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2007
SamSung
electronicS
annual
report
182989032.032.png
contents
thinking about you
01
performance summary by business 02
message from the CEO
04
message from the board
08
at-a-glance
10
thinking ahead of you
global performance
14
thinking higher for you
brand marketing
22
sponsorship
24
R&D
26
product gallery
27
design
31
34
telecommunication networks 38
digital appliance
42
semiconductor
46
LCD
50
thinking more of you
corporate citizenship
56
co-prosperity
58
green management
60
inancial statements
63
investor information
130
global network
131
2007 inancial highlights
thinking smarter for you
digital media
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2007 Financial HigHligHts
SamSung ElEctronicS and conSolidatEd SubSidiariES
[in billions of KRW]
2005
2006
2007
income Statement
Sales
80,630
85,426
98,508
OperatingProfit
7,575
9,008
8,973
NetIncome
7,640
7,926
7, 421
balance Sheet
TotalAssets
74,462
81,366
93,375
TotalLiabilities
32,854
33,426
37, 4 0 3
Shareholders’Equity
41,607 47, 9 4 0 55,972
cash Flows
CashFlowfromOperatingActivities
13,329
15,081
14,791
CashFlowfromInvestingActivities
( 9,046 )
( 11,0 9 8 )
( 12,002 )
CashFlowfromFinancingActivities
( 3,266 )
( 3,889 )
( 1,600 )
98.5
80.6
85.4
15.1
14.8
13.3
9.0
9.0
7.6
2005
2006
2007
2005
2006
2007
-9.0
-11.1
-12.0
salEs anD OPERating PROFit
[ in trillions of KRW ]
casH FlOWs
[ in trillions of KRW ]
Sales
Operating Profit
Cash Flow from Operating Activities
Cash Flow from Investing Activities
Please Read the Following cautionary statement Regarding Forward-looking statements:
This annual report includes “forward-looking statements” which relate to future events, and can be generally identified by phrases containing words
such as “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates,” or other words or phrases of similar meaning. These forward-
looking statements are not guarantees of future performance and may involve known and unknown risks, uncertainties and other factors that may
affect Samsung Electronics Co., Ltd. ( SEC ) ’s actual results, performance, achievements or financial position, making them materially different
from the actual future results, performance, achievements or financial position expressed or implied by these forward-looking statements. Likewise,
statements relating to behavior of financial and consumer electronics markets, fluctuations in interest and exchange rates or commercial and
consumer credit environments, changes in regulation and regulatory and legal actions, future integration or acquisition of businesses are forward-
looking statements. Therefore, you should treat all future statements containing such aforementioned information as forward-looking statements.
Please understand that although SEC has been careful to ensure the accuracy of the contents of this annual report, the statements within are subject to a number of risks,
uncertainties, and assumptions, any of which could cause actual results to materially differ from the plans, objectives, expectations, estimates, and intentions expressed in this
annual report as described above. Therefore, SEC and any of its subsidiaries, affiliates, directors, officers, agents, or employees assume no liability caused by these forward-
looking statements, and shall not be liable to any third party, including investors, for any damages resulting from an investment or business decision based on the information
contained in forward-looking statements of this annual report. All risks in making an investment or business decision based on the information contained in the forward-looking
statements shall be entirely assumed by you.
All the financial data in this report comes from the consolidated financial statements.
SamSung electronicS
annual report 2007
01
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PERFORmancE summaRy by businEss
n e t s a l e s a n d O p e r a t i n g Pr o f i t
Net sales
Operating profit (loss)
[ in trillions of KRW ]
[ in millions of KRW ]
26.5
20.8
17.7
2005
2006
2007
digital media
1.06
net sales \ 17,656,558 \ 20,774,962 \ 26,513,285
operating profit ( loss ) 247,700
0.2
0.7
744,178
1,061,601
2005
2006
2007
[ in trillions of KRW ]
[ in millions of KRW ]
23.8
20.9
20.2
2005
2006
2007
2.76
telecommunication
networks
2.5
1.9
net sales \ 20,914,815 \ 20,249,759 \ 23,767,268
operating profit ( loss ) 2,480,001
1,937,747
2,756,586
2005
2006
2007
[in trillions of KRW]
[ in millions of KRW ]
2005
2006
2007
digital appliance
5.6
5.5
6.9
net sales
\5,617,708 \5,538,837 \6,854,578
-0.07
0.15
operating profit (loss) (29,102)
(71,213)
159,835
- 0.03
2005
2006
2007
[in trillions of KRW]
[in millions of KRW]
22.8
22.3
20.3
5.4
2005
2006
2007
5.1
Semiconductor
2.35
net sales \ 20,332,235 \ 22,827,624 \ 22,331,501
operating profit ( loss ) 5,410,677
5,129,845
2,347,239
2005
2006
2007
[ in trillions of KRW ]
[in millions of KRW]
13.9
17.0
2005
2006
2007
8.7
lcd
2.11
0.9
net sales \8,715,225 \13,912,968 \17,062,523
0.6
operating profit (loss) 598,773
857,180
2,115,629
2005
2006
2007
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Description of business
2007 Highlights
Our Digital Media business leads the world’s digital media market by producing
a wide range of products including digital TVs, monitors, audio-visual devices,
printers and PCs. We hold the largest market share in lat-panel TVs and PC
monitors. Our innovative product lineup includes ‘Touch of Color’ TVs, all-in-one
color laser printers including the world’s smallest, and a 4th-generation Blu-ray
disc player. In May 2008, we reorganized our Digital Media unit to produce
greater business synergy and enhance our overall performance. We integrated
our Digital Appliance unit into our Digital Media operations and transferred our
PC, MP3 player and set-top box businesses to our Telecommunications Net-
work business.
In 2007, we achieved record-breaking business performance, boosted by high
growth in the lat panel TV market and a steady increase in the sale of our core
products, such as LCD monitors, digital audio-visual products, laser printers
and notebook PCs. The strength of our market leadership position in TVs
helped us to maintain the No. 1 market share position across all TV market seg-
ments, from conventional TVs to lat panel and LCD TVs. We also ranked irst in
market share for monitors in 2007, widening our lead over our competitors. Our
printer business also showed enhanced market leadership by holding the No. 1
position in all-in-one mono laser printers and the No. 2 position in color laser
printers.
Our Telecommunication Network business leads the world’s telecommunications
industry with the widest range of mobile phones on the market today, such as
3G and multimedia phones, in addition to telecommunication systems. A premium
brand image and distinctive product designs have elevated Samsung very high
among the leaders of the world market.
We have also led the standardization of next-generation mobile phone technolo-
gies such as Mobile WiMAX and HSDPA. Through a business reorganization
completed in May 2008, we integrated our PC and MP3 player businesses into
our Telecommunication Network business to enhance our competitive edge in
digital convergence solutions.
In 2007, we achieved record-breaking sales of 160 million mobile phone units,
securing the second largest share of the global market. This achievement can be
attributed to the continued success of our very popular Ultra Edition series
and our wide range of premium phones, as well as aggressive expansion into
emerging markets. Our operating proit also registered a steady performance
gain, showing a two-digit rate of revenue increase. In addition, Samsung’s
Mobile WiMAX technology for broadband mobile services was adopted as
the 3G global standard to pave the way for further market expansion worldwide.
Our Digital Appliance business creates premium home appliances that meet the
needs of consumers and help to make Samsung an undisputed market leader.
Building on distinctive designs and innovative technologies, we continue to
develop new types of added-value products to offer our customers. Our lineup
of world-leading premium products include refrigerators, air conditioners, wash-
ers, ovens, vacuum cleaners and other appliances that are ubiquitous in today’s
households. Under a company-wide reorganization plan implemented in May
2008, our Digital Appliance business was folded into our new Digital Media
business to leverage its competitive edge.
Building on the world’s most innovative technology and product designs, we
made signiicant progress at the high end of the appliance market in 2007. Our
product lines were enhanced through such innovative products as our drum
washing machine with Vibration Reduction Technology , providing the lowest
noise and vibration levels in the industry, our highly eficient system air condi-
tioners and our side-by-side refrigerator with twin-cooling systems. Such inno-
vations helped us achieve a 24% increase in sales over 2006, and build a irmer
foundation from which to lead the world’s home appliance market.
Our Semiconductor business consists of three major divisions: Memory, System
LSI and Storage. With the world’s most advanced technology, we are leading
the DRAM, SRAM, NAND Flash memory and MCP markets while pioneering
developments in next-generation Solid State Drives ( SSDs ) and fusion memories.
We also are building a strong base for our System LSI business to become one
of our next-generation growth engines and for the launch of several major new
products within our storage division.
Despite fierce competition and continued weakness in memory chip pricing,
Samsung’s Semiconductor Division continued to show steady growth and
increased profits, backed by strong customer relationships and successful
cost-reducing efforts. In 2007, Our performance remained solid with continued
market dominance in most areas of the memory business, including sales in
DRAM, SRAM, MCPs, lash memory and fusion memory devices. World-leading
introductions, such as 60 nanometer ( nm ) -class 2 Gigabit ( Gb ) DRAM, 30nm-
class 64Gb NAND Flash memory, 65nm digital TV receiver chips and the indus-
try’s fastest ( 6Gbps ) 512 Megabit ( Mb ) GDDR5 memory further enhanced our
leadership in core technologies.
Our LCD business produces panels for TVs, digital information displays, note-
book PCs and desktop monitors, as well as various display panels for mobile prod-
ucts. By investing in next-generation production facilities, we have remained the
world’s top LCD producer for the past six years. Our position is particularly
dominant in the segment of LCD TVs 40 inches and larger. We also are expand-
ing our premium product lineup for the multimedia and digital broadcasting
environments, while focusing on new businesses such as next-generation
displays and thin ilm solar cells.
With the help of price increases triggered by product shortages and our contin-
ued cost-reduction efforts, our LCD business showed outstanding results in
2007. Our sales and operating proits have increased dramatically, maintaining
the industry’s best profit rate. Successful commercialization of our 7th- and
8th-generation production lines also made us the unrivaled top producer of 46-
and 52-inch LCD TV panels, ensuring our leadership in the global LCD industry
for a sixth consecutive year. In ongoing efforts to enhance our leadership, we
also have begun mass producing the world’s irst touch-screen-enabled LCD.
SamSung electronicS
annual report 2007
03
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