Memory Market Outlook & Samsung’s Strategy th 2007 Nov. Nov. 28 28th 2007

Memory Marketing SAMSUNG Electronics Co., Ltd 1

DISCLAIMER – This presentation includes forward-looking statements which can generally be identified by words such as “believes”, “expects”, “foresees”, “forecasts”, “estimates” or other words or phrases of similar import

– Similarly, such statements that describe the company’s strategy, outlook, objectives, plans, intentions or goals are also forwardlooking statements

– All such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in this material

-2-

Contents I

Semiconductor Environment Status

II

Memory Market Prospects

III

Technology & Application Trend

IV

Samsung’s Industry Leadership

3

Memory is Everywhere in Our Life

Portable Game

DVD

NAND

Card for Movie Title

HDTV/STB

NAND for Time Shifting

Game

Graphic DRAM

Desktop PC

UDIMM/SSD

E-book/E-Dictionary

CNS

NAND

moviNAND

Cellular UMPC

SSD

MP3P/PMP

MCP

DSC/DVC

NAND

cSSD/eSSD -4-

UFD

NAND

4

World Economy & Semiconductor Market „ W/W GDP & semiconductor growth shows strong correlation ƒ W/W GDP is growing steadily by 5% since 2004

WW GDP Growth 4.1

4.2

5.4

5.3

37%

5.2

4.8

4.8

4.8

4.0

19%

28% 3.1 2.7

3.7

7%

4% -9%

18%

2.5

9%

9% 4%

1%

WW Semiconductor Growth

-8%

-32% `96

`97

`98

`99

`00

`01

`02

`03

`04

`05

`06

`07

`08 5

* Source : IMF(`07.10) , WSTS(`07.11) -5-

Macro Environmental Analysis

• `08 W/W GDP Growth 4.8% - `07: 5.2% `08: 4.8% - China: 10%, India: 8.4% - 2008 Beijing Olympic Games

• Credit issue caused by Subprime Crisis

• Healthy Growth of Major Applications - PC : 286M (11%↑)

• Oil Price Climbs

- Cellular Phone: 1,277M (12%↑)

• China Inflation Pressure • Weakness of US Dollar • The Possibility of Yen-carry Trade Liquidation

* Source : IMF (Oct 2007), IDC (Oct 2007), DQ (Oct 2007), Morgan Stanley (Nov 2007) -6-

6

Contents I

Semiconductor Environment Status

II

Memory Market Prospects

III

Technology & Application Trend

IV

Samsung’s Industry Leadership

7

Semiconductor Market Forecast „ Semicon. market is expected to grow 2%~6%, reaching $296B~$313B in `09 【 Growth Rate Forecast 】

【 Revenue Forecast 】 (B$) 330

20%

313 16%

300

296

270

12%

240

8%

210

4%

180

0% `05

`06

`07

`08

6% 2% `05

`09

`06

`07

`08

`09

(Growth)

(B$) `05

`06

`07

`08

`09

`05

`06

`07

`08

`09

DQ

(`07.9)

238

263

273

295

313

7%

10%

4%

8%

6%

IDC

(`07.7)

227

248

260

281

296

7%

9%

5%

8%

5%

Isuppli

(`07.9)

238

261

270

295

301

4%

10%

4%

9%

2%

IC Insight (`07.7)

228

248

253

291

303

7%

9%

2%

15%

4%

WSTS

227

248

257

281

298

7%

9%

4%

9%

6%

(`07.11)

-8-

8

Memory Market Forecast „ Memory market is expected to grow -1%~11%, reaching $67B~$73B in `09 【 Growth Rate Forecast 】

【 Revenue Forecast 】 (B$) 80

25%

73.4 15%

70

67.2 11%

60 5% 50 0%

-1%

40

-5% `05

`06

`07

`08

`09

`05

`06

`07

`08

(B$)

`09

(Growth)

`05

`06

`07

`08

`09

`05

`06

`07

`08

`09

DQ

(`07.9)

49.8

60.8

63.6

67.4

73.4

4%

22.2%

9%

6%

9%

IDC

(`07.7)

48.5

58.5

57.9

60.5

67.3

3%

21%

-1%

5%

11%

Isuppli

(`07.9)

48.3

59.9

62.0

69.7

68.8

1%

24%

6%

12%

-1%

IC Insight (`07.7)

48.5

58.5

57.1

64.2

67.2

3%

21%

-2%

12%

5%

WSTS

48.5

58.5

59.8

62.6

69.3

3%

21%

2%

5%

11%

(`07.11)

-9-

9

Changing Memory Cycle „ Repeated boom & bust cycle of Memory industry is changing by growing NAND market contribution 78%

YoY Growth Rate of Combined DRAM & NAND Revenue 57% 48% 25%

4%

NAND Revenue

9% 5%

-38%

-29%

DRAM Revenue

-59%

`91 `92 `93 `94 `95 `96 `97 `98 `99 `00 `01 `02 `03 `04 `05 `06

`07 10

* Source: WSTS (`07.11) - 10 -

Memory Revenue & CAPEX Trend „ CAPEX growth expected to slow-down in 2008 due to sluggish market

condition in 2007 63 62%

CAPEX YoY G/R 43%

Revenue ($B) W/W

49

47

CAPEX ($B) Samsung A B C D E F Others

60

58 39% 27% 32% 32

33

26 18 14

8.5

`03

`04

`05

`06

* Source : Company Reports, SEC Marketing, Merrill Lynch, WSTS - 11 -

`07

`08 11

Memory Margin Trend „ Most memory vendors are suffering from sharp decrease of margin „ Competitiveness gap is getting obvious under tough market condition 【 OP Margin Trend of Memory Makers 】 (Billion $) 5 E D C B A SEC

4

3

2

1

0

`06.Q1

Q2

Q3

Q4

`07.Q1

Q2

Q3

Q4

-1 * Source: SEC, Company Reports, Citi, MS, GS

12 - 12 -

DRAM Market Forecast „ DRAM market is expected to reach $33B~$38B in 2009 ƒ EDP portion is decreasing while consumer & communication portion is increasing 【 Revenue Forecast 】

(B$) 45

【 Revenue by Segment 】

2003

40

Others 1% Industrial 9%

38.1

Communications 3% Consumer 7%

35

32.9

EDP 79%

30

25

`05

`06

`07

`08

`09

2008

(B$) `05

`06

`07

`08

Others 1%

Communications 10%

Industrial 6%

`09

Consumer 9% DQ

(`07.9)

25.2

34.3

34.8

32.6

36.2

IDC

(`07.9)

25.6

33.8

33.4

34.1

37.3

IC Insight (`07.7)

25.6

33.8

32.9

36.4

38.1

WSTS

25.6

33.8

32.5

29.7

32.9

EDP 74% (`07.11)

13 * Source: DQ (`07.7) - 13 -

DRAM Market Trend ■ 1Gb portion will reach 63% in 4Q `08 ƒ DDR3 portion will Increase steadily in `08 【 Production by Density 】 5%

8%

【 Production by Mode 】

3% 256Mb

4%

8%

5%

4%

10%

9%

3% SDRAM 8% XDR

DDR1

16%

33% 512Mb 60% 53%

65% DDR2 79

84%

78%

72% 63% 1Gb 41% 33%

22% DDR3

`07.1Q 2Q

4%

1%

5%

3Q

4Q `08.1Q 2Q

3Q

`07.1Q 2Q

4Q

* Source: DQ (`07.9) * Bit equivalent base

3Q

6%

4Q `08.1Q 2Q

Others 3Q

4Q

14 - 14 -

NAND Market Forecast „ NAND market is expected to reach $16B ~ $25B in 2009 ƒ Portion for EDP & communication is increasing 【 Revenue Forecast 】

(B$)

【 Revenue by Segment 】

30

25.3

25

2003

Others 1% Industrial 7%

Communications 4%

EDP 14% (UFD 13%)

20

Consumer 74%

10

(Card 68%)

16.3

15

`05

`06

`07

`08

`09

2008

(B$)

Others 1% Industrial 3%

Automotive 3%

EDP 21% `05

`06

`07

`08

`09

DQ

(`07.9)

12.0

13.7

17.0

23.0

25.3

IDC

(`07.9)

10.6

11.5

13.2

14.2

16.8

IC Insight (`07.7)

10.6

11.5

12.1

14.7

16.3

WSTS

10.6

11.5

15.2

20.5

24.2

(`07.11)

Communications 13%

(UFD 11%)

Consumer 59% (Card 32%)

* Classifying Flash Card as Consumer & UFD as EDP 15

- 15 -

* Source: DQ (`07.7), SEC

NAND Flash Market Trend ■ 8Gb will lose the portion steeply and 16Gb will take It in 2008 ƒ SD & MS card will be Increasing continuously in 2008 【 Production by Density 】

【 Card Market by Form Factor 】

3%

4%

5%

5% 3% 10%

26%

20%

11%

18% 32Gb 30%

5% 3% 6%

CF xD MMC

31%

40% 55%

21% MS

7% 56% 16Gb

14%

16%

51% 45%

17%

31%

61%

64% SD

`07

`08

42% 14% 8% 3%

`07.1Q 2Q

4%

3Q

19% 8Gb

28%

11% 5% 4Gb 2% 2Gb

3%

4Q `08.1Q 2Q

3Q

`03

4Q

* Bit base

`04

`05

`06

* Unit base

16

* Source: DQ (`07.9) - 16 -

DRAM Demand & Supply Trend „ In 2008, DRAM oversupply is expected to ease, especially in 2H 【 DRAM Supply/Demand 】

【Market Environment in 2008】 【Demand 】 - PC shipment Forecast (IDC, `07.10) ☞ `07: 258M → `08: 286M (11%↑)

UBS (`07.9) IDC (`07.9) ML (`07.9)

Oversupply 13.2%

• Rigid Notebook growth • Corporate PC upgrade demand

- PC MB/sys Forecast (IDC, `07.10) ☞ `07: 1.4G → `08: 2.0G (48%↑)

7.5% 5.2%

4.9% 3.6%

4.1% 1.7%

1.8%

2.4% 1.1%

2.3%

0.5%

0.6%

【Supply 】

2.3%

0.9%

- DRAM Capex Cutdown

-1.6%

- Challenging Technology migration

Shortage

- 8” Fabs Retirement 2007 2Q

3Q

4Q

2008 2Q

3Q

4Q

17 - 17 -

NAND Demand & Supply Trend „ In 2008, NAND market is expected to be tightened in 2H ƒ Seasonal pattern for NAND demand still exists 【 NAND Supply/Demand 】

【Market Environment in 2008】 【Demand 】 - NAND Demand Drivers

Citi (`07.9) IDC (`07.9) ML (`07.9)

Oversupply

• PMP, Car Navigation, Music phone - Strong Card/UFD Demand due to Beijing Olympic Games

16.6%

8.4% 7.9%

【Supply 】

7.0% 4.3% 2.5% 2.3%

- Decreasing Supply Bit Growth in 2008 - 8” Fabs Retirement

0.9% -0.7%

-1.2%

Shortage 2007 2Q

3Q

-5.0%

4Q

2008 2Q

3Q

4Q

18 - 18 -

Contents I

Semiconductor Environment Status

II

Memory Market Prospects

III

Technology & Application Trend

IV

Samsung’s Industry Leadership

19

Memory Technology (Development) Trend ■ DRAM used to be the technology driver until early 2000 , but now NAND Flash is leading the Memory technology ( NAND > NOR > DRAM > SRAM )

Density (bits)

NAND

DRAM NOR SRAM

20 - 20 -

DRAM Technology Transition ■ PC has been driving DRAM technology evolution `00

`01

`02

`03

`04

`05

`06

`07

`08

`09

`10

`11

DDR1 Introduction

DDR2 DDR3

Volume Transition

DDR1

SDRAM

DDR2

100%

DDR3

8% DDR3

80%

73% DDR2

60%

DDR1

40%

SDRAM

20%

6% 2%

Rambus

0% EDO `00 `01

`02

`03

`04

`05

`06

`07

`08

`09

`10

`11

21

* Source: iSuppli(`07.9) - 21 -

DRAM vs NAND Bit Shipment „ NAND bit shipment has exceeded that of DRAM since ‘05 (1G Eq, M pcs) 10,000

400%

353% NAND G/R 302%

300% NAND Bit shipment

1,000

225%

DRAM Bit shipment 229%

200%

100 156% 157% 10

82%

97%

88%

126%

85% 61% 73%

41%

64% 40%

94%

100%

51% 48% DRAM G/R

1

0%

`91 `92 `93 `94 `95 `96 `97 `98 `99 `00 `01 `02 `03 `04 `05 `06 `07 22

* Source : DQ, WSTS - 22 -

PC Market Forecast „ In 2008, PC market will grow by 11% reaching 286M units (IDC) „ PC main memory will reach 2.0GB/sys in 2008 from 1.4G in 2007 【 W/W PC Shipment & Growth Rate 】 16% (M Units) 16% 13% 13% 11% 315 PC 8 YoY Growth Server 286 10% 10% 258 8 N/B

2% 137 4 31

155 5 39

180 6

208 6 65

229 7

【 PC Memory Contents Trend 】 2,994 2,835 2,576 2,295

7

(MB/Sys) 155 1,633

106 82

240

128 226

D/T

Main 2,211 Memory 1,596

102

111

`02

`03

`04

137

`05

139

`06

272

1,407

49

125

368 Graphic

2,045 253 1,880 209

131

415 NAND

144

148

152

`07

`08

`09

1,770

1,053

`07.Q1 Q2 Q3 Q4 `08.Q1 Q2 Q3 Q4

* Source: IDC(`07.10) - 23 -

* Source: IDC(`07.10) DQ(`07.9) for Graphic Memory

23

Retail PC Main Memory Trend „ Main memory size for US retail PC keeps steady growth ƒ 2GB : Jan. `07 : 21% → Jun. `07 : 23% → Oct. `07 : 40% ƒ 3GB or higher : Jan. `07 : 0% → Jun. `07 : 1% → Oct. `07 : 9% 100%

10%

80%

48% 3GB or Higher 2GB 1GB 512MB

60%

40% 33% 20%

9%

0% 06/12/2

07/1/2

07/2/2

07/3/2

07/4/2

07/5/2

07/6/2

07/7/2

* Source: NPD Data (`07.11)

07/8/2

07/9/2

07/10/2

24 - 24 -

High Density Memory Portion in Retail PC „ US retail PCs with 2GB or higher Memory are about 50% in October „ 2GB or higher portion for PCs above $750 is over 70% 【 2GB or Higher Main Memory Portion】 100%

【 Shipment by Price Band】 60%

$1.25K or Higher

80%

50%

$750~1.0K

$500~749

40%

60% $499 or Lower

$500~749

$1.0~1.25K

30%

40% 20% $750~1.0K 20%

$499 or Lower

10%

0%

$1.0~1.25K

0%

Jan `07

Mar

May

Jul

Sep

Nov

Jan `07

Mar

May

Jul

$1.25K or Higher Sep Nov

25 * Source: NPD Data (`07.11) - 25 -

Mobile Phone Market Forecast „ In 2008, mobile phone market will grow 12% reaching 1,277M Units ƒ 3G phones adopt 5 times more Memory Compared to 2.5G phones in 2008 - 2008 Mobile Phone MB/sys: 2.5G(127MB) vs 3G(697MB) 59%

65%

46% 22%

YoY G/R 22%

22%

15%

8%

32%

5%

-3%

12%

1,277

1,385

1,144 997 820 674 512 413 (M units)

418 400

284

42 67

78 160

158

336

425

569

3G

256

374MB

180 495

730MB

617

724 799

792

2.5G

377

199MB

172 95MB

Memory Contents 13MB

`98

`99

`00

`01

`02

`03

* Source: DQ (Oct 2007), SEC Marketing - 26 -

21MB

`04