Samsung 2007 Annual Report Download - page 5

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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 flat-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 flat 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 flat panel and LCD TVs. We also ranked first 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.
Description of Business 2007 Highlights
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 profit 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 significant 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 efficient 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 firmer
foundation from which to lead the world’s home appliance market.
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 film 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 profits 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 first touch-screen-enabled LCD.
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, flash 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.