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October 30, 2001 in Social Responsibility News

SAMSUNG Electronics Going All Out for Next-generation Memory

* Debut of 300mm wafers- Samsung Electronics becomes the industry's first to mass- produce devices on a 300mm-wafer line.
-Samsung has received 199 key patents on 300mm wafer processing technology.
-Line output will be expanded to include 0.12-micron 512M DDR devices in 2002.

* Securing a structure for continued profitability by diversifying the memory business
-Samsung's product mix is being more heavily weighted by value-added DRAMs(Rambus, DDR), as the company bolsters its leadership in the DRAM sector.
-Samsung is expanding SRAM involvement by moving into next-generation MCPs.
-Balanced growth in the flash memory segment is being pursued by adding NOR devices to the existing NAND lineup.
-Samsung will be applying the 0.10-micron design rule next year and aims to have 0.07-micron circuitry in mass production by 2004.

* Starting up the world's first mass production of the 512M DDR synchronous DRAM
-Samsung is first to apply the 0.12-micron design rule in mass production.
-The company gets a head start in the market for next-generation, high-capacity devices, securing market leadership.

SEOUL, Korea - October 29, 2001 - Samsung Electronics, the world's leading producer of memory chips, is now the first to start up mass production on a 300mm wafer line and is beginning to mass-produce 512-megabit double-data-rate (DDR) SDRAM. These moves will greatly improve the competitiveness of the company's DRAM business and extend Samsung's lead over the competition.

Samsung Electronics Semiconductor Memory Division President Chang-Gyu Hwang held a news conference at the Shilla Hotel in Seoul, Korea on October 29. There, he announced, "Our semiconductor operations(memory division) will achieve annual sales of US$20 billion in 2005 by diversifying our memory product portfolio and maximizing our competitiveness. We are now applying 300mm wafers to our memory chip mass production and have begun mass-producing 512M DRAMs to upgrade our lineup and satisfy demand for higher-capacity memory products."

Samsung Electronics started up test operation of the world's first 300mm wafer line last July. By September, the first commercial products were coming off the line, and mass production was begun in earnest. The company is pursuing a strategy for increasing its lead over the competition by enhancing its own competitiveness and diversifying the memory product portfolio to better accommodate market demand.

I. Debut of 300mm Wafers

Samsung Electronics has the production line, using 300mm wafers, for next-generation semiconductors at Hwasung Industrial. Now, mass-produced devices are coming off the 300mm wafer lines. Now that major computer makers have come out with their new products, the 300mm wafer has become a key part of the world memory market.

This is yet another first for Samsung Electronics, which was also the first company in the memory industry to begin mass-producing 200mm wafers back in 1993. This move also has historical significance, as the '80s were characterized by 6" wafers, the '90s had 8" wafers, and the '00s will soon be dominated by 12" wafers.

In early September, Samsung Electronics started applying the 0.15-micron design rule to produce fifteen hundred 256Mb synchronous DRAMs (SDRAMs) a month. The production volume will be increased next year, while 0.12-micron processing will be used to mass-produce higher-capacity memory chips such as the 512Mb.

In general, a 300mm wafer line has 2.5 times the capacity of a 200mm wafer line, paving the way for much lower production costs. Being the first to put a 300mm wafer line into mass production will give Samsung Electronics a unique price advantage in the marketplace.

Samsung Electronics organized the 300mm Wafer Project Team in 1995. After seven years of research, the team members mastered the required mass production technology, boosting operational yields. The company officials reveal that the company has received 199 key patents related to 300mm wafer processing technology.

Key technologies for making 300mm wafer mass production possible include ways to suppress wafer deformation from heat stress and ways to ensure wafer uniformity as the diameter grows larger. Applying these new technologies has greatly improved Samsung's production yields from the beginning.

In addition, Samsung Electronics will apply the 0,10-micron design rule to 512Mb devices coming off the 300mm wafer line in 2003, thereby maintaining a competitive advantage in the high-capacity DRAM market.

II. Securing a Structure for Continued Profitability by Diversifying the Memory Business

At the press conference, Samsung Electronics also announced business strategies for each of its memory product segments. These strategies are aimed at securing maximum competitiveness and creating new market demand through portfolio diversification, offering new memory devices that are well suited for the latest digital products.

DRAMs are the mainstay of Samsung's memory business. Currently, high-capacity chips (256M and 512M) represent 30% of the company's total DRAM output, but that figure is going to be raised to 45% by the end of this year.

Samsung Electronics maintained a dominating 60%+ share of the Rambus DRAM market in 2001, and the company currently turns out the equivalent of ten million 128 Mb DDR chips each month to retain the largest share of that market as well. The lead that Samsung enjoys in both these markets will be increased still more in 2002.

At the same time, Samsung Electronics is decreasing its dependence upon on providing DRAMs for PCs by continuing to increase the proportion of DRAMs for communications and digital consumer electronics products, from the current 21% of the total product mix to at least 30% by 2005.

Samsung Electronics is currently the world's leading producer of SRAMs, but the majority of its SRAM offerings are single chips. However, the company is moving into the value-added multi-chip package (MCP) devices and aims to have fifteen different devices in its MCP lineup by year's end. This availability is expected to create new
market applications. In addition, the network system market is growing rapidly. Therefore, Samsung Electronics is raising the proportion of the SRAMs it sells for network products from the current 20% to 35% of total SRAM output by 2005.

Samsung Electronics has significantly boosted its competitiveness in the flash memory business this year. In addition to the existing NAND lineup, the company is expanding its involvement in NOR devices to achieve more balanced growth. At the end of September, Samsung Electronics became the world's first to mass produce a 1-gigabit NAND flash memory chip, fabricated with the 0.12-micron design rule. The company is scheduled to come out with 512MB compact flash memory card by the end of this year as well. Mass production of 1G flash memory chips will be increased in 2002 so that the Samsung portfolio encompasses the entire market range, including multimedia cards and memory sticks.

III. Bolstering Ultra-precision Processing

Samsung Electronics has begun mass-producing 512M DRAMs with the 0.12-micron design rule, giving the company a strong price advantage over other memory chipmakers. The smaller design rule increases the yield that is possible from each
wafer, lowering overall production cost. The move from a 0.15-micron design rule to that of 0.12 microns usually means a tremendous productivity boost, and this is precisely what Samsung Electronics expects.

Samsung Electronics plans to retain its lead in processing technology, applying the 0.10-micron design rule next year and mass-producing chips with 0.07-micron circuitry by 2004.

By following the strategies outlined at the October 29 press conference, Samsung Electronics plans to further solidify its leading position in the industry. New markets will be created so that SRAM and flash memory sales account for at
least half of Samsung's total semiconductor performance by 2005. At the same time, the DRAM segment will be more heavily weighted by value-added products. These moves will greatly enhance profitability, and the Samsung Electronics
Semiconductor Memory Division aims to achieves US$20 billion in annual sales in 2005, furthering the gap with competing chipmakers.

About Samsung Electronics
Samsung Electronics Co. Ltd. is a global leader in semiconductors, the consumer electronics industry, and digital convergence technology. Samsung Electronics employs approximately 66,000 people in 46 countries. The company is the world's largest producer of memory chips, TFT-LCDs, CDMA mobile phones and monitors and the sixth-largest manufacturer of mobile phones. Samsung Electronics consists of four main business units:
Digital Media, Semiconductor, Information & Communications, and Home Appliance Businesses.
For more information, please visit the web site, http://samsungelectronics.com

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