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December 16, 1999 in Social Responsibility News

SAMSUNG Begins Construction of New Semiconductor Complex

Samsung Electronics is building a new semiconductor production complex on a 1-million-square-meter site in Hwasung-gun, Kyonggi Province. The new facility will bolster Samsung's position as the world's largest semiconductor manufacturer, and give the company stronger global competitiveness in the System LSI sector.

Samsung already operates a 1.3-million-square-meter complex in Kiheung, Korea. Initially, Line 10 will be dedicated for the production of 128Mb, 256Mb and Rambus DRAMs. Samsung Semiconductor Business President and CEO Y. W. Lee and other high-ranking company officials inaugurated the new complex at an official ceremony today. At the same time, the company outlined plans to maintain its top ranking in memory production while developing into a leader in all semiconductor-related areas.

A total of US$1.8 billion will be invested in Line 10 by the first quarter of 2001. The new line will be capable of processing 0.15-micron design rule, the highest precision in the industry today. Samsung expects Line 10 to be capable of 32,000 eight-inch wafer starts per month.

The first construction phase will be completed by the third quarter of 2000, when monthly wafer starts will total 16,000. Samsung will commence full-scale production of 256Mb DRAMs, Rambus devices and DDR DRAMs, further differentiating itself from the competition in the marketplace.

"Samsung's semiconductor operations will maintain a 6-month to one-year lead in the industry for new product development. We will complete development of 0.12-micron processing technology within one year and the 0.10-micron design rule by 2001. The increase in production capacity with the Line 10 investment will strengthen Samsung's market-leading position in DRAMs and SRAMs. We will also emerge as the top company in the flash memory area," said Lee.

As a result of the upswing in semiconductor and TFT-LCD exports, Samsung Electronics Semiconductor Business expects this year's sales to total US$9.3 billion (KRW11 trillion). Sales for memory alone are forecast to reach US$6 billion, making this the seventh straight year that Samsung Electronics has held the top share of the world memory market.

According to Dataquest, the world DRAM market in 1999 will total US$21 billion and is expected to increase at a rate of 44.3%, to reach US$30 billion next year.
Average annual sales growth through 2002 is forecast at 43%.

Meanwhile, Samsung's TFT-LCD sales are expected to reach US$2.2 billion this year, and Samsung expects to maintain its top position in this area for the second year in a row.

In 2000, Samsung Electronics will expand its research staff by 400 people, and a total of US$2.2 billion will be invested in new facilities. Next year's R&D budget is set at US$600 million. The research effort is aimed at developing next-generation devices with faster processing speeds and larger memory capacities.

These products will differentiate Samsung in the marketplace, expand sales and extend its leadership.

Since Samsung Electronics sold off its Power Device Division, the company has restructured operations around value-added products, including the System LSI division. System LSI sales for the month of November came to US$100 million. Performance for the year will be around US$1.1 billion, an increase of over 40% from 1998.

A total of KRW1.3 trillion will be invested in the System LSI Division by 2002, laying the groundwork for Samsung to grow at an annual average rate of 25%, reaching annual sales of US$4 billion by 2005. Samsung will concentrate resources on the development of sophisticated, value-added ICs for digital TVs, IMT-2000 hardware, printers and LCD monitors. Investment will also be expanded in facilities producing the world's largest 4th-generation TFT-LCD glass substrates.

Thus, the company can accommodate growing TFT-LCD demand and solidify its top ranking in this area.

"We will grow our System LSI division to respond to an expanding market for multi-functional digital products while maintaining our lead in memory devices.

We will also expand our production of large-screen TFT-LCDs for notebook PCs and desktop monitors. As a result, we expect total sales of the Semiconductor Business to increase by over 15% next year," Lee remarked.

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