1. Opportunities in Electronics Industry with Korea
October 2004
GS Choi
President & CEO
Samsung Electronics

2. India Mobile Subscribers (MN) Dec ’02 Jul ’03 Dec ’03 Jul ’04 Aug ’04
32.0
10.0
42.0
30.6
8.3
38.9
CDMA
GSM
22.0
6.2
28.2
19.5
16.3
3.2
10.5
Dec ’ Jul ’ Dec ’ Jul ’ Aug ’04

3. India Foreign Exchange Reserves ($BN)
118.4
106.4
85.6
74.3
58.8
Jul ’ Jan ’ Jul ’ Jan ’ Jul ’04

4. India Forecast of India’s GDP ($BN) 7,854 3,174 1,411 554 604
Source : Goldman Sachs BRICS report

5. India The Largest Economies in 2035 (GDP $BN) 23,828 19,605 7,854
5,882
3,734
USA China India Japan Russia
Source : Goldman Sachs BRICS report

6. India – Market Growth Color TV Demand (Units: MN) 7.0 6.2 5.1
Curved CRT
Flat CRT
PDP/LCD/PJTV
5.1
11.4
17.1
0.3
6.2
4.4
10.7
0.1
7.0
1.0
8.0

7. India – Market Growth Mobile Phone Demand (Units: MN) 57 30 12 21 11 7
CDMA
GSM 21 57 78 30 11 41 12 7 19

8. India – Market Growth Indian Market Size ($BN)
Avg. Growth %
18%
14%
25%
22%
10%
1.9
6.8
2.9
3.8
15.3 HA
Tel IT AV
1.5
5.3
2.0
3.2
12.0
1.3
3.8
1.4
2.3
8.8
1.1
2.5
9.0
1.9
6.3
1.0
1.7
5.0
1.6
4.8

9. Status of Korea’s Electronics Industry
Leading Production Country
$301bil
26%
← Electronics Production (2003)
← Proportion to W/W Total
$180bil
16%
$1,417
$1,349
←Production
per capita
$130bil
11%
$1,026
$66bil 6%
$46bil 4%
$563
$100
USA Japan China Korea Germany
Source: Yearbook of World Electronics Data Volume 4 East Europe & World Summary 2003/4, World Fact Book of CIA 2004

10. Status of Korea’s Electronics Industry
Product Portfolio
Others
1.4% IT
21.4%
Communication
24.3% CE
7.6%
Semiconductor & Parts
45.3%

11. [ Mobile Phone subscribers, 2002]
Advanced Country in Digital Era
High penetration ratio of devices & infrastructure
[ Mobile Phone subscribers, 2002] 79
70% 68 54 21
Korea USA Japan Germany China
Source: Korea Information Indicators Database 2004, National Computerization Agency

12. Advanced Country in Digital Era
High penetration ratio of devices & infrastructure
[ BB subscribers, 2002]
70% 18 19 8 1
Korea USA Japan Germany China
Source: Korea Information Indicators Database 2004, National Computerization Agency

13. Electronics and Economic Growth
Electronics has been driving the Korean Economy
Electronics Production to GDP
Electronics Exports to Total Exports
39%
35%
34%
26%
17%
15%
15%
11%
12% 7%
Source: Electronic Industries Association of Korea, National Statistics Office of Korea

14. Samsung Electronics’ Contribution
Samsung Electronics’ position in Korean economy
% Employment to
Manufacturing
1.3%
Sales/GDP 6%
Exports
17%
Sales Revenue
10%
Market Cap.
20%
Net Income
23.4%
R&D Expenses
40%
※ as of Dec. 31, Based on publicly traded companies

15. Korea – India Links Language Similarities Mother : amma (TAMIL )
umma (KOREAN) 엄마
Father : appa (TAMIL )
appa (KOREAN) 아빠
Elder brother's wife : anni (TAMIL )
unni (KOREAN) 언니
Rice : Bhat (KANNADA/HINDI)
Baap (KOREAN) 밥

16. Korea India Economic Ties
Korea-India Trade ($MN)
India is the 10th Most Important
Trade Partner for Korea
1300
2700
4000
Indian exports to Korea
Indian imports from Korea
700
1900
2600
650
1536
2186
376
1394
1770
476
1273
1749
468
1002
1469
457
1127
1593
447
778
1126
97/ / / / / / / /05(Est.)

17. Korea India Economic Ties
Investors into India (FDI $BN)
Korea is the 5th Largest Investor in India
13.9
7.5
4.4
2.7
2.5
2.3
USA Mauritius U.K Japan Korea Germany

18. Manufacturing in India
Importance
Large Economic Potential
Huge Market including Middle East & Africa
Requirements
Differentiation for Competitiveness
- Basic Infrastructure : Power, Roads, Ports
- Supportive Policy : Grant, Tax, Labor law
- Local Procurement : Parts, Material
Transfer manufacturing expertise from Korea

19. Case Study : Samsung India
1995
2004
Samsung brand unknown
Finished goods imports
Samsung set up manufacturing
Samsung as a premium brand
150 Local vendors developed
Exports “Made in India” products
< Actions >
Introduced disciplined manufacturing systems
World class quality control system
Nurtured local vendors
Used India software and R&D expertise

20. Electronics Factory, NOIDA South West Asia Regional HQ,
Case Study : Samsung India
A Hub in India for Manufacturing
India CTV factory is globally No.1 in productivity
Spread quality control program (SQCI)
- More than 50 vendors are certified this year
Received Various Awards
- Rajiv Gandhi National Quality Award, etc.
Samsung India
Electronics Factory, NOIDA
South West Asia Regional HQ,
New Delhi

21. Global R&D Hub in India Potential
Over 100 MNCs have set up R&D centers in India
→ Need to deepen software, widen hardware
450,000 engineers and IT professionals, every year
Requirements
Korea is leading the most promising fields
- Home Network & Mobile Communication
→ The more digitalized, the more software is needed
Systematic support program for acceleration

22. Samsung India Software Operation (Bangalore) Software Center (NOIDA)
Case Study : Samsung India R&D Centers
Employee (mainly researchers)
- Bangalore: 137(’00) → 329(’02) → 685(’04) → 800(’06)
- Noida : 72(’03) → 150(’04) → 200(’05) → 300(’06)
Local software outsourcing
Supply of researchers to Korea
Subjects : Embedded, Home network, IPv6, etc.
Samsung India Software
Operation (Bangalore)
Samsung India
Software Center (NOIDA)

23. Korea Can Help Position India As A Leading Global Electronics Hub
Expertise in Electronics Manufacturing
A Big Domestic Market
World Class Components Industry
Software and R&D Expertise
World’s most Networked Economy
High Quality Workforce

24. Thank you !