October 14, 2005 in Social Responsibility News

SAMSUNG Electronics Announces 2005 Third-Quarter Earnings Record Number of Handset Sales in the Third Quarter

Samsung reports quarterly sales of KRW14.54 trillion,
operating income of KRW2.13 trillion and net income of KRW1.88 trillion.




Seoul, Korea, October 14, 2005 : Samsung Electronics
Co., Ltd. announced its financial results for the third quarter of 2005.
The company recorded net income of 1.88 trillion won, on sales 14.54 trillion
won. Operating income was 2.13 trillion won, or up 28.8% from the previous
quarter.



Net profit in the third-quarter increased 11% compared with the previous
quarter, while sales jumped 7% compared to the previous quarter.



The growth rate in net profit in the third-quarter was less than that
of operating profit due to provisions set aside to cover costs related
to the U.S-government investigation into the price-fixing of memory chips.
Due to the provisions, equity-related gains decreased in the third quarter.



Sales and net income of the Semiconductor Business increased to 4.59 trillion
won and 1.35 trillion won, respectively, as demand for NAND Flash chips
used in MP3 players and mobile phones remained robust. Migration to the
finer process technology in both DRAM and NAND Flash helped reduce manufacturing
costs and boost profitability.
Samsung produces DRAM chips on 80nm and 90nm processes, and the company
finished developing a 512Mbit DDR2 memory device on a 70nm process. Yields
per wafer will be 100% higher than using 90nm technology.
The Telecommunication Network Business posted sales of 4.58 trillion
won, and operating income of 550 billion won. Samsung sold a record 26.8
million phones in the third quarter. Globally, the handset market is increasing
becoming more competitive as companies produce more mid-to-low-end handsets.
Meanwhile, Samsung continues to be a market leader in the high-end, premium
handset sector..
Demand for Blue-Black phones, which were launched November 2004, remained
robust in the third quarter. The company expects stronger ASPs in the
fourth quarter with the launch of new premium products such as the D600
and 3G phones.
The LCD Business reported revenue and operating income figures of 2.68
trillion won and 300 billion won, respectively. The company expects its
performance to improve in the fourth quarter as demand for LCDs increases,
especially of sales of 32-inch and larger LCD TV panels.
Digital Media Business sales decreased to 1.64 trillion won and posted
a 20 billion won operating loss. Sales of its Digital Appliance Business
dropped 15% to 850 billion won and operating income at 40 billion won.
Dr. Woosik Chu, Senior Vice President of Samsung’s investor-relations
team, said “Despite the challenging business environment and depressed
market conditions, sales of our mainstay products remained robust, demonstrating
the inherent strength and competitiveness of Samsung’s business model.”
Dr. Chu adds, “Samsung Electronics anticipates positive fourth-quarter
results as demand for IT products tend to surge in the year end.”




Revenue by Business








Business

3Q04

2Q05

3Q05

Growth





YoY (%)

QoQ (%)


Semiconductor
4.74
4.17
4.59
(3.2)

10.2





  -  Memory
3.64
3.22
3.47
(4.6)

7.7





  - System
LSI
0.63
0.45
0.55
(11.4)

22.8





LCD
1.90
2.12
2.68
41.1

26.4





Telecommunication
Network
4.82
4.46
4.58
(5.1)

2.7





  -  Mobile
Phone
4.57
4.19
4.37
(4.2)

4.5





Digital Media
1.95
1.61
1.64
(15.8)

2.0





Digital Appliance
0.81
1.00
0.85
4.8

(15.0)


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