June 22, 1999 in Social Responsibility News

SAMSUNG Sets Annual System LSI Chip Sales at US$2.5 Billion by 2001

SEOUL, Korea - June 22, 1999 - System large-scale integration (LSI) chips represent the future direction of the electronics industry. In step with this trend, Samsung Electronics Co., Ltd. is restructuring its business around sophisticated, value-added areas such as computer central processing units (CPUs), application-specific integrated circuits (ASICs), and next-generation wireless communications and multimedia semiconductor products.

Daeje Chin, Executive Vice President and CEO of Samsung Electronics' System LSI Division, held a press conference at New York City's Jacob Javits Conference Center, site of the PC-Expo (June 22-24), to present Samsung's position. He states, "We are increasing the competitiveness of our system LSI chips and expect aggregate sales to reach US$5.5 billion by 2001."

Chin also revealed plans to invest US$1.2 billion to expand the company's monthly production capacity of its non-memory products. With the expanded capacity, Samsung has targeted sales of system LSI chips to increase at least 44% a year, from US$1.2 billion in 1999 to US$1.8 billion in 2000 to US$2.5 billion in 2001. At the same time, Samsung plans to build its business structure around system-on-chip devices, microprocessor control units, Alpha CPUs, as well as mobile communications, multimedia, and network products.

Concrete steps to make this happen include (1) offering total system solutions, (2) aggressively investing in the development and production of next-generation products, (3) renovating the distribution system and (4) forming strategic alliances with overseas companies.

According to Chin, "We are upgrading our business by increasing the portion of investments in non-memory facilities and R&D allotted to strategic products from the current 40% to 80% in 2001. Moreover, the System LSI Division plans to concentrate on next-generation digital products to include digital TV, MP3 players, DVD players, UADSL for networks, and the next-generation kwireless communications IMT-2000 and UMTS products."

In the third quarter of this year, Samsung Electronics will complete development of 0.18-micron design rule technology. The company's research team will be augmented from the current 1,500 to 2,600 members by 2001. In particular, the number of core researchers will increase by 200% to total 300 persons.

Samsung Electronics is also strengthening ties with overseas companies to bolster its core businesses. Alpha Processor Inc. (API) was established in Boston to strengthen Samsung's alliance with Compaq for Alpha CPUs. Joint development products are also in progress with world-leading semiconductor and systems companies for TFT-LCD driver ICs, merged memory and non-memory chips, and ICs for next-generation wireless communications.

The digital technology revolution is rapidly bringing a convergence of multimedia, networks and wireless communications in the electronics industry. By restructuring its business, Samsung Electronics can better accommodate rapidly changing demand and move into new markets ahead of the competition.

In March 1999, Dataquest estimated this year's world market for system LSI semiconductors would be at US$134 billion. Moreover, it predicted that demand for these devices would dramatically increase with the development of multimedia, wireless communications and network products.

Samsung Electronics Co., Ltd., with 1998 sales revenue of US$16.6 billion, is a world leader in the electronics industry. The Korea-based firm has operations in 46 countries with 59,000 employees worldwide. The company consists of three main business units: Multimedia & Home Appliances, Semiconductors and Information & Telecommunications. For more information, please visit our website, http://www.samsungelectronics.com

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