asian Games and will main-
tain our official sponsorship for the 2010 Guangzhou Asian Games. In 2007, we provided our
first official sponsorship for the Pan American Games, in which 42 countries from the American
continents participated, and for the accompanying torch rally held throughout Brazil.
Chelsea FC, 2nd Place in 2008 UEFA Champions
League As the official club sponsor of the Chelsea
Football Club, Samsung Electronics will play a key part in
its global development. Both brands share the same
passion for success, as seen by Chelsea’s second place
showing in the 2008 UEFA Champions League.
39th WorldSkills Competition As part of our com-
mitment to social responsibility, we have supported the
biennial International Apprentices
(
“WorldSkills”
)
Competition since 2007. Worldskills is a not-for-profit
membership association that promotes vocational edu-
cation and training.
25
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JUNGHOON KANG, MANAGER
GLOBAL COMMUNICATIONS GROUP, CORPORATE COMMUNICATIONS TEAM
Our wide range of sponsorships around the world is our way
of showing our gratitude for our customers in a meaningful way.
Through these sponsorships, we’re able to support local communities
on a global scale, while sharing in the spectacle of sport.
In 2008, as an official worldwide sponsor of the Beijing Summer Games,
we will continue to share our passion with the world and contribute
to the betterment of society.
Soccer, the favorite sport in most countries of the world, is one of our main sponsored sports.
We supported major soccer championship games in each continent and acted as a sponsor for
some highly renowned soccer clubs. Since 2000, we have been the title sponsor for K-League,
held by the Korean Professional Football Association, and have supported the world-famous
Chelsea Football Club of the English Premier League since 2005. In 2008, the African Nations
Cup and various games of the Asian Football Confederation became Samsung sponsored
events. Chivas Football Team in Mexico registered as one of our sponsored teams as well.
Other noteworthy sports organizations and events include the International Hockey Federa-
tion
(
FIH
)
and the World Taekwondo Federation
(
WTF
)
, in addition to World Cup Short Track of
the International Skating Union
(
ISU
)
, and the Cycling Center of the Union Cycliste Internationale
(
UCI
)
. Each year, we also serve as the Worldwide Sponsor of the World Cyber Games
(
WCG
)
,
the world’s largest online gaming sport tournament, which was initiated in 2000. To promote
e-sports, we operate Samsung Khan, a professional online game team.
Nurturing Culture and Education
Sponsoring a wide range of cultural and academic activities represents our contribution in
n
urturing culture and science along with our global neighbors. In this relation, we have been
supporting the biennial International Apprentices
(
“WorldSkills”
)
Competition since 2007, and
recently agreed to sponsor the Nobel Museum’s Global Exhibition of the Nobel Foundation from
2008 through 2010. In March 2008, we also supported the Crufts Dog Show, the world’s most
prestigious dog show, held in the U.K. By participating as a sponsor for numerous cultural events,
we share an emotionally-charged passion for popular competitive events around the globe.
2008 Beijing Olympic Sponsorship Event Samsung
Electronics has been a proud sponsor of the Olympic
Games since 1998, and is pleased to continue that tradi-
tion at Beijing. Our passion for the Olympics is evidenced
through the diverse range of events, like the “Dreams of
Dragon” at the China Millennium Movement, to encour-
age a friendly, festive atmosphere.
Possessing an innovative R&D capability is critical for Samsung Electronics’
continued march toward becoming a leading global company.
Through strategic investments in R&D and a strong commitment to creative talent
development, we will continue to deliver cutting-edge technologies and
solutions that will advance us well into the future.
H:
Ongoing R&D Investment for Technology Leadership
By focusing our R&D efforts on our core businesses and future technology development, we
h
ope to deliver diverse and outstanding achievements, including: the world’s first 50nm-class-
1Gb DDR2 memory; first 30nm-class 64Gb NAND Flash; the world’s smallest and lightest all-
in-one color laser printer; a drum washing machine boasting the world’s lowest noise and vibration
levels; commercialization of the world’s largest (14.3-inch) color e-paper, the world’s largest
LCD panel (70-inch) for Full-HD TV; and selection of our Mobile WiMAX as the IMT-2000 stan-
dard along with WCDMA and CDMA-2000.
Special efforts have been made to manage intellectual property rights, which include our pat-
ents. In the U.S., our aggregate patent portfolio totaled approximately 20,600 by the end of 2007.
In 2007, we registered 2725 patents in the U.S. alone, which was the second most of any company.
Systematic R&D Structure for the Next Generation
In May 2008, Samsung Electronics revamped its R&D organization to focus on greater effi-
ciency and future technology development. The new organization is systematically structured in
three layers. The Corporate Technology Office
(
CTO
)
, the synergistic creator of technology,
leverages proprietary technology to drive innovation across current business units and enhance
core technologies for new business opportunities. The R&D centers of each business focus on
the development technology that is expected to deliver the most promising long-term results. In
the meantime, the development teams within each product division are responsible for com-
mercializing products scheduled to hit the market within one or two years.
Samsung Electronics operates six R&D centers in Korea and a total of 16 centers in eight
countries, including the U.S., the U.K., Russia, Israel, India, Japan and China. These centers are
tasked with developing best-in-class products and proprietary technology. We have also built a
global R&D network encompassing the world’s leading companies, research centers and
universities. These research facilities are closely linked, and develop strategic technologies for
the future as well as unique technologies that will establish new market trends.
Our greatest asset is the extensive pool of talented people who develop value-added, market-
leading products that are enhancing the lives of our customers. At the end of 2007, 39,000
people were involved in the development of Samsung products for tomorrow. There are now
3200 PhDs in our talent pool. Through solid alliances with global R&D networks and an efficient
support system for our R&D workforces, we will continue to lead the company into the future
with many of the world’s most innovative products and technologies.
Leading Future Technology Initiatives
Our goal is to be the clear leader in future technology development, rising above any challenges
in the business environment. We will enhance our technology and market leadership in our
current core businesses, while taking aim at future-oriented fields, such as the solutions busi-
ness, new IT devices, energy resources, the environment, bio-technology and health. Our R&D
investment will be further increased to strengthen our proprietary technology leadership in
nurturing future growth engines.
R&D INVESTMENT
[
in trillions of KRW
]
5.3492
2005
5.9047
2007
5.5851
2006
R&D HUMAN RESOURCE
[
Unit: employee
] [
Including employees overseas
]
32,000
2005
39,300
2007
36,000
2006
_ddelWj_l[
Our researchers are working very
closely with R&D, proud to be a part of
creating the future. Combining our ability
with unbridled passion, we will enhance
the lives of our customers through
the development of the newest,
groundbreaking technology.
JAEKWAN PARK, SENIOR RESEARCHER
NEXT-GENERATION RESEARCH TEAM 2 MEMORY
[
SEMICONDUCTOR BUSINESS
]
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8.4 Megapixel CMOS Image Sensor At 8.4
megapixels, the latest CMOS Image Sensor from
Samsung is the world’s smallest in terms of pixel
size. Its high resolution was achieved by imple-
menting advanced light-sensing features and mini-
mized noise levels.
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14.3-inch e-paper
Samsung Electronics devel-
oped a 14.3-inch
(
A4-sized
)
, color “electronic”
paper
(
e-paper
)
, delivering undistorted images even
when the surface is bent. This flexible display does
not require any electricity.
Y
Flex-OneNAND™ For the first time, this new
fusion semiconductor enables the use of two types
of NAND flash memory in a single device, allowing
for greater flexibility and signifying the increasing
importance of semiconductors in the design of dig-
ital devices.
X
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Series 7 750 LCD HDTV The ultra-advanced
Series 7 is a major achievement in both technology
and design. Its Crystal Rose exterior houses some
of the world’s more advanced features, such as
InfoLink, WiseLink and a built-in Content Library.
W
CDMA UbiCell™ The CMDA UbiCell is the
world’s first ultra-small CDMA base station. The
device attaches to a mobile network connection and
is designed to enhance coverage for the home.
Y
YP-S5 MP3 Player At only 14.9mm thick, the
YP-S5 is an extremely portable multimedia device.
Its full color screen makes watching videos a plea-
sure while its fold-out speakers are powered by
Samsung’s DNSe technology to produce rich sound.
It’s also Bluetooth enabled.
X
Y
X
W
SGH-F490
Samsung’s SGH-F490 is the phone
for people who want to use the Internet whenever,
wherever. This powerful multimedia device comes
fully equipped with a five megapixel camera and a
3.2-inch, 16:9 wide touch screen. Plus, it is built with
Samsung’s award-winning Croix user interface,
enabling greater convenience and ease of use.
W
TOUCHWIZ SGH-F480 The pocket-friendly SGH-
F480 from Samsung boasts a 2.8-inch touch screen
and its new TOUCHWIZ user interface allows for a
more rewarding and enjoyable experience through a
“drag and drop” widget system. Built with a strong
and versatile set of multimedia features, the SGH-
F480 also has a five megapixel camera and MPEG4
video recording and editing functions.
Y
Ultra Edition 10.9, SGH-U600 The highly effi-
cient Ultra Edition mobile phone has a 2.2-inch
screen display and is a mere 10.9mm thick. Housed
in a sleek, modern casing, the Ultra Edition boasts
advanced features such as a 3.2-megapixel camera,
video recorder, MP3 player and Bluetooth.
X
ijob_i^ j^_da_d]
Our approach to design begins with
the customer and ends with
the customer. With their total
experience in mind, we try to create
a design that’s both beautiful and
convenient, providing a sense of
comfort, fun, pleasure and interactivity.
31
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Building upon our unique customer-focused design philosophy,
Samsung Electronics has continued to push the limits of excellence in
becoming a globally acclaimed design powerhouse. Our innovative designs
focus on the integration of sophisticated style, versatile convenience and
emotional reactions from our customers to create
a more enjoyable and fulfilling user experience.
Z[i_]d
Customer-Focused Design
Focusing on designs that satisfy both the experiential and emotional needs of the user, we
ha
ve taken a more intuitive, holistic approach to product development. Since 1996, we have
concentrated on enhancing our product images, particularly the element of uniqueness. In
2007, we launched a holistic design initiative: “Create an Emotional Journey.” We are designing
products that are highly attractive and undeniably stylish, products that have an intuitive user
interface and distinctively enhance the sensory experience, clearly distinguishing our products
in the era of digital convergence.
Global Design Network to Satisfy Every Customer
Samsung Electronics operates seven design centers
: the Corporate Design Center in Seoul
along with centers in London, Milan, Los Angeles, Shanghai, Tokyo and Delhi. Our experts at
the six geographically dispersed locations analyze local culture, lifestyles and industry trends,
providing input critical to the Corporate Design Center, which conducts global research projects
that results in the creation of products that satisfy every consumer and business need. As
design becomes a crucial component in driving the profitability and popularity of consumer
electronics, we encourage our designers to push the limits of their creativity in order to continue
delivering some of the world’s most innovative design solutions.
Effective Programs that Nurture Design Expertise
We offer a broad range of design-related training programs in order to cultivate a greater
number
of world-class designers, while improving our overall design competitiveness. The
Samsung Design Membership
(
SDM
)
program nurtures student designers and promotes the
exchange of creative ideas around the world. Our SDM program attracts students around the
world who major in design, cultivates their skills and encourages interaction through the
exchange of ideas and a great deal of creative brainstorming. At the same time, we operate the
Samsung Art & Design Institute
(
SADI
)
, which is changing the global design education paradigm
with one of the world’s most advanced curricula including a special emphasis on practical
applications.
Excellent Design Acclaimed by Numerous Awards
Admired by customers around the world, our outstanding design capabilities have received
incr
easingly frequent validation in several of the industry’s prestigious design awards every year.
In 2007, the iF Product Design Awards from International Forum Design Hanover honored 26
Samsung products, including LCD TVs, mobile phones, note PCs, and laser printers. We also
received 27 prizes at Japan’s Good Design Awards, including the Gold Prize for our side-by-
side refrigerator.
Samsung’s Ultra Edition II mobile phone and portable DMB TV received Best of the Best
awards in 2007 along with 21 other awards at the Red Dot Design awards. Our triple-hinge
design of the Mobius LCD monitor also won the Industrial Design Excellence Award
(
IDEA
)
last
year from the Industrial Designers Society of America.
31
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MIA OH, SENIOR DESIGNER
UX PART
[
WIRELESS UNIT
]
, CORPORATE DESIGN CENTER
j^_da_d]
Satisfaction should not be a guarantee.
It should be a given.
Like modern-day pioneers, Samsung Electronics has opened doors to new worlds through
our innovative products and our dedication to customer satisfaction. In strengthening our R&D,
fostering more strategic alliances, and delivering an unrivaled customer experience, Samsung has
catapulted itself to the forefront of efforts to enhance consumer lifestyles, worldwide.
Remaining at the forefront will require a steadfast dedication to keeping customer satisfaction as our top priority.
33
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35
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Global Leader in TVs and the IT Industry
In 2007, we achieved record-breaking business results, boosted by strong growth
w
ithin the flat panel TV market and a steady increase in sales of our core products,
such as LCD monitors, digital audio-visual products, laser printers and notebook PCs.
Sales increased to KRW26.51 trillion, a 26% jump from 2006, while operating profits
soared to KRW1.06 billion, a 43% increase year-to-year.
Our dominance of the flat panel TV market helped us to maintain No. 1 market share
in both sales revenue and units sold for two consecutive years and seven consecutive
quarters, respectively, including the No. 1 position in the sale of TVs overall, as well as
in the flat panel TV and LCD TV categories. We also ranked first in the monitor market
for five quarters straight, widening our lead over our competitors in 2007. Our color
laser printer solidified its market share position–No. 2 in the world–as well. In our PC
business, we achieved our best sales ever by increasing exports of Samsung-brand
products. Meanwhile, our digital AV products, including MP3 players, received positive
feedback from the world market for their enhanced quality and design.
Overall, Samsung’s Digital Media products were highly recognized for their innova-
tive technology and attractive designs. Our LCD TV and home theater system won
three EISA Awards while eight products, including an MP3 player, received Innovation
Awards at CES 2007. Last year, we were also honored with an iF Design Award for the
quality of a wide range of our digital media products.
MAY 18
Launched world’s smallest color laser
printer
The new 3-in-1 Samsung CLX-2161K printer,
nicknamed Lay, is 20% smaller than our previously small-
est model. At 41.3
×
35.3
×
33.3cm, Lay is able to fit into the
tightest spaces. The printer boasts the use of Samsung’s
proprietary technology: Non Orbiting Noiseless Optic
Imaging System
(
NO-NOIS
)
to deliver low-noise printing.
Other keys features include an ID Card Copy and a USB
Direct port.
JUNE 11
Began construction of a TV production
facility in Russia
To meet the fast-growing demand for
digital TVs in Russia and CIS countries, Samsung
Electronics announced plans to build a TV factory in
Kaluga, Russia, southwest of Moscow. Construction is
scheduled to be completed by October 2008, and the
plant will produce up to 2.2 million TV sets annually begin-
ning in 2010.
650 Series Full HD LCD TV
Developed using our unique Crystal Design with a hint of
r
ose-red color accentuating a traditional piano-black
bezel frame, the 650 Series LCD TV features Auto Motion
Plus 120Hz, an Ultra Clear Panel, DNIe Pro and Wide
Color Enhancer Pro to provide perfect picture quality.
Building upon a long history of providing world-leading products
and cutting-edge designs, Samsung Electronics enables a strikingly easy,
highly convenient user experience by maximizing connectivity options,
simplifying designs and optimizing the user environment.
Moreover, our Digital Media business provides a myriad of refreshingly
bold approaches to the proliferation of digital convergence.
2007 AT-A-GLANCE
20.8
2006
26.5
2007
WORLDWIDE TV
MARKET SHARE IN 2007
[
By Sales
]
OPERATING
PROFIT
[
KRW hundreds of billion
]
SALES
[
KRW trillion
]
17.8
%
7.4
2006
10.6
2007
A View According to Crystal Design
As the TV market accelerates its move toward larger screen sizes and higher picture
qualit
y, competition among companies in the industry continues to intensify. The flat
panel TV market, in which both LCD and plasma TVs are major segments, is experi-
encing explosive growth, while TV makers are engaged in an unprecedented price war.
Yet, we have managed to lead the global TV market for the past two years by respond-
ing to diverse customer needs with a portfolio that includes LCD, plasma, projection
and cathode ray tube
(
CRT
)
TVs. In particular, our new style of LCD TVs, introduced in
March 2006, surpassed aggregated sales of five million units only one year and four
months after its launch—a major success and a historic milestone in the global TV
industry.
In 2008, we will be solidifying our flat panel technology leadership with a broad range
of new TVs including the 120Hz Full HD, LED, 3D Plasma and Content TVs. Our newly
sculpted “Crystal Design” TV, inspired by the craftsmanship of Italian glassblowers,
represents the best-in-class of our TV product design, while the Armani TV, co-devel-
oped with Giorgio Armani, has already received an enthusiastic response from the
marketplace. By strengthening our marketing activities, diversifying distribution chan-
nels and stepping up retail promotions, we are further elevating our global leadership.
A True Leader in the World IT Industry
Our LCD monitors have become the most popular monitors in the world. In 2007, we
r
anked No. 1 in the global LCD monitor market and were selected as the best U.S.
monitor brand for the fifth year in a row. The T series, applying our Crystal Design look,
is leading the market in terms of technological innovation and advanced design fea-
tures. We plan to extend our product line of 20-inch and larger LCD screens, and
expand our leadership in special monitors for network, videoconference and graphics
professionals, emphasizing brand recognition and quality production.
Our PC business has performed well, increasing profits after converting all exported
notebook PCs to the Samsung brand last year. In 2008, with a wide range of new
products, such as the third-generation Ultra Mobile PC
(
UMPC
)
, and a Blu-ray-enabled
notebook PCs, we will penetrate the emerging markets of China, Eastern Europe and
the Commonwealth of Independent States (CIS, the former Soviet Union) to sell more
than five million units.
In the printer business, one of our future growth engines, we launched several innova-
tive products that combine cutting-edge technology with stylish designs. Our ultra-slim
mono laser, the world’s smallest laser printer, and our all-in-one flat panel mono laser
have been recognized as the top products in the world printer market. As our color laser
printer business is growing our market share on the global stage, the world’s smallest
Blu-ray Disc Player
(
BD-P1500
)
As Samsung’s fourth-generation Blu-ray disc player, the
BD-P1500 provides incredibly detailed images with bril-
liant color in full high definition
(
1080p
)
resolution. The
BD-P1500 lets users have it all—watching their favorite
DVDs and Blu-ray discs, or listening to CDs with the
highest possible audio quality.
JUNE 15
Launched the world’s largest
(
70-inch
)
Full HD LCD TV
Samsung Electronics introduced the
world’s largest, commercially available Full HD LCD TV. It
was built with the world’s first Local Dimming Technology,
which enables it to deliver a dynamic contrast ratio of
500,000:1 while lowering power consumption by as much
as 50%.
AUGUST 20
Sold more than five million LCD TVs
Introduced in March 2006, our newly designed LCD TV
surpassed an ambitious target of selling an aggregated 5
million units, just 16 months after its launch. The 2007
model also set an industry sales record, when one million
sets were sold only five months after launch–a historic
milestone in the TV industry.
Color Laser Printer
(
C
lP-315K
)
Stylish design adorning a superb space-saving architec-
ture, the CLP-315K is the world’s smallest high-quality
color laser printer. The CLP-315K boasts a resolution of
up to 2400
x
600 dpi, 32MB of internal memory, low-noise
production
(
45dB
)
, and the ability to print up to 16 pages
per minute in B&W and four pages in color.
37
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color laser printer and all-in-one color laser printer have also received a strong market
reception. In addition, we are pursuing the corporate printer market aggressively to pro-
vide a total solution, including printer, software and service.
Opening a New Era of Digital AV
Following our development of the world’s first Blu-ray disc (BD) player, referred to as
th
e “next-generation DVD player,” Samsung Electronics is ready again to launch an up-
graded version of the player, our fourth-generation BD player. The device will be a part
of home entertainment packages including a complete TV and home theater system. In
addition, we have launched a full lineup of HD AV environmental products, featuring a
Full HD home theater with projector or TV, an HD camcorder and a BD player.
We also came out with a Bluetooth-enabled wide video MP3 player and the “new
concept” K5 MP3 player with a “slide and tilt” speaker. Our goal in 2008 in the MP3
business is to gain the No. 2 market share globally with these innovative players. The
Samsung digital cameras, backed by the premium “NV” series, ranked No. 3 in 2007
with sales of 12 million units. In maximizing our synergistic creations with Samsung
Techwin, we will focus more on premium products and enhance their quality in order to
increase market share and further strengthen our premium brand image.
Challenge for the Top-tier Digital Media Company
The world economy in 2008 has been slowing down, with reduced consumption and
in
tensifying competition. To overcome such challenges and lead the world’s TV market
for a third consecutive year, we will launch diverse high-end products such as a 120Hz
LCD TV, an LED BLU LCD TV and a Large Format Display
(
LFD
)
, while developing more
innovatively designed products with some unique features.
We will step up our involvement in the B2B IT market, consisting of PCs, printers,
servers and monitors, which will establish us as a first-rate global IT company in both
corporate and consumer markets. In the digital AV business, our advanced technolo-
gies continue to yield innovative products that strengthen our leadership in the industry.
In May 2008, we reorganized our Digital Media business to create greater synergy and
enhance our overall performance. This decision integrated Digital Appliance into our
Digital Media operations and transferred our PC, MP3 and set-top box businesses to the
Telecommunications Network business. In Digital Media, we have folded our home the-
ater, DVD player and BD player businesses into our TV business, while revamping our
camcorder and video security device businesses and providing them with an indepen-
dent team. Building upon this reorganization, we expect to dominate the global digital
media markets and further enhance the brand value of Samsung Electronics.
Wide Video MP3 Player
(
YP-P2
)
Equipped with Bluetooth and a touch screen interface,
the YP-P2 lets consumers enjoy vivid videos on a 3-inch
wide LCD screen. Samsung’s proprietary DNSe 2.0
technology with EmoTure™ UI enhances the ultimate
multimedia experience.
UMPC Q1 Ultra Premium
Improving portability and screen resolution, the second-
generation UMPC includes a touch screen, a QWERTY key-
board and an enhanced battery life of up to 4-1/2 hours—
guaranteed to add more freedom to anyone’s lifestyle.
SIZE RATIO COMPARED
TO COMPETITIVE MODEL
AUGUST 22
Selected as “Company of the Year” in
the Display Technology category
For an unprecedented
fifth consecutive year, Samsung Electronics has been
named “Company of the Year” in the Display Technology
category of the VARBusiness Annual Report Card
(
ARC
)
,
recognizing Samsung’s innovation, partnership relationships
and advanced display technology.
DECEMBER 10
Attained highest global TV mar-
ket share seven quarters in a row
According to
DisplaySearch, Samsung Electronics remained the global
leader in the world TV market, both in sales revenue and
units sold, as of Q3 2007. We were No. 1 in sales revenue
for seven straight quarters and No. 1 in unit sold for five
consecutive quarters. In addition, our Plasma TV ranked
No. 2 and our projection TVs attained the No. 1 standing in
Q2 2007.
43
%
j[b[Yecckd_YWj_ed
d[jmehai
OPERATING
PROFIT
[
KRW hundreds of billion
]
SALES
[
KRW trillion
]
20.2
2006
23.8
2007
1.93
2006
2.76
2007
GLOBAL MOBILE PHONE
MARKET SHARE IN 2007
14.3
%
39
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Global Leader in Telecommunication Networks
The global market in mobile phones has shown rapid growth year after year. In 2007,
th
e market showed a 10~15% increase over 2006, thanks to a growing need for new
phones in the advanced mobile segments and a steady flow of new customers into
emerging markets, according to Strategy Analytics, a market research firm. In Korea, the
market surged 25% as new mobile services, such as 3G and multimedia offerings, grew
rapidly. In addition, a number portability policy was launched to improve customer service.
Driven by its premium brand and unique products, Samsung Electronics showed
record-breaking figures in sales and units sold for 2007, holding a global market share of
14.3% to rank No. 2 in the world. Sales reached KRW23.76 trillion globally, with 160
million units sold—a 41.6% increase year-over-year. Our management efficiency strategy,
initiated in early 2007 to focus on customer value and cost reduction, also boosted oper-
ating profits. As a result, our net profit soared to KRW2.75 trillion, a 42% increase from
the previous year, maintaining a two-digit rate of growth for operating profits at 11.6%.
In the U.S. market, we were voted the best brand six years in a row, while customers
in France and Russia made Samsung the No. 1 market leader for two and three
consecutive years, respectively. Our products also were recently honored as the “Best
Handset” in the 2007 GSMA Awards
(
SGH-D900
)
, “The Best European Mobile Phone
2007–2008
(
SGH-U700
)
” at the European Imaging and Sound Association
(
EISA
)
Awards and “Phone of the Year” at the Mobile Choice Award, securing our reputation
for providing the world’s best mobile phones.
JANUARY 22
Ranked No. 1 in France two years in a
row
In the French market, we ranked as the No. 1 market
leader with a leadership share of 24% in units sold and 35%
in sales, maintaining the No. 1 spot in market share for a
second consecutive year. After eight years in the French
market, we reached a breakthrough level of an accumulat-
ed 20 million units sold, another significant achievement.
APRIL 5
No. 1 market share in Russia three years
consecutively We attained the market leader position in
Russia for the third consecutive year, with a 26.2% share
of units sold and a 30.7% share of overall sales. We
became the first mobile phone maker to surpass EUR1
billion in sales, at EUR1.29 billion.
Haptic Touch Screen Phones
(
SCH-W420/W4200
)
Built with TouchWiz UI software, our Haptic model prom-
ises a unique user experience, one that touches all of the
senses. The Samsung Haptic features one-touch access,
a widget for creating customized desktops and a G sen-
sor for automatic horizontal rotation of photos and videos.
It is designed for the innovative, ‘on-the-go’ user who
demands cutting-edge multimedia features, including a
web browser.
Samsung Electronics is fortifying its position as a leading global brand
in the telecommunication networks business with a wide range
of premium products. Our mobile phones, admired by customers
around the world, are at the forefront of enhancing mobile lifestyles while
meeting the converging needs of the mobile marketplace.
2007 AT-A-GLANCE
Samsung Soul
(
SGH-U900
)
Dubbed as the “Soul of Ultra,” the Samsung Soul has a
thin 12.9mm profile, and is made of bronze-gray metal. It
offers a new series of Thematic UIs, which enables users
to change the interface. A five megapixel camera,
HSDPA connectivity and Bluetooth are included.
Fashioning the Mobile Customer Worldwide
Launching premium products, as well as rapidly penetrating emerging markets,
e
nabled Samsung Electronics to become world’s second-largest mobile phone maker
last year. Following this strategy, we introduced the Ultra Edition II to drive sales of
mid-range products in emerging markets. Our Ultra Edition I model SGH-D900 and
Ultra Edition II model SCH-U600 sold a combined total of more than 10 million units in
European, Asian and Middle Eastern countries. SCH-E250, the premium mass market
model, experienced overwhelming success, selling more than 20 million units in
Europe and Asia. SCH-C260 was very popular in emerging markets such as India and
China. In the U.S. market, we distributed the popular BlackJack
(
SGH-i607
)
and Black-
Jack II
(
SGH-i617
)
, which were recognized by Brand Keys, a U.S. market research
company, as the most favored mobile phone brand for six years in a row.
Our wide range of premium phones such as the Ultra Edition smart phone, touch
screen phone, high-megapixel camera phone and music phone captured our customers’
hearts worldwide with engaging designs and convenient features. In 2007, we launched
the world’s slimmest phone in the Ultra Edition II category, the 5.9 SGH-U100. In addition,
we collaborated with some of the world’s top designers to create the SGH-E590
(
with
Jasper Morrison
)
, and the Giorgio Armani Samsung mobile. Serenata, co-developed
with Bang & Olufsen, was another trendsetting mobile phone design. In 2008, we are
going to expand our innovative mobile phone lineup with multimedia phones that
include a full touch screen user interface and enhanced versions of Samsung Soul, our
worldwide flagship product.
The Leader in Next-Generation Telecommunications Technology
In telecommunication systems, we developed the world’s first Mobile WiMAX
(
mobile
broadband Internet
)
technology in 2006, a next-generation telecommunication technology.
In 2007, we started to commercialize Mobile WiMAX among Korean service providers.
Our Mobile WiMAX technology was adopted as the 3G global standard at the Interna-
tional Telecommunications Union
(
ITU
)
conference in October, 2007, paving the way for
increased market penetration worldwide. Banking on a Mobile WiMAX total solution,
including chipset, terminal and system, we provided a commercial package to the U.S.,
Japan and Brazil, solidifying our leadership in the field.
At only 5.9mm, the SGH-U100 is the world’s slimmest mobile
phone. It includes a three megapixel camera and a bevy of
high-end features, such as Bluetooth. Its slim design is made
possible by Samsung’s innovative Smart Surface Mounting
Technology (SSMT). The phone is listed in the 2008
Guinness Book of World Records as the slimmest phone.
5.9mm
Ultra-messaging BlackJack II
(
SGH-i617
)
Microsoft’s Windows Mobile software-enabled HSDPA
smart phone boasts a bigger screen than the BlackJack
I and includes a jog wheel. The phone also has cutting-
edge features such as a touch screen, Bluetooth, GPS
and wireless LAN.
MAY 4
Launched Ultra Music Phone with ad fea-
turing Beyonce We launched the Ultra Music Phone
(
SGH-F300
)
with a commercial starring Beyonce
Knowles, a world-renowned actress and artist. The dual-
face design of the phone is fresh and eye-opening in its
slim 9.4mm package, a highly efficient model providing
the complete functionality of a multimedia phone and
music player.
MAY 9
Selected as favorite mobile phone brand six
years in a row According to research conducted by
Brand Keys, a U.S. market research company, Samsung
was selected as the most favored mobile phone brand for
the sixth year in a row. A series of new products that went
a long way in enhancing customer value proved to be the
key to becoming the top brand in the mobile phone sector.
41
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Ultimate Choice for Mobile Lifestyles
In 2008, the global mobile phone market is expected to slow, due to saturated con-
d
itions in the European and U.S. markets. However, replacement needs for 3G and
multimedia mobile services, in addition to growing demand in the emerging markets of
Southwest Asia, the Middle East and Africa, will boost overall market growth by about
15%. Opening the era of “Mobile for Every Lifestyle,” our goal is to become the most
admired mobile phone brand, providing premium products that meet the needs of our
most discerning customers’ lifestyles.
We plan to develop a wider variety of mobile phones to satisfy the needs of virtually
everyone. In the Mobile WiMAX business, we will establish alliances with a number of
carriers around the world, as well as pursue a more extensive market penetration in
Korea. This will help us move into next-generation mobile communications, such as 4G
technology, while setting a new standard for the industry.
Challenge for Convergence
In May 2008, Samsung Electronics reorganized its Telecommunication Networks unit
by m
erging the PC and MP3 player businesses that were part of Digital Media. The
decision will boost our synergy with related businesses to enhance our competitive
edge throughout the telecommunications industry. We believe we can create a unique
platform by merging the latest mobile technology with core computing technology for
the PC business, and by leading the market with the most sophisticated products to
embrace technology convergence. Our MP3 business also will be fine-tuned by
converging core mobile technologies with our world-leading power efficiency and design
capabilities. Our leadership in digital convergence will further bolster our mobile
communication brand as the industry takes mobility to the next level.
Giorgio Armani Samsung Mobile
(
SGH-P520
)
Designed by Giorgio Armani, the Armani phone represents
the perfect marriage between mobile haute couture and
advanced technology. This stylish, super slim phone features a
2.6-inch touch screen, three megapixel camera and Bluetooth.
150
ACCUMULATED BLACKJACK
SALES IN THE U.S.
[
5 AS OF 2008
]
Five-megapixel Camera Phone
(
SGH-G800
)
The SGH-G800, our most advanced camera phone,
features a five megapixel sensor, 3x optical zoom, and
face detection. It’s also equipped with the latest 3G
HSDPA connectivity, enabling multimedia features such
as mobile blogging, and a web browser.
JULY 19
Launched five megapixel camera phone
in the European market We launched our SGH-G600
model, a five megapixel camera phone, in the European
market. One of the slimmest slider phones—only
14.9mm thick—it has high-end camera functions such
as a panorama shot capability. It also features a web
browser, a virtual pointer working as a mini-mouse, the
new Espresso UI interface and Bluetooth.
SEPTEMBER 24
Co-developed Giorgio Armani
Samsung mobile In an alliance with world-famous fash-
ion designer Giorgio Armani, we launched the Giorgio
Armani Samsung mobile
(
SGH-P520
)
. The touch screen
model features cutting-edge phone technology, such as
a three megapixel camera, a web browser and Bluetooth,
in a slim 10.5mm package brimming with style.
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At Samsung Electronics, satisfying the needs of our customers
is our top priority. By developing innovative products that enhance the
lives of our customers worldwide, we have made pioneering moves
in the digital appliances market, whose impact will be felt for many years
to come. Stylishly designed, well equipped with convenient features, and
environmentally friendly, our digital appliances are tailor-made
with our customers at the forefront of our thinking.
Front-sliding Air Conditioner
Our innovative, front-sliding unit showcases a unique
Biosleep function, keeping body temperature at an opti-
mal level during the three stages of sleep. The unit also
can quickly lower a room’s temperature with its Surround
Cooling System, and includes eco- and health-friendly
features such as an air purification system.
Pioneering the Future of Digital Appliances
Intent on becoming the leading global compan
y in the digital appliance industry, we
are moving aggressively to bolster our capabilities for developing innovative products
and improving market outreach. To achieve this, we are enhancing the competitive edge
of our business by reorganizing our production network, strengthening our R&D depart-
ment, and expanding our high-end product lineups. To further increase profitability, we
are also investing in the development of premium appliances in the side-by-side refriger-
ator, system air conditioner and drum washing machine segments, while underscoring
our commitment to quality. As a market leader in advanced digital appliances, we are
committed to continually strengthening our competence in both the built-in appliance
and home network markets.
In 2007, we applied the world’s most innovative technology and design approaches
to our full range of digital appliances, introducing diverse new product lines that will be
recognized by consumers around the globe. We have received outstanding praise,
particularly in the premium market. Our product lines were enhanced through such
advancements as our drum washing machine whose Vibration Reduction Technolo-
gy
TM
(
VRT
) provides the lowest noise and vibration levels in the industry; our system
air conditioner, which incorporates our High Efficiency Combination technology; and
our side-by-side refrigerator with twin cooling systems.
These and other innovations helped us achieve sales of KRW6.85 trillion, a 24%
increase over 2006, and a global operating profit of KRW159.8 billion. Eight of our prod-
ucts, including our side-by-side refrigerator, received the Red Dot Design Award in
Germany. In Korea, we also placed first in the 2007 National Customer Satisfaction
Index
(
NCSI
)
in the refrigerator, washing machine and air conditioner categories.
OPERATING
PROFIT
[
KRW hundreds of billion
]
SALES
[
KRW trillion
]
5.5
2006
6.9
2007
-0.7
2006
1.5
2007
2007 SALES INCREASE IN THE
U.S. REFRIGERATOR MARKET
[
versus 2006
]
68
%
JANUARY 10
4th-generation Smart Inverter air
conditioner for the home
The energy efficient Smart
Inverter air conditioner from Samsung Electronics delivers
quick and powerful cooling with minimum energy con-
sumption. The Smart Inverter system also can accurately
control a room’s temperature with minimal fluctuation.
APRIL 3
Korea’s first B2B total solution showcase
Samsung Electronic opens Korea’s first B2B total solu-
tion showcase, the “System Hauzen Gallery,” displaying
the latest total solutions in appliance technology. Featured
in the showcase are built-in home appliances, and home
and office network systems, as well as system air condi-
tioners—all available to the consumer.
2007 AT-A-GLANCE
The Gobal Leader in Side-by-Side Refrigerators
Since side-by-side refrigerators were introduced in Korea in 1997, Samsung Elec-
tro
nics has led the premium refrigerator market, debuting such innovations as our
unique side-by-side model called the Quatro. In 2007, we broke the industry’s cumula-
tive sales record with global sales of over six million units, and attained the No. 1
market share position in 34 countries. In North America, we showed a 68% sales
increase over the previous year after the launch of our French door refrigerator with a
built-in Twin Cooling Plus System, which has received tremendous praise. Also in 2007,
J.D. Power and Associates awarded our side-by-side refrigerators its “Highest Cus-
tomer Satisfaction” rating for the third straight year.
In 2008, Samsung Electronics’ new products lead the industry by applying cutting-
edge technology, such as advanced moisture-regulating technology inside of our
refrigerators, and an eco-friendly LED lighting system designed to remove dirt and
agrochemicals from fruits and vegetables stored in the vegetable box. Looking forward,
we plan to accelerate our penetration of the premium market and expand our distribu-
tion channels through new alliances in the North American and European markets. In
addition, we will improve our competitive edge by developing advanced compressor
technologies that dramatically increase efficiency and reduce noise, helping us with our
goal of becoming the No. 1 brand in side-by-side refrigerators in the near future.
Cooling the World We Live In
In 2007, we launched a cutting-edge, fourth-generation home air conditioner. In it,
S
amsung Electronics’ proprietary Smart Inverter technology reduces energy consump-
tion by as much as 87.5% compared to conventional air conditioners. This was also the
industry’s first unit to be offered in black, which garnered strong favorable response
from customers. In 2008, we introduced an innovative, front-sliding unit to speed up
cooling time while enhancing eco-friendly and health-friendly features such as an air
purification system and a Good Sleep mode. Our unique air conditioner system also
was built with the latest High Efficiency Combination technology, further boosting ener-
gy efficiency. We are strengthening our marketing efforts in emerging markets such as
China, Central Asia and the CIS countries. We also are continuing to expand our mar-
ket leadership in air purification by launching products equipped with a DNA filter and
Micro Plasma Ion
(
MPI
)
technology.
Reducing Noise Through Our Advanced Technology
In 2007, we developed an innovative drum washing machine that featured the world’s
l
owest levels of vibration, and water and energy consumption. Designed with VRT, the
machine reduces barrel vibration to such an extent that it cannot be felt, even at the
highest speed. It also reduces energy and water consumption by 20% and 25%,
respectively, compared with ordinary washing machines. Furthermore, we enhanced
VRT Front Loading Washer
Designed with Vibration Reduction Technology
TM
(
VRT
)
,
our washer dramatically reduces barrel vibration—even
at the highest speed. It also reduces energy and water
consumption to the world’s lowest levels. Further, we’ve
enhanced washing performance and eco-friendly perfor-
mance with a diamond-shaped embossing drum.
Built with Smart Inverter technology, Samsung Electronics’
air conditioner is individually operated by several indoor
units linked to a single outdoor unit, using 87.5% less
power than conventional units. It is designed to precisely
maintain the room temperature and operation settings
for each indoor unit.
87.5
%
MAY 22
Jasper Morrison designed home appli-
ances in Europe We launched a side-by-side refrigera-
tor and an electric oven, both conceived by Jasper
Morrison, one of today’s most influential industrial
designers. These products combine sophisticated design
aesthetics with innovative technology to ensure that per-
formance is as impressive as appearance.
JUNE 19
VRT drum washing machine Our innova-
tive front-loading washer, built with our unique Vibration
Reduction Technology
TM
(
VRT
)
, showcases the world’s
lowest levels of vibration, and water and energy consump-
tion. It reduces energy and water consumption by 20%
and 25%, respectively, compared to ordinary machines.
45
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washing performance and environment friendliness with a diamond-shaped embossing
drum. Our washing machines developed with VRT have garnered quite a positive
response within developed markets around the world, including the United States and
Canada. Looking ahead, we will strengthen our global leadership by expanding large-
capacity drum washing machines and bolstering our competitive edge in mid- and
small-size machines, while enhancing our low-vibration and low-noise technologies.
Innovating to Improve Consumer Health and Convenience
Responding to rising demand in the microwave oven market, we launched the Smart
O
ven, followed by our Compact Oven and Steam Oven. By offering unique features like
smart cooking and home networking, we have improved the quality of life while boost-
ing product differentiation. In the vacuum cleaner sector, we developed the Stealth
Vacuum Cleaner, offering the world’s lowest noise levels, and the Steam Vacuum
Cleaner, with rotating steam mop, as well as the Robot Cleaner, comprising a full lineup
of cleaning solutions to lead both the domestic and global markets.
Leading the Premium Market
In 2008, we will focus our efforts on further penetrating premium markets by launch-
ing
new products in the United States and Europe amidst an acceleration in brand
marketing activities. We hope to achieve a 25% sales increase over 2008. To accom-
plish this, we will bolster our marketing of side-by-side refrigerators and drum washing
machines in North America, as well as side-by-side refrigerators and air conditioners in
Europe. In the fast-growing markets of China, India and the CIS, we will boost sales of
our premium models where the market conditions of these regions warrant doing so. In
addition, we will strengthen our efforts to lead the market by steadily growing the built-
in and B2B businesses, and continuing a product-centered marketing strategy.
Nano e-HEPA Filtration System-Equipped Air Purifier
Our Nano electric, High Efficiency Particulate Arrest
(
e-HEPA
)
filtration system removes air particles, elimi-
nates odors and kills airborne health threats. It features a
12-stage air purification system, including a dust filter
coated with 8 nanometer
(
nm
)
silver particles, which
delivers the cleanest and healthiest air quality possible.
6-in-1 Steam Oven
Simple, yet stylish, our 6-in-1 steam oven combines all of
the features of a conventional oven with advanced steam
cooking technology to stimulate healthier eating.
Samsung’s versatile steam cooking solution adds a
steam function to the conventional oven, grill and micro-
wave, as well as dry heat and fermenting.
25%
20%
LESS WATER
CONSUMPTION
LESS ENERGY
CONSUMPTION
Robot Vacuum Cleaner
Samsung’s innovative robot vacuum enables faster and
more efficient cleaning, with a built-in camera that draws
a 3D map of the entire room. It also features a power brush
cleaner with a three-way vacuum system that leaves floors
spotless. And, it is equipped with 15 anti-crash sensors
to minimize any damage to furniture and the machine itself.
OCTOBER 16
Named Vendor of the Year by Lowe’s
Samsung Electronics was selected as Vendor of the Year
by Lowe’s, one of the four major U.S. consumer electronics
retailers, establishing us as the first Korean company to
achieve such an honor in the home appliance category.
Building on this accolade, we will work to solidify our part-
nership with Lowe’s in further penetrating the U.S. market.
NOVEMBER 4
Highest Customer Satisfaction rat-
ing by J.D. Power
Samsung’s side-by-side refrigerators
received the “Highest Customer Satisfaction” rating for the
third year in a row from J.D. Power and Associates, a global
marketing information services firm. Our French door
refrigerator, built with the Twin Cooling Plus System, com-
bines cutting-edge technology with eco-friendly design.
i[c_YedZkYjeh
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30nm-class 64Gb NAND Flash Memory
To combat the growing demands of higher density flash
storage solutions, we developed the world’s first 64Gb
multi-level cell
(
MLC
)
NAND flash memory, using 30nm-
class process technology, in October 2007. This highly
advanced device can store up to 80 DVD resolution
movies or 32,000 MP3 music files.
The Semiconductor Business of Samsung Electronics—leveraging
numerous industry-leading technologies, highly advanced production
capabilities and close collaborations with a myriad of customers—is
a global leader in the memory, large scale integration
(
LSI
)
and
storage markets. We will continue to lead the market in our areas
of focus with non-stop development of the industry’s most innovative
products and advanced technology.
2007 MEMORY CHIP
WORLDWIDE MARKET SHARE
27.6
%
OPERATING
PROFIT
[
KRW hundreds of billion
]
SALES
[
KRW trillion
]
22.8
2006
22.3
2007
51.2
2006
23.5
2007
Solidifying Leadership in the Global Marketplace
While the world semiconductor market has shown impressive growth over the years,
it
has been prone to highly cyclical market fluctuations, experiencing more volatility
than the global economy as a whole. In 2007, the global semiconductor market
showed 3.3% growth over 2006. Overall, however, the industry has experienced a
number of difficult challenges, which have sharply reduced the profitability of most
chipmakers. DRAM prices continue to suffer as a result of continued market oversup-
ply and NAND Flash prices also show weakness in spite of expanding sales in seg-
ments featuring multimedia mobile devices. Depressed revenues have encouraged a
wide range of new alliances, joint capital investments and accelerated technology
development—further intensifying industry competition.
In today’s fast-changing markets, even in the face of modest growth, most chipmakers
have been weighed down by significant losses. However, Samsung’s Semiconductor
Business succeeded in posting KRW2.2 trillion in earnings in 2007, backed by
improvements in operational efficiency, the introduction of cost-reducing process tech-
nologies and the development of clearly differentiated products with distinct market
advantages. Our No. 2 ranking in the semiconductor industry remained solid with
continued market dominance in most areas of the memory business, including strong
sales in DRAM, SRAM, MCPs, flash memory and fusion memory devices.
MARCH 2
World’s first 60nm-class 1Gb DRAM mass
produced
As of March 2007, we began mass producing
the world’s first 1Gb DDR2 DRAM using 60nm-class
process technology. Compared to 80nm-class process
technology, 60nm increases production efficiency by up
to 40%.
MARCH 13
Developed high-capacity 8GB MoviNAND
We have developed a high capacity 8GB MoviNAND,
which uses 50nm-class NAND Flash memory. We dou-
bled the capacity and function of the 4GB product, wid-
ening the capacity range of our product lineup from
512MB to 8GB.
2007 AT-A-GLANCE
In addition, we achieved many more world firsts, including introduction of the 1.8
Ç
SATA
II 64 Gigabyte
(
GB
)
Solid State Drive
(
SSD
)
; development of 30nm-class 64Gb NAND
Flash memory; development of a 65nm digital TV receiver chip; and roll-out of the
FlashON™ Hybrid HDD
(
hard disk drive
)
. Furthermore, we introduced the world’s fastest
graphics memory—our 6Gb per second, 512 Megabit
(
Mb
)
GDDR5 chip—which doubled
the data speed of the previous industry leader, GDDR4.
Unwavering Memory Leadership
In 2007, Samsung Electronics easily held on to its No. 1 position in the memory
indust
ry with 28% overall market share. Our product portfolio included the indus-
try’s most extensive mix of Flash and DRAM chips, designed to power the widest
range of PC, server, graphics, consumer and mobile devices. We also succeeded in
producing the world’s first 60nm-class 1Gb DRAM and 50nm-class 16Gb NAND Flash
memory chips. Beyond these areas of demonstrated success and underscoring our
role as leading market innovator, we remain highly aggressive in pioneering the devel-
opment of new memory markets.
Other stand-out accomplishments in 2007 include becoming the supplier with the
most NAND Flash-based SSD product offerings and the successful addition of another
fusion memory offering—the Flex-OneNAND
TM
—to our existing portfolio, which also
includes the OneNAND
TM
and OneDRAM
TM
. As interest intensifies in memory solutions
that resolve multiple design issues in a single chip, our fusion memory products are
expected to account for an increasingly major part of the Samsung memory business
over the next several years.
60nm-class 2GB DDR2 DRAM
In September 2007, we developed the industry’s first
60nm-class 2GB DDR2 DRAM, improving DRAM perfor-
mance by up to 20%. In addition, this new device will
also deliver twice as much storage capacity over existing
system memory solutions.
In addition, we achieved many more world firsts, inc
II 64 Gi
g
abyte
(
G
B
)
Solid State Drive
(
SSD
)
;
develo
p
Flash memory; development of a 65nm digital TV
128GB SSD
In our quest to provide a better alternative to hard disk
drives in devices such as notebook PCs, we announced
development of a 128GB flash-based SSD in January 2008.
Compared to HDDs, Samsung SSDs are lighter, more durable,
consume less power, make no noise and allow PCs
to start up and load software at higher speeds.
APRIL 30
World’s first 50nm-class 16Gb NAND
Flash memory mass produced We became the first
company to mass produce 16Gb NAND Flash memory
chips—the largest capacity on the market today. This
milestone signals our commitment to minimizing produc-
tion costs while improving performance.
MAY 31
World’s first 2.5-inch 250GB HDD We
launched the world’s first 2.5-inch 250GB HDD.
Optimized for mobile devices, the 250GB HDD produces
85% less noise and consumes 95% less energy com-
pared to our previous HDD. Plus, the 250GB HDD
includes enhanced data stability capabilities.
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Next-Generation System LSI Growth Engine
Our System LSI Division has been designated as one of the most promising growth
e
ngines within Samsung Electronics. In spite of unfavorable market conditions in 2007,
the System LSI Division solidified a strong base for further growth by increasing sales
of Display Drive ICs
(
DDIs
)
, CMOS image sensors and media player chips. Specific
products such as mobile DDIs; media player System on Chip
(
SoC
)
devices; applica-
tion processors
(
APs
)
for navigation; smart card ICs; and CMOS image sensors are
being developed as core components for next generation mobile devices. Future
growth engines also will include our foundry/ASIC business, digital TV/mobile TV SoC
products, next-generation optical storage SoCs and memory storage controllers.
Expanding Storage Business Capability
In the HDD market, Samsung Electronics produces high-capacity hard drives for
bo
th mobile devices and digital home appliances. We are expanding our storage busi-
ness by entering new HDD markets in 3.5
Ç
, 2.5
Ç
and 1.8
Ç
form factors, soon to be
followed by a 1.3
Ç
size. Also, our FlashON™ Hybrid HDD has helped us to cultivate
new markets within the storage industry. With mass production of the 1.8
Ç
HDD begin-
ning in 2007, we intend to expand our presence in the consumer marketplace even further.
Strategic Growth and Product Line Focus
In the midst of price-pressuring oversupply situations in a number of memory markets,
we w
ill enhance our competitive edge by continuing capital investments and extensive
R&D efforts. Through the expansion of 68nm and introduction of 56nm DRAM produc-
tion, as well as the expansion of 51nm and introduction of 42nm NAND Flash production,
we are on track to further reduce costs. In the meantime, we plan to increase sales by
reinforcing our moviNAND
TM
, Flex-OneNAND
TM
and high-capacity SSD product lines.
Furthermore, in our System LSI Division, we will also add digital TV/mobile TV SoCs,
SoCs for next-generation optical storage and memory storage controllers to our line-up
of strategic product areas for future R&D focus and targeted market penetration.
In May 2008, we announced that we had developed the
world’s fastest 2.5
Ç
, 256GB multi-level cell
(
MLC
)
solid-
state drive
(
SSD
)
. This milestone represents a new day in
improved performance of storage drives for devices
such as notebook PCs, while also making them lighter,
more durable, quieter, and more energy efficient.
256GB
16M-Color DDI for AMOLED
In 2007, we developed a 16M-color display driver IC
(
DDI
)
for active-matrix OLED
(
AMOLED
)
displays used in
mobile phones and other mobile devices. Made of
organic material, AMOLED allows for lighter and
thinner display designs, and low power consumption.
INCREASED PRODUCTIVITY
COMPARED TO 80NM-CLASS
2GB DRAM
JUNE 26
1.8-inch 64GB SSD mass produced
We
started to mass produce 1.8-inch SATA II 64GB SSDs—
the highest density SSD available at the time. Compared
to HDDs, SSDs are more reliable and have faster boot
and application start-up times. SATA II SSDs can also
significantly improve a PC’s battery life.
DECEMBER 2
Developed world’s fastest GDDR5
memory
The GDDR5 memory chip, which can transfer
data at a rate of six gigabits per second, is the world’s
fastest memory. Developed by Samsung Electronics, the
GDDR5 is more than four times faster than the memory
chips found in most advanced game consoles on the
market today.
40
%
B9:
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Achieving No. 1 in the World, Six Years in a Row
The display business is widely predicted to see steady growth in the sale of large-
s
creen LCD TVs, expansion of the IT business and continued diversification of mobile
products. New applications for LCD products, such as large-format Digital Information
Displays
(
DID
)
, small- and mid-format Personal Multimedia Players
(
PMP
)
and Ultra
Mobile PCs
(
UMPC
)
are also boosting the growth of the LCD industry. According to
DisplaySearch, the global LCD market in 2007 was US$89.8 billion, and it expects the
market to grow to more than US$114 billion in 2008.
In the 1990s, we were primarily involved in the production of LCD panels for use in
notebook PCs, and then expanded into display panels for desktop monitors and vari-
ous mobile products, such as mobile phones, game consoles, PDAs and MP3 players.
Along the way, we also extended our business into display panels for TVs, leading the
world’s LCD industry in a wide variety of applications. In 2007, Samsung Electronics
was ranked No. 1 in display panels for TVs, desktop monitors and notebook PCs,
achieving a global market share of 23.1%, in terms of sales. We have held the highest
share of this product segment globally for six consecutive years, ensuring our contin-
ued leadership in the LCD industry.
Monitor Panel
From its ordinary desktop computer monitors to high-
end multimedia ones, Samsung Electronics leads the
industry in picture quality. Optimized for Microsoft’s
Window Vista, our monitors are built for high perfor-
mance and designed to facilitate multitasking.
With the world’s best display technology and most innovative
production techniques, Samsung Electronics is leading the evolution
in innovation within the display industry. Our LCD business is paving
the way to a wider, brighter and clearer window to the world.
2007 LCD MARKET SHARE
WORLDWIDE
23.1
%
OPERATING
PROFIT
[
KRW hundreds of billion
]
SALES
[
KRW trillion
]
13.9
2006
17.0
2007
9.0
2006
21.1
2007
JANUARY 5
World’s first truly double-sided LCD
panel Samsung’s announced creation of the world’s first
double-sided LCD panel. Unlike conventional double-sid-
ed panels, our panel can display two entirely different
images simultaneously on the front and back of the same
screen.
JUNE 1
Mass production of 70-inch HD LCD
panels for TVs
Starting in June 2007, we began mass
producing the world’s largest (70-inch) LCD panel for Full
HD TVs. By applying LED backlight technology, we have
been able to increase the panel’s picture quality and con-
trast ratio while reproducing rapidly moving video images
with much greater clarity.
2007 AT-A-GLANCE
TV Panel
Our highly impressive LCD TV panels range
from 26 to 70 inches. The successful commercialization
of our 8th-generation production lines has transformed
us into the industry-leading manufacturer of
LCD TV panels, 46 inches or greater.
Small- and Mid-sized Panels
We are producing a wide range of AMOLED sizes for
premium mobile multimedia devices. The displays use
Samsung’s proprietary amorphous silicon gate technology
and their production has reduced the mobile panel cir-
cuitry footprint and the number of parts by about one-third.
T
O
f
o
u
L
Our LCD panel sales reached more than KRW17.06 trillion with an operating profit of
KRW2.11 trillion in 2007, a 23% and a 147% increase from the previous year, respec-
tively, to maintain the industry’s best profit rate. With the help of price increases due to
short product supply and continuing cost-reduction efforts, our outstanding perfor-
mance should continue to lead the LCD industry.
The Successful Commercialization of the 8th-Generation Production Line
In August 2007, we began manufacturing LCD panels from the world’s largest moth-
erglass to date, at the first 8th-generation production lines. These lines can make a
2200 by 2500mm motherglass, from which 300,000 panels a month (based on 52-inch
panels) can be produced. We returned a profit for the new lines after only three months
of commercial production. In 2008, we are expanding capacity to bolster our position
in the rapidly expanding large-screen LCD TV market. Our industry-leading production
capacity here will be leveraged with investments in the building of additional 7th-gener-
ation production lines, and our second 8th-generation production line in a joint venture
with Sony.
We also are expanding our global LCD production capacity by building new facilities
around the world. In September 2007, we completed our second plant in Suzhou,
China and already have produced more than five million LCD modules for TVs there.
In addition, we commenced operations in a new plant in Slovakia in January 2008.
With a annual production capacity of 2.5 million LCD modules, the Solvakian plant
will increase its cost efficiency quickly in helping us to meet the needs of the fast-
growing European LCD TV market.
AUGUST 28
Successful mass production of the
8th-generation line Samsung Electronics has secured
its leadership position through the successful shipment
of LCD panels produced from its 8th-generation line.
With growing demand for larger panels, the 8th-genera-
tion line is essential to fulfilling this need.
SEPTEMBER 17
First aggregate 200 million LCD
shipments for IT products As of the end of August
2007, we shipped an industry-first aggregate of 2.04
hundred million LCD panels for IT products, exceeding
200 million shipments. This took place over the course of
12 years after mass production began in 1995.
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Leading the Industry with Cutting-Edge Technology
Samsung Electronics has led the LCD industry with aggressive investments and cut-
t
ing-edge technology development. As we move to the next generation, we will contin-
ue to introduce new products and technology to build a sustainable growth platform.
We have developed the world’s first truly double-sided LCD panel, which can display a
different image on each side of the panel, followed by the world’s first touch-screen-
enabled LCD in response to the expansion of the touch screen market. In addition, we
have developed the world’s first blue phase mode LCD–a 15-inch prototype having a
super-fast 240Hz visualization rate, as well as a 2.1-inch Sensor-based Automatic
Brightness Control
(
SABC
)
LCD which can reduce power consumption by 25%
compared to conventional models. Furthermore, we introduced next-generation stan-
dards for color displays and black-and-white e-paper, plus several commercial sizes of
AMOLEDs as we continue to accelerate the advancement of the display business.
Expanding Production Capacity and Premium Product Lines
In 2008, we expect increased demand for LCD modules in the production of
large-format TVs and mobile devices, while we expect to see continued product
supply shortages. In anticipation of the 2008 Olympic Games in Beijing and full-
scale implementation of digital broadcasting in the U.S. by 2009, Samsung Electronics
plans to accelerate its market leadership position within the LCD industry. With
expansion of our 7th- and 8th-generation production operations, we will increase
our share in the 46-inch LCD module segment of the large-screen TV market. Our
strategy will include expanding our premium product lineup for the multimedia and
digital broadcasting categories, as well as further market penetration in the areas of
next-generation display panels and thin-film solar cells. With such aggressive expan-
sion efforts, we will consolidate our status as the world’s leading LCD producer.
Notebook PCs Panel
With this multifunctional panel, we are leading
the trend toward wider-screen notebook PCs.
The ultra-slim profile improves portability, and
its screen size is ideal for multimedia applications.
Samsung’s new Blue Phase technology will dramatically
enhance the picture quality on our high-end LCD TVs.
With image quality driven at a speed of 240Hz, LCD TVs
built with Blue Phase technology will far exceed the
performance of other LCD TVs.
240Hz
300
MID- AND SMALL-SIZED LCD
AGGREGATE TOTAL SHIPPING AMOUNT
[
AS OF OCTOBER 2007
]
OCTOBER 12
PVC-free LCD panel products
In
efforts to preserve the environment and curb chemical
use, Samsung Electronics made a commitment to pro-
duce only PVC-free LCD panels in the future. We replaced
PVC with polyethylene to increase our commitment to
eco-friendliness.
NOVEMBER 28
First LCD sales record over US$2
billion a month
In October 2007, our LCD sales exceed-
ed US$2 billion for the first time. By October, aggregate
sales surpassed our 2006 total sales amount. By the
end of 2007, we had maintained our No. 1 global leader-
ship position for six years in a row.
j^_da_d]
A global leader is not only responsible
for that which lies within its walls but
also for that which lies beyond them.
Making industry-leading products is only part of the big picture. Our commitment to creating
a better world for future generations is equally as important. We strongly believe that if future
generations aren’t given the opportunity succeed, we definitely won’t. As a corporate citizen, we have
dedicated ourselves to nurturing our local communities through corporate social responsibility and
co-prosperity initiatives. Samsung has also remained steadfast when it comes to supporting
education initiatives, helping of the disadvantaged and efforts to stop the “greening” of the planet.
55
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ceh[e\oek
We share with all communities our hope
for a brighter future, and try each day
to make this world a better place to live in.
From a Good Company to an Admirable One
Samsung Electronics believes that it’s our responsibility to realize sustainable growth
while driving business performance to enhance the value of the corporation. We also
believe that corporate citizenship entails a responsibility to contribute to local and glob-
al communities, thereby enhancing the values of our society. Through our program
“Contribution to a Better Society through CSR Management for Communities,” we fulfill
our vision of corporate social responsibility
(
CSR
)
and corporate citizenship by promot-
ing social welfare, culture and the arts, academics and education, the environment,
international exchange, and volunteer community service to make life better for all. To
become a great company that earns trust and respect around the globe, we continue
to develop a wide range of social contribution programs worldwide.
Gaining Love and Respect from the Community
Establishing social contribution programs to help people in need within local commu-
nities is part of our corporate culture. All of our employees understand that pursuing
mutual prosperity is an important corporate ethical value. In 1995, Samsung Electronics
launched the Social Contribution Corps to encourage employees to participate in
community service. In 2006, the organization expanded with the creation of a Social
Contribution Secretariat at the Head Office to map out a new direction in philanthropic
initiatives and establish a CSR brand. Currently, the secretariat has eight volunteer
centers under its wing. The centers are manned by social welfare experts who support
the development of employee volunteer programs.
We chose “Another Family” as our new CSR motto in 2006. This shift in message
has led to specific changes in our social contribution programs, such as supporting a
better future for teenagers, assisting children from low-income families; and imple-
menting a family well-being program. We are also carrying out programs designed
specifically for each of our eight major volunteer centers and have collaborated on a
wide range of programs with Samsung Community Relations, the Samsung Group’s
social contribution organization. In 2007, our employees in 1500 volunteer groups con-
tributed to a wide range of undertakings for our neighbors in need, through associa-
tions with more than 400 organizations and 1300 people. Moreover, we pledge that
our efforts to earn trust and respect as a member of society will continue.
Making a Difference through Active Involvement
In order to promote mutual prosperity, our social contribution programs focus on the
following areas: social welfare, culture and the arts, academics and education, the envi-
ronment, international exchanges, and volunteer services. For social welfare, we estab-
lished the Stepping Stone Scholarship Foundation to provide scholarships for disabled
university students. We also have formed “One Company, One Village Sisterhood Ties”
for helping farming communities, in addition to offering computer training for the blind.
Samsung Running Festival Linking social contribution
activity with sports, Samsung Running Festival represents an
ongoing community commitment on a global scale. Every year,
more and more people participate in the event to raise donations
for those in need within participating communities while enjoying a
5km run.
Adopt-a-Village in China Since 2005, our 40 regional offices
in China have established sisterhood relationships with farming
villages nationwide to help disadvantaged people and rural com-
munities, while protecting the environment and supporting
education.
^ef[\kb
CORPORATE CITIZENSHIP
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In particular, each of our business divisions support industry-related contribution pro-
grams that give back to their local communities. To help combat the growing number of
people affected by Alzheimer’s disease, our Semiconductor Business established the
Alzheimer’s Disease Prevention Center. Our Telecommunication Network business also
supports hearing aids for the deaf and guide dogs for the blind. Our LCD Business pro-
vides magnifying glasses for low-income elderly people in farming communities and
drives an eye disease prevention campaign.
Sharing Love and Hope around the World
Samsung Electronics’ social contribution work extends beyond our country’s bor-
ders. We contribute to communities on the global stage with diverse CSR programs
and events. Responding to social environments and regional situations, we have devel-
oped unique programs to meet the needs of local communities.
The “Samsung Running Festival” is a showcase for our ongoing commitment to
community service. Originally organized in Hungary in 1995, the event has subse-
quently spread to other regions around the world, including countries in Asia, Europe,
Africa, South America and Australia. A charity program including fundraising and a
5km run, the event has gathered more people and larger donations each year, and has
proven to be a big help to the communities involved.
Samsung’s “Four Seasons of Hope” program in the U.S., since 2002, has brought
Samsung Electronics together with major retail partners and world-famous sports stars
for an incredibly effective charity campaign. By 2007, the program raised US$10 million
in donations. We also launched the “Hope for Education” program with Microsoft in
2004, supporting primary and secondary schools in the U.S. with a number of educa-
tion products representing the latest in technology.
In China, we are promoting goodwill and our reputation as a company that gives to
society by protecting the environment, supporting education and helping disadvan-
taged people and rural communities. Our social contribution programs, such as
“Adopt-a-Village” and a program that provides free cataract surgery for patients in
need, were highly praised by the communities they served. In 2007, the Guangming
Daily awarded Samsung Electronics, for the third year in a row, with one of its Public
Benefit Prizes in recognition of our support for Chinese communities.
Our “Digital Hope” program for Southeast Asia continued to offer opportunities to
share the digital experience with many youths and people with disabilities. Program
funds were used to set up computer-equipped classrooms in Thailand, Vietnam, Indo-
nesia, the Philippines, Singapore, Malaysia and Australia. In Russia, we raised money to
help children with congenital heart defects, children’s hospitals and other undertakings
for the disadvantaged. In Ukraine, we have supported the “Chestnut Run,” a fundraiser
for children with heart disease, since 2002.
Samsung’s Four Seasons of Hope With world
famous sports stars and major retail partners,
Samsung’s Four Seasons of Hope strives to
improve the quality of life for children in need and
their families. Since 2002, we’ve raised more than
US$10 million and have made a major difference
in the lives of countless needy children.
j^_da_d]
A total of 269,000 Samsung Electronic employees participated
in volunteer community activities in 2007, with over 981,815
hours of service. Each individual contributed an average of
12 hours of their time in community-based projects.
269,000
Our employees have made significant donations and partic-
ipated in numerous volunteer activities over the years. 74%
of our employees contributed a portion of their salaries to
further our corporate citizenship initiatives.
74
%
Mutual Growth with Our Partners
Our business partners have been our companions and a key source of sustainable
growth. Driven by our philosophy of mutual growth, we are continuously pursuing win-
win partnerships that elevate Samsung Electronics to being a truly top-notch global
company. In late 2003, we announced a comprehensive supplier support plan to help
solve partners’ issues with technology, human resources and capital for promoting our
co-prosperity management philosophy. Following this announcement, we supported
our business partners through the construction of facilities, on-site training and profes-
sional development programs. Besides conducting fair evaluations of our partners, we
encourage their participation through Samsung Partners’ Day, inviting hundreds of
executives to share management goals and strategy while presenting awards for excep-
tional innovation. In May 2008, we established the Co-prosperity Management Office
under the CEO to drive more efficient and rewarding win-win alliances with our partners.
Supporting Our Business Partners’ Competitive Edge
Embracing our belief that “our business partners’ competitiveness is our own
competitiveness,” we at Samsung Electronics strive to help our partners sharpen their
expertise through a long-term mutual development strategy. Facility upgrades and
technology development are some of the examples of our support. In addition, we have
helped to improve how work is performed on the factory floor. We have sent our own
experts or hired outside professionals to provide guidance for production innovation to
enhance quality, productivity and distribution. External consultants were hired to help
implement our Enterprise Resource Planning (ERP) installation project, which aims to
improve our business partners’ information management systems and their ability to
improve business management controls internally by sharing transaction information
with Samsung Electronics in real time.
In addition, our support included funds for hardware and software as well as man-
agement consultants. Along with financial and manpower support, we are involved in
promoting technology exchange among outstanding companies. Assistance is also
extended for development projects related to government policy such as those linked
to the Small and Medium Business Association
(
SMBA
)
. In our strategic alliances, we
provide full support, through joint development projects, for local development of parts
and equipment used in our semiconductor and LCD products. Competitive business
partners enable us to secure high-quality parts and components at the right time at the
right price, paving the way for win-win partnerships.
Samsung Partners’ Day The annual Samsung Partners’ Day
was held in February 2007 with more than 400 executives from
Samsung and its partner companies in attendance. The event
encompasses various activities, including an awards presenta-
tion to recognize exceptional innovation. In the future, we will
remain a true “partner for mutual prosperity,” sharing an ambi-
tious global strategy with our partners while advancing further
toward the pinnacle of global leadership.
We pursue true co-prosperity
through win-win partnerships.
CO-PROSPERITY
YebbWXehWj_l[
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Nurturing the Talent of Our Business Partners
We believe our partners’ competitive edge lies within nurturing their talented work-
force. Samsung Electronics contributes to fostering our business partners’ human
resources through a wide range of education and training programs in three categories:
job specialists, future leaders and top management leadership. Job specialists
programs include GVE (Group Value Engineering), Six Sigma, CAD planning, ERP
education and support in the fields of manufacturing and quality control. We also offer
technology courses in collaboration with domestic universities. In addition, we help our
suppliers with recruiting and run other education support programs. Furthermore, we
pass our management know-how on to our business partners’ top executives through
diverse education programs and seminars.
2007 Innovation Case Studies of Partner Companies
On November 15, 2007, we organized our “Innovation Case
Studies of Partner Companies” event, attended by 196 part-
ner companies and our employees. At the event, our partners
presented a wide range of innovative ideas to sharpen our
mutual leadership in technology while enhancing the cohe-
siveness of our partnerships.
As part of a comprehensive supplier support plan, we imple-
mented the ERP Project from 2004 to 2006. This program
has greatly enhanced our business partners’ operational
efficiency, reducing inventory days by 30% and bookkeeping
time by 50%.
50
%
j^_da_d]
Green Management Initiative to be a Global Standard
Building upon Samsung’s philosophy of contributing to a better global society and
preserving the planet through activities related to the environment, safety and human
health (ESH), we are committed to being a respectful global corporate citizen. In 1992,
Samsung Electronics established a set of environmental guidelines, and took our com-
mitment one step further in May 1996 as we announced our Green Management policy.
Enhancing our Green Management initiative, we organized an Environment and Safety
Committee, implemented an Environment and Safety Management System based on
ISO 14001 and OHSAS 18001 certifications, and adopted a Total Integrated Safety
System to better implement the policy.
Green Management consists of five major segments aimed at preserving the global
environment: the Greening of Management is a commitment toward improving our ESH
program through the public disclosure of corporate information; the Greening of Prod-
ucts is our assumption of responsibility for all processes related to our products; the
Greening of Processes is the application of clean process technologies; the Greening of
Workplaces is a set of actions aimed at eliminating pollution, occupational illnesses and
accidents on the job; and the Greening of Communities, as the name suggests, is a
“green partnership” between Samsung and society.
Minimizing the Environmental Impact
Samsung Electronics is developing cleaner production technologies by revamping
its manufacturing processes and facilities, while converting to alternative resources in a
concerted effort to become more sensitive to the environment. We also are striving to
minimize the pollutants discharged during manufacturing and to reduce the amount of
energy consumed company-wide.
We have undertaken a series of activities that encompass the entire product lifecycle
to improve our products’ environmental performance. The “Eco-Design” concept was
adopted to develop products with minimal environmental impact in every respect, from
raw material acquisition, production and logistics to the use and disposal of materials.
An ongoing effort is underway to make Samsung products as environment friendly as
possible without the use of hazardous materials. In addition, we have taken steps to
promote eco-friendly supply chain management, operate recycling centers that disposal
of end-of-life products more efficiently, and fulfill transparent disclosure requirements for
environmental information.
ISO 14001 and OHSAS 18001 Certificates We are building
an advanced EHS management system to ensure sustainable
development, and our EHS certification continues to expand
worldwide.
Eco-partner Certification Program In 2004, Samsung
Electronics established the Eco-partner Certification Program to
manage hazardous substances found within components and
other raw materials. This program has helped our business
partners set up their own environmental quality management
systems.
We continue our Green Management initiative
for a healthy future for our people and planet.
GREEN MANAGEMENT
]h[[d
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Actively Responding to Climate Change
In line with the Kyoto Protocol—the international Framework Convention on Climate
Change—the world is strengthening its efforts and regulations to reduce greenhouse
gases. As an active leader of environment initiatives to address global warming, Samsung
Electronics introduced the “Catch CO
2
Project” in 2002, a voluntary initiative to reduce
our CO
2
emissions. We also signed a voluntary agreement with the Korean government
to reduce greenhouse gas emissions through energy conservation. In addition, we are
striving to curtail the discharge of substances that cause global warming, with a particu-
lar focus on CO
2
emissions during the manufacturing processes. Meanwhile, we continue
to be a leader in energy conservation efforts through company-wide energy-saving initia-
tives, including the manufacturing of more energy-efficient electronic products.
Partnerships on Environmental Initiatives
Samsung Electronics is committed to earning the respect of local communities by
fulfilling its social obligations regarding ESH. We have a program in place to minimize
our environmental impact, starting with the construction of new plants and office buildings.
Data on facility operations is analyzed regularly and all necessary follow-up measures
are carried out in a timely manner.
We also sponsor activities to protect the ecosystem of the communities where we
work. These activities heighten public awareness of the importance of preserving the
environment and restoring it where it has been damaged. True to our commitment to
environmental responsibility, we organize regular cleanup drives at local mountains
and streams, as well as nature classes for local schools. By publishing the Environ-
mental & Social Report every year, we provide detailed information about our Green
Management initiatives to customers, shareholders and communities for their better
understanding of and involvement in our activities.
Environment Website for Our Product Group We
proactively communicate our environmental activities to stake-
holders through our website’s homepage. With environmental
websites designed specifically for our semiconductors and
mobile phones, we are able to provide further information on our
product-related environmental policies .and programs.
1400
We continue to be recognized by our peers around the world
for our development of innovative environment-friendly prod-
ucts backed by our unique Eco-Design process. As of April
2008, we have received six Eco-labels, including the Korean
Eco-label and the China Environmental Label, in addition to
EU’s Eco-Flower, Germany’s Blue Angel, Sweden’s TCO and
the U.S. EPEAT. More than 1400 Samsung Electronics prod-
ucts were certified as eco-friendly from these institutions,
making us the No. 1 producer of Eco-labeled products in the
global electronics industry.
j^_da_d]
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FINANCIAL STATEMENTS
REPORT OF INDEPENDENT AUDITORS 64
CONSOLIDATED FINANCIAL STATEMENTS
BALANCE SHEETS 66
STATEMENTS OF INCOME 68
STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 69
STATEMENTS OF CASH FLOWS 73
CONSOLIDATED FIVE-YEAR FINANCIAL SUMMARY 75
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 77
INVESTOR INFORMATION 132
GLOBAL NETWORK 133
ASSETS
Current assets
Cash and cash equivalents 5,831,989 4,222,027 $ 6,217,472 $ 4,501,095
Short-term financial instruments (Note 4) 5,061,898 3,504,366 5,396,480 3,735,998
Short-term available-for-sale securities (Note 5) 922,833 2,058,781 983,830 2,194,862
Short-term held-to-maturity securities (Note 5) 130 248 139 264
Trade accounts and notes receivable,
net of allowance for doubtful accounts (Note 6) 11,125,132 9,089,452 11,860,482 9,690,247
Other accounts and notes receivable,
net of allowance for doubtful accounts
(
Note
6)
989,143 972,426 1,054,523 1,036,701
Inventories, net of valuation losses
(
Note
7)
7,968,803 6,753,445 8,495,526 7,199,835
Short-term financing receivables, net (Note 8) 5,575,006 4,586,972 5,943,503 4,890,162
Short-term deferred income tax assets (Note 24) 1,537,946 1,469,973 1,639,601 1,567,135
Prepaid expenses and other current assets 2,888,134 2,331,215 3,079,035 2,485,305
Total Current Assets 41,901,014 34,988,905 44,670,591 37,301,604
Property, plant and equipment, including
revaluations, net of accumulated depreciation (Note 11) 37,380,644 33,784,615 39,851,433 36,017,713
Long-term available-for-sale securities (Note 9) 3,712,322 2,557,004 3,957,699 2,726,017
Long-term held-to-maturity securities (Note 9) 147,287 197,680 157,022 210,746
Equity-method investments (Note 10) 3,782,413 3,393,617 4,032,423 3,617,929
Deferred income tax assets (Note 24) 266,280 353,027 283,881 376,361
Intangible assets, net of accumulated amortization (Note 12) 704,627 658,385 751,201 701,903
Long-term financing receivables, net of
allowance for doubtful accounts (Note 8) 3,799,955 3,806,535 4,051,125 4,058,140
Long-term deposits and other assets, net 1,680,594 1,626,438 1,791,678 1,733,943
Total Assets
93,375,136 81,366,206 $ 99,547,053 $ 86,744,356
continued
CONSOLIDATED BALANCE SHEETS
YEARS ENDED DECEMBER 31, 2007 AND 2006
2007 2006 2007 2006
(In millions of Korean won and in thousands of U.S. dollars (Note 3))
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LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Trade accounts and notes payable 6,037,864 4,578,915 $ 6,436,955 $ 4,881,572
Short-term borrowings (Note 13) 8,453,099 7,360,778 9,011,833 7,847,311
Current maturities of long-term debts (Notes 14 and 15) 1,987,148 2,771,866 2,118,495 2,955,081
Other accounts and notes payable 3,861,661 3,609,419 4,116,909 3,847,995
Accrued expenses 6,777,936 5,011,755 7,225,945 5,343,022
Income taxes payable
1,343,941 1,263,088 1,432,773 1,346,576
Other current liabilities 1,334,327 927,050 1,422,522 988,327
Total Current Liabilities 29,795,976 25,522,871 31,765,432 27,209,884
Long-term debts, net of current
maturities
(Note 14)
3,843,728 4,210,669 4,097,791 4,488,986
Foreign currency notes and bonds (Note 15) 228,658 133,797 243,772 142,641
Long-term accrued expenses (Note 17) 43,005 276,019 45,848 294,263
Long-term advances received 168,913 341,438 180,078 364,006
Accrued severance benefits, net (Note 16) 739,936 721,205 788,844 768,875
Deferred income tax liabilities (Note 24) 1,465,555 1,182,262 1,562,425 1,260,407
Other long-term liabilities 1,117,457 1,038,078 1,191,319 1,106,694
Total Liabilites 37,403,228 33,426,339 $ 39,875,509 $ 35,635,756
Commitments and contingencies
(Note 18)
Minority interests 4,306,221 2,675,456 4,590,854 2,852,299
Shareholders’ equity
Capital stock (Note 19)
Common stock 778,047 778,047 829,474 829,474
Preferred stock 119,467 119,467 127,364 127,364
Capital surplus 6,574,995 6,364,604 7,009,590 6,785,292
Capital adjustments
Treasury stock (Note 22) (9,157,492) (7,520,023) (9,762,785) (8,017,082)
Others 410,111 525,813 437,218 560,568
Accumulated other comprehensive income (Note 26) 1,875,385 532,820 1,999,345 568,038
Retained earnings (Note 20) 51,065,174 44,463,683 54,440,484 47,402,647
Total shareholders’ equity 51,665,687 45,264,411 55,080,690 48,256,301
Total Liabilites & Shareholders’ Equity 93,375,136 81,366,206 $ 99,547,053 $ 86,744,356
2007 2006 2007 2006
(In millions of Korean won and in thousands of U.S. dollars (Note 3))
The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2007 AND 2006
(In millions of Korean won and in thousands of U.S. dollars (Note 3))
The accompanying notes are an integral part of these consolidated financial statements.
SALES (Note 27) 98,507,817 85,834,604 $ 105,018,995 $ 91,508,107
Cost of sales (Note 27) 70,880,912 60,055,925 75,566,005 64,025,507
Gross profit 27,626,905 25,778,679 29,452,990 27,482,600
Selling, general and administrative expenses 18,653,619 16,649,654 19,886,587 17,750,164
Operating profit 8,973,286 9,129,025 9,566,403 9,732,436
Non-Operating Income
Interest and dividend income 483,604 384,169 515,569 409,562
Foreign exchange gains 1,831,629 1,328,344 1,952,696 1,416,145
Gain on foreign currency translation (Note 29) 127,891 191,178 136,344 203,814
Gain on valuation of equity method investments (Note 10) 652,500 551,057 695,629 587,481
Others 1,049,315 810,542 1,118,674 864,118
4,144,939 3,265,290 4,418,912 3,481,120
Non-Operating Expenses
Interest expense 294,140 294,449 313,582 313,912
Foreign exchange losses 1,849,002 1,257,136 1,971,217 1,340,230
Loss on foreign currency translation (Note 29) 116,231 109,444 123,914 116,678
Loss on valuation of equity method investments (Note 10) 274,874 31,396 293,043 33,471
Impairment losses on investments 1,452 14,499 1,548 15,457
Others 949,653 859,745 1,012,424 916,573
3,485,352 2,566,669 3,715,728 2,736,321
Net income before income tax 9,632,873 9,827,646 10,269,587 10,477,235
Income tax (Note 24) 1,709,892 1,633,987 1,822,912 1,741,991
Net income 7,922,981 8,193,659 $ 8,446,675 $ 8,735,244
Controlling interests 7,420,579 7,926,087 7,911,065 8,449,986
Minority interests 502,402 267,572 535,610 285,258
Basic earnings per share (Note 25)
(in Korean won and U.S. dollars) 49,502 52,880 $ 53 $ 56
Diluted earnings per share (Note 25) (in Korean won and U.S. dollars) 48,924 52,120 $ 52 $ 56
2007 2006 2007 2006
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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
YEARS ENDED DECEMBER 31, 2007 AND 2006
continued
(In millions of Korean won)
Capital
Stock
Capital
Surplus
Capital
Adjustments
Retained
Earnings
Minority
Interests
Total
Accumulated
Other
Comprehensive
Income
Shareholders’ equity,
January 1, 2006
897,514 6,338,460 (5,343,046) 445,333
37,369,265
1,899,885 41,607,411
Cash dividends from prior year’s
net income - - - - (757,403) - (757,403)
Retained earnings
after appropriations - - - - 36,611,862 1,899,885 40,850,008
Cash dividends from current year’s
net income - - - - (74,386) - (74,386)
Change in ownership interests,
including new stock issues
by consolidated subsidiaries - (398) - - - - (398)
Cumulative effects of changes of
consolidated subsidiaries - 2,284 - - - 1,805 4,089
Net income - - - - 7,926,087 267,572 8,193,659
Acquisition of treasury stock - - (1,812,879) - - - (1,812,879)
Disposal of treasury stock - 4,366 263,634 - - - 268,000
Stock options - 664 (77,672) - - - (77,008)
Gain on valuation
of available-for-sale securities - - - 173,169 - - 173,169
Loss on valuation
of available-for-sale securities - - - 21,607 - - 21,607
Gain on valuation
of equity-method investments - - - 18,574 - - 18,574
Loss on valuation
of equity-method investments - - - 20,082 - - 20,082
Others - 19,228 (24,247) (145,945) 120 506,194 355,350
Shareholders’ equity,
December 31, 2006
897,514 6,364,604 (6,994,210) 532,820
44,463,683
2,675,456
47,939,867
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
YEARS ENDED DECEMBER 31, 2007 AND 2006
continued
(In millions of Korean won)
Capital
Stock
Capital
Surplus
Capital
Adjustments
Retained
Earnings
Minority
Interests
Total
Accumulated
Other
Comprehensive
Income
Shareholders’ equity,
January 1, 2007
897,514 6,364,604 (6,994,210) 532,820 44,463,683 2,675,456 47,939,867
Cash dividends from prior year’s
net income - - - - (746,075) (5,888) (751,963)
Retained earnings
after appropriations - - - - 43,717,608 2,669,568 47,187,904
Cash dividends from current year’s
net income - - - - (73,036) (21,793) (94,829)
Change in ownership interests,
including new stock issues
by consolidated subsidiaries - 275,760 - - - 934,832 1,210,592
Cumulative effects of changes of
consolidated subsidiaries - 17,970 - - - - 17,970
Net income - - - - 7,420,579 502,402 7,922,981
Acquisition of treasury stock - - (1,825,395) - - - (1,825,395)
Disposal of treasury stock - (5,978) 187,925 - - - 181,947
Stock options - 2,403 (63,955) - - - (61,552)
Gain on valuation
of available-for-sale securities - - - 697,756 - 190,969 888,725
Loss on valuation
of available-for-sale securities - - - 583 - (258) 325
Gain on valuation
of equity-method investments - - - 109,633 - - 109,633
Loss on valuation
of equity-method investments - - - 35,870 - - 35,870
Translation of foreign currency
financial statements - - - 496,509 - 29,029 525,538
Others - (79,764) (51,746) 2,214 23 1,472 (127,801)
Shareholders’ equity,
December 31, 2007
897,514 6,574,995 (8,747,381) 1,875,385 51,065,174 4,306,221 55,971,908
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continued
Capital
Stock
Capital
Surplus
Capital
Adjustments
Retained
Earnings
Minority
Interests
Total
Accumulated
Other
Comprehensive
Income
Shareholders’ equity,
January 1, 2006 $ 956,838 $ 675,420 $ (5,696,211) $ 474,769 $ 39,839,302 $ 2,025,464 $ 44,357,582
Cash dividends from prior year’s
net income - - - - (807,466) - (807,466)
Retained earnings
after appropriations - - - - 39,031,836 2,025,464 43,550,116
Cash dividends from current year’s
net income - - - - (79,303) - (79,303)
Change in ownership interests,
including new stock issues
by consolidated subsidiaries - (424) - - - - (424)
Cumulative effects of changes of
consolidated subsidiaries - 2,435 - - - 1,924 4,359
Net income - - - - 8,449,986 285,258 8,735,244
Acquisition of treasury stock - - (1,932,707) - - - (1,932,707)
Disposal of treasury stock - 4,654 281,060 - - - 285,714
Stock options - 708 (82,806) - - - (82,098)
Gain on valuation
of available-for-sale securities - - - 184,615 - - 184,615
Loss on valuation
of available-for-sale securities - - - 23,035 - - 23,035
Gain on valuation
of equity-method investments - - - 19,802 - - 19,802
Loss on valuation
of equity-method investments - - - 21,409 - - 21,409
Others - 20,449 (25,850) (155,592) 128 539,653 378,838
Shareholders’ equity,
December 31, 2006 $ 956,838 $ 6,785,292 $ (7,456,514) $ 568,038 $ 47,402,647 $ 2,852,299 $ 51,108,600
(In thousands of U.S. dollars (Note 3))
The accompanying notes are an integral part of these consolidated financial statements.
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
YEARS ENDED DECEMBER 31, 2007 AND 2006
(In thousands of U.S. dollars (Note 3))
Capital
Stock
Capital
Surplus
Capital
Adjustments
Retained
Earnings
Minority
Interests
Total
Accumulated
Other
Comprehensive
Income
Shareholders’ equity,
January 1, 2007 $ 956,838 $ 6,785,292 $ (7,456,514) $ 568,038 $ 47,402,647 $ 2,852,299 $ 51,108,600
Cash dividends from prior year’s
net income - - - - (795,389) (6,277) (801,666)
Retained earnings
after appropriations - - - - 46,607,258 2,846,022 50,306,934
Cash dividends from current year’s
net income - - - - (77,864) (23,233) (101,097)
Change in ownership interests,
including new stock issues
by consolidated subsidiaries - 293,987 - - - 996,623 1,290,610
Cumulative effects of changes of
consolidated subsidiaries - 19,158 - - - - 19,158
Net income - - - - 7,911,065 535,610 8,446,675
Acquisition of treasury stock - - (1,946,050) - - - (1,946,050)
Disposal of treasury stock - (6,373) 200,346 - - - 193,973
Stock options - 2,562 (68,182) - - - (65,620)
Gain on valuation
of available-for-sale securities - - - 743,876 - 203,592 947,468
Loss on valuation
of available-for-sale securities - - - 622 - (276) 346
Gain on valuation
of equity-method investments - - - 116,880 - - 116,880
Loss on valuation
of equity-method investments - - - 38,241 - - 38,241
Translation of foreign currency
financial statements - - - 529,327 - 30,948 560,275
Others - (85,036) (55,167) 2,361 25 1,568 (136,249)
Shareholders’ equity,
December 31, 2007
$ 956,838 $ 7,009,590 $ (9,325,567) $ 1,999,345 $
54,440,484
$ 4,590,854 $ 59,671,544
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CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2007 AND 2006
(In millions of Korean won and in thousands of U.S. dollars (Note 3))
continued
CASH FLOWS FROM OPERATING ACTIVITIES
Net income 7,922,981 8,193,659 $ 8,446,675 $ 8,735,244
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 8,497,528 6,872,793 9,059,198 7,327,071
Provision for severance benefits 615,586 522,926 656,275 557,490
Loss on transfer of trade accounts and notes receivable 296,375 269,450 315,965 287,260
Bad debt expenses 172,827 545,878 184,251 581,959
Loss on disposal of property, plant and equipment 71,964 54,270 76,721 57,857
Gain on disposal of property, plant and equipment (107,542) (84,629) (114,650) (90,223)
Loss on foreign currency translation 122,597 159,382 130,700 169,917
Gain on foreign currency translation (128,580) (238,194) (137,079) (253,938)
Loss on valuation of equity-method investments 274,874 31,396 293,043 33,471
Gain on valuation of equity-method investments (372,239) (340,893) (396,843) (363,425)
Deferred income taxes (99,601) 115,565 (106,184) 123,204
Others 501,656 575,920 534,813 613,988
17,768,426 16,677,523 18,942,885 17,779,875
Changes in operating assets and liabilities
Increase in trade accounts and notes receivables (1,355,615) (2,409,893) (1,445,219) (2,569,182)
Increase in inventories (1,301,580) (1,336,430) (1,387,612) (1,424,765)
Increase in trade accounts and notes payable 464,720 882,643 495,437 940,984
Increase in accrued expenses 1,146,178 713,322 1,221,938 760,471
Increase in income taxes payable 43,576 308,838 46,456 329,252
Payment of severance benefits (338,137) (184,845) (360,487) (197,063)
Decrease(increase) in financing receivables (1,288,638) 364,223 (1,373,814) 388,297
Increase in long-term accrued expenses 198,601 139,471 211,728 148,690
Others (546,719) (74,253) (582,856) (79,161)
Net cash provided by operating activities 14,790,812 15,080,599 15,768,456 16,077,398
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease (increase) in short-term financial instruments (1,646,130) 564,016 (1,754,936) 601,296
Proceeds from sale of short-term available-for-sale securities 3,028,477 3,718,317 3,228,654 3,964,091
Acquisition of short-term available-for-sale securities (1,842,360) (3,718,158) (1,964,136) (3,963,921)
2007 2006 2007 2006
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2007 AND 2006
(In millions of Korean won and in thousands of U.S. dollars (Note 3))
Decrease (increase) in other accounts and notes receivable 220,787 (93,219) $ 235,381 $ (99,381)
Proceeds from disposal of property, plant and equipment 491,701 344,797 524,201 367,587
Acquisition of property, plant and equipment (12,251,537) (11,738,291) (13,061,340) (12,514,170)
Proceeds from sale of long-term available-for-sale securities 82,198 22,625 87,631 24,120
Proceeds from sale of long-term held-to-maturity securities 49,124 75,211 52,371 80,182
Proceeds from sale of equity-method investments 184,472 23,073 196,665 24,598
Acquisition of long-term available-for-sale securities (20,758) (34,226) (22,130) (36,488)
Acquisition of equity-method investments (127,080) (142,904) (135,480) (152,350)
Others (170,953) (118,948) (182,253) (126,808)
Net cash used in investing activities (12,002,059) (11,097,707) (12,795,372) (11,831,244)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from (repayment of) short-term borrowings 798,134 (545,201) 850,889 (581,238)
Proceeds from long-term debts 2,527,696 3,086,201 2,694,772 3,290,193
Repayment of long-term debts (191,644) (277,859) (204,311) (296,225)
Repayment of current maturities of long-term debts (2,767,259) (4,183,020) (2,950,170) (4,459,510)
Payment of dividends (819,110) (831,789) (873,252) (886,769)
Acquisition of treasury stock (1,825,395) (1,812,879) (1,946,050) (1,932,707)
Others 677,766 675,317 722,565 719,955
Net cash used in financing activities (1,599,812) (3,889,230) (1,705,557) (4,146,301)
Effect of exchange rate changes on cash and cash equivalents 419,006 30,125 446,701 32,116
Net increase in cash and cash equivalents from
changes in consolidated subsidiaries 2,016 15,423 2,150 16,443
Net increase in cash and cash equivalents 1,609,963 139,210 1,716,378 148,412
CASH AND CASH EQUIVALENTS
Beginning of year 4,222,027 4,082,817 4,501,095 4,352,683
End of the year
5,831,990 4,222,027 $ 6,217,473 $ 4,501,095
The accompanying notes are an integral part of these consolidated financial statements.
2007 2006 2007 2006
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Assets 68,042 69,005 74,462 81,366 93,375
Cash & Cash Eq. * 9,095 8,108 8,144 7,726 10,894
Marketable Securities 2,795 2,868 1,932 2,059 923
A/R (Traded) 6,315 6,774 7,397 9,090 11,125
Inventory 4,781 5,804 5,865 6,753 7,969
Liabilities 37,882 32,604 32,854 33,426 37,403
Debt 23,466 17,654 16,432 14,477 14,514
Stockholder’s Equity 30,160 36,400 41,607 47,940 55,972
2003 2004 2005 2006 2007
CONSOLIDATED BALANCE SHEET
CONSOLIDATED INCOME STATEMENT
Sales 64,817 81,963 80,630 85,426 98,508
- COGS 42,252 52,953 55,252 59,652 70,881
Gross Profit 22,565 29,010 25,378 25,773 27,627
(Margin) 34.8% 35.4% 31.5% 30.2% 28%
- SG&A 16,269 17,250 17,802 16,766 18,654
Operating Profit 6,296 11,761 7,575 9,008 8,973
(Margin) 9.7% 14.3% 9.4% 10.5% 9.1%
- Non Operating Income (Expense) 133 615 550 820 660
Interest Payment (Net) 76 192 66 70 171
Equity Method Gain (Loss) 247 496 342 520 378
- Extra Gain (Loss) 0 0 0 0 0
Income before tax 6,430 12,376 8,125 9,828 9,633
(Margin) 9.9% 15.1% 10.1% 11.5% 9.8%
- Income Tax Expense 1,076 2,207 1,218 1,634 1,710
- Minority Interests, etc. (Net) 609 621 733 (268) (502)
Net Income 5,962 10,790 7,640 7,926 7,421
(Margin) 9.2% 13.2% 9.5% 9.3% 7.5%
CONSOLIDATED FIVE-YEAR FINANCIAL SUMMARY
Consolidated base
2003 2004 2005 2006 2007
(In billions of Korean won)
(In billions of Korean won)
continued
Cash Flow from Operating Activities 14,565 16,744 13,329 15,081 14,791
Net Income 5,962 10,790 7,640 7,926 7,421
Depreciation & Armortization 4,299 5,185 6,020 6,873 8,498
Cash Flow from Investing Activities (7,728) (8,183) (9,046) (11,098) (12,002)
Acquisition of PP&E (7,701) (10,497) (11,540) (11,738) (12,252)
Cash Flow from Financing Activities (5,178) (9,639) (3,266) (3,889) (1,600)
Dividend (910) (1,596) (849) (832) (819)
Rights Issuance / Stock repurchase (1,979) (3,841) (2,149) (1,813) (1825)
Consolidation adjustments 108 81 (63) 46 421
Increase in Cash & Cash Eq. * 1,767 (996) 953 139 1,610
2003 2004 2005 2006 2007
2003 2004 2005 2006 2007
(In billions of Korean won)
FINANCIAL RATIOS
ROE 21.4% 32.4% 19.6% 17.7 % 14.3%
Profitability (Net Income/Sales) 0.09 0.13 0.09 0.09 0.08
Asset Turnover (Sales/Asset) 0.97 1.20 1.12 1.10 1.13
Leverage (Asset/Equity) 2.39 2.06 1.84 1.74 1.68
Debt to Equity 77.8% 48.5% 39.5% 30.2% 25.9%
Net Debt / Equity 38.4% 18.8% 15.3% 9.8% 4.8%
Earnings per share (KRW) 36,376 67,916 49,969 52,880 49,502
*
Cash & Cash Eq. includes short-term financial instruments
The numbers are adjusted for the latest change in Korean GAAP and thus may be different from those in audited financial statements.
Financial sectors are included in the consolidated base financial statements from 2000.
CONSOLIDATED CASH FLOW STATEMENT
(In billions of Korean won)
CONSOLIDATED FIVE-YEAR FINANCIAL SUMMARY
Consolidated base
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1. THE COMPANY
Samsung Electronics Co., Ltd. (“SEC”) was incorporated under the laws of the Republic of Korea to manufacture and sell semiconduc-
tors, LCD, telecommunication products, digital appliances and digital media products.
SEC’s shares of stock are publicly traded, and all issued and outstanding shares are listed on the Korea Stock Exchange.
As of December 31, 2007, the major shareholders of SEC, including preferred shareholders, and their respective shareholdings, are as follows:
CONSOLIDATED SUBSIDIARIES
The consolidated financial statements include the accounts of SEC and its controlled subsidiaries(collectively referred to as “the
Company”). Controlled subsidiaries include majority-owned entities and entities in which SEC owns more than 30% of the total
outstanding voting stock and is the largest shareholder. Percentage of ownership is the sum of the percentage of direct and indirect
ownership. The consolidated financial statements include the accounts of the consumer financing subsidiary, Samsung Card Co., Ltd.,
in accordance with the consolidation accounting standards of the Republic of Korea.
Name of Shareholder Number of Shares Percentage of Ownership
(%)
Citibank N.A. 14,089,230 8.28
Samsung Life Insurance Co., Ltd. 10,774,501 6.33
Samsung Corporation 5,917,362 3.48
National Pension Corporation 5,447,212 3.20
Lee Kun-Hee and related parties 4,790,712 2.82
EURO-PACIFIC GROWTH 2,823,753 1.66
Samsung Fire & Marine Insurance Co., Ltd. 1,856,370 1.09
NTC-GOV SPORE 1,777,715 1.04
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2007 AND 2006
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(In millions of Korean won)
1. As of June 27, 2007, Samsung Card Co., Ltd., one of SEC’s domestic subsidiaries,
has listed its issued and outstanding shares on the Korea Stock Exchange.
continued
The following table sets forth certain information with regard to consolidated subsidiaries as of December 31, 2007.
Samsung Gwangju Electronics Co., Ltd. Home appliances 720,123 94.25 Korea
manufacturing
Samsung Card Co., Ltd.
1
Consumer financing 3,558,879 36.87 Korea
STECO Co., Ltd. Semiconductor equipment 63,486 51.00 Korea
manufacturing
SEMES Co., Ltd. Semiconductor equipment 85,550 63.87 Korea
manufacturing
Secron Co., Ltd. Semiconductor equipment 44,345 50.63 Korea
manufacturing
Samsung Electronics Service Co., Ltd. Service center for electronic goods 56,695 83.33 Korea
Living Plaza, Co., Ltd. Sales 140,428 100.00 Korea
Samsung Electronics Logitech Co., Ltd. Distribution 39,838 100.00 Korea
S-LCD Corporation LCD manufacturing 3,484,000 50.00 Korea
Samsung Electronics Hainan Optical cable manufacturing 24,765 100.00 Korea
Fiberoptics Korea Co., Ltd. (SEHF-K)
Samsung Electronics Canada Inc. (SECA) Sale of electronic goods 75,104 100.00 Canada
Samsung Electronics America, Inc. (SEA) Sale of electronic goods 1,956,231 100.00 U.S.A
Samsung Receivables Corporation (SRC) Financing 444,626 100.00 U.S.A
Samsung Semiconductor, Inc. (SSI) Semiconductor sales 1,096,135 100.00 U.S.A
Samsung Austin Semiconductor, LLC (SAS) Semiconductor manufacturing 1,196,354 100.00 U.S.A
Samsung Information Systems America, Inc. (SISA) Information system 24,373 100.00 U.S.A
research and development
Samsung International, Inc. (SII) Manufacturing and sale of 137,710 100.00 U.S.A
electronic goods
Samsung Mexicana S.A. de C.V. (SAMEX) Manufacturing and sale of 35,473 100.00 Mexico
electronic goods
Samsung Telecommunications America, LLC (STA) Mobile phone sales and 209,333 100.00 U.S.A
research and development
Samsung Electronics Sale of electronic goods 44,141 100.00 Panama
Latinoamerica (Zona Libre), S.A. (SELA)
Samsung Electronics Sale of electronic goods 16,498 100.00 U.S.A
Latinoamerica Miami, Inc. (SEMI) and mobile phone
Percentage of
Subsidiaries Primary Business Capital
Ownership(%)
Location
79
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(In millions of Korean won)
continued
Percentage of
Subsidiaries Primary Business Capital
Ownership(%)
Location
Samsung Electronica Columbia S.A. (SAMCOL) Sale of electronic goods
9,942 100.00 Columbia
Samsung Electronics Mexico S.A.de C.V. (SEM) Manufacturing and sale of 24,613 100.00 Mexico
electronic goods
Samsung Electronics Argentina S.A. (SEASA) Sale of electronic goods 5,443 100.00 Argentina
Samsung Electronica da Amazonia Ltda. (SEDA) Sale and manufacturing of 216,614 100.00 Brazil
electronic goods
Samsung Electronics Iberia, S.A. (SESA) Sale of electronic goods 109,970 100.00 Spain
Samsung Electronics Nordic AB (SENA) Sale of electronic goods 55,113 100.00 Sweden
Samsung Electronics Hungarian RT. Co., Ltd. (SEH) CTV manufacturing and sales 377,579 100.00 Hungary
Samsung Electronica Portuguesa S.A. (SEP) Sale of electronic goods 27,901 100.00 Portugal
Samsung Electronics France S.A.S. (SEF) Sale of electronic goods 160,897 100.00 France
Samsung Electronics (UK) Ltd. (SEUK) Sale of electronic goods 338,957 100.00 U.K.
Samsung Semiconductor Europe Limited (SSEL) Semiconductor sales 48,293 100.00 U.K.
Samsung Electronics Holding GmbH (SEHG) Holding company (financing) 251,055 100.00 Germany
Samsung Semiconductor Europe GmbH (SSEG) Semiconductor sales 12,607 100.00 Germany
Samsung Electronics GmbH (SEG) Sale of electronic goods 62,502 100.00 Germany
Samsung Electronics Austria GmbH (SEAG) Marketing 22,155 100.00 Austria
Samsung Electronics Italia SpA (SEI) Sale of electronic goods 102,363 100.00 Italy
Samsung Electronics Europe Logistics B.V. (SELS) Logistics 45,354 100.00 Netherlands
Samsung Electronics Benelux B.V. (SEBN) Distribution and sale of 190,903 100.00 Netherlands
electronic goods
Samsung Electronics LCD Slovakia s.r.o. (SELSK) LCD manufacturing 84,814 100.00 Slovakia
Samsung Semiconductor Israel R&D Center Ltd. (SIRC) Research center (87) 100.00 Israel
LLC Samsung Electronics Rus (SER) Marketing 12,547 100.00 Russia
Samsung Electronics Polska Sp.zo.o. (SEPOL) Sale of electronic goods 59,273 100.00 Poland
and telephone
Samsung Electronics South Africa (Pty) Ltd. (SSA) Sale of electronic goods 29,092 100.00 South Africa
Samsung Electronics Slovakia s.r.o. (SESK) Monitor manufacturing 421,867 100.00 Slovakia
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(In millions of Korean won)
continued
Percentage of
Subsidiaries Primary Business Capital
Ownership(%)
Location
Samsung Electronics Overseas B.V. (SEO) Sale of electronic goods
791 100.00 Netherlands
LLC Samsung Electronics Rus Company (SERC) Sale of electronic goods 101,461 100.00 Russia
LLC Samsung Russia Service Center (SRSC) Service 8,290 100.00 Russia
Samsung Japan Corporation (SJC) Sales 275,280 50.96 Japan
Samsung Yokohama Research Institute (SYRI) Research center 54,135 100.00 Japan
Samsung Electronics Australia Pty. Ltd. (SEAU) Sale of electronic goods 93,605 100.00 Australia
Samsung Electronics (M) Sdn.Bhd. (SEMA) Home appliances 121,753 100.00 Malaysia
manufacturing
Samsung Gulf Electronics FZE (SGE) Sale of electronic good 27,238 100.00 Arab Emirates
PT. Samsung Electronics Indonesia (SEIN) A / V manufacturing and 124,924 99.99 Indonesia
sale of electronic goods
PT. Samsung Telecommunications Indonesia (STIN) Installation of telecom systems 5,057 99.00 Indonesia
Samsung Electronics Display (M) Sdn.Bhd. (SDMA) Monitor manufacturing 226,638 100.00 Malaysia
Samsung India Electronics Private.Ltd. (SIEL) CTV manufacturing and 65,382 100.00 India
sale of electronic goods
Samsung India Software Operations Private. Ltd. (SISO) Research and development 19,874 100.00 India
Samsung Telecommunications India Private. Ltd. (STI) Mobile phone 14,010 100.00 India
manufacturing and sales
Samsung Asia Private. Ltd. (SAPL) Sales 325,414 70.00 Singapore
Samsung Electronics Philippines Corporation (SEPCO) Sale of electronic goods 17,003 100.00 Philippines
Samsung Electronics Asia Holding Private. Ltd. (SEAH) Holding company 195,964 100.00 Singapore
Samsung Vina Electronics Co., Ltd. (SAVINA) Manufacturing and sale of 21,026 80.00 Vietnam
electronic goods
Thai Samsung Electronics Co., Ltd. (TSE) CTV and washing machine 241,592 91.83 Thailand
manufacturing and sales
Samsung Electronics Philippines ODD Manufacturing 49,023 100.00 Philippines
Manufacturing Corporation (SEPHIL)
Samsung Malaysia Electronics Sdn.Bhd. (SME) Semiconductor and LCD sales 7,936 100.00 Malaysia
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(In millions of Korean won)
Percentage of
Subsidiaries Primary Business Capital
Ownership(%)
Location
Samsung Electronics Hong Kong Co., Ltd. (SEHK) Sales
75,890 100.00 China
Samsung Electronics Taiwan Co., Ltd. (SET) Semiconductor sales and 75,036 100.00 Taiwan
sale of electronic good
Samsung Electronics Suzhou Semiconductorv manufacturing 327,507 100.00 China
Semiconductor Co., Ltd. (SESS)
Samsung (China) Investment Co., Ltd. (SCIC) Holding company 127,040 100.00 China
Tianjin Tongguang Samsung Electronics Co., Ltd. (TTSEC) CTV manufacturing 213,085 96.02 China
Samsung Electronics (Beijing) Service Co., Ltd. (SBSC) Service 4,299 100.00 China
Samsung Electronics Huizhou Co., Ltd. (SEHZ) A/V manufacturing 136,030 99.91 China
Tianjin Samsung Electronics Display Co., Ltd. (TSED) Monitor manufacturing 87,216 79.95 China
Souzhou Samsung Electronics Co., Ltd. (SSEC) Home appliances manufacturing 130,382 88.28 China
Tianjin Samsung Electronics Co., Ltd. (TSEC) A/V manufacturing 152,986 91.07 China
Samsung Electronics (Shandong) Manufacturing and sales of 61,325 100.00 China
Digital Printing Co., Ltd. (SSDP) facsimile, printer and
telecommunication products
Tianjin Samsung Telecom Technology Co., Ltd. (TSTC) Mobile phone manufacturing 374,277 90.00 China
Samsung Electronics Suzhou Computer Co., Ltd. (SESC) Computer manufacturing 48,962 100.00 China
Samsung Electronics Suzhou LCD Co., Ltd. (SESL) LCD manufacturing 210,300 100.00 China
Shenzhen Samsung Kejian Mobile Mobile phone manufacturing 115,037 60.00 China
Telecommunication Technology Co., Ltd. (SSKMT)
Shanghai Samsung Semiconductor Co., Ltd. (SSS) Semiconductor sales 8,953 100.00 China
Samsung Semiconductor (China) R&D Co., Ltd. (SSCR) Research center 5,050 100.00 China
Samsung Electronics Hainan Fiberoptics Co., Ltd. (SEHF) Optical cable manufacturing 29,703 100.00 China
Hangzhou Samsung Eastcom Network equipment 1,061 70.00 China
Network Technology Co., Ltd. (HSEN) manufacturing and sales
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(In millions of Korean won)
The summary of financial information of subsidiaries as of and for the year ended December 31, 2007, included in the consolidated
financial statements follows:
Net Income
Subsidiaries Assets Liabilities Sales
(Loss)
Samsung Gwangju Electronics Co., Ltd. 953,935 233,812 2,404,892 109,582
Samsung Card Co., Ltd. 12,493,877 8,934,998 2,426,287 531,589
S-LCD Corporation 4,348,221 864,221 4,785,445 112,076
Samsung Electronics America, Inc. (SEA) 3,226,435 1,270,204 11,615,562 246,241
Samsung Semiconductor, Inc. (SSI) 1,892,931 796,796 6,781,587 (13,534)
Samsung Austin Semiconductor, LLC (SAS) 2,053,873 857,519 782,056 (7,590)
Samsung Electronica da Amazonia Ltda. (SEDA) 662,151 445,537 1,647,862 42,441
Samsung Electronics Hungarian RT. Co., Ltd. (SEH) 782,263 404,684 2,493,452 70,551
Samsung Electronics France S.A.S. (SEF) 799,839 638,943 2,960,391 48,970
Samsung Electronics (UK) Ltd. (SEUK) 812,420 473,464 3,198,687 113,590
Samsung Electronics Holding GmbH (SEHG) 715,438 464,383 - 50,583
Samsung Electronics Europe Logistics B.V. (SELS) 1,016,397 971,043 7,839,805 6,488
Samsung Electronics Slovakia s.r.o. (SESK) 1,005,736 583,869 4,197,888 135,223
Samsung Electronics Overseas B.V. (SEO) 799,356 798,566 3,667,001 (406)
Samsung Japan Corporation (SJC) 1,784,996 1,509,715 9,528,018 38,919
Samsung Asia Private Ltd. (SAPL) 833,138 507,724 4,795,851 29,991
Samsung Electronics Hong Kong Co., Ltd. (SEHK) 821,489 745,599 6,196,513 15,244
Samsung Electronics Taiwan Co., Ltd. (SET) 1,308,695 1,233,659 10,584,827 20,518
Samsung (China) Investment Co., Ltd. (SCIC) 868,529 741,488 1,827,410 102,692
Tianjin Samsung Telecom Technology Co., Ltd. (TSTC) 914,925 540,647 4,788,349 232,717
Others 15,441,374 10,216,292 52,893,772 902,661
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Subsidiaries excluded from the consolidated financial statements as of December 31, 2007, are as follows:
In accordance with consolidation accounting standards generally accepted in the Republic of Korea, the financial statements of the above
subsidiaries are excluded from the consolidated financial statements because their total assets at the end of the prior fiscal year end were
less than 7,000 million.
CHANGES IN SUBSIDIARIES CONSOLIDATED
(a) Details of subsidiaries newly included in the consolidated financial statements for the year ended December 31, 2007, are as follows:
Location Name of Subsidiaries Remark
Korea Bluetek Co., Ltd. Liquidation completed
(b) The subsidiaries excluded from the consolidated financial statements for the year ended December 31, 2007, are as follows:
(In millions of Korean won)
Location Name of Subsidiaries Remark
China Samsung Semiconductor (China) R&D Co., Ltd. (SSCR) Increase in assets
Europe Samsung Electronics LCD Slovakia s.r.o. (SELSK) Newly incorporated
Samsung Semiconductor Israel R&D Center Ltd. (SIRC) Newly acquired
Percentage of
Subsidiaries Primary Business
Ownership(%)
Location
SEMES America Inc. Service 100.00 U.S.A
Samsung Electronics Chile Limitada(Ltda) Marketing and service 99.99 Chile
Samsung Semiconductor International Inc. Holding company 100.00 Mexico
Samsung Semiconductor Mexico, S.A. de C.V. Semiconductor sales 100.00 Mexico
Tasman Properties, Inc. Real-properties collateral pledge 100.00 U.S.A
Samsung-Crosna Joint Stock Company Telecom(switchboard) 67.00 Russia
LLC Samsung Electronics Rus Kaluga CTV manufacturing 100.00 Russia
Samsung Electronics Istanbul Marketing & Trading LTD Company Marketing 100.00 Turkey
Samsung Electronics Ukraine Marketing 99.99 Ukraine
Samsung Telecom Benelux B.V. Installation and service of
telecom systems 100.00 Netherlands
Samsung Electronics Kazakhstan LLP Marketing 100.00 Kazakstan
Samsung Electronics Baltics S.I.A. Sale of electronic goods 100.00 Latvia
Samsung Electronics Romania LLC Marketing 100.00 Rumania
Samsung Semiconductor France S.A.R.L Semiconductor sales 100.00 France
Samsung Semiconductor Italia S.R.L Semiconductor sales 100.00 Italy
Samsung Semiconductor Sweden AB Semiconductor sales 100.00 Sweden
Samsung Electronics Limited - 100.00 U.K.
Samsung Telecoms(UK) Ltd. - 100.00 U.K.
Batino Realty Corporation Real-properties lease 38.90 Philippines
Beijing Samsung Telecom R&D Center Research 100.00 China
Samsung Electronics China R&D Center Research 100.00 China
Samsung Electronics Shenzhen Co., Ltd. Semiconductor sales 100.00 China
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies followed by the Company in
the preparation of its consolidated financial statements are sum-
marized below:
BASIS OF FINANCIAL STATEMENT PRESENTATION
The Company maintains its accounting records in Korean
won and prepares statutory financial statements in the Korean
language in conformity with accounting principles generally ac-
cepted in the Republic of Korea. Certain accounting principles
applied by the Company that conform with financial accounting
standards and accounting principles in the Republic of Korea
may not conform with generally accepted accounting principles
in other countries. Accordingly, these financial statements are in-
tended for use by those who are informed about Korean account-
ing principles and practices. The accompanying consolidated
financial statements have been condensed, restructured and
translated into English from the Korean language consolidated
financial statements. Certain information attached to the Korean
language consolidated financial statements, but not required for
a fair presentation of the Company’s financial position, results of
operations or cash flows or changes in shareholders’ equity, is
not presented in the accompanying consolidated financial state-
ments.
APPLICATION OF THE STATEMENTS OF KOREAN
FINANCIAL ACCOUNTING STANDARDS
The Korean Accounting Standards Board has published a
series of Statements of Korean Financial Accounting Standards
(“SKFAS”), which will gradually replace the existing financial
accounting standards established by the Korean Financial and
Supervisory Board. As SKFAS No. 11, No. 21 and No. 24 became
applicable to the Company on January 1, 2007, the Company
adopted these statements in its financial statements as of and for
the year ended December 31, 2007.
In accordance with SKFAS No. 21, Preparation and Presentation
of Financial Statements and SKFAS No. 25, Consolidated
Financial Statements, the Company separated its capital
adjustments account into capital adjustment and accumulated
other comprehensive income, and disclosed the details of its
comprehensive income in the notes to the consolidated financial
statements. In addition, the Company disclosed its earnings per
share on the face of its statements of income and net incomes
of the controlling interests and minority interests were presented
separately on its statements of income.
In accordance with SKFAS No. 24, Preparation and Presentation
of Financial Statements (Financial Industry), Samsung Card Co.,
Ltd., one of SEC’s domestic subsidiaries, changed its account
classification. The Company’s consolidated financial statements
for the year ended December 31, 2006, presented herein for
comparative purposes, have been restated to reflect this change.
These changes had no effect on previously reported net income
or shareholders’ equity.
In accordance with SKFAS No. 23, Earnings per Share, the
Company now deducts any excess of the consideration given over
the carrying amount of the preferred shares from the profit avail-
able to common stockholders in calculating its earnings per share.
As explained in Note 24, in accordance with the Korea
Accounting Institute Opinion 06-2 announced on December 29,
2006, the Company changed its method of recognizing deferred
income taxes on temporary differences related to investments
in subsidiaries and equity-method investees. The Company’s
consolidated financial statements for the year ended December
31, 2006, presented herein for comparative purposes, have not
been restated as permitted under the Korea Accounting Institute
Opinion 06-2.
USE OF ESTIMATES
The preparation of the financial statements requires management
to make estimates and assumptions that affect amounts reported
therein. Although these estimates are based on management’s
best knowledge of current events and actions that the Company
may undertake in the future, actual results may differ from those
estimates.
PRINCIPLES OF CONSOLIDATION
The Company records differences between the investment ac-
count and corresponding capital account of subsidiaries as good-
will or negative goodwill, and such differences are amortized over
five years using the straight-line method. However, differences
which occur from additional investments acquired in consolidated
subsidiaries are reported in a separate component of sharehold-
ers’ equity, and are not included in the determination of the
results of operations. In accordance with accounting principles
generally accepted in the Republic of Korea, minority interests in
consolidated subsidiaries are presented within equity and identi-
fied separately from the equity of the controlling interests in the
consolidated balance sheet.
All significant intercompany transactions and balances have been
eliminated during consolidation.
Unrealized profits included in inventories, property, plant and
equipment and other assets, as a result of intercompany transac-
tions, are eliminated.
Unrealized profits, arising from sales by the consolidated subsid-
iaries, or equity-method investees, to the controlling companies,
or sales between consolidated subsidiaries, or equity-method
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investees, are fully eliminated, and charged to the equity of the
controlling interests and minority interests, based on the percent-
age of ownership.
SEC and its consolidated subsidiaries follow the same fiscal year
end. Differences in accounting policies between the Company and
its consolidated subsidiaries are adjusted during consolidation.
MARKETABLE SECURITIES
Investments in equity securities or debt securities are classified
into trading securities, available-for-sale securities and held-to-
maturity securities, depending on the acquisition and holding
purpose. Trading securities are classified as current assets while
available-for-sale securities and held-to-maturity securities are
classified as long-term investments, except those securities that
mature or are certain to be disposed of within one year, which are
classified as current assets.
Cost is measured at the market value upon acquisition, including
incidental costs, and is determined using the average cost
method.
Available-for-sale securities are stated at fair value, while non-
marketable equity securities are stated at cost. Unrealized holding
gains and losses on available-for-sale securities are reported
in a separate component of shareholders’ equity under capital
adjustments, which are to be included in current operations
upon the disposal or impairment of the securities. In the case
of available-for-sale debt securities, the difference between the
acquisition cost after amortization, using the effective interest rate
method, and the fair value is reported as a capital adjustment.
Impairment resulting from the decline in realizable value below
the acquisition cost, net of amortization, are included in current
operations.
EQUITY-METHOD INVESTMENTS
Investments in business entities in which the Company has con-
trol or the ability to exercise significant influence over the operating
and financial policies are accounted for using the equity method of
accounting.
Under the equity method, the original investment is recorded at
cost and adjusted by the Company’s share in the net book value
of the investee with a corresponding charge to current opera-
tions, a separate component of shareholders’ equity, or retained
earnings, depending on the nature of the underlying change in
the net book value. All significant unrealized profits arising from
intercompany transactions between the Company and its equity-
method investee and subsidiaries are fully eliminated.
Differences between the investment amounts and correspond-
ing capital amounts of the investee at the date of acquisition
of the investment are recorded as part of investments and are
amortized over five years using the straight-line method. However,
differences which occur from additional investments made after
the Company obtains control and the investment becomes a
subsidiary are reported in a separate component of shareholders’
equity, and are not included in the determination of the results of
operations.
Assets and liabilities of the Company’s foreign investees are
translated at current exchange rates, while income and expense
are translated at average rates for the period. Adjustments
resulting from the translation process are reported in a separate
component of shareholders’ equity, and are not included in the
determination of the results of operations.
Certain equity-method investments are accounted for based on
unaudited or unreviewed financial statements as the audited or
reviewed financial statements of these entities are not available as
of the date of this audit report.
ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Company provides an allowance for doubtful accounts and
notes receivable based on the aggregate estimated collectibility of
the receivables.
INVENTORY VALUATION
Inventories are stated at the lower of cost or net realizable value.
Cost is determined using the average cost method, except for
materials-in-transit which are stated at actual cost as determined
using the specific identification method. Losses on valuation of
inventories and losses on inventory obsolescence are recorded as
part of cost of sales.
PROPERTY, PLANT AND EQUIPMENT AND
RELATED DEPRECIATION
Property, plant and equipment are stated at cost, except for
certain assets subject to upward revaluation in accordance with
the Asset Revaluation Law of Korea. The revaluation presents
production facilities and other buildings at their depreciated
replacement cost, and land at the prevailing market price, as of
the effective date of revaluation. The revaluation increment, net
of revaluation tax, is first applied to offset accumulated deficit
and deferred foreign exchange losses, if any. The remainder may
be credited to other capital surplus or transferred to common
stock. A new basis for calculating depreciation is established for
revalued assets.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Depreciation is computed using the straight-line method over the
following estimated useful lives:
MAINTENANCE AND REPAIRS
Routine maintenance and repairs are charged to expense as
incurred. Expenditures which enhance the value or extend the
useful life of the related assets are capitalized.
INTANGIBLE ASSETS
Intangible assets are amortized on a straight-line basis over the
following estimated useful lives:
LEASES
A lease which has substantially non-cancelable terms, and
transfers the benefits and risks incidental to ownership from lessor
to lessee is classified as a financing lease. All other leases are
classified as operating leases.
Financing lease receivables are recorded at the present value of
minimum lease payments. Accrued interest is recognized over the
lease period using the effective interest rate method.
Operating lease assets are recognized as property, plant and
equipment and depreciated using the same depreciation method
used for other similar assets. Revenues from operating lease
assets are recognized on a reasonable basis to reflect patterns of
benefits over the lease term.
DISCOUNTS AND PREMIUMS ON DEBENTURES
The difference between the face value and the proceeds on issu-
ance of a debenture is treated as either a discount or premium on
the debenture, which is amortized over the term of the debenture
using the effective interest rate method. The discount or premium
is reported in the balance sheet as a direct deduction from or
addition to the face value of the debenture. Amortization of the
discount or premium is treated as part of interest expense.
CONVERTIBLE BONDS
The Company separately recognizes the value of conversion
rights when issuing convertible bonds. The conversion rights
compensation, which is calculated by deducting the present
value of general bonds from the issue price of convertible bonds,
is stated as capital surplus. The conversion rights adjustment is
deducted from the par value and the put premium is added to the
par value of convertible bonds. Amortization of the conversion
right adjustment is treated as part of interest expense over the
term of the bonds using effective interest rate method.
However, for convertible bonds issued before December 31,
2002, the previous standard is applied.
ACCRUED SEVERANCE BENEFITS
Employees and directors with at least one year of service are
entitled to receive a lump-sum payment upon termination of their
employment with SEC, its Korean subsidiaries and certain foreign
subsidiaries, based on their length of service and rate of pay at
the time of termination. Accrued severance benefits represent the
amount which would be payable assuming all eligible employees
and directors were to terminate their employment as of the balance
sheet date.
In accordance with the National Pension Act, a certain portion of the
accrued severance benefits is deposited with the National Pension
Fund and deducted from the accrued severance benefits liability.
REVENUE RECOGNITION
Sales of products and merchandise are recognized upon delivery
when the significant risks and rewards of ownership of the goods
are transferred to the buyer. Revenue from installation service
contracts is recognized using the percentage-of-completion
method.
FOREIGN CURRENCY TRANSLATION
Assets and liabilities denominated in foreign currencies are trans-
lated into Korean won at the rate of exchange in effect as of the
balance sheet date. Gains and losses resulting from the transla-
tion are reflected as either income or expense for the period.
TRANSLATION OF FOREIGN OPERATIONS
Accounts of foreign subsidiaries are maintained in the currencies
of the countries in which they operate. In translating the foreign
currency financial statements of these subsidiaries into Korean
won, income and expenses are translated at the average rate
for the year and assets and liabilities are translated at the rate
prevailing on the balance sheet date. Resulting translation gains
or losses are recorded as a cumulative translation adjustment
presented as part of shareholders’ equity.
Estimated useful lives
Buildings and auxiliary facilities 15 and 30 years
Structures 15 years
Machinery and equipment 5 years
Tools and fixtures 5 years
Vehicles 5 years
Estimated useful lives
Goodwill 5 years
Intellectual property rights 10 years
Other intangible assets 5 years
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DEFERRED INCOME TAX ASSETS AND LIABILITIES
Deferred income tax assets and liabilities are recognized based on
estimated future tax consequences attributable to the differences
between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases, and operating
loss and tax credit carryforwards.
Deferred income tax assets and liabilities are computed on such
temporary differences by applying statutory tax rates applicable to
the years when such differences are expected to be reversed. Tax
assets related to tax credits and exemptions are recognized to the
extent of the Company’s certain taxable income.
The balance sheet distinguishes the current and non-current por-
tions of the deferred tax assets and liabilities, whose balances are
offset against each other.
LONG-TERM RECEIVABLES AND PAYABLES
Long-term receivables and payables that have no stated interest
rate or whose interest rate are different from the market rate are
recorded at their present values using the market rate of discount.
The difference between the nominal value and present value of the
long-term receivables and payables are amortized using the effec-
tive interest rate method with interest income or expense adjusted
accordingly.
STOCK-BASED COMPENSATION
The Company uses the fair-value method in determining com-
pensation costs of stock options granted to its employees and
directors. The compensation cost is estimated using the Black-
Scholes option-pricing model and is accrued as a charge to
expense over the vesting period, recorded as a separate compo-
nent of shareholders’ equity under other capital adjustments.
EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net income
available to common shareholders by the weighted-average num-
ber of common shares outstanding during the year. Diluted earn-
ings per share is calculated using the weighted-average number
of common shares outstanding adjusted to include the potentially
dilutive effect of common equivalent shares outstanding.
PROVISIONS AND CONTINGENT LIABILITIES
When there is a probability that an outflow of economic benefits will
occur due to a present obligation resulting from a past event, and
whose amount is reasonably estimable, a corresponding amount
of provision is recognized in the financial statements. However,
when such outflow is dependent upon a future event, is not certain
to occur, or cannot be reliably estimated, a disclosure regarding the
contingent liability is made in the notes to the financial statements.
DERIVATIVE INSTRUMENTS
Derivative financial instruments for trading or hedging purpose
are valued at estimated market price with the resulting unrealized
gains or losses recognized in the current operations, except for
the effective portion of derivative transactions entered into for the
purpose of cash-flow hedges, which is recorded as an adjustment
to shareholders’ equity.
All derivative instruments are accounted for at fair value with the
resulting valuation gain or loss recorded as an asset or liability. If
the derivative instrument is not designated as a hedging instru-
ment, the gain or loss is recognized in earnings in the period of
change. Fair value hedge accounting is applied to a derivative in-
strument with the purpose of hedging the exposure to changes in
the fair value of an asset or a liability or a firm commitment (hedged
item) that is attributable to a particular risk.
The gain or loss, both on the hedging derivative instrument and
on the hedged item attributable to the hedged risk, is reflected
in current operations. Cash flow hedge accounting is applied to
a derivative instrument with the purpose of hedging the exposure
to variability in expected future cash flows of an asset or a liability
or a forecasted transaction that is attributable to a particular risk.
The effective portion of the gain or loss on a derivative instrument
designated as a cash flow hedge is recorded as a capital adjust-
ment and the ineffective portion is recorded in current operations.
The effective portion of the gain or loss recorded as a capital
adjustment is reclassified to current operations in the same period
during which the hedged forecasted transaction affects earnings.
If the hedged transaction results in the acquisition of an asset or
the incurrence of a liability, the gain or loss recognized as a capital
adjustment is added to or deducted from the asset or the liability.
ASSET IMPAIRMENT
When the book value of an asset is significantly greater than its
recoverable value due to obsolescence, physical damage or
the abrupt decline in the market value of the asset, the decline in
value is deducted from the book value and recognized as an asset
impairment loss in the current period.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
3. UNITED STATES DOLLAR AMOUNTS
The Company operates primarily in Korean won and its official accounting records are maintained in Korean won. The U.S. dol-
lar amounts, provided herein, represent supplementary information solely for the convenience of the reader. All won amounts are
expressed in U.S. dollars at the rate of 938 to US$1, the exchange rate in effect on December 31, 2007. Such presentation is not
in accordance with generally accepted accounting principles in either the Republic of Korea or the United States, and should not be
construed as a representation that the won amounts shown could be readily converted, realized or settled in U.S. dollars at this or at any
other rate.
The 2006 U.S. dollar amounts, which were previously expressed at 929 to US$1, the rate in effect on December 31, 2006, have been
restated to reflect the exchange rate in effect on December 31, 2007.
4. CASH SUBJECT TO WITHDRAWAL RESTRICTIONS
Cash deposits subject to withdrawal restrictions as of December 31, 2007 and 2006, consist of the following:
5. SHORT-TERM AVAILABLE-FOR-SALE SECURITIES AND SHORT-TERM HELD-TO-MATURITY SECURITIES
Short-term available-for-sale securities as of December 31, 2007 and 2006, consist of the following:
(In millions of Korean won)
2007 2006
Financial institution bonds
¹
147,340 589,697
Beneficiary certificates
²
775,493 1,469,084
922,833 2,058,781
2007 2006
Call loan 9,151 13,937
Certificates of deposit 270,546 400,824
Bonds 392,414 1,033,091
Time deposits 101,500 -
(In millions of Korean won)
(In millions of Korean won)
1. Include accrued interest income amounting to 2,677 million (2006: 5,022 million).
2. Beneficiary certificates as of December 31, 2007 and 2006, consist of the following:
2007 2006
Short-term
financial instruments Government-sponsored
research and development projects 35,632 31,425
Other activities 34,548 26,493
70,180 57,918
Long-term financial instruments Special deposits 19 77
Other activities 374 330
393 407
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For the years ended December 31, 2007 and 2006, changes in valuation gain or loss on short-term available-for-sale securities are as follows:
Balance at Balance at Balance at Balance at
January 1, Valuation Included in
December 31,
January 1, Valuation Included in
December31,
2007 Amount Earnings 2007 2007 Amount Earnings 2007
Beneficiary
certificates
9,085 5,493 9,085 5,493
-
-
-
-
Financial institution
bonds - - - - (580) (196) (580) (196)
9,085 5,493 9,085 5,493 (580) (196) (580) (196)
Deferred income tax (1,510) 53
3,983 (143)
2007
(In millions of Korean won)
Short-term held-to-maturity securities as of December 31, 2007 and 2006, consist of the following:
2007 2006
Government and public bonds 130 248
(In millions of Korean won)
Valuation Gain on Available-For-Sale Securities
Valuation Loss on Available-For-Sale Securities
(In millions of Korean won)
Valuation Gain on Available-For-Sale Securities
Valuation Loss on Available-For-Sale Securities
2006
Balance at Balance at Balance at Balance at
January 1, Valuation Included in
December 31,
January 1, Valuation Included in
December31,
2006 Amount Earnings 2006 2006 Amount Earnings 2006
Beneficiary
certificates
4,543 9,085 4,543 9,085
-
-
-
-
Financial institution
bonds - - - - (392) (580) (392) (580)
Listed equities - - - - (31,683) - (31,683) -
4,543 9,085 4,543 9,085 (32,075) (580) (32,075) (580)
Deferred income tax (2,498) 160
6,587 (420)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
6. ACCOUNTS AND NOTES RECEIVABLE
Accounts and notes receivable, and their allowance for doubtful accounts as of December 31, 2007 and 2006, are as follows:
The outstanding balance of trade accounts and notes receivable sold to financial institutions as of December 31, 2007 and 2006, are as
follows:
As a consolidation entry to account for the sale of subsidiaries’ receivables, the Company has recognized borrowings of 4,384,783
million and 3,808,404 million as of December 31, 2007 and 2006, respectively.
The outstanding balances of financing receivables sold to financial institutions as of December 31, 2007 and 2006, are as follows:
From 2003 to 2005, Samsung Card Co., Ltd. transferred credit card receivables and financial assets to SangRokSoo 1st Securitization
Specialty Co., Ltd., Badbank Harmony Co., Ltd. and Badbank Heemangmoah Securitization Specialty Co., Ltd. in accordance with the
“personal credit rehabilitation” program in exchange for cash, preferred stock and subordinated bonds. The preferred stock is recorded
as available-for-sale securities, while the subordinated bonds are recorded as held-to-maturity securities.
Accounts that are valued at present value under long-term installment transactions, including current portions, are as follows:
2007 2006
Asset-backed securities with limited recourse
4,037,885 4,002,923
(In millions of Korean won)
2007 2006
Trade accounts and notes receivable 11,180,598 9,133,647
Less: Allowance for doubtful accounts (55,466) (44,195)
11,125,132 9,089,452
Other accounts and notes receivable 1,010,801 987,634
Less: Allowance for doubtful accounts (21,600) (15,156)
Discounts on present value (58) (52)
989,143 972,426
(In millions of Korean won)
Accounts
Face Present Weighted-Average
Value
Discount
Value
Period
Interest Rate (%)
Long-term loans and other receivables
220,439 22,858 197,581 2004. 5 ~ 2013. 1 3.1~8.0
Long-term payables and other payables 745,634 92,970 652,664 2002. 3 ~ 2015. 12 7.7~8.0
(In millions of Korean won)
2007 2006
Asset-backed securities with recourse 1,396,041 1,254,030
Trade accounts receivable with recourse 446,770 556,432
Trade accounts receivable without recourse 1,206,320 905,375
3,049,131 2,715,837
(In millions of Korean won)
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7. INVENTORIES
Inventories, net of valuation losses, as of December 31, 2007 and 2006, consist of the following:
Inventories are insured against fire and other casualty losses for up to 6,258,083 million as of December 31, 2007 (2006: 5,572,203
million).
As of December 31, 2007, losses on valuation of inventories, amounted to 258,787 million (2006: 183,964 million).
2007 2006
Finished goods and merchandise 2,340,066 2,181,047
Semi-finished goods and work-in-process 1,695,511 1,594,414
Raw materials and supplies 2,309,980 1,963,723
Materials-in-transit 1,623,246 1,014,261
7,968,803 6,753,445
(In millions of Korean won)
8. FINANCING RECEIVABLES
Financing receivables of the consumer financing subsidiary, Samsung Card Co., Ltd., as of December 31, 2007 and 2006, are as
follows:
Accounts 2007 2006
Short-term financing receivables
Credit card assets 4,311,592 3,323,235
Lease assets 141,228 107,293
Installment finance 358,870 448,653
General loans 698,043 615,031
Call loans and others 507,215 595,000
6,016,948 5,089,212
Less: Allowance for doubtful accounts (441,942) (502,240)
5,575,006 4,586,972
(In millions of Korean won)
Long-term financing receivables
Credit card assets 2,069,388 2,425,802
Lease assets 801,395 624,094
Installment finance 406,619 352,049
General loans 547,318 606,330
Trust assets and others 221,087 247,291
4,045,807 4,255,566
Less: Allowance for doubtful accounts (245,852) (449,031)
3,799,955 3,806,535
9,374,961 8,393,507
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Collection schedule of installment finance and general loans as of December 31, 2007, follows:
Year Installment finance General loans
2008 358,870 698,043
2009 222,723 247,706
2010 150,112 183,552
2011 23,129 86,957
2012 10,170 25,741
Thereafter 485 3,362
765,489 1,245,361
(In millions of Korean won)
Maturities of finance lease, as of December 31, 2007 and 2006, are as follows:
The minimum lease receipts relating to operating lease agreements as of December 31, 2007 and 2006, are as follows:
As of December 31, 2007 and 2006, properties under operating leases are classified as follows:
2007 2006
Within one year 214,707 192,193
From one year to five years 195,561 163,158
410,268 355,351
(In millions of Korean won)
2007 2006
Automobiles 867,157 688,021
Electronic system 12,546 14,390
879,703 702,411
Less: Accumulated depreciation 270,168 204,652
Accumulated impairment losses 1,970 854
Operating lease assets
607,565 496,905
(In millions of Korean won)
(In millions of Korean won)
2007 2006
Minimum Lease Present Minimum Lease Present
Payment Values Payment Values
Within one year 26,466 25,636 32,327 31,147
From one year to five years 259,274 234,557 187,270 168,167
More than five years 804 639 1,337 1,148
Unguaranteed residual value 62,420 54,691 29,279 25,607
348,964 250,213
Present value adjustment (33,441) (24,144)
Financing lease receivables 315,523 315,523 226,069 226,069
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9. LONG-TERM AVAILABLE-FOR-SALE SECURITIES AND LONG-TERM HELD-TO-MATURITY SECURITIES
(1) LONG-TERM AVAILABLE-FOR-SALE SECURITIES
Long-term available-for-sale securities as of December 31, 2007 and 2006, consist of the following:
(In millions of Korean won)
1. Exclude equity-method investees.
1) LISTED EQUITIES
Listed equities as of December 31, 2007 and 2006, consist of the following:
The Company determined that the decline in the fair value of certain investments would not be recoverable, and recorded an impairment
loss of
13,349 million under non-operating expenses for the year ended December 31, 2006.
(In millions of Korean won, except for the number of shares and percentage)
Number of
Shares Owned
Percentage of
Ownership(%)
Acquisition
Cost
Market
Value
Recorded
Book Value
Recorded
Book Value
2007 2006
Listed equities
¹
(1) 564,524 3,027,052 1,810,756
Non-listed equities
¹
(2) 505,252 682,002 729,190
Government and public bonds and others 3,266 3,268 17,058
1,073,042 3,712,322 2,557,004
2007 2006
Detail
Acquisition Recorded Recorded
Cost Book Value Book Value
Related parties
Samsung Heavy Industries Co., Ltd. 40,675,641 17.61 258,299 1,635,161 1,635,161 907,067
Samsung Fine Chemicals Co., Ltd. 2,969,730 11.51 61,374 130,668 130,668 69,195
The Shilla Hotels & Resorts 2,529,580 6.35 18,604 56,915 56,915 38,323
Cheil Communications Inc. 259,949 5.65 25,737 73,306 73,306 60,048
Samsung Fire & Marine
Insurance Co., Ltd. 2,298,377 4.85 90,443 581,489 581,489 371,188
Samsung Securities Co., Ltd. 3,143,194 4.70 57,347 285,402 285,402 159,360
S1 Corporation Inc. 725,060 1.91 16,207 40,893 40,893 31,431
Samsung Engineering Co., Ltd. 704,104 1.76 9,018 66,045 66,045 30,452
Cheil Industries Inc. 2,449,713 4.90 18,339 128,120 128,120 96,151
Other companies
Korea Information Service Inc. 107,603 2.26 797 1,915 1,915 2,513
Hanmi Capital - - - - - 2,086
Saehan Media 324,579 2.32 1,840 1,529 1,529 1,675
SANYO - - - - - 11,806
Tomen Device Corp. 832,000 12.23 942 11,586 11,586 16,360
Others 5,577 14,023 14,023 13,101
564,524 3,027,052 3,027,052
1,810,756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Number of
Shares
Owned
Percentage of
Ownership(%)
Acquisition
Cost
Net Book
Value/
Market Value
Recorded
Book Value
Recorded
Book Value
2007 2006
(In millions of Korean won, except for the number of shares and percentage)
1. As of December 31, 2007, these investments in affiliated companies were not valued using the equity method of accounting due to the immateriality of their
total asset balances or the Company’s inability to exercise significant influence over the operating and financial policies.
2) NON-LISTED EQUITIES
Non-listed equities as of December 31, 2007 and 2006, consist of the following:
Related parties
Samsung Petrochemical Co., Ltd. 514,172 12.96 8,040 23,582 8,040 8,040
Samsung General Chemicals Co., Ltd. 1,914,251 3.91 19,143 30,220 13,864 13,865
Samsung Venture Investment
Corporation 980,000 16.33 4,900 6,554 4,900 4,900
Samsung Life Insurance 131,588 0.66 92,112 60,905 92,112 92,112
iMarketKorea Inc. 380,000 14.10 1,900 8,382 1,900 1,900
International Cyber Marketing, Inc
1
450,000 45.00 1,166 - - 1,166
Samsung Everland Co., Ltd.
1
641,123 25.64 64,112 496,077 256,452 270,313
Allat Corporation
1
300,000 30.00 1,500 5,074 5,074 3,476
LLC Samsung Electronics Rus Kaluga
1
- 100.00 9,168 9,168 9,168 -
Samsung Electronics
Manufacturing (UK) Ltd. - - - - - 40,152
Others 24,567 12,541 18,750 13,005
Other companies
Kihyup Technology
Banking Corporation 1,000,000 17.24 5,000 10,687 5,000 5,000
Pusan Newport Co., Ltd. 1,135,307 1.15 5,677 5,144 5,677 5,677
Renault Samsung Motors 17,512,000 19.90 87,560 143,896 143,896 127,680
Bluebird Soft Inc. 140,000 17.00 10,199 2,606 2,441 2,441
SkyLife Broadcasting 600,000 0.71 3,344 571 3,000 3,000
Yong Pyong Resort Co., Ltd. 400,000 1.05 1,869 1,278 1,869 2,000
TU Media Corp. 3,015,195 5.62 15,076 3,527 15,076 15,076
Symbian Ltd. 10,359,926 4.50 31,839 11,886 31,839 31,839
Beijing T3G Technology Co., Ltd. - 16.90 9,164 - 9,164 9,164
Mybi Co., Ltd. 72,000 1.31 1,080 423 423 312
MasterCard International Inc. (Class B) - - - - - 12,152
Bad bank Harmony 58,524 - 58,524 36,899 36,899 47,931
Others 49,312 16,932 16,458 17,989
505,252 886,352 682,002 729,190
95
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Gain and loss on evaluation of available-for-sale securities for 2007 are as follows:
Losses on impairment of cost-method investments resulting from the decline in realizable value below the acquisition cost amounted to
6,234 million for the year ended December 31, 2007 (2006: 1,150 million).
As of December 31, 2007, the Company’s investments in Pusan Newport Co., Ltd. are pledged as collateral against the investee’s debt.
Valuation Gain on Available-For-Sale Securities
Valuation Gain on Available-For-Sale Securities
Valuation Loss on Available-For-Sale Securities
Valuation Loss on Available-For-Sale Securities
Balance at Balance at Balance at Balance at
January 1, Valuation Included in
December 31,
January 1, Valuation Included in
December 31,
2007 Amount Earnings 2007 2007 Amount Earnings 2007
Balance at Balance at Balance at Balance at
January 1, Valuation Included in
December 31,
January 1, Valuation Included in
December 31,
2006 Amount Earnings 2006 2006 Amount Earnings 2006
1,286,374 1,244,388 11,581 2,519,181 (2,086) (897) (1,318) (1,665)
Deferred income tax
and Minority interest (1,092,358) 458
1,426,823 (1,207)
Gain and loss on evaluation of available-for-sale securities for 2006 are as follows:
989,079 297,297 3 1,286,373 (402) (2,060) (375) (2,087)
Deferred income tax
and Minority interest (559,910) 574
726,463 (1,513)
(2) LONG-TERM HELD-TO-MATURITY SECURITIES
Long-term held-to-maturity securities as of December 31, 2007 and 2006, consist of the following:
The subordinate bonds of SangRokSoo 1st Securitization Specialty Co., Ltd. were previously impaired by 423,895 million; however,
the realizable value subsequently recovered and a gain of 19,312 million was recognized in 2007. Also in 2007, as the recoverable
amount of the subordinate bonds of Badbank Heemangmoah Securitization Specialty Co., Ltd. declined significantly, the difference
between the book value and recoverable amount amounting to 20,700 million was charged to impairment loss.
Face Value
Recorded
Face Value
Recorded
Book Value Book Value
(In millions of Korean won)
Government and public bonds 165 165 294 294
ABS subordinated securities 572,406 147,122 621,281 197,386
572,571 147,287 621,575 197,680
20062007
2007
2006
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
The maturities of long-term held-to-maturity securities as of December 31, 2007, consist of the following:
10. EQUITY-METHOD INVESTMENTS
Equity-method investments as of December 31, 2007, consist of the following:
Samsung SDI Co., Ltd. 9,282,753 19.68 423,722 911,657 893,419
Samsung Electro-Mechanics Co., Ltd. 17,693,084 22.80 359,237 448,570 445,205
Samsung Techwin Co., Ltd. 19,604,254 25.46 211,726 261,362 258,411
Seoul Commtech Co., Ltd. 3,933,320 35.76 9,172 48,686 47,020
Samsung Economic Research Institute 3,576,000 29.80 17,880 35,144 34,535
Samsung SDS Co., Ltd. 11,977,770 21.27 12,753 202,790 178,123
Samsung Networks Inc. 23,955,550 23.07 5,214 62,350 61,205
Samsung Lions Co., Ltd. 55,000 27.50 275 - -
MEMC Electronic Materials Korea, Inc. 3,440,000 20.00 17,200 35,245 35,245
Samsung Corning Precision
Glass Co., Ltd. 7,512,165 42.54 297,165 1,302,773 1,246,710
Samsung Thales Co., Ltd. 13,500,000 50.00 135,000 128,045 128,020
Bokwang FUND I 75 50.00 7,500 10,503 10,500
SVIC FUND IV 985 65.67 98,500 112,102 112,102
SVIC FUND V 297 99.00 29,700 13,996 13,996
SVIC FUND VI 407 99.00 40,689 33,374 33,374
SVIC FUND II 149 99.00 14,850 15,244 15,244
Samsung SDI (Malaysia) Sdn. Bhd. 38,595,040 25.00 19,759 19,852 23,346
Skyworld Corporation 530,000 25.00 1,834 1,205 1,394
Siltronic Samsung Wafers Private Ltd. - 50.00 195,978 184,819 184,830
Samsung Electro-Mechanics
Thailand Co., Ltd. 1,060,625 25.00 3,709 18,640 17,114
Syrian-Korean Telecommunication
Equipments Manufacturing
Establishment Co., Ltd. - 49.00 2,061 3,654 3,260
Shanghai Bell Samsung Mobile
Communications Co., Ltd. - 49.00 7,742 2,482 2,393
eSamsung Greater China Co., Ltd. 295,294,966 22.71 858 2,378 1,470
TSST Japan Co., Ltd. 294 49.03 150,451 19,024 35,497
2,062,975
3,873,895 3,782,413
(In millions of Korean won, except for the number of shares and percentage)
Number of Percentage of Acquisition Net Recorded
Investee
Shares Owned Ownership (%) Cost Book Value Book Value
(In millions of Korean won)
Recorded book value
Maturity
Government and public bonds ABS subordinated securities Total
From one year to five years 165 147,122 147,287
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Equity-method investments as of December 31, 2006, consisted of the following:
Samsung SDI Co., Ltd. 9,282,753 19.68 423,722 925,819 920,389
Samsung Electro-Mechanics Co., Ltd. 17,693,084 22.80 359,237 407,018 394,899
Samsung Techwin Co., Ltd. 19,604,254 25.46 211,726 216,657 216,118
Seoul Commtech Co., Ltd. 3,933,320 35.76 9,172 47,171 46,120
Samsung Economic Research Institute 3,576,000 29.80 17,880 24,153 23,535
Samsung SDS Co., Ltd. 11,977,770 21.27 12,753 151,457 125,614
Samsung Networks Inc. 23,955,550 23.07 5,214 46,368 45,024
Samsung Lions Co., Ltd. 55,000 27.50 275 - -
MEMC Electronic Materials Korea, Inc. 3,440,000 20.00 17,200 37,639 37,639
Samsung Corning Precision Glass Co., Ltd. 7,406,991 42.47 179,993 922,347 894,801
Samsung Thales Co., Ltd. 13,500,000 50.00 135,000 116,121 116,075
Bokwang FUND I 75 50.00 7,500 7,428 7,422
SVIC FUND II - 99.00 - 3,563 3,563
SVIC FUND III 42 99.00 4,158 2,884 2,884
SVIC FUND IV 985 65.67 98,500 98,077 98,077
SVIC FUND V 297 99.00 29,700 14,000 14,000
SVIC FUND VI 265 99.00 26,532 24,337 24,337
SVIC FUND VII 149 99.00 14,850 15,096 15,096
Samsung SDI (Malaysia) Sdn. Bhd. 38,595,040 25.00 18,445 31,492 27,679
Skyworld Corporation 530,000 25.00 1,712 974 1,195
Siltronic Samsung Wafers Private Ltd. - 50.00 79,681 77,751 77,751
Samsung Electro-Mechanics
Thailand Co., Ltd. 1,060,625 25.00 3,462 13,865 10,808
Syrian-Korean Telecommunication
Equipments Manufacturing
Establishment Co., Ltd. - 49.00 2,061 3,683 3,356
Shanghai Bell Samsung Mobile
Communications Co., Ltd. - 49.00 7,742 4,458 3,233
TSST Japan Co., Ltd. 294 49.03 150,451 19,926 50,518
1,911,229 3,445,782 3,393,617
(In millions of Korean won, except for the number of shares and percentage)
Number of Percentage of Acquisition Net Recorded
Investee
Shares Owned Ownership (%) Cost Book Value Book Value
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Seoul Commtech
Co., Ltd.
(548)
-
(153) (395) (701)
-
(153) (548)
Samsung Corning
Precision Glass
Co., Ltd. (7,971) (23,631) (2,346) (29,256) - (9,761) (1,790) (7,971)
eSamsung Greater
China Co., Ltd. - (1,010) (202) (808) - - - -
TSST Japan Co., Ltd. 30,592 - 14,119 16,473 44,712 - 14,120 30,592
Others (6) 12 (2) 8 (9) - (3) (6)
22,067 (24,629) 11,416 (13,978) 44,002 (9,761) 12,174 22,067
(In millions of Korean won)
Balance at Balance at Balance at Balance at
Beginning Increase Amortization End of Beginning Increase Amortization End of
of Year (Decrease) (Reversal) Year of Year (Decrease) (Reversal) Year
2007 2006
Changes in goodwill (negative goodwill) for the years ended December 31, 2007 and 2006, are as follows:
(In millions of Korean won)
Property, Plant Property, Plant
and Equipment and Equipment
and Intangible and Intangible
Inventories Assets Total Inventories Assets Total
2007 2006
Eliminated unrealized gains and losses as of December 31, 2007 and 2006, are as follows:
Amounts in the table are recognized as part of equity earnings (losses) from equity-method investments’ unrealized gains and losses for the years ended
December 31, 2007 and 2006.
Samsung SDI Co., Ltd. 1,810 (14,236) (12,426) 2,793 574 3,367
Samsung Electro-
Mechanics Co., Ltd. 8,516 239 8,755 (9,195) 529 (8,666)
Samsung Techwin Co., Ltd. (2,407) 194 (2,213) 1,367 221 1,588
Seoul Commtech Co., Ltd. (875) 106 (769) 24 60 84
Samsung SDS Co., Ltd. 676 500 1,176 (590) (2,240) (2,830)
Samsung Networks Inc. (37) 235 198 1 151 152
Samsung Corning Precision
Glass Co., Ltd. (2,141) (4,951) (7,092) (3,588) (1,743) (5,331)
Shanghai Bell Samsung Mobile
Communications Co., Ltd. 1,053 75 1,128 (410) 75 (335)
Others (2) 27 25 886 45 931
6,593 (17,811) (11,218) (8,712) (2,328) (11,040)
Investee
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The changes in the book values of equity-method investments for the years ended December 31, 2007 and 2006, are as follows:
(In millions of Korean won)
Earnings Earnings
(Losses) (Losses)
Balance at from Equity Other Balance at from Equity Other
Beginning -Method Increase Balance at Beginning -Method Increase Balance at
of Year Investments (Decrease) End of Year of Year Investments (Decrease) End of Year
Samsung SDI
Co., Ltd. 920,389 (131,751) 104,781 893,419 890,801 22,360 7,228 920,389
Samsung Electro-
Mechanics Co., Ltd. 394,899 34,714 15,592 445,205 371,176 13,571 10,152 394,899
Samsung Techwin
Co., Ltd. 216,118 48,720 (6,427) 258,411 179,133 42,004 (5,019) 216,118
Samsung SDS
Co., Ltd. 125,614 49,285 3,224 178,123 79,187 44,981 1,446 125,614
Samsung Corning
Co., Ltd. 233,484 (53,220) (180,264) - 253,342 (21,180) 1,322 233,484
MEMC Electronic
Materials Korea, Inc. 37,639 3,403 (5,797) 35,245 37,648 5,491 (5,500) 37,639
Samsung Corning
Precision Glass
Co., Ltd. 894,801 409,000 (57,091) 1,246,710 629,366 374,313 (108,878) 894,801
Samsung Thales
Co., Ltd. 116,075 11,945 - 128,020 104,520 11,555 - 116,075
Samsung SDI
(Malaysia) Sdn.Bhd. 27,679 (6,325) 1,992 23,346 27,791 3,714 (3,826) 27,679
Siltronic Samsung
Wafers Private Ltd. 77,751 (9,147) 116,226 184,830 - (1,914) 79,665 77,751
TSST Japan Co., Ltd. 50,518 (10,402) (4,619) 35,497 52,304 (3,182) 1,396 50,518
Others 298,650 31,404 23,553 353,607 298,046 27,948 (27,344) 298,650
3,393,617 377,626 11,170 3,782,413 2,923,314 519,661 (49,358)
3,393,617
2007 2006
Investee
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Financial information of investees as of and for the years ended December 31, 2007 and 2006, follows:
(In millions of Korean won)
2007 2006
Investee Net Income
Assets Liabilities Sales
(Loss)
Assets Liabilities Sales Net Income
Market value information of publicly listed investees as of December 31, 2007 and 2006, are as follows:
Valuation gain or loss on securities as of December 31, 2007 and 2006, are as follows:
As of December 31, 2007, gains and losses from changes in equity of equity method investments included the tax effect of
60,599
million and 459 million, respectively, which are included in the shareholders’ equity.
On December 28, 2007, Samsung Corning Co., Ltd. merged with Samsung Corning Precision Glass Co., Ltd.
(In millions of Korean won)
Recorded Recorded
Market Value
Book Value
Market Value
Book Value
2007 2006
Samsung
SDI Co., Ltd.
617,303 893,419 596,881 920,389
Samsung Electro-Mechanics Co., Ltd. 869,615 445,205 766,995 394,899
Samsung Techwin Co., Ltd. 826,319 258,411 665,564 216,118
(In millions of Korean won)
Balance at Balance at Balance at Balance at
January 1, Valuation Included in December January 1, Valuation Included in December
2007 Amount Earnings 31, 2007 2006 Amount Earnings 31, 2006
2007 2006
Gains from changes in
equity of equity
method investments
141,958 109,633 - 251,591 123,384 18,877 303 141,958
Losses from changes in
equity of equity
method investments (43,887) 33,479 (2,391) (8,017) (63,969) 20,562 480 (43,887)
98,071 143,112 (2,391) 243,574 59,415 39,439 783 98,071
Samsung SDI
Co., Ltd. 6,570,071 1,936,904 3,792,465 (592,183) 6,399,632 1,694,492 4,907,618 91,446
Samsung Electro-
Mechanics Co., Ltd. 3,191,355 1,223,959 2,690,431 112,789 3,061,143 1,275,989 2,393,645 96,896
Samsung Techwin
Co., Ltd. 1,900,287 873,731 3,243,196 203,209 1,776,634 925,667 2,868,706 160,262
Samsung SDS
Co., Ltd. 1,599,974 646,587 2,164,100 226,179 1,272,924 560,871 2,100,034 220,863
MEMC Electronic
Materials Korea, Inc. 204,678 28,452 173,508 17,010 224,300 36,104 207,830 28,500
Samsung Corning
Precision Glass
Co., Ltd. 3,736,683 674,303 2,244,348 974,232 2,445,602 273,780 1,965,653 891,066
Samsung Thales
Co., Ltd. 536,827 280,738 480,690 23,847 447,303 215,061 461,872 22,525
Samsung SDI
(Malaysia) Sdn.Bhd. 141,555 62,145 303,123 (34,779) 177,821 51,853 330,726 19,370
TSST Japan Co., Ltd. 324,215 285,416 1,542,781 7,582 382,393 341,754 1,395,532 22,311
Others 1,886,436 637,137 1,427,122 87,049 1,892,639 508,814 1,716,891 22,489
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Korea Samsung Everland Inc.
¹
25.64 Absence of significant influence
Allat
¹
30.00 Absence of significant influence
International Cyber Marketing
²
45.00 Limited assets
America Content Management License Administrator LLC
²
25.00 Limited assets
Asia Samsung Electronic Ticaret A.S.
²
20.00 Limited assets under liquidation
Future Technology & Service Corporation
²
28.60 Limited assets
SSJ Vina LLC
²
29.00 Limited assets
The Company has not applied the equity method of accounting for following investees:
1. Investments are excluded from the application of equity method of accounting because SEC does not have the ability to exercise significant influence over the
operating and financial policies, in accordance with the Monopoly Regulations and Fair Trade Law No. 11.
2. In accordance with the accounting principles generally accepted in the Republic of Korea, these investments are excluded from the application of equity
method of accounting either because their total assets at the end of the prior fiscal year end were less than 7,000 million, or are in the process of liquidation.
(In millions of Korean won)
Percentage of
Location Subsidiaries
Ownership (%)
Reason
11. PROPERTY, PLANT AND EQUIPMENT
Changes in property, plant and equipment for the years ended December 31, 2007 and 2006, consist of the following:
(In millions of Korean won)
1. Others include amounts from changes in scope of consolidation and changes in foreign currency exchanges rates.
(In millions of Korean won)
Balance at January 1, 2006 2,768,774 5,570,436 15,850,980 4,033,198 1,052,773 29,276,161
Acquisition 3,306 59,430 376,891 11,089,236 209,4281 1,738,291
Transfer 276,892 1,375,293 8,924,265 (10,941,017) 364,567 -
Disposal (64,372) (98,285) (91,858) - (37,082) (291,597)
Depreciation - (422,703) (5,837,939) - (435,520) (6,696,162)
Others
1
(7,781) (30,129) (80,802) (135,298) 11,932 (242,078)
Balance at December 31, 2006 2,976,819 6,454,042 19,141,537 4,046,119 1,166,098 33,784,615
Construction-
Buildings In-Progress/
and Machinery and Machinery- Tools and
Land Structures Equipment In-Transit Vehicles Total
Construction-
Buildings In-Progress/
and Machinery and Machinery- Tools and
Land Structures Equipment In-Transit Vehicles Total
Balance at January 1, 2007 2,976,819 6,454,042 19,141,537 4,046,119 1,166,098 33,784,615
Acquisition 8,863 151,707 604,391 11,194,987 291,589 12,251,537
Transfer 303,629 1,686,516 9,631,007 (11,834,995) 213,843 -
Disposal (140,090) (43,424) (248,975) - (36,594) (469,083)
Depreciation - (492,301) (7,292,619) - (516,148) (8,301,068)
Others
1
5,109 43,618 85,680 (51,683) 31,919 114,643
Balance at December 31, 2007 3,154,330 7,800,158 21,921,021 3,354,428 1,150,707 37,380,644
2007
2006
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
In accordance with the Asset Revaluation Law, on January 1,
1980, 1982, 1998 and April 1, 1999, SEC revalued a substantial
portion of its property, plant, equipment and investments in equity
securities by 3,051,612 million. The remaining revaluation
increments amounting to 1,209,024 million, net of revaluation
tax, credits to deferred foreign currency translation losses
and others, were credited to capital surplus, a component
of shareholders’ equity. Also, in ccordance with the Asset
Revaluation Law, on October 1, 2000, Samsung Gwangju
Electronics Co., Ltd., an SEC subsidiary, revalued a portion of its
property, plant and equipment by
63,326 million. The remaining
revaluation increments amounting to 62,145 million, net of
revaluation tax, were credited to capital surplus, a component of
shareholders’ equity.
As of December 31, 2007 and 2006, a certain portion of overseas
subsidiaries’ property, plant and equipment amounting to
5,251
million equivalent to US$5,597 thousand (2006: 4,633 million,
equivalent to US$4,984 thousand is pledged as collaterals for
various loans from financial institutions.
As of December 31, 2007, property, plant, equipment are insured
against fire and other casualty losses, and business interruption
losses of up to 69,342,078 million (2006: 56,492,021
million) and 22,424,885 million (2006: 21,456,224 million),
respectively.
As of December 31, 2007, the value of land owned by SEC and
its Korean subsidiaries based on the posted price issued by the
Korean tax authority amounted to 4,124,574 million (2006:
3,654,206 million).
As of December 31, 2007 and 2006, Samsung Card Co., Ltd.,
an SEC subsidiary, recorded
626,731 million (2006: 505,319
million) of operating lease assets, cancellation lease assets and
prepaid finance lease assets acquired through the lease financing
business (Note 8).
12. INTANGIBLE ASSETS
The changes in intangible assets for the years ended December 31, 2007 and 2006, are as follows:
(In millions of Korean won)
Negative Intellectual
Goodwill
Goodwill Property Rights
Others Total
(In millions of Korean won)
1. Acquisitions include amounts transferred from other accounts such as construction-inprogress.
2. Others include amounts from changes in scope of consolidation and changes in foreign currency exchange rates.
Balance at January 1, 2007 6,776 (186) 262,726 389,069 658,385
Acquisition
1
22,830 - 113,564 108,006 244,400
Disposal - - (3,019) (3,145) (6,164)
Amortization (3,181) 186 (58,329) (134,950) (196,274)
Others
2
219 - (41) 4,102 4,280
Balance at December 31, 2007 26,644
-
314,901 363,082 704,627
Balance at January 1, 2006
9,839 (599) 240,754 382,862 632,856
Acquisition
1
512 - 80,354 124,292 205,158
Disposal (237) - (2,661) (1,469) (4,367)
Amortization (3,170) 413 (55,706) (117,815) (176,278)
Others
2
(168) - (15) 1,199 1,016
Balance at December 31, 2006 6,776 (186) 262,726 389,069 658,385
2007
Negative Intellectual
Goodwill
Goodwill Property Rights
Others Total
2006
103
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The amortization expense of intangible assets for the years ended December 31, 2007 and 2006, is distributed among the
following accounts:
(In millions of Korean won)
Account 2007 2006
Production costs
30,327 25,332
Selling and administrative expenses 89,774 81,058
Research and development expenses 76,173 69,888
196,274 176,278
13. SHORT-TERM BORROWINGS
Short-term borrowings as of December 31, 2007 and 2006, consist of the following:
Certain bank deposits and property, plant and equipment are pledged as collaterals for the above borrowings. As of December 31,
2007 and 2006, overdraft facilities of SEC and subsidiaries amount to 1,189,000 million and 688,500 million. In addition, SEC
guarantees repayment f substantially all short-term borrowings of overseas subsidiaries (Note 18).
In addition, the above short-term borrowings include those of Samsung Card Co., Ltd., the consumer financing subsidiary, amounting
to
2,127,160 million (2006: 1,557,976 million) and current maturities of long-term debts of 1,933,885 million (2006: 2,722,010
million) as of December 31, 2007.
(In millions of Korean won)
Annual Interest Rates (%)
as of December 31, 2007
2007 2006
Overdraft -
-
16
General term loans from commercial banks 5.6 ~ 7.2 1,616,000 1,290,464
Notes discounted 5.5 ~ 6.9 567,160 320,000
Usance financing, including document
against acceptance loans incurred from LIBOR +0.5 4,391,387 3,814,409
intercompany transactions
Short-term borrowings of overseas subsidiaries 0.0 ~ 7.1 1,878,552 1,935,889
8,453,099 7,360,778
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
14. LONG-TERM DEBTS
Long-term debts as of December 31, 2007 and 2006, consist of the following:
(In millions of Korean won)
(A) Local currency loans as of December 31, 2007 and 2006, consist of the following:
(B) Long-term debts denominated in foreign currencies as of December 31, 2007 and 2006, consist of the following:
(In millions of Korean won)
As of December 31, 2007, certain bank deposits, and property, plant and equipment are pledged as collaterals for the above long-term
debts (Notes 4 and 11). In addition, repayment of certain long-term debts are guaranteed by various Korean financial institutions and/or
certain affiliated companies (Note 18).
Included in the long-term debts are the borrowings of Samsung Card Co., Ltd. with an aggregate amount of 3,559,518 million (2006:
4,032,036 million) as of December 31, 2007.
Reference 2007 2006
(In millions of Korean won)
Shinhan Bank and others 5.4 ~ 7.9 56,292 65,072
Royal Bank of Scotland and others 5.2 ~ 5.4 234,550 185,920
Foreign financial institutions (Overseas subsidiaries) 1.4 ~ 8.9 278,722 228,829
569,564 479,821
Korea Energy Management Corporation 4.5
282 576
Samsung Shinhan 4th Special Purpose Company - 151,881 172,320
Shinhan Bank and others 5.8 ~ 6.1 471,500 117
623,663 173,013
Korean won loans (A)
623,663 173,013
Foreign currency loans, in Korean won equivalents (B) 569,564 479,821
Debentures (C) 4,633,179 6,329,701
5,826,406 6,982,535
Less: Current maturities (1,982,678) (2,771,866)
3,843,728 4,210,669
Annual Interest Rates (%)
as of December 31, 2007
2007 2006
Annual Interest Rates (%)
as of December 31, 2007
2007 2006
105
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(C) Debentures outstanding as of December 31, 2007 and 2006, consist of the following:
(In millions of Korean won)
Samsung Card Co., Ltd., a domestic subsidiary, issued subordinated convertible bonds on June 23, 2003, with a principal of
800,000 million, coupon rate of 2.0% and with a maturity date of June 23, 2008. Convertible bonds are convertible to common stock at
the exercise price of 43,040 per share adjusted from 8,608 to reflect capital reduction from five to one shares on November 2, 2006,
effective from June 23, 2006 (or when listed on the exchange) through May 23, 2008. Premium of 9% (or 5% when listed) on principal is
additionally payable in case the bonds are not converted to equity before the due date.
Maturities of long-term debts outstanding, excluding premiums and discounts on debentures, as of December 31, 2007, are as follows:
(In millions of Korean won)
For the Years Local Foreign
Ending December 31 Currency Loans Currency Loans
Debentures Total
2009 9,482 288,163 1,455,000 1,752,645
2010 606,708 114,592 890,000 1,611,300
2011 4,828 25,371 370,000 400,199
2012 2,430 4,831 10,000 17,261
Thereafter - 64,303 - 64,303
623,448 497,260 2,725,000 3,845,708
Non-guaranteed debentures 2.68 ~ 8.5
4,337,000 5,318,500
Subordinated convertible bonds 2.0 265,379 799,947
4,602,379 6,118,447
Add: Premium for non-executed rights 43,902 334,676
Less: Conversion rights (10,117) (116,153)
Discounts (2,985) (7,269)
4,633,179 6,329,701
Annual Interest Rates (%)
as of December 31, 2007
2007 2006
15. FOREIGN CURRENCY NOTES AND BONDS
Unsecured foreign currency notes and bonds as of December 31, 2007 and 2006, consist of the following:
(A) US dollar denominated straight bonds
On October 2, 1997, SEC issued straight bonds in the amount of US$100 million at 99.85% of face value. The bonds bear interest
at 7.7% per annum and will mature on October 1, 2027, with repayments to be made annually for 20 years after a ten-year grace
period from the date of issuance.
(B) US dollar floating rate notes
US dollar floating rate notes issued by Samsung Card Co., Ltd., one of SEC’s domestic subsidiaries, will be repaid at their maturities.
Interests will be paid every quarter.
(C) Overseas subsidiaries
Overseas subsidiaries’ bonds will be repaid at maturities with the biannual interest payments over the terms of the bonds. SEC has
provided guarantees over the overseas subsidiaries’ bonds.
Maturities of foreign currency notes and bonds, outstanding as of December 31, 2007, are as follows:
(In millions of Korean won)
2009 4,691
2010 103,202
2011 4,691
2012 4,691
Thereafter 117,275
234,550
For the Years Ending December 31 Foreign Currency Notes and
Bonds
SEC
US dollar denominated straight bonds ( A ) October 1, 2027 93,820 92,960
US dollar floating rate notes ( B ) August 28, 2010 98,511 -
Overseas subsidiaries
US dollar denominated fixed rate notes ( C ) April 1, 2027 23,455 23,240
US dollar denominated fixed rate notes ( C ) April 1, 2030 23,455 23,240
239,241 139,440
Discounts (6,113) (5,643)
233,128 133,797
Less: Current maturities (4,470) -
228,658 133,797
Reference Due Date 2007 2006
(In millions of Korean won)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
107
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16. ACCRUED SEVERANCE BENEFITS
Change in accrued severance benefits for the years ended December 31, 2007 and 2006, consist of the following:
As of December 31, 2007, the Company funded 60.7% of severance payable through severance insurance deposits with Samsung Life
Insurance Co., Ltd. and Samsung Fire & Marin Insurance Co., Ltd.
In addition, Samsung Card Co., Ltd., one of SEC’s domestic subsidiaries, implemented a defined benefit pension plan with Samsung
Life Insurance Co., Ltd. in accordance with Employee Retirement Benefit Security Act.
Retirement pension operating assets as of December 31, 2007, consist of the following:
(In millions of Korean won)
Balance at the beginning of the year 1,769,385 1,431,997
Provision for severance benefits 615,586 522,926
Actual severance payments (346,803) (184,845)
Others
1
3,545 (693)
2,041,713 1,769,385
Less: Cumulative deposits to the National Pension Fund (11,467) (13,156)
Severance insurance deposits (1,239,563) (1,001,591)
Retirement pension operating assets (50,747) (33,433)
Balance at the end of the year 739,936 721,205
2007 2006
1. Others include amounts from changes in scope of consolidation and changes in foreign currency exchange rates.
Financial instruments 70.57
Securities 24.21
Others 5.22
100.00
Percentage of the Component (%)
17. LIABILITY PROVISIONS
Changes in main liability provisions for the years ended December 31, 2007and 2006, are as follows:
(In millions of Korean won)
2007
Warranty reserves (A)
703,797 1,126,488 938,852 37,644 929,077
Royalty expenses (B) 975,238 706,384 340,328 1,638 1,342,932
Long-term incentives (C) 274,358 220,635 455,848 - 39,145
Point reserves (D) 124,870 156,445 134,440 - 146,875
Reference January 1, 2007 Increase Decrease Others
1
December 31, 2007
2006
Reference January 1, 2006 Increase Decrease Others
1
December 31, 2006
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(A) The Company accrues warranty reserves for estimated costs of future service, repairs and recalls, based on historical experience
and terms of guarantees (1~4 years).
(B) The Company makes provisions for estimated royalty expenses related to technical assistance agreements that have not been
settled. The timing of payment depends on the settlement of agreement.
(C) The Company introduced long-term incentive plans for its executives based on a three-year management performance criteria and
has made a provision for the estimated incentive cost for the accrued period. The incentive is expected to be paid from 2008.
(D) Samsung Card Co., Ltd., a domestic subsidiary, accrues point reserves based on estimated expenses of future service occurring
within five years to reward loyal members and expand customer base.
18. COMMITMENTS AND CONTINGENCIES
(A) As of December 31, 2007, SEC is contingently liable for guarantees of indebtedness, rincipally for related parties, approximating
7,693 million in loans and US$749 million on drawn facilities which have a maximum limit of US$3,020 million.
As of December 31, 2007, SEC is contingently liable for guarantees of indebtedness up to a limit of 250,132 million for employees’
housing rental deposits.
As of December 31, 2007, SEC is contingently liable for guarantees amounting to $21.6 million undertaken by Citi Bank relating to
the guarantees for Samsung Electronics Latinoamerica (Zona Libre), S.A., one of SEC’s foreign subsidiaries.
As of December 31, 2007, SEC is providing a US$25 million guarantee for Samsung Electronics Hungarian RT. Co., Ltd. relating to
the investment incentive contract with the Hungarian government.
In addition, as of December 31, 2007, the Company’s overseas subsidiaries enter into “Cash Pooling Arrangement” contracts and
“Banking Facility” agreements with overseas financial institutions to provide mutual guarantees of indebtedness.
Europe SEUK and 18 other subsidiaries Citibank and another bank
Asia SAPL and 7 other subsidiaries Bank of America
Asia SEMA and 2 other subsidiaries Standard Chartered bank
Area Participating Subsidiaries Financial Institutions
(In millions of Korean won)
1. Others include amounts from changes in consolidated subsidiaries and foreign currency exchange rates.
Warranty reserves (A) 579,362 993,817 862,783 (6,599) 703,797
Royalty expenses (B) 844,538 397,689 267,347 358 975,238
Long-term incentives (C) 133,579 143,796 3,017 - 274,358
Point reserves (D) 107,984 121,629 104,743 - 124,870
109
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As of December 31, 2007, the Company has various lease agreements that are recognized as operating leases. Related rental
payments amounting to 73,508 million (2006: 61,188 million) are charged to current operations for the year ended December
31, 2007.
The minimum lease payments as of December 31, 2007 and 2006, are as follows:
As of December 31, 2007, SEC has credit insurance against its approved foreign customers on behalf of its affiliates and
subsidiaries with Korea Export Insurance Corporation.
As of December 31, 2007, the Company has forward exchange contracts to manage the exposure to changes in currency
exchanges rates in accordance with its foreign currency risk management policy. The use of foreign currency forward contracts
allows the Company to reduce its exposure to the risk that it may be adversely affected by changes in exchange rates.
In addition, the Company has interest rate swap contracts and foreign currency swap contracts to reduce the impact of changes in
floating rates on long-term debt and borrowings, and interest rate swap contracts and foreign currency swap contracts to reduce
the impact of changes in the fair-value risk on fixed rate long-term debt.
As of December 31, 2007, SEC and its domestic subsidiaries have been insured against future contract commitments of up
to
122,377 million. In addition, Samsung Card Co., Ltd. has been provided payment guarantee amounting to US$5 million from
Woori Bank, in relation to a payment guarantee to AMEX.
As of December 31, 2007, the Company has technical assistance agreements with certain companies requiring payment for use of
the technology or from sales of products manufactured using such technology.
The Company leases certain property, plant and equipment under various finance lease arrangements. Assets recorded
under capitalized lease agreements are included in property, plant and equipment with a net book value of 41,787 million
(2006: 24,029 million). Depreciation expense for the finance lease assets amounted to 2,986 million (2006: 1,442 million) for
the year ended December 31, 2007.
The minimum lease payments and their present value as of December 31, 2007 and 2006, are as follows:
(In millions of Korean won)
Within one year 7,837 6,240 4,386 3,833
From one year to five years 26,678 20,576 17,544 14,575
More than five years 55,297 31,489 43,420 24,212
89,812 65,350
Present value adjustment (31,507) (22,730)
Financing lease liabilities 58,305 58,305 42,620 42,620
Within one year 83,903 59,156
From one year to five years 192,918 133,373
More than five years 70,242 51,418
347,063 243,947
2007 2006
(In millions of Korean won)
(B)
(C)
(D)
(E)
(F)
(G)
Minimum Lease
Present Values
Minimum Lease
Present Values
Payments Payments
2007 2006
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
A summary of derivative transactions as of and for the year ended December 31, 2007 and 2006, follows:
(In millions of Korean won)
2007 2006
Asset Gain (Loss) on Gain (Loss) on Asset
(Liability) Valuation (I/S) Valuation (B/S) (Liability)
Of the amounts charged to accumulated other comprehensive income from the valuation of interest rate swap contracts, a gain of
1,861 million will be realized by December 31, 2008.
As of December 31, 2007, SEC has been named as a defendant in overseas legal actions filed by Matsushita Electric Industrial Co.,
Ltd., Commissariat A L’Energie Atomique, St.Clair Intellectual Property Consultants Inc., Tadahiro Ohmi, Rambus Inc., Agere
Systems Inc., InterDigital Communication Corporation, ON Semiconductor Corporation, Hitachi Global Storage Technologies
Netherlands B.V., Stormedia Texas, LLC., Renesas Technology Corp., Anvik Corporation, Texas MP3 Technologies Ltd., Seiko
Instruments Inc., Alberta Telecommunications Research Centre, Pioneer Electronics(USA) Inc., Sharp Corporation, Genoa Color
Technologies, Ltd., Wistron Corporation, International Printer Corp., Premier International Associates, LLC., Saxon Innovations,
LLC., Innovative Patented Technology, LLC., Technology Patents, LLC., and as the plaintiff in overseas legal actions against
International Rectifier Corporation, Matsushita Electric Industrial Co., Ltd, Rambus Inc., Hitachi Global Storage Technologies
Netherlands B.V., ON Semiconductor Corporation, Renesas Technology Corp., Sharp Corporation, InterDigital Communication
Corporation for alleged patent infringements.
Domestic legal actions involving SEC include eight cases as the plaintiff with total claims amounting to approximately
7,823
million, and 29 cases as the defendant, excluding the Samsung Motors Inc. case mentioned in (K), amounting to approximately
58,862 million.
Considering the legal cases mentioned above and various other claims and proceedings pending as of December 31, 2007, the
Company’s management believes that, although the outcome of these matters is uncertain, the conclusion of these matters will not
have a material adverse effect on the operations or financial position of the Company.
The United States Department of Justice Antitrust Division had investigated the alleged anti-trust violations by the sellers of
Dynamic Random Access Memory (“DRAM”) in the United States, which include Samsung Semiconductor Inc. (SSI), a US
subsidiary of SEC. Following the Justice Department’s investigation, several civil class actions were filed against SEC and SSI. SEC
and SSI entered into a plea agreement with the Justice Department in 2005 and agreed to pay US$300 million over five years. The
class actions by direct purchasers were settled for US$67 million in 2006 and the class actions by indirect purchasers were settled
for US$113 million in 2007.
The United States Department of Justice Antitrust Division (the Justice Department) and other countries’ anti-trust authorities
initiated an investigation into alleged anti-trust violations by the sellers of TFT-LCD, SRAM and Flash Memory, including SEC and
some of its foreign subsidiaries. Following the investigation by the Justice Department, several civil class actions were filed against
SEC and its subsidiaries. As of balance sheet date, the outcome of these civil actions is uncertain and accordingly, the ultimate
effect of this matter on the financial position of the Company cannot be determined.
(H)
( I )
(J)
Forward exchange 14,825 12,534
-
6,319
(9,417) (8,219) - (8,866)
Interest rate swap 13,898
-
13,418 1,851
(3,044) - (2,564) (3,876)
Currency swap 2,149 6,366
-
-
(5,032) (651) (4,794) (28,948)
Type
111
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SEC and 30 other Samsung Group affiliates (the “Affiliates”) entered into an agreement with the institutional creditors (the
“Creditors”) of Samsung Motors Inc. (“SMI”) in September 1999. In accordance with this agreement, SEC and the Affiliates agreed
to sell 3,500,000 shares of Samsung Life Insurance Co., Ltd. (the “Shares”), which were previously transferred to the Creditors in
connection with the petition for court receivership of SMI. The Shares were to be disposed of by December 31, 2000.
And if the sales proceeds fell short of 2,450 billion (the “Shortfall”), SEC and the Affiliates agreed to compensate the Creditors for
the Shortfall by other means, including participating in any equity offering or subordinated debentures issued by the Creditors. Any
excess proceeds over 2,450 billion were to be distributed to SEC and the Affiliates. In the event of non-performance to this
agreement, default interest on the Shortfall was agreed to be paid to the Creditors by SEC and the Affiliates.
As of December 31, 2007, the sale of the Shares had not been completed and on December 9, 2005, the Creditors filed a civil
action against Mr. Kun-Hee Lee, the Chairman of SEC, SEC and 27 of the remaining Affiliates, in connection with this agreement
claiming the agreed sales proceeds amount of 2,450 billion plus interest of 6% per annum from January 1, 2001, until the date
SEC and the Affiliates were served with court process and 20% per annum thereafter until settlement.
In addition, the Creditors are claiming from SEC and 27 of the Affiliates damages resulting from delays amounting to 2,287.9
billion (the “Damages”), the aggregate amount of monthly default interest calculated from January 1, 2001, at 19% per annum on
2,450 billion, with interest. Interest on the Damages has been calculated by applying 6% per annum on the monthly calculated
Damages amount from the following month until the date SEC and the Affiliates were served with court process and 20% per
annum thereafter until settlement. Additional damage for delays, calculated at 19% per annum on 2,450 billion, is also being
claimed by the Creditors from December 1, 2005, until settlement.
On January 31, 2008, the court ruled that the agreement was valid, and that Mr. Kun-Hee Lee, SEC and 27 of the remaining
Affiliates have a joint and severable liability for the principal less an amount related to Samsung Life shares that have already been
disposed of by the Creditors, plus interest at a rate of 6% per annum.
As of the balance sheet date, the financial impact of this case is uncertain and accordingly, the ultimate effect of this matter on the
financial position of the Company cannot presently be determined.
As of December 31, 2007, SEA and four other overseas subsidiaries have agreements with financial institutions to sell certain
eligible trade accounts receivable under which, on an ongoing basis, a maximum of US$1,622 million can be sold. SEC and Living
Plaza, one of SEC’s domestic subsidiaries, have trade notes receivable discounting facilities with financial institutions, including
Shinhan Bank with a combined limit of up to 498,800 million and a trade financing agreement with 23 banks including Woori Bank
for up to US$9,300 million. In addition, SEC has a credit sales facility agreement with five banks, including Woori Bank and an
accounts receivable factoring agreement with Korea Exchange Bank for up to 150,000 million. In relation to the credit sales facility
agreement with Woori Bank (up to 70,000 million) and Kookmin Bank (up to 200,000 million), SEC has recourse obligations on
the receivables where the extensions have been granted on the credit periods. The Company also has loan facilities with accounts
receivable pledged as collaterals with four banks, including Woori Bank, for up to 1,065,000 million.
In addition, SEMES Co., Ltd., and two other domestic subsidiaries have credit purchase facility agreements of up to 136,500
million with Korean banks, including Hana Bank, and S-LCD Corp. and two other domestic subsidiaries have general term loan
facilities of up to 282,000 million with Korean banks, including Kookmin Bank.
As of December 31, 2007, SEC’s domestic subsidiaries have provided a blank note and two notes amounting to 30,000 million,
to financial institutions as collaterals for bank borrowings and for the fulfillment of certain contracts, which do not have a direct
adverse effect on the operations or financial position of the Company.
(K)
(L)
(M)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
A domestic subsidiary of the Company, Samsung Card Co., Ltd. transferred certain eligible financial assets in accordance with the
Act on Asset Backed Securitization of the Republic of Korea to several financial institutions (“FIs”). The transfer is with recourse and
was completed through a Special Purpose Entity (“SPE”) issued securities. In the event of non-performance of those transferred
financial assets within certain measurement criteria noted in the transfer agreement, the Samsung Card is obliged to redeem the
issued securities.
The transfer of the financial assets has been recognized as a sale and accordingly, have been derecognized from the financial
statements. Total financial assets transferred amounted to 852,750 million for the year ended December 31, 2007 (2006:
1,448,439 million). As of December 31, 2007, 4,037,885 million (2006: 4,002,923 million) remain uncollected and
outstanding with the financial institutions.
19. CAPITAL STOCK
Under its Articles of Incorporation, SEC is authorized to issue 500 million shares of capital stock with a par value of
5,000 per share,
of which 100 million shares are cumulative, participating preferred stock that are non-voting and entitled to a minimum cash dividend
at 9% of par value. In addition, SEC is authorized to issue to investors, other than current shareholders, convertible debentures and
debentures with warrants with face values up to 4,000 billion and 2,000 billion, respectively. The convertible debentures amounting
to 3,000 billion and 1,000 billion are assigned to common stock and preferred stock, respectively. While the debentures with
warrants amounting to 1,500 billion and 500 billion are assigned to common stock and preferred stock, respectively.
SEC is also authorized, subject to the Board of Directors’ approval, to issue shares of common or preferred stock to investors other than
current shareholders for issuance of depository receipts, general public subscription, urgent financing with financial institutions, and
strategic alliance.
SEC is authorized, subject to the Board of Directors’ approval, to retire treasury stock in accordance with applicable laws up to the
maximum amount of certain undistributed earnings. As of December 31, 2007, the 8,310,000 shares of common stock and 1,060,000
shares of non-voting preferred stock had been retired over three trenches, with the Board of Directors’ approval.
SEC has issued global depositary receipts (“GDR”), representing certain shares of non-voting preferred stock and common stock, at
overseas stock markets, are as follows:
In addition to the above issuances, there have been several conversions of foreign currency convertible bonds into GDRs and
conversions of the issued GDRs into original shares of common stock or non-voting preferred stock.
As of December 31, 2007, SEC’s outstanding global depositary receipts, as follows:
As of December 31, 2007, exclusive of retired stocks, 147,299,337 shares of common stock and 22,833,427 shares of preferred stock
have been issued. The preferred shares, which are non-cumulative and non-voting, were all issued on or before February 28, 1997, and
are entitled to an additional cash dividend of 1% of par value over common stock.
The par value of capital stock differs from paid-in capital as the retirement of capital stock was recorded as a deduction from retained
earnings.
Non-voting preferred stock 7,695,272 15,390,544
Common stock 4,251,339 8,502,678
Number of Shares of Stock Number of Shares of GDR
(N)
Non-voting preferred stock 3,459,872 6,919,744
Common stock 10,629,358 21,258,716
Number of Shares of Stock Number of Shares of GDR
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20. RETAINED EARNINGS
Retained earnings as of December 31, 2007 and 2006, consist of the following:
Appropriated
Legal reserve
Earned surplus reserve
1
450,789 450,789
Reserve for improvement of financial structure
2
- 204,815
Discretionary reserve
Reserve for improvement of financial structure
2
204,815 -
Reserve for business rationalization 8,512,101 7,512,101
Reserve for overseas market development 510,750 510,750
Reserve for overseas investment losses 164,982 164,982
Reserve for research and human resource development 22,936,458 18,936,458
Reserve for export losses 167,749 167,749
Reserve for loss on disposal of treasury stock 2,550,000 2,000,000
Reserve for capital expenditure 8,216,439 6,660,814
43,714,083 36,608,458
Unappropriated 7,351,091 7,855,225
51,065,174 44,463,683
2007 2006
(In millions of Korean won)
1. The Commercial Code of the Republic of Korea requires SEC to appropriate as a legal reserve, an amount equal to a minimum of 10% of annual cash
dividends declared, until the reserve equals 50% of its issued capital stock. The reserve is not available for the payment of cash dividends, but may
be transferred to capital stock through a resolution of the Board of Directors or used to reduce accumulated deficit, if any, with the ratification of the
shareholders.
2. In accordance with the Regulation for Securities Issuance and Disclosure (“Regulation”), SEC is required to appropriate, as a reserve for improvement
of financial structure, an amount equal to at least 50% of the net extraordinary gain on disposal of property, plant and equipment and 10% of net earnings
for each year, until the shareholders’ equity equals 30% of total assets. This reserve was not available for the payment of cash dividends, but could be
transferred to capital stock or used to reduce accumulated deficit, if any. However, effective December 21, 2007, the Regulation was amended and as
result the Company is no longer required to further accumulate reserve and removed the restrictions on the usage of the existing reserve.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
(D) Dividend Yield Ratio
SEC declared cash dividends to shareholders of common stock and preferred stock as interim dividends for the six-month periods
ended June 30, 2007 and 2006, and as year-end dividends for the years ended December 31, 2007 and 2006.
Details of interim dividends and year-end dividends are as follows:
21. DIVIDENDS
SEC declared cash dividends to shareholders of common stock and preferred stock as interim dividends for the six-month periods
ended June 30, 2007 and 2006, and as year-end dividends for the years ended December 31, 2007 and 2006.
Details of interim dividends and year-end dividends are as follows:
(A) Interim Dividends
(B) Year-end Dividends
(C) Dividend Payout Ratio
Number of shares eligible for dividends Common stock 126,217,610 shares 128,519,810 shares
Preferred stock 19,853,734 shares 20,253,734 shares
Dividend rate 10% 10%
Dividend amount Common stock
63,109 64,260
Preferred stock 9,927 10,126
73,036 74,386
2007 2006
(In millions of Korean won and number of shares)
Number of shares eligiblefor dividends Common stock 126,427,076 shares 128,758,653 shares
Preferred stock 19,853,734 shares 20,253,734 shares
Dividend rate Common stock 150% 100%
Preferred stock 151% 101%
Dividend amount Common stock 948,203 643,793
Preferred stock 149,896 102,282
1,098,099 746,075
2007 2006
(In millions of Korean won and number of shares)
Dividends 1,171,135 820,461
Net income 7,420,579 7,926,087
Dividend payout ratio 15.78% 10.35%
2007 2006
(In millions of Korean won)
Dividend per share 8,000 8,050 5,500 5,550
Market price
1
566,600 426,700 611,400 486,000
Dividend yield ratio 1.41% 1.89% 0.90% 1.14%
2007 2006
Common Stock Preferred Stock Common Stock Preferred Stock
1. The average closing price for the prior week from two trading days before closing date of shareholders’ list.
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23. STOCK OPTION PLAN
SEC has a stock option plan that provides for the granting of stock purchase options to employees r directors who have contributed or
are expected to contribute to the management and technological innovation of SEC.
A summary of the terms of stock options granted is as follows:
1. The exercise price can be adjusted in the case of the issuance of new shares, stock dividends, stock splits, or stock mergers.
2. The options will be fully vested after two years of continuous employment from the date of grant.
The fair value of each option grant was estimated using the Black-Scholes option-pricing model based on the date of the grant
using the following assumptions:
The compensation expense related to stock options amounted to
780 million for the year ended December 31, 2007. No
compensation expense was estimated for future periods.
As of December 31, 2007, Samsung Card Co,. Ltd., a domestic subsidiary, has granted 120,472 shares including 45,472 shares,
which had been granted by Samsung Capital Co., Ltd. as part of the merger in 2004. The compensation expense recognized by
Samsung Card Co., Ltd. was 2,237 million for the year ended December 31, 2006. The stock options of 1,231 million according to
SEC’s ownership ratio are included in a separate component of shareholders’ equity as other capital adjustments.
Risk-free
interest rates 9.08% 6.04% 5.71% 6.44% 4.62% 4.60% 3.56% 4.95%
Expected stock
price volatility 69.48% 74.46% 64.97% 64.90% 60.08% 43.09% 42.46% 32.71%
Expected life 4 years 4 years 3 years 3 years 3 years 3 years 3 years 3 years
Expected
dividend yield 0.39% 0.89% 0.73% 0.74% 1.25% 0.73% 0.99% 1.14%
22. TREASURY STOCK
SEC purchases its own common shares and non-voting preferred shares at market price for stock price stabilization. As of December
31, 2007, SEC holds 20,872,261 common shares with acquisition cost of 8,535,649 million, and 2,979,693 preferred shares
with acquisition cost of 621,843 million, as treasury stock recorded as capital adjustment. As of December 31, 2006, SEC held
18,540,684 common shares with acquisition cost of 7,078,265 million, and 2,579,693 preferred shares with acquisition cost of
441,758 million. SEC is planning to use the treasury stock for stock options in the future.
Quantity net of
forfeitures and
exercises 769,356 1,102,704 530,319 82,682 200,122 548,549 7,200 10,000
Exercise price
1
272,700 197,100 329,200 342,800 288,800 580,300 460,500 606,700
Exercise period
from the date
of the grant
2
3~10 years 3~10 years 2~10 years 2~10 years 2~10 years 2~10 years 2~4 years 2~10 years
Date of the Grant
March March February March March April October December
16, 2000 9, 2001 28, 2002 25, 2002 7, 2003 16, 2004 15, 2004 20, 2005
Date of the Grant
March March February March March April October December
16, 2000 9, 2001 28, 2002 25, 2002 7, 2003 16, 2004 15, 2004 20, 2005
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
24. INCOME TAX
The statutory income tax rate applicable to the Company, including resident surtax, is 27.5%.
Income tax expense for the years ended December 31, 2007 and 2006, consists of the following:
The following table reconciles the expected amount of income tax expense based on statutory rates to the actual amount of taxes
recorded by the Company for the years ended December 31, 2007 and 2006:
Current income taxes 1,833,087 1,652,083
Deferred income taxes (95,524) (10,702)
Items charged directly to shareholders’ equity (27,671) (7,394)
1,709,892 1,633,987
2007 2006
(In millions of Korean won)
Income before taxes 9,632,873 9,827,646
Statutory tax rate 27.5% 27.5%
Expected taxes at statutory rate 2,649,040 2,702,603
Tax credit (1,049,744) (1,120,772)
Others, net 110,596 52,156
Actual taxes 1,709,892 1,633,987
Effective tax rate 17.75% 16.63%
2007 2006
(In millions of Korean won)
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Deferred income tax assets and liabilites from tax effect of temporary differences including available tax credit carryforwards and
undisposed accumulated deficit as of December 31, 2007, are as follows:
Temporary Differences Deferred Income Tax Asset (Liabilities)
Beginning Increase Ending Beginning Increase Ending Non-
Balance (Decrease) Balance Balance (Decrease) Balance
Current
Current
(In millions of Korean won)
Deferred tax arising from temporary differences
Special reserves
appropriated for
tax purposes
(2,042,850) 587,286 (1,455,564) (561,784) 161,504 (400,280) (36,667) (363,613)
Equity-method
investments and
others (2,627,490) (1,470,337) (4,097,827) (395,923) (112,792) (508,715) - (508,715)
Depreciation (865,817) 496,575 (369,242) (256,028) 132,543 (123,485) 1,598 (125,083)
Capitalized interest
expense (126,786) 77,068 (49,718) (34,866) 21,193 (13,673) - (13,673)
Accrued income (223,414) 13,701 (209,713) (61,157) 3,580 (57,577) (57,155) (422)
Allownce(technical
expense, others) 2,356,597 128,622 2,485,219 653,549 37,601 691,150 648,569 42,581
Deferred foreign
exchange gains 24,112 (3,153) 20,959 6,506 (666) 5,840 472 5,368
Impairment losses
on investments 532,066 (23,916) 508,150 149,489 (9,948) 139,541 425 139,116
Others 1,049,223 66,755 1,115,978 254,048 4,644 258,692 169,502 89,190
(1,924,359) (127,399) (2,051,758) (246,166) 237,659 (8,507) 726,744 (735,251)
Deferred tax assets arising from the carryforwards
Undisposed
accumulated
deficit
3,353,235 (126,967) 3,226,268 246,060 60,263 306,323 20,090 286,233
Tax credit
carryforwards
1,341,941 (101,330) 1,240,611 988,122 (196,903) 791,219 787,929 3,290
Deferred tax relating to items charged to equity
(1,283,947) (2,278,554) (3,562,501) (355,117) (399,886) (755,003) (1,456) (753,547)
334,032 1,533,307 (1,199,275)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Deferred income tax assets and liabilities from tax effect of temporary differences including available tax credit carryforwards and
undisposed accumulated deficit as of December 31, 2006, were as follows:
Temporary Differences Deferred Income Tax Asset (Liabilities)
Beginning Increase Ending Beginning Increase Ending Non-
Balance (Decrease) Balance Balance (Decrease) Balance
Current
Current
(In millions of Korean won)
Deferred tax arising from temporary differences
Special reserves
appropriated for
tax purposes
(2,054,259) 11,409 (2,042,850) (564,094) 2,310 (561,784) (160,417) (401,367)
Equity-method
investments and
others (1,280,543) (1,346,947) (2,627,490) (287,144) (108,779) (395,923) - (395,923)
Depreciation (618,076) (247,741) (865,817) (184,221) (71,807) (256,028) (5,681) (250,347)
Capitalized interest
expense (139,753) 12,967 (126,786) (38,432) 3,566 (34,866) - (34,866)
Accrued income (449,617) 226,203 (223,414) (123,627) 62,470 (61,157) (60,735) (422)
Accrued expenses 2,204,061 152,536 2,356,597 603,695 49,854 653,549 548,076 105,473
Deferred foreign
exchange gains 26,628 (2,516) 24,112 7,221 (715) 6,506 (462) 6,968
Impairment losses
on investments 631,212 (99,146) 532,066 174,830 (25,341) 149,489 229 149,260
Others 765,310 283,913 1,049,223 153,779 100,269 254,048 134,872 119,176
(915,037) (1,009,322) (1,924,359) (257,993) 11,827 (246,166) 455,882 (702,048)
Deferred tax assets arising from the carryforwards
Undisposed
accumulated
deficit
3,773,184 (419,949) 3,353,235 334,513 (88,453) 246,060 28,411 217,649
Tax credit
carryforwards
1,236,484 105,457 1,341,941 909,804 78,318 988,122 980,149 7,973
Deferred tax relating to items charged to equity
(757,513) (526,434) (1,283,947) (210,876) (144,241) (355,117) (2,308) (352,809)
632,899 1,462,134 (829,235)
The Company periodically assesses its ability to recover deferred income tax assets. In the event of a significant uncertainty regarding the Company’s
ultimate ability to recover such assets, a valuation allowance is recorded to reduce the assets to its estimated realizable value.
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Temporary differences, whose deferred tax effects were not recognized due to the uncertainty regarding ultimate realizability such assets,
as of December 31, 2007 and 2006, are as follows:
In accordance with the Korea Accounting Institute Opinion 06-2 announced on December 29, 2006, the Company changed its method
of recognizing deferred income taxes on temporary difference in relation to investments in subsidiaries and equity-method investees.
The Company’s consolidated financial statements for the year ended December 31, 2006, presented herein for comparative purposes,
have not been restated as permitted under the Korea Accounting Institute Opinion 06-2.
. Deductible temporary differences Equity-method investments and others
2
422,188 1,631,015
Undisposed accumulated deficit 2,235,756 2,457,237
Tax credit carryforwards 413,966 318,588
Others 161,308 137,061
. Taxable temporary differences Land revaluation
1
(398,538) (399,034)
Equity-method investments and others
2
(1,807,196) (1,884,373)
Others (344) (1,026)
2007 2006
(In millions of Korean won)
Deferred income tax assets and liabilities and income tax expense charged directly to shareholders’ equity as of and for the
years ended December 31, 2007 and 2006, are as follows:
. Deferred income tax assets and liabilities
Gain(Loss) on valuation of available-for-sale securities and others (755,003) (355,117)
. Income tax expense
Gain on sale of treasury stock and others (27,671) (7,394)
2007 2006
(In millions of Korean won)
1. It is uncertain that the temporary differences arising from the revaluation of the land are realizable as it is uncertain that the land will be disposed in the
foreseeable future.
2. The Company does not expect cash inflows, such as proceeds from the disposal of, or receipts of dividends from earnings arising from certain
subsidiaries and equity method investments within the foreseeable future.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Net income as reported on the statements of income 7,420,579 7,926,087
Adjustments:
Dividends for preferred stock (159,823) (112,408)
Undeclared participating preferred stock dividend (825,162) (965,779)
Excess of purchase price of preferred stock (169,607) -
Net income available for common stock 6,265,987 6,847,900
Weighted-average number of common shares outstanding 126,580,267 129,499,781
Earnings per share (in Korean won)
49,502 52,880
2007 2006
(In millions of Korean won and number of shares)
Stock options 1,494,909 365/365 1,494,909
Stock options 1,888,379 365/365 1,888,379
(In millions of Korean won and number of shares)
25. EARNINGS PER SHARE
Earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the year.
Basic earnings per share for the years ended December 31, 2007 and 2006, are calculated as follows:
The number of dilutive shares of outstanding stock options is calculated by applying the treasury stock method.
Under the treasury stock method, the proceeds from the exercise of the stock options are assumed to be used to purchase common
stock at the average market price. The incremental number shares which is the difference between the number of shares assumed to
be issued and the number of shares assumed to be purchased, is included in the denominator in calculating diluted earnings per share.
1. Common equivalent shares:
2007 Number of shares Weight Common Stock Equivalent
2006 Number of shares Weight Common Stock Equivalent
Diluted earnings per share for the years ended December 31, 2007 and 2006, are calculated as follows:
Net income available for common stock 6,265,987 6,847,900
Adjustment: Compensation expense for stock options - -
Net income available for common stock and common equivalent shares 6,265,987 6,847,900
Weighted-average number of shares of common stock and common equivalent
shares
1
outstanding 128,075,176 131,388,160
Diluted earnings per share (in Korean won) 48,924 52,120
2007 2006
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Stock options April 17, 2006 ~ April 16, 2014 548,549 shares 580,300
Stock options December 21, 2007~ December 20, 2015 10,000 shares 606,700
Exercise Period Quantity Exercise Price (Per share)
Potential ordinary shares that could potentially dilute basic earnings per share in the future, but were not included in the calculation of
diluted earnings per share for the year ended December 31, 2007, because they are anti-dilutive, are as follows:
Net income 7,922,981 8,193,659
Other cumulative comprehensive income
Gain on valuation of available-for-sale securities, net of tax of 338,645 million (2006: 80,697 million) 941,648 220,660
Loss on valuation of available-for-sale securities, net of tax of 221 million (2006: 8,191 million) 248 21,286
Gain on valuation of equity-method investments, net of tax of 60,599 million (2006: nil) 109,633 18,574
Loss on valuation of equity-method investments, net of tax of 459 million (2006: nil) 35,870 20,082
Gain (loss) on translation of foreign operation, net of tax of 13,828 million (2006: 56,752 million) 525,538 (156,147)
Gain (loss) on valuation of derivative instruments, net of tax of 2,202 million (2006: 1,399 million) 5,761 (3,734)
Consolidated comprehensive income
9,541,679 8,314,380
Comprehensive income of controlling interests 8,763,144 8,013,574
Comprehensive income of minority interests 778,535 300,806
9,541,679 8,314,380
2007 2006
(In millions of Korean won)
26. CONSOLIDATED COMPREHENSIVE INCOME
Consolidated comprehensive income for the years ended December 31, 2007 and 2006, consist of:
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
27. RELATED PARTY TRANSACTIONS
(A) Significant transactions between SEC and its consolidated subsidiaries, which have been eliminated during consolidation, for the
years ended December 31, 2007 and 2006, and the related receivables and payables as of December 31, 2007 and 2006, are as follows:
(In millions of Korean won)
1. Include the sale of subsidiaries’ receivables as of December 31, 2007 and 2006.
SJC 3,878,456 3,798,069 1,816,334 2,100,737 266,067 194,106 164,459 244,467
SLCD 1,272,13 4 930,983 2,401,750 1,940,542 618,180 327,564 270,395 161,129
STA 2,042,880 1,248,304 490,280 401,378 240,957 110,333 182,683 166,839
SET 4,846,588 3,987,161 749,573 578,541 389,544 334,475 31,958 42,696
SSI 6,339,597 6,797,940 32,249 9,471 537,142 589,577 - -
SAPL 1,977,577 2,318,294 868,209 880,677 166,710 189,049 43,345 36,921
SEHK 2,602,602 2,293,407 1,251,867 1,053,224 305,260 246,390 67,928 40,261
SEA 681,968 619,432 1,588,155 1,310,381 136,749 138,846 58,545 65,619
SSEG 4,683,872 3,866,865 16,476 5,405 566,969 371,801 5,712 3,324
SEO 683,950 1,726,447 43,322 58,595 210,339 292,635 13,087 20,103
SEUK 1,275,001 1,386,474 128,178 122,189 24,554 40,646 46,473 54,091
SEF 1,149,175 989,792 26,613 31,421 100,131 77,575 14,228 24,730
SSEL 1,285,898 1,289,931 1,855 148 192,224 219,342 8 3,702
SII 697,578 678,497 21,106 15,517 81,189 66,468 320 2,010
SEI 478,643 797,545 38,400 45,937 33,078 30,600 26,220 41,100
SELS 361,466 340,656 8,378 3,260 68,825 87,094 1,466 184
TSTC 3,039,144 2,549,547 14,179 179 259,299 236,333 1,051 -
SESC 128,307 125,752 418,026 290,226 25,235 11,936 46,305 41,010
Others 12,055,982 10,750,083 5,689,401 5,063,732 1,586,341 1,301,644 926,603 935,168
49,480,818
46,495,179
15,604,351 13,911,560 5,808,793 4,866,414 1,900,786
1,883,354
Sales Purchases Receivables
1
Payables
Subsidiaries
2007 2006 2007 2006 2007 2006 2007 2006
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The intercompany loans resulting from significant transactions among subsidiaries for the year ended December 31, 2007, amount
to 1,516,374 million (2006: 1,170,074 million).
SESK SELS 3,832,499 1,973,548 295,821 192,821
SII SEA 3,180,049 2,621,556 106,428 46,979
SEH SELS 1,800,663 820,901 157,534 95,280
TSTC STA 1,216,822 978,057 22,088 64,246
SELS SEUK 1,171,582 538,778 16,292 8,503
SELS SEF 1,147,339 758,010 13,920 22,697
SSI SII 1,017,949 584,015 70,869 45,906
SSKMT STA 988,373 881,494 75,713 84,099
SSEG SESK 943,860 625,352 81,362 28,664
SET SESK 917,890 536,355 113,318 23,077
TSED SCIC 845,589 654,289 63,120 40,047
SET SEH 822,217 357,502 92,878 25,857
SELS SEG 815,416 482,308 32,299 8,033
SELS SEI 784,213 461,140 9,760 1,365
SET TSED 693,862 413,651 74,450 38,805
Others 23,811,663 17,111,864 2,814,220 1,813,791
43,989,986 29,798,820 4,040,072
2,540,170
Sales Receivables
Seller Purchaser
2007 2006 2007 2006
(In millions of Korean won)
Samsung SDI Co., Ltd. 120,793 168,755 860,198 1,279,239 9,783 19,300 86,296 127,143
Samsung SDS Co., Ltd. 33,563 46,032 726,661 693,679 12,368 13,477 158,481 126,857
Samsung Electro-
Mechanics Co., Ltd. 32,109 40,187 1,126,395 1,090,620 2,664 8,532 64,529 86,312
Samsung Corning Precision
Glass Co., Ltd. 132,233 5,793 865,935 724,817 12,562 100 47,330 4,254
Samsung Techwin Co., Ltd. 66,099 75,363 448,501 578,741 22,520 24,200 31,413 50,216
Seoul Commtech. Co., Ltd. 9,868 7,783 127,668 96,744 5,807 2,760 32,633 36,411
Others 11,699 12,255 240,480 379,001 26,441 25,952 42,035 42,737
406,364 356,168 4,395,838 4,842,841 92,145 94,321 462,717 473,930
2007 2006 2007 2006 2007 2006 2007 2006
(In millions of Korean won)
Significant transactions among subsidiaries for the years ended December 31, 2007 and 2006, and the related receivables as of
December 31, 2007 and 2006, are as follows:
Significant transactions between SEC and equity-method investees for the years ended December 31, 2007 and 2006, and the
related receivables and payables as of December 31, 2007 and 2006, are as follows:
(B)
(C)
Equity-method Investees
Sales Purchases Receivables Payables
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Samsung SDI Co., Ltd. SII 415,381 413,178 14,174 7,455
Samsung SDI Co., Ltd. SESK 292,685 247,197 16,142 12,201
SJC Samsung SDI Co., Ltd. 236,834 651,505 20,248 37,685
Samsung Techwin Co., Ltd. SEO 119,758 47,605 - -
SJC Samsung Electro-Mechanics Co., Ltd. 109,669 128,860 11,925 14,334
SJC Samsung Techwin Co., Ltd. 87,960 95,040 25,980 14,692
Samsung Corning Co., Ltd. SESK 59,200 51,482 - 2,375
Samsung SDI Co., Ltd SDMA 53,971 9,609 1,434 284
Samsung SDI (Malaysia)
Sdn. Bhd. SAPL 46,415 57,720 1,138 9
Samsung SDI Co., Ltd. TSE 43,166 24,251 806 1,876
Others 456,806 444,294 52,985 44,226
1,921,845 2,170,741 144,832 135,137
Sales Receivables
Seller Purchaser
2007 2006 2007 2006
(In millions of Korean won)
Sales Purchases Receivables Payables
Others
2007 2006 2007 2006 2007 2006 2007 2006
(In millions of Korean won)
Significant transactions between subsidiaries and equity-method investees for the years ended December 31, 2007 and 2006, and
the related receivables as of December 31, 2007 and 2006, are as follows:
Significant transactions between SEC and its related parties, which are not subsidiaries or equity-method investees, for the years
ended December 31, 2007 and 2006, and the related receivables and payables as of December 31, 2007 and 2006, are as follows:
(D)
(E)
Samsung Corporation 20,293 31,335 1,298,578 1,729,644 14,022 28,630 333,796 499,446
iMarketKorea Inc. 62,371 42,117 291,739 334,574 33,590 13,066 92,690 102,870
Samsung Life Insurance
Co., Ltd. 62,796 43,741 18,001 13,392 25,973 20,926 431 565
Cheil Communications Inc. 1,100 1,197 258,634 283,991 16 62 208,817 205,040
Samsung Everland Co., Ltd. 2,417 1,396 232,829 227,633 214,905 213,362 31,059 37,614
Samsung Heavy
Industries Co., Ltd. 10,148 17,714 91,722 153,616 3,295 12,832 26,095 14,558
Samsung Fire &
Marine Insurance Co., Ltd. 30,315 14,547 168,333 156,753 1,285 707 14,295 2,030
Samsung America Inc. 588 - 45,323 43,089 593 - 130,368 103,834
Samsung Deutschland
GmbH 1,732 - 1,217,046 1,103,072 3 - 63,838 123,334
Others 118,937 109,570 454,761 358,003 16,073 9,663 59,719 79,723
310,697 261,617 4,076,966 4,403,767 309,755 299,248 961,108 1,169,014
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Further, as of December 31, 2007, the balances of beneficiary certificates from Samsung Securities Co., Ltd. amounted to 503,934
million (2006: 1,156,158 million) (Note 5). Also, the Company has entered into a severance insurance plan with Samsung Life
Insurance Co., Ltd., and fire and other insurance policies with Samsung Fire & Marine Insurance Co., Ltd. In addition, Samsung Card
Co., Ltd. a domestic subsidiary, purchased defined benefit pension plan from Samsung Life Insurance Co., Ltd. (Note 16).
As of December 31, 2007 and 2006, Samsung Card Co., Ltd., a domestic subsidiary, has general term loans amounting to 320,000
million from Samsung Life Insurance Co., Ltd. (Note 14).
As of December 31, 2007, SEC is contingently liable for guarantees of indebtedness, principally for related parties, approximating
7,693 million in loans and drawn facilities which have a maximum limit of US$3,020 million (Note 18).
For the year ended December 31, 2007, SEC recognized expenses for short-term benefits of 24,546 million, long-term benefits of
24,910 million and severance benefits of 7,514 million as key management compensation. Key management consists of registered
executive officers who have the authority and responsibility in the planning, directing and controlling of Company operations.
Samsung Corporation SAPL 474,577 308,782 39,676 14,605
SJC Samsung Heavy Industries
Co., Ltd. 407,551 377,517 23,484 24,018
Samsung America Inc. SAS 260,289 17,528 212,892 1,070
Samsung Corporation SJC 250,603 213,642 4,219 5,349
Samsung Deutschland GmbH SAS 155,310 21,744 120,276 -
SAPL Samsung Petrochemical
Co., Ltd. 113,548 61,783 15,158 11,320
Samsung Electro-Mechanics
America, Inc. SII 88,638 - 6,569 -
Samsung Electro-Mechanics
Germany, GmbH SESK 84,971 52,581 3,583 1,770
Samsung Electro-Mechanics
Germany, GmbH SEH 84,199 28,952 4,298 993
Scommtech Japan Co., Ltd. SJC 73,360 - 15,496 -
Others 1,144,271 2,029,319 124,644 281,190
3,137,317 3,111,848 570,295 340,315
Sales Receivables
Seller Purchaser
2007 2006 2007 2006
(In millions of Korean won)
Significant transactions between subsidiaries and related parties, which are not subsidiaries or equity-method investees, for the
years ended December 31, 2007 and 2006, and the related receivables and payables as of December 31, 2007 and 2006, are as
follows:
(F)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
28. RESEARCH AND DEVELOPMENT COSTS
Research and development costs incurred and expensed for the years ended December 31, 2007 and 2006, consist of the following:
29. ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES
As of December 31, 2007 and 2006, assets and liabilities denominated in foreign currencies are as follows:
(In millions of Korean won)
Foreign Companies Domestic Companies
2007 2006 2007 2006
Foreign Foreign
Foreign Currency Korean Won Korean Won Currency Korean Won Korean Won
Currency Amount (Equivalent) (Equivalent) Amount (Equivalent) (Equivalent)
(In millions of Korean won and foreign currencies in thousands)
Research expenses 2,353,844 2,252,848
Ordinary development expenses 3,720,115 3,461,914
6,073,959 5,714,762
2007 2006
Foreign currency US$ 882,042 827,532 441,739 729,657 684,564 150,076
deposits JPY 1,561,432 13,012 26,261 11,187,056 93,225 3,284
EUR 451,097 623,082 330,193 41,243 56,967 2,401
Others 1,372,737 1,171,310 338 869
2,836,363 1,969,503 835,094 156,630
Trade accounts and US$ 1,458,416 1,368,286 1,824,597 537,061 503,871 378,541
notes receivable JPY 116,763,649 973,027 770,981 3,257,747 27,148 35,893
EUR 1,688,533 2,332,303 1,790,668 22,415 30,961 29,565
Others 4,951,467 3,362,367 2,558 5,022
9,625,083 7,748,613 564,538 449,021
Other assets US$ 279,164 261,912 97,542 318,230 298,564 162,721
JPY 30,122,753 251,022 254,411 2,504,357 20,870 3,763
EUR 109,064 150,645 67,005 29,866 41,253 30,312
Others 331,463 370,278 6,676 45,899
995,042 789,236 367,363 242,695
Total foreign
currency assets
13,456,488 10,507,352 1,766,995 848,346
Account
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Monetary assets and liabilities of overseas subsidiaries after eliminating intercompany ransactions are translated at the foreign
exchange rate in effect as of the balance sheet date.
Foreign currency translation gains and losses for the year ended December 31, 2007, amounted to 128,577 million and 122,597
million, respectively.
Foreign Companies Domestic Companies
2007 2006 2007 2006
Foreign Foreign
Foreign Currency Korean Won Korean Won Currency Korean Won Korean Won
Currency Amount (Equivalent) (Equivalent) Amount (Equivalent) (Equivalent)
(In millions of Korean won and foreign currencies in thousands)
Trade accounts and US$ 920,094 863,232 410,685 460,172 431,733 298,669
notes payable JPY 114,779,592 956,493 923,962 33,096,452 275,803 262,852
EUR 120,820 166,883 111,063 2,526 3,489 4,918
Others 2,664,612 1,749,856 468 1,745
4,651,220 3,195,566 711,493 568,184
Short-term borrowings
(including document
against acceptance)
1,878,552 1,935,889 4,323,095 3,760,967
Other current US$ 665,776 624,631 579,997 1,457,630 1,367,549 1,133,957
liabilities JPY 7,858,906 65,491 55,031 19,764,000 164,699 211,692
EUR 854,414 1,180,168 761,135 421,022 581,541 520,968
Others 1,532,585 1,081,403 90,843 80,430
3,402,875 2,477,566 2,204,632 1,947,047
Long-term other US$ 100,000 93,820 140,765 313,178 293,824 295,383
accounts payable Others 102,433 64,511 24,618 41,078
196,253 205,276 318,442 336,461
Foreign currency
notes and bonds
(including current
portions) US$ 50,000 46,910 46,480 205,000 192,331 92,960
Long-term debts US$ 45,772 42,943 29,144 310,000 290,842 250,992
(including current JPY 5,824,000 48,533 78,871 - - -
maturities) EUR - - 17,329 - - -
Others 187,246 103,484 - -
278,722 228,828 290,842 250,992
Total foreign
currency liabilities
10,454,532 8,089,605 8,040,835 6,956,611
Account
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
30. SEGMENT INFORMATION
A summary of consolidated financial data by industry as of December 31, 2007 and 2006, and for the years then ended, are follows:
Assets
Current assets 35,437,169 29,619,547 6,464,785 5,367,432
Investments 7,497,133 5,846,111 5,727,153 5,241,496
Property, plant and equipment 37,336,483 33,719,089 45,100 65,691
Intangible assets 645,247 572,191 59,429 86,194
Other non-current assets 1,394,431 1,240,492 197,410 391,278
Total assets 82,310,463 70,997,430 12,493,877 11,152,091
Liabilities
Current liabilities 24,976,013 20,603,624 4,819,963 4,917,322
Non-current liabilities 3,492,217 3,323,390 4,115,035 4,414,216
Total liabilities
28,468,230 23,927,014 8,934,998 9,331,538
Consolidated Balance Sheets by Industry
Non-financial Business Financial Business
2007 2006 2007 2006
(In millions of Korean won)
The above consolidated financial statements of the non-financial business include the financial service subsidiary which is accounted
for using the equity method.
Sales 96,090,565 83,243,925 2,426,287 2,604,957
Cost of sales 69,940,425 59,130,794 939,409 924,973
Selling, general and administrative expenses 17,681,817 15,336,123 981,220 1,328,439
Operating profit 8,468,323 8,777,008 505,658 351,545
Non-operating income 4,157,704 3,380,706 183,424 12,520
Non-operating expenses 3,482,316 2,564,878 3,318 1,791
Income before income tax 9,143,711 9,592,836 685,764 362,274
Income tax expense 1,555,717 1,543,583 154,175 90,404
Net income
7,587,994 8,049,253 531,589 271,870
Controlling interests 7,420,579 7,926,087
Minority interests 167,415 123,166
7,587,994 8,049,253
Consolidated Balance Sheets by Industry
Non-financial Business Financial Business
2007 2006 2007 2006
(In millions of Korean won)
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Operating data according to business segment as of and for the year ended December 31, 2007:
Gross sales 58,534,569 42,088,316 41,765,150 32,500,801 12,798,707 20,904,080 (110,083,806) 98,507,817
Intersegment
sales (32,021,284) (18,321,048) (19,433,649) (15,438,278) (5,944,129) (12,840,411) 103,998,799 -
Net sales
1
26,513,285 23,767,268 22,331,501 17,062,523 6,854,578 8,063,669 (6,085,007) 98,507,817
Operating
profit
2
1,061,601 2,756,586 2,347,239 2,115,629 159,835 532,396
-
8,973,286
Total assets
20,759,123 16,159,900 35,051,679 17,750,581 4,751,512 24,269,932 (25,367,591) 93,375,136
2007 Summary of Business by Segment
Digital Telecommuni- Semi- Device
Media cations Conductor LCD Appliances Others Elimination Consolidated
(In millions of Korean won)
1.Net sales include intersegment sales of SEC and foreign subsidiaries.
2.Operating profit of each segment is inclusive of all consolidation eliminations.
Operating data according to business segment as of and for the year ended December 31, 2006:
The presentation and classification of 2006 was revised for comparability with 2007 presentation.
(In millions of Korean won)
1. Net sales include intersegment sales of SEC and foreign subsidiaries.
2. Operating profit of each segment is inclusive of all consolidation eliminations.
Gross sales 44,766,941 36,365,140 42,483,360 26,316,368 10,277,254 17,177,358 (91,551,817) 85,834,604
Intersegment
sales (23,991,979) (16,115,381) (19,655,736) (12,403,400) (4,738,417) (9,495,148) 86,400,061 -
Net sales
1
20,774,962 20,249,759 22,827,624 13,912,968 5,538,837 7,682,210 (5,151,756) 85,834,604
Operating
profit (loss)
2
744,178 1,937,747 5,129,845 857,180 (71,213) 531,288
-
9,129,025
Total assets
14,058,014 12,906,452 31,083,615 17,064,598 3,789,101 20,471,589 (18,007,163) 81,366,206
2006 Summary of Business by Segment
Digital Telecommuni- Semi- Device
Media cations Conductor LCD Appliances Others Elimination Consolidated
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
continued
Operating data of entities classified according to geographic area as of and for the year ended December 31, 2007:
Operating data of entities classified according to geographic area as of and for the year ended December 31, 2006:
2007 Summary of Business by Geographic Area
Korea
Domestic Export
Americas Europe Asia China Elimination Consolidated
(In millions of Korean won)
(In millions of Korean won)
The presentation and classification of 2006 was revised for comparability with 2007 presentation.
2006 Summary of Business by Geographic Area
Korea
Domestic Export
Americas Europe Asia China Elimination Consolidated
Gross sales
17,532,929 53,234,429 27,794,408 31,385,995 21,585,644 25,853,016 (91,551,817) 85,834,604
Intersegment sales (4,532,519) (46,978,990) (9,809,096) (9,377,729) (6,777,997) (14,075,486) 91,551,817 -
Net sales
13,000,410 6,255,439 17,985,312 22,008,266 14,807,647 11,777,530
-
85,834,604
Operating profit
7,541,161 163,898 552,440 217,307 325,752 328,467 9,129,025
Total assets 74,253,472 7,154,657 7,751,904 4,647,950 5,565,386 (18,007,163) 81,366,206
Gross sales
18,962,111 57,414,865 31,657,811 41,703,043 23,668,887 35,184,906 (110,083,806) 98,507,817
Intersegment sales (4,788,207) (50,449,491) (12,089,350) (14,751,677) (7,928,861) (20,076,220) 110,083,806 -
Net sales
14,173,904 6,965,374 19,568,461 26,951,366 15,740,026 15,108,686
-
98,507,817
Operating profit
6,819,490 206,549 641,551 329,685 723,686 252,325 8,973,286
Total assets 84,014,706 10,458,239 10,877,916 5,593,774 7,798,092 (25,367,591) 93,375,136
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31. TRANSACTION NOT AFFECTING CASH FLOWS
Significant transactions not affecting cash flows for the years ended December 31, 2007 and 2006, are as follows:
32. SUBSEQUENT EVENT
Subsequent to December 31, 2007, Samsung Card Co., Ltd. issued unguaranteed bonds amounting to
455,000 million.
33. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements as of and for the year ended December 31, 2007, were approved by SEC’s Board of Directors on
March 4, 2008.
Write-off of accounts receivables and financing receivables 483,841 1,473,054
Gain on valuation of available-for-sale securities 956,298 225,203
Loss on valuation of available-for-sale securities 1,139 11,164
Decrease in gain on valuation of available-for-sale securities due to disposal 14,650 4,543
Decrease in loss on valuation of available-for-salesecurities due to disposal 1,387 32,450
Gain on valuation of equity-method investments 109,633 18,574
Loss on valuation of equity-method investments 35,870 20,082
Current maturities of long-term prepaid expenses 168,268 193,860
Current maturities of long-term debts and foreign currency notes and bonds 1,983,225 2,317,933
Transfer of construction-in-progress and machinery in transit to other property,
plant and equipment accounts 11,834,995 10,941,017
Current maturities of other long-term liabilities 304,374 332,435
Current maturities of long-term advances received 171,383 165,917
Current maturities of long-term accrued expenses 433,943 1,254
2007 2006
(In millions of Korean won)
INVESTOR INFORMATION
SHARES
Samsung Electronics shares are traded on the Korea Exchange
under code “005930” for common stock and “005935” for
preferred stock. As of December 31, 2007, there were
147,299,337 common and 22,833,427 preferred shares issued
and outstanding. All shares have a par value of KRW5,000.
Samsung global depository receipts are traded on the London
Stock Exchange under the “SMSN LI” ticker symbol for common
shares and “SMSD” symbol for preferred shares. Preferred GDRs
are also traded on the Luxemburg Stock Exchange under the
symbol “SAMDR.” A total of 24,284,064 GDRs are currently
outstanding, representing 12,142,032 common shares.
STOCK PERFORMANCE
Our fiscal year follows the calendar year, with quarters ending
March 31, June 30, September 30, and December 31.
KOREA EXCHANGE
Share price in KRW
LONDON STOCK EXCHANGE
GDR price in USD
DIVIDENDS
In 2007, we declared a total dividend of KRW8,000 for each
common share and KRW8,050 for each preferred share, resulting
in a total payout of KRW1171.1 billion. We also invested
KRW1825.4 billion to repurchase 2,800,000 common shares and
400,000 preferred shares as part of our ongoing efforts to increase
shareholder value. The total payout ratio for the year was 40.4%.
GDR DEPOSITORY AGENT
For information regarding our global depository receipts, please
contact Citibank, N.A. DR Shareholder Services in the US at
877-248-4237, or e-mail your inquiry to citibank@shareholders-
online.com.
INDEPENDENT AUDITORS
Samil PricewaterhouseCoopers
Kukje Center Building, 21st Floor
191, Hangangno 2-ga, Yongsan-gu
Seoul 140-702, Korea
82-2-709-0800
IMPORTANT INVESTOR NOTE
This report may contain certain forward-looking statements that
reflect the current views and expectations of Samsung Electronics
with respect to its performance, businesses, and future events.
Please understand that these statements are subject to a number
of risks, uncertainties, and assumptions, any of which could
cause actual results to materially differ from the plans, objectives,
expectations, estimates, and intentions expressed in this annual
report. In no event will Samsung Electronics nor any of its
subsidiaries, affiliates, directors, officers, agents, or employees be
liable before any third party, including investors, for any investment
or business decision made or action taken based on information
and statements contained in this annual report or for any
consequential, special, or similar damages.
ADDITIONAL INFORMATION
The 2007 Samsung Electronics Annual Report and the latest
investor information are available online at www.samsung.com/ir.
You may also contact us at [email protected].
For information, please visit www.samsung.com.
Q1 625,000 562,000 563,000
Q2 604,000 532,000 566,000
Q3 687,000 534,000 575,000
Q4 614,000 507,000 556,000
Q1 336.75 292.25 304.25
Q2 320.50 284.50 309.50
Q3 372.00 288.50 313.75
Q4 334.00 272.50 292.75
2007 High Low Close
2007 High Low Close
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GLOBAL NETWORK
HEADQUARTERS
GLOBAL HEADQUARTERS
Samsung Electronics Co., Ltd.
Samsung Main Building
250, Taepyeongno 2-ga, Jung-gu
Seoul 100-742 Korea
Tel: 82-2-751-7114
Fax: 82-2-727-7892
www.samsung.com
REGIONAL HEADQUARTERS
North America
Samsung Electronics
North America Headquarters
105 Challenger Road, Ridgefield Park,
NJ 07660, USA
Latin America
Samsung Electronics
Latin America Headquarters
Samsung Electronica Da Amazonia
LTDA Avenida das Nacoes Unidas,
12901 - 8 andar - Torre Oeste,
Brooklin Novo - CEP 04578-000,
Sao Paulo - SP, Brasil
Europe
Samsung Electronics
Europe Headquarters
Samsung House, 1000 Hillswood Drive,
Chertsey, Surrey, KT16 0PS
Southeast Asia
Samsung Electronics
Southeast Asia Headquarters
3 Church Street #26-02 Samsung Hub,
Singapore 049483, Singapore
China
Samsung Electronics China Headquarters
23/F China Merchants Tower No.2,
Dong Huan Nan Lu, Chao Yang District,
Beijing, China 100022
CIS and Baltics
Samsung Electronics Co., Ltd.
CIS & Baltics Headquarters
Floor 5, B.Gnezdnikovsky Pereulok 1,
Stroenie 2, 103009, Moscow, Russia
Middle East and Africa
Samsung Electronics
Middle East & Africa Headquarters
#1201, Al Salemiyah Tower,
Beniyas Road, PO BOX 4246,
Dubai, UAE
Southwest Asia
Samsung Electronics Southwest Asia
Headquarters
7th & 8th Floor, IFCI Tower,
61 Nehru Place,
New Delhi 100-019, India
PRODUCTION NETWORK
KOREA
Suwon Complex
416, Maetan 3-dong,
Yeongtong-gu, Suwon
Gyeonggi-do
Tel: 82-31-200-1114
Fax: 82-31-200-1530
Gumi Complex
Gumi 1st Plant
259, Gongdan-dong, Gumi
Gyeongsangbuk-do
Tel: 82-54-460-2114
Fax: 82-54-460-2111
Gumi 2nd Plant
94-1, Imsu-dong, Gumi
Gyeongsangbuk-do
Tel: 82-54-479-5114
Fax: 82-54-479-5058
Giheung Complex
San-24, Nongseo-ri
Giheung-eup, Yongin
Gyeonggi-do
Tel: 82-31-209-7114
Fax: 82-31-209-7049
Hwaseong Plant
San-16, Banweol-ri, Taean-eup
Hwaseong, Gyeonggi-do
Tel: 82-31-209-7114
Fax: 82-31-208-6798
Onyang Plant
San-74, Buksu-ri
Baebang-myeon, Asan
Chungcheongnam-do
Tel: 82-41-540-7114
Fax: 82-41-540-7049
Tangjeong Plant
200, Myeongam-ri
Tangjeong-myeon, Asan
Chungcheongnam-do
Tel: 82-41-535-1114
Fax: 82-41-535-1117
Cheonan Plant
510, Seongseong-dong, Cheonan
Chungcheongnam-do
Tel: 82-41-529-7114
Fax: 82-41-529-6049
Gwangju Plant
217, Oseon-dong, Gwangsan-gu
Gwangju
Tel: 82-62-950-6114
Fax: 82-62-950-6019
ASIA PACIFIC
China
Samsung Electronics Huizhou
Company (SEHZ), Huizhou
Tel: 86-752-389-7777
Samsung Electronics Hainan
Fiberoptics (SEHF), Hainan
Tel: 86-0898-6683-2001
Samsung Electronics Suzhou
Computer (SESC), Suzhou
Tel: 86-512-6253-8988 (6688)
Samsung Electronics Suzhou LCD
Co., Ltd. (SESL), Suzhou
Tel: 86-512-6253-0188
Samsung Electronics Suzhou
Semiconductor Co., Ltd. (SESS), Suzhou
Tel: 86-512-6761-1121
Tianjin Samsung Electronics
Company (TSEC), Tianjin
Tel: 86-22-2532-1234
Tianjin Samsung Electronics Display
(TSED), Tianjin
Tel: 86-22-2396-1234
Tianjin Samsung Telecom
Communication (TSTC), Tianjin
Tel: 86-22-8396-9600
Tianjin Tongguang Samsung
Electronics Company (TTSEC), Tianjin
Tel: 86-22-2396-1234
China Printed Board Assembly
(TSED), Zhongshan
Tel: 86-760-830-4848(219)
Samsung Electronics Shandong
Digital Printing Co., Ltd. (SSDP), Weihai
Tel : 86-631-562-6868
Shenzhen Samsung Kejian Mobile
Telecommunication Technology
Co., Ltd. (SSKMT), Shenzhen
Tel: 86-755-2699-0888
Suzhou Samsung Electronics
Co., Ltd. (SSEC), Suzhou
Tel: 86-512-6258-1234
India
Samsung India Electronics Ltd.
(SIEL), Noida
Tel: 91-11-691-1747
Samsung Telecommunications India
Private Ltd. (STI), Haryana
Tel: 91-124-436-8000
Indonesia
P.T. Samsung Electronics Indonesia
(SEIN), Cikarang
Tel: 62-21-8983-7114
Malaysia
Samsung Electronics Display (M)
SDN. BHD. (SDMA), Seremban
Tel: 60-6-678-7914
Samsung Electronics (M)
SDN. BHD. (SEMA), Klang
Tel: 60-3-3176-2050
Philippines
Samsung Electronics Philippines
Manufacturing Corp. (SEPHIL),
Laguna Calamba
Tel: 63-49-545-1144
Thailand
Thai Samsung Electronics Co., Ltd.
(TSE), Bangkok
Tel: 66-2-695-9000
Vietnam
Samsung Vina Electronics Co., Ltd.
(SAVINA), Ho Chi Minh City
Tel: 84-8-896-5500
EUROPE
Hungary
Samsung Electronics Hungarian
Co., Ltd. (SEH), Budapest
Tel: 36-1-451-1180
Slovakia
Samsung Electronics Slovakia, S.R.O.
(SESK), Galanta
Tel: 421-31-7882-111
NORTH & SOUTH AMERICA
Brazil
Samsung Electronica Da Amazonia
Ltda. (SEDA), Sao Paulo
Tel: 55-11-5644-6400
Mexico
Samsung Electronics Mexico
(production) (SEM), Queretaro
Tel: 52-442-296-9003
Samsung Mexicana S.A. de C.V.
(SAMEX), Tijuana
Tel: 1-619-671-1669
United States
Samsung Austin Semiconductor, Llc
(SAS), Austin
Tel: 1-512-672-1000
SALES NETWORK
ASIA PACIFIC
Australia
Samsung Electronics Australia
Pty Ltd. (SEAU), Sydney
Tel: 61-2-9763-9700
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China
Samsung Electronis Beijing Sales
Co., Ltd. (SEBJ), Beijing
Tel: 86-10-8261-9166
Samsung Electronics Chengdu
(SECD), Chengdu
Tel: 86-28-8665-8855
Samsung Electronics Guangzhou Sales
Co., Ltd. (SEGZ), Guangzhou
Tel: 86-20-8888-8199
Samsung Electronics Shanghai Sales
Co., Ltd. (SESH), Shanghai
Tel: 86-21-5464-4777
Shanghai Samsung Semiconductor
(SSS), Shanghai
Tel: 86-21-5258-2211
Samsung Electronics Shenyang
(SESY), Shenyang
Tel: 86-24-2281-3838
Hong Kong
Samsung Electronics H.K.
Co., Ltd. (SEHK), Hong Kong
Tel: 852-2862-6300(6900)
India
Samsung India Electronics Ltd.
(SIEL), Noida
Tel: 91-11-691-1747
Samsung Telecommunications India
Private Ltd. (STI), Haryana
Tel: 91-124-436-8000
Indonesia
P.T. Samsung Electronics Indonesia
(SEIN), Cikarang
Tel: 62-21-8983-7114
Japan
Samsung Japan Corporation
(SJC), Tokyo
Tel: 81-3-6234-2111
Malaysia
Samsung Malaysia Electronics (SME)
SDN. BHD., Kuala Lumpur
Tel: 60-3-2263-6600
Philippines
Samsung Electronics Philippines
Corp. (SEPCO), Manila
Tel: 63-2-722-7777
Singapore
Samsung Asia Pte. Ltd. (SAPL)
Tel: 65-6833-3106
Taiwan
Samsung Electronics Taiwan
Co., Ltd. (SET), Taipei
Tel: 886-2-2656-8686
Thailand
Thai Samsung Electronics Co., Ltd.
(TSE), Bangkok
Tel: 66-2695-9000
Vietnam
Samsung Vina Electronics Co., Ltd.
(SAVINA), Ho Chi Minh City
Tel: 84-8-896-5500
CIS & BALTICS
Russia
Samsung Electronics Russia
Co., Ltd. (SER), Moscow
Tel: 7-095-797-2344
Ukraine
Samsung Electronics Ukraine (SEU), Kiev
Tel: 380-44-490-6424
Uzbekistan
Samsung Electronics Co., Ltd.
Tashkent Office
Tel: 82-2-751-6079
Kazakhstan
Samsung Electronics Kazakhstan LLP
(SEK), Almaty
Tel: 7-3272-585-965
EUROPE
Austria
Samsung Electronics Austria Gmbh
(SEAG), Vienna
Tel: 43-1-516-15
France
Samsung Electronics France (SEF), Paris
Tel: 33-1-5568-4000
Germany
Samsung Electronics Germany
(SEG), Schwalbach
Tel: 49-6196-6660
Samsung Semiconductor Europe
GmbH (SSEG), Schwalbach
Tel: 49-6196-66-3300~1
Greece
Samsung Electronics Co., Ltd.
Athens Office
Tel: 30-210-689-6235
Hungary
Samsung Electronics Hungarian
Co., Ltd. (SEH), Budapest
Tel: 36-1-451-1180
Rumania
Samsung Electronics Co., Ltd.
Bucharest Office
Tel : 40-73-278-0080
Italy
Samsung Electronics Italia Spa (SEI), Milan
Tel: 39-02-921891
Netherlands
Samsung Electronics Benelux
B.V. (SEBN), Hague
Tel: 031-15-219-6100
Poland
Samsung Electronics Polska
(SEPOL), Warsaw
Tel: 48-22-607-4400
Portugal
Samsung Electronica Portuguesa
S.A. (SEP), Lisbon
Tel: 351-21-425-1000
Spain
Samsung Electronics Iberia, S.A.
(SESA), Barcelona
Tel: 34-93-261-6700
Sweden
Samsung Electronics Nordic AB
(SENA), Stockholm
Tel: 46-85-909-6600
United Kingdom
Samsung Electronics U.K. Ltd.
(SEUK), London
Tel: 44-193-245-5000
Samsung Semiconductor Europe
Ltd. (SSEL), London
Tel: 44-193-245-5000
MIDDLE EAST & AFRICA
United Arab Emirates
Samsung Gulf Electronics Co., Ltd.
(SGE), Dubai
Tel: 971-4-22-5747~54
South Africa
Samsung Electronics South Africa
(Pty) Ltd. (SSA), Johannesburg
Tel: 27-11-463-5678
Turkey
Samsung Electronics Turkey Ltd.
(SETK), Istanbul
Tel: 90-212-288-5638
Iran
Samsung Electronics Co., Ltd.
Tehran Office
Tel: 98-21-875-8551
Israel
Samsung Electronics Co., Ltd.
Tel-Aviv Office
TEL: 972-77-902-6216
Saudi Arabia
Samsung Electronics Co., Ltd.
Jeddah Office
Tel: 966-2-665-0940
Jordan
Samsung Electronics Co., Ltd.
Amman Office
Tel: 962-6-551-0071~2
Morocco
Samsung Electronics Co., Ltd.
Casablanca Office
Tel: 212-22-335-383
Algeria
Samsung Electronics Co., Ltd.
Algiers Office
Tel: 213-21-59-1029~30
Tunisia
Samsung Electronics Co., Ltd.
Tunis Office
Tel: 216-1-860-275(234)
Kenya
Samsung Electronics Co., Ltd.
Nairobi Office
Tel: 254-2-273-0434
Pakistan
Samsung Electronics Co., Ltd.
Karachi Office
Tel: 92-21-779-0281~3
Nigeria
Samsung Electronics Co., Ltd.
Lagos Office
Tel: 234-1-461-7611
NORTH AMERICA
Canada
Samsung Electronics Canada Inc.
(SECA), Toronto
Tel: 905-542-3535
Mexico
Samsung Electronics Mexico
S.A. de C.V. (SEM), Mexico City
Tel: 52-55-5747-5100
United States
Samsung Electronics America, Inc.
(SEA), Ridgefield Park
Tel: 1-201-229-4000
Samsung Electronics Latino America
Miami Inc. (SELA-Miami), Miami
Tel: 1-305-594-1090
Samsung Semiconductor, Inc.
(SSI), San Jose
Tel: 1-408-544-4000
Samsung Telecommunications
America (STA), Dallas
Tel: 972-761-7000
LATIN AMERICA
Argentina
Samsung Electronics Argentina, S.A.
(SEASA), Buenos Aires
Tel: 54-11-4893-1700(2800)
Brazil
Samsung Electronica Da Amazonia
Ltda. (SEDA), Sao Paulo
Tel: 55-11-5644-6400
Chile
Samsung Electronics Chile Ltda.
(SECH), Santiago
Tel: 56-2-485-8500
Colombia
Samsung Electronics Latino America
Colombia S.A. (SAMCOL),
Santa Fe de Bogota
Tel: 57-1-642-0555
Panama
Samsung Electronics Latino America
S.A. (SELA), Panama City
Tel: 50-7-210-1122
Peru
Samsung Electronics Co., Ltd.
Peru Lima Office
Tel: 51-1-221-4134
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