Dear Shareholders,
At dawn of 2008, I wish you and your family the best.

In retrospect, 2007 was an eventful year both at home and abroad: On the global front, we were faced with global economic uncertainties such as high oil prices reaching USD 100 per barrel, surge in the raw materials prices, and the capital market instability related to the US sub-prime mortgage crisis. On the domestic front, we witnessed the sluggish domestic consumption, exchange rate fluctuations, and interest rate hikes.

Despite all these challenging macro economic environments, our '07 consolidated revenue reached USD 100 billion for the first time in the company's history, by endeavoring endless efforts for cost reduction as well as management innovations. I would like to attribute these successes to our shareholders' supports and encouragements.

Now, I would like to highlight some of our major achievements in 2007.

In '07, most of the competitors in the Memory Business posted massive deficits due to the persistent weak memory pricing resulting from the oversupply. However, our Semiconductor Business could generate about KRW 2 trillion operating profit thanks to our endless efforts to reduce cost through technology differentiation as well as procuring solid customer base.

In LCD, we maintained the highest level of profit margin in the industry during the year, and such performance was made possible by our continuous efforts for cost reduction and strong panel pricing. We also enhanced our leadership in the rapidly growing 46" and 52" TV panel markets by differentiating our investment strategy.

In Handsets, we attained the second largest market share and our sales volume in '07 grew more than 40% over the previous year. These results were made possible through our aggressive efforts to penetrate into new markets and launch of diverse products. At the same time, we also achieved enhancement in brand recognition as well as improvement in margin.

In TV, we maintained our number one position in the overall TV, LCD TV, and PDP TV markets altogether continuously from '06. Main drive for this success was the strong sales of our LCD TVs: our LCD TV sales volume more than doubled that of '06. As a result, the gap between us and number two player has further widened.

Since our declaration to become a world premier company in 2004, we have concentrated on enhancing our core competencies in three major segments: competent human resources, innovative technology, and brand differentiation. And in '07, such efforts led to outstanding results such as the following.

First, we focused on expanding talented R&D workforce to reinforce our competitiveness. As a result, our R&D employees account for about 40% of total employees. Also, the number of the PhD. degree holders among the R&D employees reached over 3,200, further enhancing our R&D competitiveness.

As a result of such efforts, we were able to register over 2,700 patents in the US in 2007, which were up by 11% from 2,400 of the previous year, fortifying our number two position.

Also, our premium marketing activities conducted to enhance our brand recognition were paid off; our brand value has continuously improved and was ranked 21st globally in a survey coconducted by Interbrand and Businessweek.

As a continuation of our shareholder-centric policy, in 2007, we returned approximately 40% of our net profits to our shareholders. We paid out dividends of KRW 8,000 per share and repurchased shares worth KRW 2 trillion.

Notably, we have actively reflected shareholders' request for dividend increase; we raised our year- end dividend by 50% from KRW 5,000 per share in 2006 to KRW 7,500 per share. This action proves our strong commitment to the shareholder-centric policy.

In addition, we held "Analyst Day" for three consecutive years to help investors and shareholders' understanding in our business strategy, and to further enhance our company's mid- to long-term value.

As a result of such efforts, Samsung Electronics was selected as the company with the best IR and corporate governance by the world-renowned financial and IR journals such as "Finance Asia" and "The Asset."

We expect that in 2008, we will once again be faced with risks and uncertainties as we did in 2007. We assume that there will continuously be some uncertainties in the global economy related to the sub-prime mortgage crisis, high oil prices, and possible economic recession. And such uncertainties may directly and indirectly affect domestic market and bring difficulties in our business environment.

Despite all those challenges, we will further solidify our foundation as a world premier company with our collective efforts, by turning risks into opportunities as we have done so far.

With the recent fierce price competition in the IT industry, cost competitiveness has become no more an option for differentiation but an essential for survival. Furthermore, non- price related factors such as marketing, design, and service have been gaining much importance to meet customers' needs that are becoming increasingly diversified.

We will actively respond to such paradigm shift by maximizing our cost competitiveness and further reinforcing our leadership in the non- price related sectors at the same time.

We will further strengthen our market leadership in our major businesses such as Memory, LCD, Handset, and flat panel TV with differentiated design and management efficiency. At the same time, we will also build the foundation for growth in new growth engine businesses like Printer, LSI, and Wibro by developing high value added products and enhancing our solution capability.

Recently, emerging markets such as China, India, Russia and Brazil have been rising rapidly and have led market diversification. We will take this opportunity as a momentum for new growth, and actively capture those markets through product customization for local markets, differentiated marketing, and so forth.

On the other hand, development of digital technology has brought convergence among industries, and accelerated competitions among the companies. To cope with this trend, we will aggressively develop new businesses which can create consumers' new life styles and generate new demands based on our company's competency in digital convergence. To this end, we will develop the corporate culture of innovations and endless challenges.

In order to maintain absolute leadership position in today's competitive business environment, one needs to have utmost cost competitiveness as well as speed management. To cope with this environment, we will enhance our management efficiency by fortifying our partnership with equipment suppliers as well as our customers and accordingly, actively respond to market & customers' needs ahead of our competitors.

We know that today's success of Samsung Electronics as one of the world's premier companies was made possible by the trust and support from our shareholders. With that in mind, this year again, we will endeavor to maximize our company's profit level, which, we believe is the most important way to enhance our shareholders' value. At the same time, we will proceed with diverse ways to enhance our shareholders' benefits.

Samsung Electronics achieved unparalleled prosperity in a very short period, but also went through the painful restructuring process during the financial crisis in late 1990s.

We are fully aware that even a world's best company can fail in a moment by remaining satisfied with the current achievement.

We are now standing at the critical point by which the future of the company will be determined. And whether the company will be able to take a leap to become world's premier company lies in the management and employees' current actions and thinking.

In 2008 with many challenges expected at home and abroad, we will renew our sense of crisis and take this year as the last opportunity for our growth. We will also get back to the basics and get equipped with challenging spirit as well as creativity.

Thus, we will make our utmost efforts to secure world's premier company position in 2009, when our company will mark its 40th anniversary. We will also do our best to become the world leader in the global IT industry both in terms of quality and quantity, and at the same time, get everyone's trust and support.

We ask for your continuous supports and encouragements, and wish you and your family the best.

Sincerely yours,