Earnings Release

Samsung Electronics Reports Fourth Quarter & FY 2009 Results

4Q consolidated revenues of 39.24 trillion won, operating profit of 3.70 trillion won; FY 2009 revenues reach record 136.29 trillion won

SEOUL, Korea - January 29, 2010 : - Samsung Electronics Co., Ltd. today announced revenues of 39.24 trillion Korean won on a consolidated basis for the fourth quarter ended December 31, 2009, an 18.9 percent increase year-on-year.

Consolidated operating profit for the quarter was 3.70 trillion won, a 12.5 percent decrease quarter-on-quarter and up from a loss of 740 billion won in same period a year earlier. Income before income taxes reached 3.61 trillion won on a consolidated basis.

In its earnings guidance disclosed on January 7, Samsung estimated fourth quarter consolidated revenues would reach 39 trillion won with an operating profit of 3.7 trillion won.

The fourth quarter results brought Samsung's full year 2009 revenue to a record 136.29 trillion won. Full year 2009 operating profit was 10.92 trillion won. Net income, on a parent company basis, was 9.64 trillion won.

Samsung's strong performance in the fourth quarter was supported by improved pricing for memory semiconductors and the seasonal increase in sales of consumer electronics products. Operating profit was affected by an increase on marketing expenditure quarter-on-quarter and exchange rate losses due to the appreciation of the Korean won against the US dollar and Euro.

Samsung forecast positive growth across its businesses in 2010, with the continued economic recovery expected to stimulate demand for flat panel TVs, mobile handsets and notebook PCs. The company aims to continue to enhance its cost competitiveness and bolster market leadership across its core businesses.

��Despite the uncertain business environment in 2009, Samsung was able to achieve record revenues and strong profitability based on our technological and marketplace leadership,�� said Robert Yi, Vice President and Head of Samsung Electronics' Investor Relations Team. ��We see this positive growth and performance flowing on into 2010 as the global economy continues to stabilize.��

Capex to Increase

Capital expenditure on a consolidated basis reached 8.1 trillion won for the full year 2009, including 4.5 trillion won for the Semiconductor Business and 2.1 trillion won for the LCD Business.

Samsung expects consolidated capital expenditure to expand significantly in 2010, increasing its estimate for Semiconductor Business capex to more than 5.5 trillion won to meet growing demand and further transition to 30-nanometer process technology. It maintained its previous forecast of 3 trillion won in capex outlay for the LCD Business.

Semiconductor Pricing Remains Strong

Samsung's Semiconductor Business recorded a consolidated basis operating profit of 1.7 trillion won in the fourth quarter. Revenue reached 8.02 trillion won, a 50.0 percent increase year-on-year.

Performance was driven by a rise in market prices for memory chips and solid demand. In DRAM, spot prices increased by 25-30 percent from the beginning of the quarter, supported by strong PC sales.

Despite traditionally weak seasonality, sales were boosted by demand for high-density chips for smart phones. During the fourth quarter, Samsung also began production of 30-nm-class, 3-bit Multi-Level-Cell NAND chips for the first time in the industry, providing a further technological edge for 2010.

Following weak pricing for much of 2009, Samsung forecast an improved business environment in 2010 with sales growing in the 10-20 percent range due to increased PC sales. In System LSI, the market is forecast to grow around 10 percent year-on-year on sales of chips for smart phones and LCD TVs.

LCD Sales Solidify

The LCD Business recorded an operating profit of 0.53 trillion won as revenue reached 6.34 trillion won, a 20.9 percent increase year-on-year.

Samsung shipped 147 million large-sized LCD panels in the fourth quarter, down 1 percent quarter-on-quarter. IT panel sales were supported by adoption of Windows 7, while demand from Chinese TV makers remained high.

Despite weak seasonality, late season demand from set makers and supply shortages moderated the fall in panel prices. Average sales prices fell across all segments including panels for TVs (down 4 percent), monitors (down 7 percent) and notebook computers (down 7 percent).

Samsung forecast solid sales in the first quarter of 2010, due to low inventory levels among set makers and expectations for new 2010 product lines to stimulate demand.

Achieves 227 Million in 2009 Mobile Unit Sales

Samsung's Telecommunications businesses - Mobile Communications and Telecommunications Systems - registered an operating profit of 0.99 trillion won in the fourth quarter. Revenue reached 11.57 trillion won, a 12.1 percent increase year-on-year.

Samsung's sales of mobile handsets for the quarter reached 69 million, up 16 percent year-on-year. This enabled the company to comfortably exceed its 2009 sales target of 200 million units in reaching 227 million units for the full year.

In spite of an industry-wide decline in mobile sales in 2009, Samsung achieved balanced growth across North America, Europe and emerging markets. The company expects its market share to exceed 20 percent in 2009.

With mobile phone sales expected to increase 10 percent in 2010, Samsung will continue to focus on mid- and high-end touch screen handsets and smart phones in developed markets, while streamlining its lineup and offering specialized products for emerging markets.

The Telecommunication Systems Business continues to strengthen its leadership in Mobile WiMAX and Long-Term Evolution networks, aiming to expanding business partnerships in the US, Japan and Russia while establishing new relationships in Asia and the Middle East.

Outperforms in Flat Panel TV Market

Samsung's Digital Media businesses - including Visual Display and Digital Appliances - registered an operating profit of 0.47 trillion won, a 370 percent increase year-on-year. Revenue reached 14.68 trillion won, up 16.3 percent year-on-year.

In flat panel TVs, Samsung recorded unit sales of 10.88 million, exceeding the 10 million mark for the first time in the industry. The sales record represented a 41 percent increase year-on-year and quarter-on-quarter. With its new line of LED TVs selling strongly, Samsung was also able to meet its sales target of 2.5 million units for the year.

Sales revenue for the Digital Appliance Business increased slightly quarter-on-quarter, as sales of premium products including refrigerators and drum washing machines grew.

Although demand is expected to be weak in the first quarter due to seasonality, Samsung forecast positive growth in Digital Media businesses in 2010. For flat panel TVs, demand is expected to increase 20 percent overall. Samsung set a target to sell 10 million LED TVs in 2010, as well as 2 million of its new range of 3D TVs.

Consolidated Basis Revenues and Operating Profit by Business
(in Trillion won)
Business Revenue Operating Profit
'09 4Q '09 3Q FY'09 FY'08 '09 4Q '09 3Q FY'09 FY'08
  Semiconductor
(Margin)
8.02 7.46 26.85 22.35 1.70 (21%) 1.15 (15%) 2.42 (9%) 0.00 -
  LCD
(Margin)
6.34 6.73 22.28 21.52 0.53 (8%) 1.01 (15%) 1.38 (6%) 2.35 (11%)
  Telecommunication
(Margin)
11.57 10.71 42.09 34.57 0.99 (9%) 1.03 (10%) 4.13 (10%) 2.98 (9%)
Digital Media
(Margin)
14.68 12.37 48.89 42.19 0.47 (3%) 0.94 (8%) 2.85 (6%) 0.40 (1%)
Total
(Margin)
39.24 35.87 136.29 118.38 3.70 (9%) 4.23 (12%) 10.92 (8%) 5.71 (5%)
Consolidated Basis Net Income After Income Taxes
(in Trillion won)
'09 4Q '09 3Q FY'09 FY'08
3.61 4.62 11.90 6.14
Parent Basis Revenues and Operating Profit by Business
(in Trillion won)
Business Revenue Operating Profit
'09 4Q '09 3Q FY '09 FY '08 '09 4Q '09 3Q FY '09 FY '08
Semiconductor 6.89 6.11 21.79 17.66 1.56 1.08 2.15 0.13
  - Memory 4.37 3.80 13.77 11.58
LCD 5.72 6.01 20.04 18.07 0.42 0.92 1.23 2.04
Telecommunication 9.11 9.08 34.30 26.72 0.76 0.70 2.98 2.37
  - Mobile Comms 7.27 7.60 28.63 23.70
Digital Media 3.50 3.54 13.21 9.87 -0.37 0.06 -0.01 -0.39
  - Digital Appliance 1.53 1.63 6.09 4.19
About Samsung Electronics

Samsung Electronics Co., Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2010 consolidated sales of US$135.8 billion. Employing approximately 190,500 people in 206 offices across 68 countries, the company operates two separate organizations to coordinate its nine independent business units: Digital Media & Communications, comprising Visual Display, Mobile Communications, Telecommunication Systems, Digital Appliances, IT Solutions, and Digital Imaging; and Device Solutions, consisting of Memory, System LSI and LCD. Recognized for its industry-leading performance across a range of economic, environmental and social criteria, Samsung Electronics was named the world’s most sustainable technology company in the 2011 Dow Jones Sustainability Index. For more information, please visit www.samsung.com.