Samsung 2008 Annual Report Download - page 13

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Dear Samsung Electronics stakeholder:
As the US financial crisis deepen the global economic downturn in 2008, we experienced an extreme-
ly challenging year with conditions that recalled those we faced a decade earlier during the 1997 Asian
financial crisis. This difficult situation was further aggravated as high oil prices fueled inflation, ex-
change rates increased in volatility, and falling asset values impacted real income. Despite this chal-
lenging business environment, systematic oversight and effective action enabled us to post continued
growth in our core businesses as we delivered yet another solid financial performance with record
consolidated sales of KRW 121.3 trillion and a net profit of KRW 5.5 trillion.
THE YEAR IN REVIEW
Our core semiconductor, mobile phone, LCD panel, and TV businesses enjoyed continued growth.
While DRAM and NAND memory prices dropped sharply in 2008, our technical leadership and ongoing
cost-reduction efforts enabled us to further extend our lead over our industry rivals. Our non-memory
semiconductor businesses delivered dramatic growth despite significantly weakened market demand.
In mobile phones, we continued to generate stellar growth as our focus on bolstering our lineup with
new smartphones and building market share in emerging markets paid off, enabling us to ship nearly
200 million phones for the year as we demonstrated our potential to vie for the industry’s top spot. Our
LCD business overcame slowing demand and tougher competition in the second half of the year as we
maintained our industry-leading net profit margin and extended our lead over the competition in the
40-inch-and-larger TV panel market. Our TV business also overcame adverse conditions to grow ship-
ments by 54% over 2007 as our global market share surpassed 20%, solidifying our position as the
undisputed industry leader as we marked our third consecutive year at the top of the LCD, flat-panel,
and overall TV markets.
We used creativity to strengthen our foundation for global leadership.
Fueled by creativity, our ambition to become one of the world’s top companies has driven continuous
improvement in every area of our organization thanks to our hard work and success in attracting the
best and brightest people, pursuing innovative R&D, and building a strong, distinctive brand. Approxi-
mately 40% of our global employees are now involved in R&D as we develop the technologies of tomor-
row. In 2008, we earned 3,515 patents in the US, a 29% increase over 2007 that kept us a solid No. 2
in the annual patent ranking. We also continued to press forward with a variety of market- and custom-
er-focused brand marketing programs, including our successful role as the official wireless communica-
tions equipment partner of the Beijing 2008 Olympic and Paralympic Games.
We actively worked to build shareholder value and promote sustainability.
Even as volatility in financial markets was triggering the global economic downturn, we were actively
pushing ahead with investor relations initiatives to improve our stock valuation. While the majority of
global bourses and technology stocks lost more than half their value in 2008, our shares faired com-
paratively better, declining just 19% as our IR efforts paid off. We also launched a number of initiatives
to improve workplace environment, safety, and health as well as reduce energy consumption as part
of our growing commitment to sustainability. Our ongoing efforts to reduce toxic chemicals and
improve product recycling were recognized by our second place ranking in Greenpeace’s quarterly
Guide to Greener Electronics.
Our vision of becoming one of the
world’s leading companies is coming
to life with creative innovation and
progressive entrepreneurship.
“
Despite the global
economic downturn in
2008, systematic oversight
and effective action
enabled us to generate
continued growth in our
core businesses as we
delivered yet another
solid financial
performance. ”