Annual R eport 2000

Annual Report 2000

Contents [3] Foreword [4] Financial Highlights [8] CEO’s Message [12] 2000 Highlights [13] Business Portfolios

[16] Home Networks [22] Mobile Networks [28] Office Networks [34] Core Components [40] Vision in Action

[44] Sports Sponsorship [46] Community Service [47] Financial Report [88] Board of Directors [90] Global Network

a strategy for leadership

in the digital convergence revolution

At the start of our 30th anniversary year in November 1999, we dedicated ourselves to being at the

forefront of the digital convergence revolution. Now in our 31st, we’re working hard to turn that ambitious

commitment into reality through an initiative we call our strategy.

The “digital” part of this strategy focuses on enhancing the value chain by realigning our operations

into four major business portfolios—home networks, mobile networks, office networks, and core

components. The “ E” or “electronic” part aims to create a solid support framework for these portfolios

by optimizing the supply chain to make our operations as efficient and timely as possible.

So, where do we expect this strategy to take us? All the way to the top in the very, very near future.

And everyone’s invited to join us!

The year 2000 presented Samsung Electronics with a host of external

challenges. But even record-high oil prices, plummeting memory prices,

and faltering technology sector stocks couldn’t stop us from once again

recording our best financial performance ever.

2000 1999

Capital Ratio 60.2% 54%

Debt to Equity Ratio 66.1% 85.3%

Return on Equity Ratio 41% 31%

Net Debt Equity Ratio 9% 33%

EBITDA Margin 32% 27%

Earnings per Share

35,006 19,214

US$28 US$15

in millions of won in millions of U.S. dollars

2000 1999 2000 1999

Sales 34,283,752 26,117,786 27,230.9 20,744.9

Operating Profit 7,435,154 4,481,500 5,905.6 3,559.6

Net Income 6,014,530 3,170,403 4,777.2 2,518.2

Total Assets 26,895,046 24,709,803 21,362.2 19,626.5

Total Liabilities 10,702,199 11,378,234 8,500.6 9,037.5

Shareholders’ Equity 881,675 875,542 700.3 695.4

• The financial results in the above tables are for Samsung Electronics only and do not reflect the results of its subsidiaries or affiliates.

• US$ amounts are converted at a rate of US$1= 1,259 won.

During the year, sales climbed over 31%, gross profit jumped over 45%,

operating profit soared to 66%, and net income skyrocketed to 90%.

While these impressive figures clearly show solid quantitative growth,

they also show outstanding qualitative growth, providing unequivocal

proof that our ongoing efforts to deliver greater value to our customers,

partners, and shareholders have given us a solid, efficient, and

profitable financial structure that’s second to none.

Sales For the 7th straight year, we led the domestic

manufacturing sector with sales of 34.3 trillion won,

a 31.3% increase over 1999. Approximately 68% of

the total came from international markets,

representing 12% of Korea’s total year 2000

exports. The Semiconductor Business Group

accounted for 38% (13 trillion won), followed by the

Digital Media System Business Group with 27% (9.3

trillion won), the Information & Communications

Business Group with 22% (7.6 trillion won), and the

Home Appliances Business Group with 8% (2.7

trillion won).

Gross Profit Ongoing restructuring and manage-

ment innovation activities were behind the

remarkable 45.3% growth in gross profit to 12.3

trillion won. The year also saw the overwhelming

bias toward semiconductors begin to shift toward a

more balanced profit structure.

Operating Profit The 2000 operating profit of 7.4

trillion won was the highest in company history and

an outstanding 66% improvement over 1999,

translating into an overall profit margin of 22%. The

Semiconductor Business Group led with 81.5% of

this total (6.1 trillion won), an outstanding profit

margin of 47%, followed by the Information &

Communications Business Group with 12.2% (908

billion won), the Digital Media System Business

Group with 7.1% (525 billion won), and the Home

Appliances Business Group with 2.5% (187 billion

won).

Net income In 2000, net income shot up 90% to

just over 6 trillion won. This produced an equally

remarkable 82% rise in EPS from 19,214 won to

35,006 won. The fact that net income rose nearly

90%—nearly triple the 31% increase in sales—is a

solid indicator that we’ve successfully made the

transition to a profit-driven organizational

structure.

Return on Equity Total shareholders’ equity rose to

16.2 trillion won from 13.3 trillion won in 1999, a

21.5% year-on-year increase. This as well as strong

sales helped ROE jump from 31% year-on-year to

41%, putting us in the same league as the world’s

top corporations.

Debt to Equity For the second straight year, we

took advantage of strong earnings to trim our

overall debt. In 2000, we paid back 1.6 trillion won,

slashing our 5.7 trillion won debt burden by 28% to

4.1 trillion won. This in turn improved our debt to

equity ratio from 85% in 1999 to 66%, laying a

strong foundation for continued profitability.

“ Samsung Electronics is dedicated to leading

the digital convergence revolution…”

Dear Customers, Partners, and Shareholders,

I am pleased to report that 2000 was Samsung Electronics’ best

year ever. During the year, our sales grew over 31.3% to 34.3

trillion won. Even more remarkable was the 66% rise in operating

profit to 7.4 trillion won, producing an outstanding 22% operating

margin. Taken alone, these figures are an impressive testimony to

the success of our ongoing customer-driven efforts to enhance the

value of the Samsung brand as well as our aggressive marketing and

pricing policies in markets worldwide. Taken in the context that

they and similarly impressive figures in 1998 and 1999 were

recorded in an environment marked by unfavorable economic

conditions at home and unclear economic prospects abroad, they

are also unmistakable proof that the restructuring initiatives of the

past three years have helped lay a solid foundation for profitability.

But our work is far from over.

As I have stated many times, the coming decade will bring

more changes to the way we live, work, and play than the entire

past century. And Samsung intends to be the driving force behind

as many of these changes as possible. Our ambitious plans for the

next five years call for us to more than double sales to 80 trillion

won as we aim for an operating margin of 15% in 2005. We also

intend to triple our brand value from US$5 billion to US$15

billion. I would like to share with you now the master strategy that

will make this all possible.

On our 30th anniversary in November 1999, we made public

our vision of leading the digital convergence revolution. On our

31st in 2000, we announced how we intend to translate this vision

into reality. Recognizing the critical role that digital convergence

and networking technology will play in our success in this endeavor,

we have highlighted them in the name of our new master plan—

Digital-

Company—a strategy that seeks to maximize both

customer and corporate value through a comprehensive solution-

and process-centric approach to enhancing the value chain and

optimizing the supply chain.

Our value chain focus is now putting in place an integrated,

solution-focused organizational framework where each of our

divisions is assigned to one of four synergetic business portfolios:

home networks, mobile networks, office networks, and core components.

This reorganization will create a fertile internal climate for synergy

and greater value as our divisions cooperate, share, and together

create digital solutions far superior to anything they could achieve

on their own.

Similarly, our supply chain focus now reflects the simple reality

that value innovation is not just about developing the most

innovative products. It is about finding ways to enhance value at

every step of the supply chain process—from the research lab to

the marketing department. By applying e-processes to streamline,

accelerate, and create opportunities for synergy within the business

process itself, we will reap the benefits across the entire organiza-

tion, ultimately creating greater value for all. And that will help us

more effectively achieve our mission of bringing innovation and

digital technology to all our products in ways that will make life

easier, richer, and more enjoyable for all generations and all

customers. We call it Samsung Digitall. And everyone’s invited.

I would like to close with a sincere thank you for your support

during the past year that helped make 2000 our best year ever. We

look forward to bringing you even better news in 2001.

Jong-Yong

Yun

Vice Chairman and CEO

September 15-30

While our latest mobile

phones help keep the

Olympic Games running

smoothly, we play host

to over 1.1 million

Sydney Olympic Park

visitors. Our Olympic

Rendezvous@Samsung

pavilion provides a

unique showcase for our

latest mobile communi-

cations technology, a

convenient gathering

place for athletes and

their families, and a full

daily program of cultural

performances and enter-

tainment for all.

September 29

We debut the world’s

fastest graphics memory

chip. Fabricated with

0.17-micron technology,

the 128Mb double-data-

rate SDRAM chip is

capable of moving data

at 500Mbps, a two-and-

a-half-fold increase in

performance over our

previous fastest offer-

ing. The chip will play a

key role in our continued

dominance in the graph-

ics memory market, an

area where we currently

hold a 40%-plus market

share.

October 10

Our technology specifi-

cation for digital image

compression is accepted

into the patent pool for

MPEG-4, a next-genera-

tion compression tech-

nology designed to

shrink multimedia con-

tent down to compact,

high-quality data

streams that can be

smoothly broadcast over

the Internet or to 3G

mobile phones.

September 7

We introduce the

world’s first cdma2000

mobile phone. The first

step toward global 3G

mobile communications,

the SCH-X100 cellular

and SPH-X1000 PCS

phones offer full back-

ward compatibility with

existing cdmaOne net-

works, up to 10x higher

data speeds for services

like audio- and video-on-

demand, and 30%

longer talk and 100%

longer standby times.

We also demonstrate a

complete cdma2000

system during the

Sydney Olympic Games.

November 1

We mark our 31st

anniversary by unveiling

our Digital-E Company

strategy to guide us as

we work to become the

leader of the digital con-

vergence revolution. The

goal of this strategy is to

build on the success of

our reorganization

efforts over the past

three years to take our

organization to the next

level, focusing on value

innovation in both the

value and supply chains

to propel ourselves to

the top of the industry in

2005.

2000 Highlights

January 4

We develop the world’s

first 288Mb Rambus

DRAM. Designed with

0.17-micron process

technology, this new

RDRAM offers the high-

est bandwidth of any

current memory technol-

ogy. Up to 16 of these

288Mb chips can be

combined to create

memory modules of up

to 576MB. RDRAM is

used primarily in high-

end Pentium 4-based

workstations, PCs, and

game consoles.

May 1

We join AMD, Compaq,

Gateway, Hitachi, HP,

Infineon, NEC, Quantum,

SCI Systems, Solectron,

and Western Digital to

form eHITEX, an inde-

pendent online B2B mar-

ketplace focused on

creating a high-tech sup-

ply chain for the comput-

ing and electronics

industries. In December,

the name changes to

Converge as the consor-

tium moves to acquire

NECX, a global trading

exchange operator with

a trading volume

exceeding US$1 billion.

May 15

We produce our 10 mil-

lionth TFT-LCD to date.

Entering the field in

1995, we’ve led the com-

petition since 1998 with

over 20% of the global

market. In February, we

introduce the

WiseView

logo to

increase our brand visi-

bility, and in August we

add a 4th-generation

production line that will

push annual production

capacity from 8 million

14-inch panel equiva-

lents in 2000 to nearly

15 million in 2001.

June 13

We announce a strategic

partnership with

Microsoft to create

Internet-savvy 2G, 2.5G,

and 3G mobile phones.

The agreement covers

both GSM and CDMA

feature phones based on

the Microsoft Mobile

Explorer wireless com-

munications platform as

well as the Microsoft

smart phone platform

which integrates the

functionality of a PDA

into slightly larger form

factor. Our first product

from this alliance debuts

in December.

June 22

H.M. King Juan Carlos I

inaugurates our first

GSM phone plant in

Europe. The Barcelona,

Spain plant’s two pro-

duction lines began

turning out our SGH-600

and SGH-2400 mobile

phones in January. When

completed in 2002, the

plant will have 11 pro-

duction lines, employ

more than 1,000 local

workers, and produce

some 7.5 million units

annually, 80% for sale

outside of Spain.

The power to lead a revolution

It takes a special combination of capabilities and resources to

lead the digital convergence revolution.

At Samsung, we believe we’ve got the critical mass of

technology, facilities, personnel, partnerships, and capital

needed to compete with and beat the world’s best. Backed by

our leadership in key core component fields, we intend to set

the pace for industry innovation in home networks, mobile

networks, and office networks into the indefinite future.

Welcome to Samsung Digitall. Where everyone’s invited.

more inside…

Mobile

Home Networks

Our advanced digital audio and video technology continues to keep

us on the cutting edge of home theater with a full lineup of high-

performance HDTVs, SDTVs, and DVD players. We’ve also been

breaking new ground in the home appliances field by adding digital

functionality and networking capabilities as we participate in the

creation of the digital home network infrastructure that’ll bring a

whole new level of comfort and convenience to life.

You may have heard that we’ve

mobile phone maker for four yea

didn’t know that we were among

phones and systems that’ll hand

phones handle voice. Other mob

notebook PCs, PDAs, digital cam

designed to help keep you organ

A digit

all

portfolio of solutions

Samsung Electronics is the world leader in computer memory, TFT-LCD and CDT monitors, DVD-ROM

and combination CD-RW/DVD-ROM drives, microwave ovens, and CDMA mobile phones as well as a

top-ten player in CD-ROM and IDE hard drives, color TVs, VCRs, and DVD players. Our leadership in

core component technologies in each of these product categories is the synergistic force that’s now

driving our other three digital business portfolios.

Office Networks

etworks

een the world’s No. 1 CDMA

s running. But you probably

the first to develop 3G mobile

e video as easily as today’s 2G

le network offerings include

ras, and cordless phones, all

ized and in touch.

With some of the largest, sharpest screens available, Samsung TFT-

LCD flat-panel and CDT flat-screen displays are easily the highest-

profile products in this portfolio. We also make a full range of

computers and peripherals including hard drives, combination

DVD/CD-RW drives, fax machines, laser and ink-jet printers,

multifunction printers, and business communications solutions

that will make any office network more productive and efficient.

We’re serving up the tastiest

digital dishes in the industry.

Home Networks

What’s on today’s menu? How about 42 inches of plasma

goodness delivered to your table. But it could just as easily be

served up on a wall. Or even the ceiling. You see, this isn’t just

your ordinary kind of meal. It’s a digital smorgasbord that’s a

feast for the eyes. Bon appétit!

SPK-4215 42-inch 16:9 Plasma TV

There’s simply no other way to get a bigger, flatter picture

hanging on your wall. Or anywhere else for that matter.

Cool Multimedia

Our top-of-the-line SR-127DTL

refrigerator keeps your food

fresh as it keeps you in touch,

entertained, and organized

with Internet access, video-

phone capability, TV reception,

recipe file, scheduler, and a

digital photo album.

Video Convergence

Looking to replace an aging

VCR or set up a home theater?

Our new SV-DVD1E combina-

tion DVD player and VHS

recorder will let you do both

with a single compact unit.

Gently Powerful Cooking

With 1,100-watts of cooking

power, 10 power levels, and

our exclusive variable-power

Gentle Cook technology, the

MW8593G brings a whole new

level of cooking control to the

kitchen.

Internet Communicator

As simple to use as a tele-

phone, our second-generation

Anyweb™ Web phone will help

take computerless Internet

access, e-mail, and IP tele-

phony mainstream with more

memory, a faster processor,

and a full complement of digi-

tal media interfaces.

“The fully automated home has been a technophile’s dream since the

1960s. Today, Samsung’s making it a digital reality with the world’s first

home network solution to use Internet protocols to seamlessly link

virtually any electric-powered device imaginable…. And that’ll make home

an even sweeter place to be.”

—Jae-Moon Jo, Senior Manager, Digital Media R&D Center

In January 2001, we publicly demonstrated our TCP/IP-

based digital home network concept for the first time at the

Consumer Electronics Show in Las Vegas, USA. With the

network infrastructure and protocol standards now in

place, we’ll be accelerating development work on network-

ready electronics and appliances to fully exploit our

competitive advantage in the field. Our iZZi Web Webpad is

just a taste of the upcoming Bluetooth-enabled Internet

appliances our engineers are working on that will introduce

the Internet to a whole new category of consumers.

Our leadership in digital display technology will

continue to pave the way for bigger, brighter, thinner, and

sharper TVs. These innovations in manufacturing

technology as well as digital services will enable us to

break into the top-3 in 2001 with a market share exceeding

10%.

In home appliances, we’ll extend our market

leadership in microwave ovens by boosting production

capacity, focusing on high-margin recreational vehicle and

commercial models, and expanding sales channels to major

retail chains worldwide. Our refrigerator lineup is also

projected to continue its high double-digit growth, focusing

on high-margin side-by-side and specialized refrigerators

for keeping fermented foods, meat, and fruit fresh.

In 2000, we maintained our No. 5 position with 8.5%

of the global TV market as we made history by

shipping our 100 millionth color TV. Our new 65-inch

CRT projection and 50-inch LCoS (liquid-crystal-on-

silicon) projection TVs received Innovations 2000

awards at CES 2000, while our 24-inch TFT-LCD TV

won an iF Product Design Award from Industrie Forum

Design. In the DVD player category, we rose to No. 3 in

the market, selling 2.5 million units to secure a global

15.5% stake as we shipped the world’s first hybrid

game console and VHS VCR players. We also signed

on with U.S. satellite broadcaster DirecTV to supply

HDTV-capable set-top boxes capable of receiving both

satellite and terrestrial analog and digital broadcasts.

It was a banner year for home appliances as

microwave oven sales rose over 24%, propelling us

into the global No. 1 position for the first time. Best-

sellers in some 20 countries, our microwaves now

command a 25% market share. Refrigerator sales

were also up 25% as our high-margin side-by-side and

specialized models enjoyed high double-digit growth.

Our digital home network strategy took a major

step forward with the arrival of iZZi Web, the world’s

first Internet appliance to deliver wireless access

using Bluetooth technology. Part of a flexible, modular

system, this innovative Webpad promises to change

how people surf the Web. And control their homes.

Home Surfer

Surfing the Internet used to tie

you down to a desk. But with our

new iZZi Web wireless Webpad in

hand, your entire home will

become your surfing ground.

The space-saving, pearl-white Tantus 32-inch HDTV will brighten any

room it’s in. And with the world’s shallowest 32-inch picture tube, it’ll

take up about 20% less space than a standard 32-inch and about the

same as a 20-inch. Key features include a built-in DTV tuner, Dolby

Pro Logic surround sound, and a second-generation progressive-scan

circuit that delivers silky-smooth motion with dramatically improved

noise reduction for the ultimate viewing experience.

thinner...

We’re designing the haute couture

of the communications world.

Mobile Networks

In the competitive world of mobile haute couture, Samsung consistently steals

the show with world-first designs. Like phones with a built-in TV, MP3 player,

digital camera, or even a mobile videoconferencing center. And that’s what

makes them great entertainers as well as great communicators.

3G Mobile Phone

It’s a multimedia future. And our 3G phones will let you see, hear, and interact with

it wherever you go.

“In 1996, Samsung introduced cdmaOne 2G digital mobile communi-

cations to the world. In 2000, we made history again by delivering the

world’s first cdma2000 1x solution as we continued to pioneer the way

to global 3G mobile communications. Our mission is simple—we

intend to be the world’s wireless communications solution leader.”

—Ki-Hwa Choi, Senior Engineer, RF/ System Laboratory

Guinness Candidate

Our first-generation SPH-WP10

wristwatch phone made it into

the 2001

Guinness Book

. Our

smaller and lighter second-gen-

eration SPH-S100 may be the

first mobile you wear.

MP3 With Vision

Your music is portable, why not

your photos? Our YVP-P64

Yepp Internet audio player is

the world’s first to let you

share digital photos and text

when you’re on the go.

Sound Sense

At 19.8 mm thin and 1.35 kg

light, the award-winning

NV5000/Sens 760 notebook

with the world’s first inte-

grated-but-independent MP3

player is a convergence prod-

uct that truly rocks.

GSM Turns 2.5

GSM is also beginning the tran-

sition to 3G. Our SGH-Q100 is

the world’s fastest GPRS phone

to deliver enhanced Internet

and data services at 2.5G

speeds of up to 115 kbps.

In 2001, we’ll continue work on the communications

technologies that’ll make us a leader in tomorrow’s global

3G mobile multimedia networks. We’ll launch our first

CDMA and GSM phones built on the Microsoft smart

phone platform, giving users seamless access to next-

generation wireless information and entertainment

services. We’ll also expand our cdma2000 1x and GPRS

mobile phone offerings.

During the year, we expect our cdma2000 1x network

solution to be deployed nationwide in Korea. As part of

our market diversification efforts, we’ll also continue work

on network solutions for W-CDMA, the 3G migration

choice for today’s GSM networks.

Samsung notebook PCs will continue to get lighter,

thinner, and faster in the coming year. We intend to

maintain our commanding 50% market share at home as

we build on our impressive 100% sales growth that

pushed overseas revenues to US$3.3 billion in 2000. Our

Yepp Internet audio player and Nexca digital camera lines

will also continue to gain convergence features and

connectivity options that will empower them to become

even more active participants in tomorrow’s mobile

networks.

No.

SCH-X120 cdma2000 Mobile Phone

As the maker of the world's first

cdma2000 1x mobile phone, we

continue to roll out new upscale

models like the SCH-X120 that are

helping bring the promise of true

global 3G communications one

step closer in style.

Samsung continues to lead in CDMA

mobile communications technology, an

area we helped pioneer with the world’s

first commercial service in 1996. We’ve

sold the world’s most CDMA-based

cellular and PCS phones for the past four

years running. And what’s even more

gratifying is the fact that our SCH-3500

was the best-selling phone in the U.S. in

2000, capturing an amazing 28% market

share as it helped us surpass the 10-

million-unit sales milestone in that

market in just three short years.

In 2000, we led the global CDMA phone industry for a

fourth straight year as we shipped a new lineup of

convergence phones with MP3 player, TV, digital

camera, and Internet functionality. In a first for any

Korean-made product, we made it into the 2001

edition of the

Guinness Book of World Records

for the

world’s smallest cell phone TV (SCH-M220) and

wristwatch phone (SPH-WP10). We also introduced

the world’s first cdma2000 and fastest GPRS phones,

heralding the arrival of 2.5G mobile communications

services.

During the year, we teamed up with 3Com to

develop the world’s first 3G network solution based

on cdma2000 1x technology. Backwardly compatible

with existing cdmaOne networks, the new system

made the world’s first cdma2000 1x test call in May

and was deployed in the Seoul metropolitan area with

commercial service starting October 1. Features of the

new system include double the channel capacity and

data rates of up to 144 kbps.

Enjoying 100% growth in sales in 2000, we

continued to make portable computing even more

convenient with the launch of new highly-rated line of

Pentium III notebooks. We also continued to expand

our line of digital cameras, adding 1.3- and 2.1-

megapixel models with 3x optical zoom and 1.8-inch

color LCD screens.

1 in CDMA

CDMA Goes 2.5G

Our comprehensive cdma2000 1x solution

allows existing cdmaOne cellular and PCS

operators to seamlessly upgrade their

networks without downtime or backward-

compatibility issues.

Office Networks

We’re helping people get

the big picture of the future.

These days, you almost have to be a futurist to keep up the breakneck pace of

technology. Samsung is working to show everyone the “big picture” of where

technology is headed, empowering people to express themselves in new ways on

screen, on paper, on optical media, and on the Internet. Get the picture?

SyncMaster 240T 24-inch TFT-LCD Monitor

Easily displaying two A4-size pages side-by-side with room to spare, this massive flat-

panel monitor will change the dynamics of desktop computing.

Enterprising Communications

Today’s businesses are

looking for a comprehensive,

integrated communications

solution. And the InfoMobile

PBX delivers it with seamless,

scalable support for CDMA

wireless, voice-over-IP, data,

and standard phone networks.

Digital Imagemaker

Our new Nexca SDC-200Z

makes capturing those special

moments easy with 2.11-

megapixel resolution, five

intelligent exposure modes, a

6x zoom (3x optical/2x digital),

and a bright 1.8-inch TFT-LCD

display.

Page Burner

Printing at 35 ppm, the ML-

3550 A3-oversize business

laser promises to outrun the

competition in speed, features,

and total cost of ownership.

All-In-Wonder

With an 866-MHz Pentium III,

30 GB hard drive, and the

world’s first 1,400 x 1,050-pixel

15-inch TFT-LCD display, the

award-winning M1500 is the

ultimate all-in-one desktop

computer.

“The world is flat. At least the monitor world of the future is. And Samsung

is a leader in bringing flat-screen CDT and flat-panel TFT-LCD monitors to

the desktop. Our latest development is a 24-inch TFT-LCD monitor with a

record-setting WUXGA resolution of 1,920 x 1,200 pixels that’ll give

computer users plenty of room to create their own flat digital worlds.”

—Byung-Woo Kang, Vice President, Flat Panel Display R&D Team

In 2001, we’ll continue to challenge the limits of display

technology as we deliver the clearest, sharpest, most

ergonomic visual access to office networks with the

most-advanced CDT and TFT-LCD monitors available.

These flagship products will continue to enhance the

SyncMaster brand image as we mount a major marketing

push to capture 25% of the market backed by a new

fourth-generation TFT-LCD manufacturing line that’ll

boost output to 3 million units annually.

In the desktop PC category, our market leadership in

virtually every major component area will ensure we

maintain a 50%-plus share of the Korean market in the

coming year. We also plan to step up marketing of our

MagicStation PC brand in international markets, focusing

on leading-edge products like the all-in-one M1500 with a

high-resolution 1,400 x 1,050 SXGA+ TFT-LCD display.

2001 will also mark our full-scale entrance into the

business laser category with the mid-year debut of the

ML-3550 35-ppm A3-oversize laser printer. With unique

features like standard full-speed duplex printing and the

lowest cost-per-page in the class, this printer engine will

also pave the way for our entry into the high-speed

digital copier field before year-end.

19%

In 2000, we once again dominated the global monitor

market with a 19% stake. Our growing SyncMaster

flat-screen CDT and flat-panel TFT-LCD lineup won a

remarkable total of 200 top ratings in magazines

worldwide. Among the new arrivals during the year

were the 2000 IDEA Silver Award-winning 150MP and

170MP multimedia TFT-LCDs, a 22-inch flat-screen CDT

monitor, the world’s first 24-inch TFT-LCD, and our

first LCD projector with a powerful 2,400-lux output.

During the year, we extended our lead in the

Korean desktop PC category to 43.6% of the market.

Our MagicStation desktops continued to keep pace

with the industry trends with 1-GHz PIII and P4

processors, high-tech styling, and an all-in-one design

with the industry’s highest-resolution 15-inch LCD.

In 2000, we expanded our lead in the computer

storage market, capturing 25% of the DVD-ROM and

30% of the combination CD-RW/DVD-ROM drive

categories. Our SpinPoint hard drive capacities also

continued their rapid growth, doubling to 40 GB.

Printers and fax machines are an increasingly

important part of our office network strategy. The year

saw us launch the world’s first flatbed multifunction

ink-jet printer with a built-in SmartMedia™ memory

card interface as well as the iF Product Design Award-

winning ML-4500 and ML-4600 laser printers.

Multimedia Goes Flat

Featuring a TV tuner, picture-in-picture,

and inputs for any analog video source,

the 171MP brings a sharp, stylish 1,280 x

1,024-pixel multimedia viewing experi-

ence to any desktop.

Topping the sales lists in 29 nations, Samsung moni-

tors were hooked up to almost one out of every five

computers sold worldwide in 2000. The international

media liked them even more, awarding a total of 130

and 43 top ratings to our CDT and LCD monitor fami-

lies during the year. And as the year came to a close,

we marked yet another milestone as we shipped our

100 millionth monitor to date.

SyncMaster 740 DFT 17-Inch Monitor

Samsung brings DynaFlat flat-screen technology

to a new price-point in this stylish new package.

market share

Core Components

We’re turning manufacturers

on to the essence of the digital age.

It doesn’t take much contemplation to realize semiconductors are the life-force of the

electronics industry. Samsung derives great inner strength from industry leadership in

computer memory and LCD displays as well as a rapidly increasing share of the system-

on-chip and optical storage device markets. And electronics manufacturers worldwide

are finding that fact very enlightening.

Alpha 21264a 833-MHz Microprocessor

Spectacular bandwidth and a choice of either Unix or Linux operating systems are just two of

the reasons our 64-bit Alpha processors are found in some of today’s highest-performance

Wafers Grow Up

Our new 12-inch wafer

fabrication technology will

allow us to produce over twice

as many chips per wafer as

today’s 8-inch lines, giving us a

major competitive advantage

as the industry moves to

higher-margin 256Mb and

512Mb chips.

Cards With Smarts

Whether it’s facilitating e-

commerce, building customer

loyalty, paying for a phone call

or bus fare, or simply providing

identification, our full-range of

contact and contactless smart

cards are the perfect solution.

Mobile High-Definition

The next generation of

cdma2000 1x and GPRS mobile

phones are making video-on-

the-go a reality. Our new high-

resolution 720 x 240-pixel

poly-silicon reflective TFT-LCD

ensures the viewing

experience is as sharp and

clear as possible.

More Memory To Go

Leaping from 0.18-micron to

0.15-micron technology in just

a six-month period, we

boosted our NAND flash mem-

ory chip capacities from 256Mb

to 512Mb with the world’s

smallest die size to date. And

0.12-micron is just around the

corner.

“The networked multimedia future is going to require lots of memory. In

2000, we developed the world’s first 0.10-micron process technology for

the next generation of 4Gb DRAM chips…. This technology will soon be

dramatically increasing per-wafer yields of our 128Mb and 256Mb chips

as we lead the industry in introducing higher-capacity, higher-margin

512Mb and 1Gb chips.”

—Su-Jin Ahn, Senior Engineer, Technology Development Team

In 2001, we’ll continue to push our fabrication process

technology below the 0.10-micron level and add 12-inch

fabrication technology as we aim for significant new

economies of scale. Our continuous pursuit of higher-

capacity, higher-margin memory products will keep us

comfortably No. 1 in this area. In particular, a strategic

alliance with Intel will provide us with the funding for

necessary testing and validation equipment that will

help us boost output of third-generation 128Mb RDRAM

to 10 million chips monthly in early 2001 and 20 million

in the second half of the year, giving us a market share

of over 50% in this high-performance memory area.

During the year, we’ll continue our diversification

into non-memory semiconductor fields to reduce our

exposure to volatile memory markets. Focusing on the

system-on-chip, LCD driver IC, and smart card fields,

our system large-scale integration business will

concentrate on solid growth opportunities with existing

cash-cow as well as new high-margin products.

Hand-in-hand with ongoing work on larger, higher-

resolution TFT-LCDs, we’ll allocate more resources on

small and medium-size LCD development to meet

increasing demand for higher-quality displays for PDAs,

mobile phones, Internet appliances, and other portable

digital devices.

0.13-mi

In 2000, we marked our 8th consecutive year at the

top of the memory business, capturing 21% of the

DRAM and the SRAM markets. Among the year’s key

developments were a 0.12-micron 512Mb SDR/DDR

DRAM, 128MB SmartMedia

™

flash memory card, 500-

Mbps 128M DDR SDRAM, 0.17-micron 288Mb RDRAM,

0.15-micron 512Mb NAND flash memory, and 0.10-

micron process technology that’ll pave the way for

Memory Breaks 1 GHz

Our new 0.17-micron technology

has boosted the speed of our

third-generation RDRAM memory

chips by over 30% from 800 MHz

to 1,066 MHz as well as increased

per-wafer yields by 25%.

cron leader

When we unveiled the world’s first 1Gb DDR DRAM

in mid-1999, it became the first memory chip to use

0.13-micron process technology, the first DRAM chip

to operate at 350 MHz, and the smallest 1Gb chip

with a 30% to 40% smaller die size. This ground-

breaking technology dramatically improved our

cost-competitiveness in 2000, more than doubling

per-wafer yields of our 64Mb, 128Mb and 256Mb

chips as it removed the immediate need to invest in

expensive 12-inch wafer lines.

next-generation 4Gb devices.

In non-memory fields, we focused on honing our

competitive edge during the year as we developed

Right Ware, the industry’s first CAD software design

tool for system large-scale integration chips. In

addition to helping us reduce the initial stage of chip

development time by at least 20%, Right Ware will

save us approximately US$2 million annually in

software licensing fees.

During the year, we also maintained our No. 1

ranking in the TFT-LCD industry for a 3rd straight

year with a 20.1% market share, recording US$3

billion in sales as production surpassed 6.11 million

panels. Early in the year, we reintroduced our TFT-

LCD panel lineup under the WiseView

™

name to

strengthen our branding as we rolled out a 2-inch

the vision:

leading the digital convergence revolution

the strategy:

year zero

Samsung Electronics is an electronics industry leader with 66,000

employees and operations in some 50 countries around the globe.

We’re currently the world’s top-selling brand in six core product

areas—memory chips, TFT-LCDs, computer monitors, micro-

wave ovens, DVD-ROM drives, and CDMA mobile phones—

and a top-ten player in numerous others.

Our Semiconductor Business Group maintained a comm-

anding 20% market share in the DRAM, SRAM, and TFT-LCD

markets in 2000 as we continued to diversify into non-memory

areas to reduce our exposure to memory market volatility, focusing

on high-growth, high-margin areas such as small and medium-size

TFT-LCDs, smart cards, and system-on-chip products.

Our Information & Communications Business Group stayed

No. 1 in CDMA phone sales during the year as we introduced the

world’s first 2.5G GPRS and cdma2000 1x mobile phones,

marking an important first step in the migration to global 3G

mobile service. We demonstrated a complete working solution for

cdma2000 1x at the Sydney Olympic Games as well as supplying

all the wireless communications equipment and technical

assistance to ensure the world’s greatest sports festival went as

smoothly as possible. We also acquired TL 9000 certification—the

communications indus- try’s equivalent of ISO 9001—for our

entire wired and wireless product lineup, including the world’s first

in the radio access network equipment and phone software

categories.

Our Digital Media System and Home Appliances Business Groups

continued to move away from single-function, low-margin commodity

products to multifunction, high-margin convergence products like a

combination DVD player/VHS recorder, an MP3 player capable of

storing and displaying digital photos, and the world’s thinnest notebook

PC with an industry-first integrated-but-independent MP3 player. We

also marked our 10th straight year at the top of the computer monitor

category with 19% of the global market and our first in the microwave

oven category, shipping over 7 million units to capture 25% of the world

market.

The record-breaking financial performance we achieved in 2000 was

a culmination of several factors. Our ongoing restructuring efforts since

the 1997 Korean financial crisis and a select-and-focus strategy helped us

make a total commitment to investing in growth businesses and exiting

marginal ones. Operational innovations also played a key role as we suc-

cessfully reengineered and systemized business processes around customers

and markets.

During the year, we achieved our global supply chain management

goal of order fulfillment within five days for all monitor, memory, and

TFT-LCD module products, a system we’re now in the process of expand-

ing to our audio/video, home appliance, mobile phone, and printer

product lines. In addition to completing implementation of a global ERP

system at 70 worksites for real-time access to logistics and financial infor-

mation throughout our global manufacturing and sales networks , we also

carried out 720 Six Sigma projects and added 3,800 black belts to our

ranks as we significantly improved both product quality and customer

satisfaction on our way to a cost savings of 180 billion won.

Expanded investment in R&D in 2000 enhanced our ability to

proacti vely respond to changing markets and customer requirements. We

invested 1.8 billion won or 5.3% of sales—a 12.5% year-on-year increase

in mone- tary terms—in developing tomorrow’s digital network techno-

logies at our nine-center global R&D network. Our staff of 13,000

engineers was hard at work adding links to the value chain and acquiring

key Internet techno- logies as it created new convergence products and

enhanced our capability to leverage the latest developments in the rapidly

changing digital landscape.

Building on accomplishments in recent years that have included

participation in the development of the 4.7 GB DVD specification and

the contribution of three MPEG-2 technologies to the MPEG-LA patent

pool, we continued to steadily move from standard-adopter to standard-

maker by contributing a technology specification for digital image comp-

ression to the MPEG-4 patent pool in 2000 as we accelerated our

pioneering development work in the 3G mobile communications and

double-data-rate DRAM fields. These efforts helped us win 1,442 US

patents during the year, making us the No. 4 innovator in the world’s

biggest technology market for a third consecutive year.

Individually and collectively, the achievements mentioned above have

helped set the stage for the next phase of our corporate growth—value

innovation. We expect our Digital

Company strategy launched in late

2000 to have a profound impact on our bottom line in 2001 as we focus

our considerable resources on creating tomorrow’s digital technologies and

solutions as well as building a cutting-edge global supply chain manage-

ment system that’ll rapidly move us toward our goal of leading the digital

convergence revolution.

If you want to reach consumers worldwide, you’ve got to speak their language. At Samsung, we’ve spent the past

two decades becoming fluent in the universal “language” of sports, sponsoring a growing number of international

events including the prestigious Samsung Nations Cup equestrian team championship series, the Asian Games,

Samsung Running Festival 5 km fun runs, and dozens of professional and amateur sports teams worldwide. But

our biggest and most meaningful involvement with sports is our successful relationship with the Olympic Move-

ment as the Worldwide Wireless Communications Equipment Partner of the Olympic Games.

An Olympic Rendezvous with Samsung

Since 1997, we’ve helped keep the Olympic Games running smoothly with state-of-the-art wireless communi-

cations technology. However, our presence at the 2000 Sydney Games was much more than just about mobile

phones and two-way radios. Our Olympic Rendezvous@Samsung pavilion in Olympic Park drew more than 1.1

million visitors, giving athletes a place to relax, spectators entertainment from around the world, and everyone an

up-close look at how Samsung 3G mobile communications technology will change their future. We look forward to

bringing the world even closer together at the upcoming 2002 Salt Lake Winter Games and 2004 Athens Summer

At Samsung, corporate citizenship is a responsibility we take very seriously. Recognized by the Washington D.C.-

based Points of Light Foundation in 1998 with the prestigious Award for Excellence in Corporate Community Service,

we continue to actively develop programs and support the over 10,000 employees who volunteer their time to help

the disabled and disadvantaged, protect the environment, and promote computer literacy to make their local

communities better places to live. In 2000, we reached out to the world’s less fortunate children by contributing 600

million won to UNESCO that will be used to fund educational programs for needy children in 15 countries worldwide.

Volunteers Make All the Difference

Financial Report 2000

[48] Report of Independent Accountants

[49] Balance Sheets

[52] Statements of Income

[53] Statements of Appropriations of Retained Earnings

[54] Statements of Cash Flows

[56] Notes to Financial Statements

* The financial results in the following report are for Samsung Electronics only

and do not reflect the results of its subsidiaries or affiliates.

As of December 31, 2000 and 1999

In Thousands of Korean Won In Thousands of U.S. Dollars (Note 3)

2000 1999 2000 1999

ASSETS

Current assets:

Cash and cash equivalents (Note 4)

521,883,690 526,829,785 $414,522 $418,451

Short-term financial instruments (Note 4) 1,409,879,711 648,343,188 1,119,841 514,967

Marketable securities (Note 5) 673,340,493 237,450,347 534,822 188,602

Trade accounts and notes receivable,

less allowance for doubtful

accounts of

129,404,961,000

in 2000 and

133,890,311,000

in 1999 (Note 6)

1,162,483,845 1,334,971,347 923,339 1,060,343

Other accounts and notes receivable,

less allowance for doubtful

accounts of

15,232,211,000

in 2000 and

29,131,354,000

in 1999

659,700,104 690,544,173 523,987 548,486

Inventories (Note 7) 2,802,763,625 2,261,379,652 2,226,182 1,796,171

Accrued income 88,277,060 21,614,484 70,117 17,168

Advance payments, less allowance

for doubtful accounts of

14,346,074,000 in 2000 and

745,090,000 in 1999 44,286,594 84,940,457 35,176 67,467

Guarantee deposits 160,287,992 171,716,625 127,314 136,391

Other 233,538,148 219,441,221 185,494 174,299

Total current assets 7,756,441,262 6,197,231,279 $6,160,794 $4,922,345

Property, plant and equipment,

including revalued portion,

net of accumulated depreciation (Note 8)

12,324,428,649 9,822,251,279 $9,789,062 $7,801,629

Equity investments (Note 9) 5,409,741,103 6,050,044,457 4,296,856 4,805,436

Long-term financial instruments, receivables

and other assets (Notes 4, 6 and 10)

1,226,228,972 1,559,748,944 973,971 1,238,879

Deferred income tax assets (Note 19) 178,206,497 1,080,526,923 141,546 858,242

Total assets 26,895,046,483 24,709,802,882

$21,362,229 $19,626,531

Continued;

The accompanying notes are an integral part of these statements.

Balance Sheets

As of December 31, 2000 and 1999

In Thousands of Korean Won In Thousands of U.S. Dollars (Note 3)

2000 1999 2000 1999

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Trade accounts and notes payable

1,492,046,020 1,405,008,718 $1,185,104 $1,115,972

Other accounts and notes payable 1,697,547,216 1,613,961,632 1,348,330 1,281,939

Short-term borrowings (Note 11) 14,217 49,511 11 39

Current maturities of long-term debt,

net of discounts and premiums

on debentures (Notes 12 and 13)

2,357,173,686 1,396,329,672 1,872,259 1,109,078

Accrued expenses 1,162,008,323 733,624,266 922,961 582,704

Dividends payable (Note 16) 422,741,482 342,729,389 335,776 272,224

Income taxes payable (Note 19) 896,957,557 606,942,742 712,437 482,083

Other 579,960,001 682,225,510 460,651 541,880

Total current liabilities 8,608,448,502 6,780,871,440 $6,837,529 $5,385,919

Long-term debt, less current

maturities (Note 12)

493,102,602 2,933,429,090 $391,662 $2,329,968

Foreign currency notes and

bonds (Note 13)

1,210,765,542 1,415,529,449 961,688 1,124,328

Other long-term liabilities 245,146,335 160,902,912 194,715 127,802

Accrued severance benefits,

net of transfer to the

National Pension Fund of

27,769,854,000 in 2000 and

35,175,071,000 in 1999, and severance

insurance fund deposits of

190,900,174,000

in 2000 and

153,133,724,000

in 1999 (Note 2)

144,736,222 87,501,523 114,961 69,500

Total liabilities 10,702,199,203 11,378,234,414 $8,500,555 $9,037,517

Continued;

The accompanying notes are an integral part of these statements.

Balance Sheets

As of December 31, 2000 and 1999

In Thousands of Korean Won In Thousands of U.S. Dollars (Note 3)

2000 1999 2000 1999

LIABILITIES AND SHAREHOLDERS’ EQUITY

Commitments and contingencies (Note 14)

Shareholders’ equity:

Capital stock (Note 1):

Common stock

762,207,995 756,074,960 $605,407 $600,536

Preferred stock 119,467,135 119,467,135 94,890 94,890

Paid-in capital in excess of

par value (Note 1)

3,843,442,538 3,719,943,012 3,052,774 2,954,682

Other capital surplus (Notes 8 and 13) 1,843,210,752 1,834,985,265 1,464,028 1,457,494

Retained earnings (Note 15):

Appropriated

10,754,395,688 5,241,659,358 8,542,014 4,163,352

Unappropriated 31,409 31,989 25 25

Capital adjustments:

Treasury stock (Note 17)

(962,247,859) (427,838,371) (764,295) (339,824)

Consideration for conversion rights (Note 13) 29,434,909 85,476,294 23,380 67,892

Gain (loss) on valuation of

investments (Note 9)

(287,568,317) 2,005,562,370 (228,410) 1,592,980

Loss on valuation of derivative

instruments (Note 14)

(3,272,484) (3,793,544) (2,599) (3,013)

Stock option compensation (Note 18) 93,745,514 – 74,460 –

Total shareholders’ equity 16,192,847,280 13,331,568,468 $12,861,674 $10,589,014

Total liabilities and shareholders’ equity 26,895,046,483 24,709,802,882 $21,362,229 $19,626,531

The accompanying notes are an integral part of these statements.

Balance Sheets

For the years ended December 31, 2000 and 1999

In Thousands of Korean Won In Thousands of U.S. Dollars (Note 3)

2000 1999 2000 1999

Sales (Note 21):

Domestic

10,903,383,976 8,850,624,784 $8,660,353 $7,029,885

Export 23,380,368,303 17,267,160,967 18,570,586 13,714,980

Total sales 34,283,752,279 26,117,785,751 $27,230,939 $20,744,865

Cost of sales (Note 21) 21,993,377,770 17,661,171,944 17,468,926 14,027,936

Gross profit 12,290,374,509 8,456,613,807 $9,762,013 $6,716,929

Selling, general and administrative expenses 4,855,219,849 3,975,113,690 3,856,410 3,157,358

Operating profit 7,435,154,660 4,481,500,117 $5,905,603 $3,559,571

Non-operating income:

Interest and dividend income

156,427,345 227,740,962 $124,247 $180,890

Gain on foreign currency transactions 299,070,108 267,472,334 237,546 212,448

Gain on foreign currency translation (Note 23) 34,121,680 261,416,440 27,102 207,638

Gain on valuation of investments

using the equity method

871,326,886 298,242,218 692,079 236,888

Other 649,446,121 592,472,848 515,843 470,591

Total non-operating income 2,010,392,140 1,647,344,802 $1,596,817 $1,308,455

Non-operating expenses:

Interest expense

343,367,140 721,198,940 $272,730 $572,835

Loss on foreign currency transactions 279,048,744 280,490,610 221,643 222,788

Loss on foreign currency translation (Note 23) 237,838,325 106,594,502 188,911 84,666

Other 638,478,440 726,334,345 507,131 576,914

Total non-operating expenses 1,498,732,649 1,834,618,397 $1,190,415 $1,457,203

Ordinary profit 7,946,814,151 4,294,226,522 $6,312,005 $3,410,823

Extraordinary income 153,634,395 – 122,029 –

Extraordinary loss – 266,258,185 – 211,484

Net income before income taxes 8,100,448,546 4,027,968,337 $6,434,034 $3,199,339

Income tax expense (Note 19) 2,085,918,354 857,565,763 1,656,806 681,148

Net income 6,014,530,192 3,170,402,574 $4,777,228 $2,518,191

Earnings per share (Note 20) 35,006 19,214 $28 $15

(In Korean Won and U.S. Dollars)

Diluted earnings per share (Note 20)

34,393 18,848

$27 $14.9

(In Korean Won and U.S. Dollars)

The accompanying notes are an integral part of these statements.

Statements of Income

For the years ended December 31, 2000 and 1999

Date of appropriations: March 9, 2001 and March 16, 2000

In Thousands of Korean Won In Thousands of U.S. Dollars (Note 3)

2000 1999 2000 1999

Retained earnings before appropriations:

Unappropriated retained earnings carried

over from prior year

31,989 32,306 $25 $26

Cumulative effects of changes

in accounting policy (Note 2)

6,761,574 (1,744,477,621) 5,371 (1,385,606)

Additional accrued severance benefits – (8,450,909) – (6,712)

Interim dividends (Note 16, dividend rate: 10%) (85,885,559) (84,663,871) (68,217) (67,247)

Net income 6,014,530,192 3,170,402,574 4,777,228 2,518,191

Total retained earnings before approp. 5,935,438,196 1,332,842,479 $4,714,407 $1,058,652

Transfers from voluntary reserves (Note 15):

Reserve for overseas market development

37,990,685 53,600,000 $30,175 $42,573

Reserve for overseas investment loss 48,400,000 70,199,899 38,443 55,758

Reserve for technology development 184,700,000 274,700,000 146,704 218,190

Reserve for export loss 49,368,985 68,000,000 39,213 54,011

Total transfers from voluntary reserves 320,459,670 466,499,899 $254,535 $370,532

Appropriations (Note 15):

Legal reserve

53,000,000 150,000,000 $42,097 $119,142

Reserve for business rationalization 1,000,000,000 700,000,000 794,281 555,997

Reserve for technology development 2,000,000,000 606,581,000 1,588,562 481,796

Cash dividends (Note 16) 422,670,457 342,729,389 335,719 272,224

[Common stock: 50% in 2000 and 40% in 1999]

[Preferred stock: 51% in 2000 and 41% in 1999]

Reserve for loss on disposal of treasury stock

200,000,000 – 158,856 –

Reserve for facilities investment 2,580,196,000 – 2,049,402 –

Total appropriations 6,255,866,457 1,799,310,389 $4,968,917 $1,429,159

Unappropriated retained earnings carried over

to subsequent year

31,409 31,989 $25 $25

The accompanying notes are an integral part of these statements.

Statements of Appropriations of Retained Earnings

For the years ended December 31, 2000 and 1999

In Thousands of Korean Won In Thousands of U.S. Dollars (Note 3)

2000 1999 2000 1999

Cash flows from operating activities:

Net income

6,014,530,192 3,170,402,574 $4,777,228 $2,518,191

Items not involving cash flows:

Depreciation and amortization

2,666,229,096 2,739,262,420 $2,117,736 $2,175,745

Provision for severance benefits 160,523,572 119,847,588 127,501 95,193

Loss on disposal of property,

plant and equipment

23,325,284 51,750,930 18,527 41,105

Gain on disposal of property,

plant and equipment

(28,459,459) (23,523,016) (22,605) (18,684)

Loss on disposal of equity investments 36,411,398 32,702,754 28,920 25,975

Gain on disposal of equity investments (1,016,307) (106,514,836) (808) (84,603)

Loss on foreign currency translation 237,838,325 106,358,633 (692,079) (236,888)

Gain on foreign currency translation (27,643,050) (261,376,425) 188,911 84,479

Gain on valuation of investments

using the equity method

(871,326,886) (298,242,218) (21,956) (207,606)

Deferred income taxes 899,310,939 199,038,851 714,306 158,092

Other 283,050,658 526,336,066 224,822 418,058

Total items not involving cash flows 3,378,243,570 3,085,640,747 $2,683,275 $2,450,866

Changes in operating assets and liabilities:

Trade accounts and notes receivable

(697,751) 19,068,860 $(554) $15,146

Inventories (488,361,559) (475,512,306) (387,896) (377,690)

Accrued income (65,522,394) 3,536,432 (52,043) 2,809

Advance payments (18,126,650) 21,607,277 (14,398) 17,162

Guarantee deposits 11,449,282 (3,072,795) 9,094 (2,441)

Trade accounts and notes payable 68,396,233 308,456,595 54,326 245,001

Accrued expenses 409,340,228 84,558,898 325,131 67,164

Income taxes payable 290,014,815 564,890,732 230,353 448,682

Payment of severance benefits (68,872,692) (110,691,623) (54,704) (87,920)

Other (74,574,885) 408,846,750 (59,234) 324,739

Total changes in op. assets and liabilities 63,044,627 821,688,820 $50,075 $652,652

Net cash provided by operating activities 9,455,818,389 7,077,732,141 $7,510,578 $5,621,709

Continued;

The accompanying notes are an integral part of these statements.

Statements of Cash Flows

For the years ended December 31, 2000 and 1999

In Thousands of Korean Won In Thousands of U.S. Dollars (Note 3)

2000 1999 2000 1999

Cash flows from investing activities:

Increase in short-term financial instruments

(761,536,523) – $(604,874) $–

Decrease in short-term financial instruments – 362,368,502 – 287,823

Proceeds from sale of marketable securities 1,708,799,613 837,207,770 1,357,267 664,978

Acquisition of marketable securities (2,136,393,351) (929,344,062) (1,696,897) (738,160)

Increase in other accounts and notes receivable (5,495,533,634) (2,370,114,943) (4,364,998) (1,882,538)

Decrease in other accounts and notes receivable 5,522,883,460 2,448,959,963 4,386,723 1,945,163

Proceeds from disposal of property,

plant and equipment

52,860,263 399,277,815 209,649 317,139

Acquisition of property, plant and equipment (5,036,923,839) (3,401,866,665) (4,281,161) (2,702,039)

Proceeds from sale of equity investments 142,963,660 258,841,067 113,553 205,593

Acquisition of equity investments (954,452,666) (1,980,667,389) (758,104) (1,573,207)

Increase in long-term financial instruments

and other assets

(275,443,541) (609,048,949) (218,780) (483,756)

Decrease in long-term financial instruments

and other assets

550,781,633 790,771,403 437,475 628,095

Other (141,956,097) 3,902,019 11 3,099

Net cash used in investing activities (6,823,951,022) (4,189,713,464) $(5,420,136) $(3,327,810)

Cash flows from financing activities:

Proceeds from short-term borrowings

1,506,859 214,979,206 $1,197 $170,754

Repayment of short-term borrowings (1,542,153) (453,342,931) (1,225) (360,082)

Increase in other accounts and notes payable 15,422,340,509 9,603,870,409 12,249,674 7,628,174

Decrease in other accounts and notes payable (15,297,532,349) (9,046,194,581) (12,150,542) (7,185,222)

Proceeds from long-term debt – 722,407,330 – 573,795

Repayment of long-term debt (391,627,375) (3,304,344,477) (311,062) (2,624,579)

Proceeds from bonds – 478,410,000 – 379,992

Repayment of current maturities

of long-term debt

(1,398,995,814) (2,064,758,293) (1,111,196) (1,639,999)

Issuance of common stock – 1,567,684,230 – 1,245,182

Payments of dividends (428,543,923) (172,423,703) (340,384) (136,953)

Proceeds from acquisition of treasury stock (534,409,488) – (424,471) –

Other (8,009,728) (84,243,073) (6,362) (66,913)

Net cash used in financing activities (2,636,813,462) (2,537,955,883) $(2,094,371) $(2,015,851)

Net change in cash and cash equivalents (4,946,095) 350,062,794 $(3,929) $278,048

Cash and cash equivalents at beginning of year 526,829,785 176,766,991 418,451 140,403

Cash and cash equivalents at end of year 521,883,690 526,829,785 $414,522 $418,451

The accompanying notes are an integral part of these statements.

Statements of Cash Flows

December 31, 2000 and 1999

1. The Company

Samsung Electronics Co., Ltd. (the “Company”) is incorporated

under the laws of the Republic of Korea to manufacture and sell

electronic goods, communication facilities, semiconductors,

telecommunication products and other similar products.

The Company’s stock is publicly traded and all issued and

outstanding shares are listed on the Korea Stock Exchange.

Under its Articles of Incorporation, the Company is authorized to

issue 500,000,000 shares of capital stock (par value 5,000), of

which 100,000,000 shares are cumulative, participating preferred

stock, which are non-voting and entitled to a minimum cash

dividend (9% of par value). The non-cumulative, non-voting

preferred stock issued on or before February 28, 1997 is entitled to

an additional cash dividend (1% of par value) over common stock.

As of December 31, 2000, 152,441,599 shares of common stock and

23,893,427 shares of such preferred stock were issued and

outstanding.

As of December 31, 2000, major shareholders of the Company’s

stock, including preferred stock, and their respective shareholdings

are as follows:

In addition, the Company is authorized to issue convertible

debentures with face values of up to 4,000 billion (3,000 billion

for common stock and 1,000 billion for preferred stock) and

debentures with stock purchase options with face values of up to

2,000 billion (1,500 billion for common stock and 500 billion

for preferred stock). The Company is authorized to issue depository

receipts with the approval of the Board of Directors. Also, the

Company is authorized to issue capital stock through the exercise

of stock options or general public subscription and to domestic and

foreign financial institutions for urgent fund raising or to co-

operating companies for technical assistance with the approval of

the Board of Directors.

The Company has a stock option plan under which options to

purchase shares of common stock may be granted to key

employees with the approval of shareholders. On March 16, 2000,

stock options were granted to 76 employees and directors (see

Note 18).

The Company issued 1,226,607 shares of common stock upon the

conversion of foreign currency convertible bonds in the amount of

US$146,930,000 during the year ended December 31, 2000 (see

Note 13). The cash proceeds in excess of par value of 123,500

million were credited to paid-in capital in excess of par value.

As of December 31, 2000, 546,427,650,000 (face value of

US$477,080,000) of convertible bonds are outstanding (see Note

13). No debentures with stock purchase options have been issued

as of December 31, 2000.

2. Summary of Significant Accounting Policies

The significant accounting policies followed by the Company in the

preparation of its financial statements in accordance with the

Financial Accounting Standards of the Republic of Korea are

summarized below.

Basis of Financial Statement Presentation

The official accounting records of the Company, on which the

Korean language financial statements are based, are maintained in

Korean Won in accordance with the laws and regulations of the

Republic of Korea.

The accompanying financial statements have been extracted from

the Company’s Korean language financial statements that were

prepared using accounting principles, procedures and reporting

practices generally accepted in the Republic of Korea. These

standards vary from International Accounting Standards and the

accounting principles generally accepted in the country of the

reader. The financial statements have been translated from Korean

into English, and have been formatted in a manner different from

the presentation under Korean financial statement practices.

Certain supplementary information included in the Korean

language statutory financial statements, but not required for a fair

presentation of the Company’s financial position or results of

operations, is not presented in the accompanying financial

statements. Accordingly, the accompanying financial statements

are not intended to present the financial position, results of

operations and cash flows in accordance with accounting principles

and practices generally accepted in countries and jurisdictions

other than Korea.

Notes to Financial Statements

Shareholder

Citibank N.A.

Samsung Life Insurance Co., Ltd.

Samsung Corporation

Lee, Kun-Hee and relatives

Seoul Bank

CMB-Europac Growth Fund

The Government of Singapore

CMB-CAP RE Emerg. Growth Fund

Korea Exchange Bank

CMB-ADIA

Number of

23,958,134

10,624,693

5,917,362

5,322,559

3,950,559

2,682,771

2,462,839

2,207,122

1,949,946

1,919,098

Percentage of

Ownership (%)

13.59

6.03

3.36

3.02

2.24

1.52

1.40

1.25

1.11

1.09

The preparation of financial statements requires management to

make estimates and assumptions that affect amounts reported

therein. Due to the inherent uncertainty involved in making

estimates, actual results reported in future periods may differ from

those estimates.

Cash, Cash Equivalents and Short-Term Financial Instruments

Cash and cash equivalents include cash on hand and in bank

accounts with original maturities of three months or less.

Investments which are readily convertible into cash within four to

twelve months of purchase are classified on the balance sheet as

short-term financial instruments. The cost of these investments

approximates fair value.

Marketable Securities

Marketable securities are stated at fair value.

Allowance for Doubtful Accounts

The Company provides an allowance for doubtful accounts and

notes receivable based on the aggregate estimated collectibility of

the receivables.

Inventory Valuation

Inventories are stated at the lower of cost or market. Cost is

determined by the average cost method, except for materials in

transit which are stated at actual cost as determined by the specific

identification method.

Property, Plant and Equipment and Related Depreciation

Property, plant and equipment are stated at cost, except for certain

assets subject to upward revaluation in accordance with the Asset

Revaluation Law of Korea. The revaluation presents production

facilities and other buildings at their depreciated replacement cost,

and land at the prevailing market price, as of the effective date of

revaluation. The revaluation increment, net of revaluation tax, is

first applied to offset accumulated deficit and deferred foreign

exchange losses, if any. The remainder may be credited to other

capital surplus or transferred to common stock. A new basis for

calculating depreciation is established for revalued assets (see

Note 8).

Depreciation is computed using the straight-line method, based on

the estimated useful lives of the assets as described below.

The Company capitalizes interest expense incurred on borrowings

used to finance the cost of constructing facilities and equipment

(see Note 8).

Maintenance and Repairs

Routine maintenance and repairs are charged to expense as

incurred. Expenditures which enhance the value or extend the

useful life of the related assets are capitalized.

Research and Development Costs

Research and development costs are charged to expense as

incurred.

Intangible Assets

Intangible assets are state at cost, net of depreciation calculated

using the straight-line method based on the estimated useful lives

as follows:

Equity Investments in Subsidiaries and

Affiliated Companies & Other Investments

All investments in equity and debt securities are initially carried at

cost, including incidental expenses. The subsequent accounting for

investments by the type of security is as follows.

Investments in marketable equity securities of non-controlled

investees, classified as other investments, are carried at fair value.

Temporary changes in fair value are accounted for in the capital

adjustment account, a component of shareholders’ equity. Declines

in fair value which are anticipated to be permanent are recorded in

current operations after eliminating any previously recorded capital

adjustment for temporary changes. Subsequent recoveries or other

future changes in fair value are recorded in the capital adjustment

account.

Investments in non-marketable equity securities of non-controlled

investees, classified as other investments, are carried at cost,

except for declines in the Company’s proportionate ownership of

the underlying book value of the invested company which are

anticipated to be permanent. The declines are recorded in current

operations, and subsequent recoveries are also recorded in current

operations up to the original cost of the investment.

Investments in equity securities of companies over which the

Company has the ability to control or exercise significant influence

on, classified as equity investments in subsidiaries and affiliated

companies, are recorded using the equity method of accounting.

Differences between the purchase price and the Company’s

proportionate ownership of the net book value of the invested

company are amortized over 5 years using the straight-line method.

Under the equity method, the Company records changes in its

proportionate ownership of the book value of the invested

Asset

Goodwill

Intellectual proprietary rights

Other intangibles

Estimated Useful

Life in Years

5 - 10

2 - 25

Asset

Buildings and auxiliary facilities

Machinery and equipment

Tools and fixtures

Structures and others

Estimated Useful

Life in Years

7 - 60

2 - 10

2 - 40

company as current operations, capital adjustments or adjustments

to retained earnings, depending on the nature of the underlying

change in book value of the invested company.

In accordance with the revised financial accounting standards for

consolidation generally accepted in the Republic of Korea, effective

March 23, 2000, the Company has changed its accounting policy for

additional investments acquired in consolidated subsidiaries.

Previously, all goodwill and negative goodwill arising from the

additional investment was amortized over 5 years using the

straight-line method. As of the current year, such differences that

previously resulted in goodwill and negative goodwill are

recognized as gain or loss on valuation of investment, a component

of capital adjustments.

As a result of this change in accounting policy, beginning retained

earnings and net profit for the year ended December 31, 2000 are

11,562 million and 5,332 million greater, respectively, and the

capital adjustment (gain or loss on valuation of investments) is

approximately 33,356 million less than what would have been

reported under the previous accounting method. If the revised

accounting method were applied to the previous year ended

December 31, 1999, the disclosed amounts for the following

accounts would have been as follows:

Investments in 6 companies including Samsung Electronics India

Information & Telecommunication Ltd. which were not valued using

the equity method as of December 31, 1999 due to the small scale

of their assets, were valued using the equity method as of

December 31, 2000. As a result of these changes, unappropriated

retained earnings carried over from the prior year are

approximately, 4,800 million less than what would have been

reported under the previous accounting method.

Stock and Debenture Issuance Costs

Stock and debenture issuance costs are credited to capital surplus

and debentures.

Accrued Severance Benefits

Employees and directors with more than one year of service are

entitled to receive a lump-sum payment upon termination of their

employment with the Company, based on their length of service

and rate of pay at the time of termination. Accrued severance

benefits represent the amount which would be payable assuming

all eligible employees terminated their employment at the balance

sheet date.

As of December 31, 2000, approximately 53% of the accrued

severance benefits are funded through an employee severance

insurance plan with Samsung Life Insurance Company, Ltd. The

amounts funded under this insurance plan are classified as a

deduction to accrued severance benefits liability. Subsequent

accruals are to be funded at the discretion of the Company.

In accordance with the National Pension Act, a certain portion of

the accrued severance benefits is deposited with the National

Pension Fund and deducted from the accrued severance benefits

liability. The contributed amount shall be refunded from the

National Pension Fund to employees on their retirement.

Discounts and Premiums on Debentures

Discounts and premiums on debentures represent the difference

between the issue price and par value of debentures. Discounts

and premiums on debentures are amortized over the redemption

period of the related debentures using the effective interest rate

method. The amortization of discount on debentures is recorded as

interest expense and the amortization of premiums on debentures

is deducted from interest expense.

Foreign Currency Translation

Monetary assets and liabilities denominated in foreign currencies

are translated into Korean Won at the rates prevailing at the

balance sheet date (in the case of U.S. Dollars, US$1 to 1,259) and

resulting translation losses and gains are recognized currently.

Foreign currency convertible debentures are translated at a fixed

conversion exchange rate in accordance with accounting practices

generally accepted in the Republic of Korea.

Income Tax Expense

The Company has adopted the deferred method of accounting for

income taxes. Under this method, the future tax effects of

temporary differences between the financial and tax bases of

assets and liabilities are reflected in the balance sheet.

Valuation of Assets and Liabilities at Present Value

Assets acquired and liabilities incurred through long-term

installment transactions and accounts and notes receivables under

rescheduled debt payments approved by the Korean judiciary are

stated at present value.

Product Warranties and Performance Guarantees

In conformity with accounting practices prevailing in the Republic of

Korea, costs related to repairs, service and other work required in

accordance with product warranties and performance guarantees

are charged to expense when incurred.

Derivative Instruments

The Company utilizes derivative instruments to reduce its exposure

to fluctuations in interest and foreign currency exchange rates.

Rights or obligations derived from derivative instruments are

recorded as assets or liabilities at fair value on an accrual basis.

Gains or losses on valuation of derivative instruments are

recognized as a component of current operations, except for gains

or losses on valuation of derivative instruments used to hedge cash

flows, which are recorded as a capital adjustment.

Account

Ordinary income

Net income

Earnings per share (in Won)

Diluted earnings per share (in Won)

Millions of Won



4,300,003

3,174,400

19,242

18,875

3. Amounts Stated in U.S.Dollars

The Company operates primarily in Korean Won and its official accounting records are maintained in Korean Won. The U.S. Dollar amounts

are provided herein as supplementary information solely for the convenience of the reader. Won amounts are expressed in U.S. Dollars at

the rate of

1,259 to US$1, the rate in effect on December 31, 2000. This presentation is not in accordance with accounting principles

generally accepted in either the Republic of Korea or the United States, and should not be construed as a representation that the Won

amounts shown could be converted, realized or settled in U.S. Dollars at this rate.

The 1999 U.S. Dollar amounts were previously stated at the rate of

1,145 to US$1, which was in effect on December 31, 1999.

4. Cash and Cash Equivalents, Short-Term Financial Instruments

Cash and cash equivalents and short-term financial instruments as of December 31, 2000 and 1999 consist of the following:

At December 31, 2000, bank deposits of

35,968 million are pledged as collateral for certain short-term borrowings and are subject to

restriction from withdrawal (see Note 11).

5. Marketable Securities

Marketable securities as of December 31, 2000 and 1999 consist of the following:

At December 31, 2000, marketable securities of 3,160 million are restricted from withdrawal.

Asset

(1) Cash and cash equivalents

Cash on hand and in banks

Passbook accounts

Money market deposit accounts

Foreign currency deposits

Total cash and cash equivalents

(2) Short-term financial instruments

Installment and time deposits

Foreign currency deposits

Trust deposits

Other financial instruments

Total short-term financial instruments

Less: portions classified as non-current

Total

Annual Interest Rate (%)

2000

–

5.4 - 5.5

–

5.9 - 13

0 - 7.3

–

6.8

2000



396,121

54,243,231

451,841,207

15,403,131



521,883,690



1,031,731,500

318,333,711

–

60,072,500



1,410,137,711

(258,000)



1,409,879,711

1999



2,770,492

43,081,819

480,095,523

881,951



526,829,785



438,401,514

145,441,850

15,896,324

50,071,000



649,810,688

(1,467,500)



648,343,188

Thousands of Won

Asset Annual Interest Rate (%) Thousands of Won

2000 2000 1999

Beneficiary certificates 5 - 6.8



672,708,231



237,257,709

B0nds 5 - 6 632,262 192,638

Total



673,340,493



237,450,347

6. Trade Accounts and Notes Receivable, and Valuation at Present Value

The outstanding balance of trade accounts and notes receivable sold to financial institutions as of December 31, 2000 and 1999 are as

follows (see Note 14):

Accounts which are valued at present value under rescheduled payment and long-term installment transactions are as follows:

7. Inventories

Inventories as of December 31, 2000 and 1999 consist of the following:

Inventories are insured against fire and other casualty losses up to 2,357,936 million at December 31, 2000.

At December 31, 2000, 245,583 million of land and construction in progress held for resale are included in the finished goods and

merchandise account. Related interest costs of 10,048 million and 29,885 million have been capitalized for the years ended December

31, 2000 and 1999, respectively.

Asset Millions of Won

2000 1999

Asset backed securities with limited recourse



–



1,953

Export accounts and notes receivable with recourse 2,427,993 1,523,803

Trade notes receivable with recourse 243,981 199,909

Trade accounts receivable without recourse 128,895 113,626

Trade accounts receivable with recourse 71,015 –

Total



2,871,884



1,839,291

Account Millions of Won

Face Value Discount Present Value

Long-term installment transactions

Long-term trade receivables



5,867



375



5,492

Other long-term receivables 403,694 58,034 345,660

Rescheduled

Long-term trade receivables and other assets 5,607 1,041 4,566

Total



415,168



59,450



355,718

Inventory Millions of Won

2000 1999

Finished goods and merchandise



737,544,326



572,945,964

Semifinished goods and work in process 982,591,087 666,500,256

Raw materials and supplies 952,276,658 909,922,532

Materials in transit 130,351,554 112,010,900

Total



2,802,763,625



2,261,379,652

8. Property, Plant and Equipment

Property, plant and equipment as of December 31, 2000 and 1999 consist of the following:

At December 31, 2000, certain portions of the Company’s property, plant and equipment, up to a maximum of 1,133,413 million, are

pledged as collateral for various loans from Korea Development Bank (see Note 12).

As of December 31, 2000, property, plant and equipment are insured against fire and other casualty losses and business interruption losses

up to 26,869,541 million and 6,336,077 million, respectively. Of the insured amount, Korea Development Bank is the beneficiary for

789,621 million, held as collateral for borrowings.

At December 31, 2000 and 1999, the value of land based on the posted price issued by the Korean tax authority is 1,277,325 million and

1,099,429 million, respectively.

Interest costs of 82,245 million and 45,418 million were capitalized for the year ended December 31, 2000 and 1999, respectively.

In accordance with the Asset Revaluation Law, on January 1, 1980, 1982, 1998, and April 1, 1999, the Company revalued a substantial portion

of its property, plant, equipment and investments in equity securities by 3,054,518 million. The remaining revaluation increments of

1,216,054 million, net of revaluation tax and credits to deferred foreign currency translation losses, were credited to other capital surplus,

a component of shareholders’ equity.

The Company has also reversed the revaluation of property, plant, equipment and investment performed on April 1, 1999 as allowed for in

the Asset Revaluation Law for assets which are sold within a year of the revaluation date. As a result, 2,819 million was deducted from

other capital surplus.

Property, Plant & Equipment Millions of Won

2000 1999

Buildings and auxiliary facilities



2,420,800,450



2,046,105,987

Machinery and equipment 12,498,044,648 8,406,254,860

Tools and fixtures 1,047,094,582 924,901,314

Structures and other 219,483,897 173,440,082



16,185,423,577



11,550,702,243

Less: accumulated depreciation (6,799,853,811) (4,380,933,468)



9,385,569,766



7,169,768,775

Land 1,778,542,402 1,708,831,071

Construction in progress 1,160,316,481 943,651,433

Total



12,324,428,649



9,822,251,279

9. Equity Investments

Equity investments in subsidiaries and affiliated companies, and other investments as of December 31, 2000 and 1999 consist of the

following:

(1) Equity investments in subsidiaries and affiliated companies

Subsidiaries:

Samsung Electronics Canada, Inc.

Samsung Electronics America, Inc.

Samsung Electronics Latinoamerica

Panama (Zone Libre) S.A.

Samsung Electronics Mexicana S.A. de C.V.

Samsung Electronics Argentina S.A.

Cagent Technologies, Inc.

Alpha Processor, Inc.

Samsung Electronics Iberia, S.A.

Samsung Electronics Svenska AB

Samsung Electronics Hungarian Co., Ltd.

Samsung Electronica Portuguesa S.A.

Samsung Electronics France S.A.

Samsung Europe PLC

Samsung Electronics Holding GmbH

Samsung Electronics Italia, S.p.A.

Samsung Electronics Benelux B.V.

Samsung Electronics Polska, Sp.Zo.O

Samsung Electronics South Africa (Pty) Ltd.

Samsung Electronics Overseas B.V.

Uzbekistan Samsung Electronica Co., Ltd.

Samsung Electronics India Private, Ltd.

Samsung Electronics Hong Kong Co., Ltd.

Samsung Electronics Taiwan Co., Ltd.

Samsung Electronics Suzhou Semiconductor Co., Ltd.

Samsung (China) Investment Co., Ltd

Tianjin Samsung Electronics Display Co., Ltd.

Suzhou Samsung Electronics Co., Ltd.

Tianjin Samsung Electronics Co., Ltd.

Shandong Samsung Telecommunications Co., Ltd.

Samsung Yokohama Research Institute

Samsung Electronics Australia Pty. Ltd.

Samsung Electronics Malaysia Sdn. Bhd.

Samsung Gulf Electronics Co., Ltd.

P.T. Samsung Electronics Indonesia

Samsung Electronics Display (M) Sdn. Bhd.

Continued;

Recorded

Book Value



37,409,624

350,001,625

63,895,606

39,171,013

37,310,963

20,334,100

17,602,340

60,795,407

16,424,831

49,339,949

11,307,056

35,616,262

162,689,875

47,226,773

47,154,194

40,316,777

15,623,487

3,595,491

2,302,079

4,041,131

7,583,935

65,292,556

9,171,375

82,671,064

48,623,694

21,251,186

47,268,539

49,238,518

17,805,913

65,845,110

33,718,954

26,197,362

10,973,267

27,913,474

40,043,788

Recorded

Book Value



32,929,230

45,440,513

33,029,905

32,714,719

31,361,130

18,970,664

40,996,621

62,271,067

12,480,220

49,027,338

10,235,514

31,877,434

177,064,807

58,537,194

43,982,797

37,706,970

9,456,425

11,670,423

10,648,885

5,936,797

–

62,634,166

721,209

39,577,031

12,324,814

10,108,585

39,545,497

39,667,002

18,779,418

32,656,218

31,156,982

30,264,479

9,682,868

22,601,517

29,620,515

Market Value

(Net Book Value)



37,068,405

373,057,625

55,551,280

42,820,958

38,081,434

19,745,210

26,514,993

75,865,753

16,329,882

46,970,685

12,038,192

36,928,045

190,442,863

58,022,145

48,240,321

36,442,709

15,780,637

4,139,733

24,728,566

2,624,966

8,224,621

61,451,381

1,524,856

80,373,051

35,559,892

19,017,566

45,774,348

50,262,573

19,498,302

65,845,110

32,971,530

29,272,560

13,528,188

35,271,021

41,867,063

Acquisition

Cost



37,910,597

752,108,617

43,842,300

30,767,040

50,227,700

22,162,492

32,189,788

65,221,118

16,153,454

48,397,117

12,594,046

39,433,410

179,626,805

77,607,622

56,778,556

38,334,024

20,097,600

39,829,558

119,898

3,341,000

6,444,200

48,397,188

1,524,856

46,189,260

36,427,936

9,895,816

60,432,457

47,930,825

13,307,035

33,991,706

40,457,800

4,378,136

7,976,308

56,910,316

21,876,246

Percentage

of Ownership

100.00

91.48

87.50

100.00

80.00

100.00

59.17

82.41

85.82

59.00

100.00

75.00

2000 1999

Thousands of Won

9. Equity Investments, Continued

Samsung India Electronics, Ltd.

Samsung Asia Private, Ltd.

Samsung Vina Electronics Co., Ltd.

Thai Samsung Electronics Co., Ltd.

Novita Co., Ltd.

Samsung Kwangju Electronics Co., Ltd.

Samsung Capital Co., Ltd.

Samsung Card Co., Ltd.

STECO, Ltd.

DNS Korea Co., Ltd.

Samsung Electronics Service Co., Ltd.

Korea Electronics & Information Distribution Co., Ltd.

Blueteck ITL

Bokwang VFUND

Bokwang XFUND

SVIC  Fund

SVIC  Fund

SVIC  Fund

SVIC  Fund

SVIC  Fund

Samsung Corning Micro-Optics Co., Ltd.

Samsung Thomsom-CSF Co., Ltd.

Samsung Glass America, Inc.

PrimeTel, Ltd.

Tianjin Tongguang Samsung Electronics Co., Ltd.

Affiliated companies:

Samsung Portugal Productos Electro-Mechanicos S.A.

Samsung Electronics (UK), Ltd.

Syrian-Korean Telecommunication Equipment

Manufacturing Establishment Co., Ltd.

Samsung Electronics Huizhou Co., Ltd.

Samsung Japan Co., Ltd.

Union Optical Co., Ltd.

Samsung SDI Co., Ltd.

Samsung Electro-Mechanics Co., Ltd.

Samsung Techwin Co., Ltd.

Seoul Commtech Co., Ltd.

Samsung Economic Research Institute

Samsung SDS Co., Ltd.

Continued;

Recorded

Book Value



21,261,110

89,033,174

16,079,981

29,371,870

29,000,155

277,079,813

263,587,477

422,344,859

18,353,237

6,146,792

33,814,936

39,591,631

33,219,004

6,329,003

9,000,200

9,948,323

30,893,377

20,444,785

102,692,786

29,741,079

26,701,530

–

1,742,504

7,122,282

4,578,192

23,721,093

37,176,293

1,274,366

488,122,167

405,271,665

222,859,819

12,037,741

18,087,984

28,057,349

Recorded

Book Value



15,387,943

53,907,380

15,677,406

25,416,928

23,090,236

155,753,593

222,920,398

234,398,940

14,217,607

3,941,894

32,934,818

–

2,509,254

14,218,067

28,425,751

2,487,701

6,305,140

3,325,921

37,876,046

53,351,029

3,153,721

–

266,167,164

211,725,943

5,174,213

9,027,093

26,324,854

Market Value

(Net Book Value)



20,569,458

66,333,455

16,273,828

34,255,673

29,142,399

284,948,785

230,215,509

397,694,988

18,729,136

17,686,472

36,790,237

38,692,144

29,993,255

6,329,003

9,000,200

9,948,323

30,893,377

20,444,785

102,692,786

29,741,079

26,701,530

133,752,226

–

1,766,443

8,857,024

4,578,192

27,244,272

82,082,042

1,274,366

457,120,673

387,230,169

147,717,981

12,758,519

18,116,210

33,544,429

Acquisition

Cost



15,526,467

20,454,044

13,531,704

37,422,945

29,991,151

192,675,696

230,849,938

153,387,755

12,239,960

6,542,382

29,999,990

30,000,000

22,993,240

5,000,000

9,000,000

9,900,000

29,700,000

19,800,000

98,500,000

29,700,000

28,135,800

135,000,000

–

2,123,880

8,280,489

2,060,925

16,390,839

47,766,973

17,388,905

423,721,523

359,237,063

196,321,791

4,191,977

17,880,000

12,752,735

Percentage

of Ownership

73.87

70.00

81.62

91.50

96.14

94.25

75.03

56.59

51.00

61.08

83.33

96.77

100.00

83.33

81.82

99.00

65.67

99.00

50.00

–

24.15

5.17

49.00

44.88

49.00

20.00

19.32

22.80

22.93

30.30

29.80

26.27

2000 1999

Thousands of Won

9. Equity Investments, Continued

At December 31, 2000, investments in 11 affiliated companies, including Samsung Glass America Inc. were not valued using the equity

method due to the immateriality of their assets to the financial statements of the Company.

At December 31, 2000, the financial conditions of invested companies, such as Korea Housing Guarantee Co., Ltd., New ICO Global

Communications, Samsung Electronics Moscow Service Center Ltd., TRL Microwave Tech, Inc. and Samsung Crosana Joint Stock Company

have deteriorated significantly. Accordingly, these investments have been written down and charged to current operations.

The cumulative net gain on the valuation of investments in listed companies of 457,997 million as of December 31, 2000 is recorded in

the capital adjustment account.

10. Long-Term Financial Instruments, Receivables and Other Assets

Long-term financial instruments and other assets as of December 31, 2000 and 1999 consist of the following:

Unitel Co., Ltd.

Samsung Corning Co., Ltd.

Samsung Lions Co., Ltd.

Towa Korea Co., Ltd.

POSCO Hüls Co., Ltd.

Samsung Corning Precision Glass Co., Ltd.

The Joong-Ang Daily News California, Inc.

Total investment in subsidiaries, affiliates

(2) Other investments

Investment in listed companies

Investment in unlisted companies

Securities market stabilization fund

Other

Total other investments

Total investments

Recorded

Book Value



8,097,545

266,813,817

–

1,477,250

31,258,890

98,648,359

–



4,779,785,567



440,442,604

180,337,602

8,743,987

431,343



629,955,536



5,409,741,103

Recorded

Book Value



–

234,741,156

–

937,991

13,693,448

–

3,509,432



2,856,280,021



2,898,807,045

122,658,461

18,760,587

153,538,343



3,193,764,436



6,050,044,457

Market Value

(Net Book Value)



14,092,076

269,615,291

46,816

4,150,664

34,820,290

75,434,805

–



4,886,678,412



440,442,604

161,472,369

8,743,987

750,658



611,409,618



5,498,088,030

Acquisition

Cost



5,213,925

94,263,035

275,000

800,000

17,200,000

116,140,060

–



4,505,243,019



898,439,398

197,315,163

16,601,222

431,343



1,112,787,126



5,618,030,145

Percentage

of Ownership

29.07

45.29

27.50

40.00

20.00

41.85

–

2000 1999

Thousands of Won

Asset

Long-term financial instruments

Long-term trade receivables

Long-term loans (A)

Long-term deposits

Long-term prepaid expenses

Intangible assets (B)

Total



258,000

2,817,779

60,075,540

411,152,293

486,509,110

265,416,250



1,226,228,972



1,467,500

16,583,583

366,164,492

457,313,823

472,116,096

246,103,450



1,559,748,944

Millions of Won

2000 1999

(A) As of December 31, 2000 and 1999, long-term loans including employee loans totaled 58,094,777,000 and 365,674,421,000,

respectively.

(B) As of December 31, 2000 and 1999, intangible assets including intellectual property rights totaled 256,347,261,000 and

243,203,924,000, respectively.

11. Short-Term Borrowings

Short-term borrowings as of December 31, 2000 and 1999 consist of the following:

As of December 31, 2000. the Company’s unused bank overdraft facility is 340,283 million (see Note 4). In addition, certain bank deposits

are pledged as collateral for the above borrowings.

12. Long-Term Debt

Long-term debt as of December 31, 200 and 1999 consists of the following:

(A) Local currency loans as of December 31,200 and 1999 consist of the following:

Borrowings

Bank overdraft facilities

Usance finance

Total

Annual Interest Rate (%)

2000

11.5



14,217



14,217



5,046

44,465



49,511

Thousands of Won

2000 1999

Long-Term Debt

Local currency loans

Foreign currency loans, in Won equivalents

Debentures

Less: current maturities

Total

Reference

(A)

(B)

(C)



98,271,686

1,234,528,597

1,351,000,000



2,683,800,283

(2,190,697,681)



493,102,602



272,833,344

1,587,280,784

2,174,950,124



4,035,064,252

(1,101,635,162)



2,933,429,090

Thousands of Won

2000 1999

Hanvit Bank

Korea Development Bank

Kookmin Bank

Korea Technology Banking Corporation

Samsung Card Co., Ltd.

Annual Interest Rate (%)

2000

5 - 6.5

9.35 - 9.65

11.5 - 12.45

6.5



1,114,195

66,053,000

18,823,440

12,198,051

83,000



98,271,686



1,624,515

224,109,000

28,975,527

18,041,302

83,000



272,833,344

Thousands of Won

2000 1999

12. Long-Term Debt, Continued

(B) Long-term debt denominated in foreign currencies as of December 31, 2000 and 1999 consist of the following:

At December 31, 2000, certain property, plant and equipment are pledged as collateral for the above long-term debts (see Note 8). In

addition, the repayment of certain long-term debts is guaranteed by various Korean financial institutions.

Maturities of long-term debts outstanding, excluding premiums and discounts, at December 31, 2000 are as follows:

Foreign Denominated Debt

ING

Citibank, N.A.

Korea Development Bank

Korea Exchange Bank

Hanvit Bank

Bank of Seoul

Korea Development Leasing Corporation and others

U. S. Dollar equivalent of foreign currencies

Won equivalents (in thousands)

Annual Interest Rate (%)

LIBOR + 0.45

LIBOR + 0.6

LIBOR + 0.4-0.6

LIBOR + 0.375

LIBOR + 0.45

LIBOR + 1

LIBOR + 0.65-1.1

$–

129,444

539,084

37,778

10,000

–

263,712

980,018



1,234,528,597

8,533

181,222

618,371

56,667

20,000

8,606

492,388

1,385,787



1,587,280,784

Thousands of U.S. Dollars

2000 1999

Outstanding Debentures

Guaranteed by banks, payable through 2001

Floating rate notes payable in 2001

Other, payable through 2003

Add: premiums

Less: discounts

Total

Annual Interest Rate (%)

2000

11 - 22

CD + 0.1

8 - 15.70



122,500,000

32,000,000

1,196,500,000



1,351,000,000

–



1,351,000,000



538,550,000

32,000,000

1,646,000,000



2,216,550,000

–

(41,599,876)



2,174,950,124

Thousands of Won

2000 1999

Long-Term Debt Maturities

2001

2002

2003

2004

Thereafter

Total

Debentures



1,331,000,000

20,000,000

–



1,351,000,000

Foreign Currency

Loans



805,829,177

394,020,369

34,679,051

–



1,234,528,597

Local Currency

Loans



53,868,504

36,986,222

7,006,660

410,300

–



98,271,686

Total



2,190,697,681

451,006,591

41,685,711

410,300

–



2,683,800,283

Thousands of Won

13. Foreign Currency Notes and Bonds

Unsecured foreign currency notes and bonds as of December 31, 2000 and 1999 consist of the following:

(A) USD denominated straight bonds

On November 1, 1992, the Company issued straight bonds of US$200 million at 99.5% of face value for the expansion of its semiconductor

product manufacturing facilities. The bonds bear interest at 8.5% per annum and mature on November 1, 2002. The Company redeemed

US$44,055,000 of these bonds during 1998 and 1999.

(B) JPY denominated straight bonds

On April 23, 1996, the Company issued straight bonds of 20,000 million at face value. The bonds bear interest at 3.3% per annum and

mature on April 23, 2003. The Company redeemed 5,210 million of these bonds during 1998.

On December 16, 1996, the Company issued straight bonds of DEM 300 million at face value. The bonds bear interest at 5.375% per annum

and mature on December 16, 2001.

(D) USD denominated straight bonds

On October 2, 1997, the Company issued straight bonds of US$100 million at 99.85% of face value. The bonds bear interest at 7.7% per

annum and mature on October 1, 2027.

(E) USD denominated straight bonds

On October 2, 1997, the Company issued straight bonds of US$227 million at 93.11% of face value. The bonds bear interest at 7.45% per

annum and mature on October 1, 2002. The Company redeemed US$74,135,000 of these bonds during 1998 and 1999.

EUR denominated floating rate notes

USD denominated straight bonds

DEM denominated straight bonds

JPY denominated straight bonds

DEM denominated straight bonds

USD denominated straight bonds

Convertible bonds

Less: current maturities

Add: premiums

Less: discounts

Add: long-term accrued interest

Less: conversion rights

Total

Due Date

May 16, 2000

November 1, 2002

March 24, 2000

April 23, 2003

December 16, 2001

October 1, 2027

October 1, 2002

December 31, 2006

December 31, 2007

February 1, 2004

July 30, 2002

January 31, 2003

(A)

(B)

(C)

(D)

(E)

(F)

(G)

(H)

(I)

(J)



196,443,917

–

162,914,808

182,112,000

125,970,000

192,564,040

6,018,120

61,999,530

117,300,000

120,470,000

240,640,000



1,406,432,415

(182,112,000)

–

(6,378,785)

14,018,755

(21,194,843)



1,210,765,542



122,420,352

178,619,403

176,481,000

165,920,136

176,481,000

114,540,000

175,091,571

18,911,736

178,650,695

117,300,000

120,470,000

240,640,000



1,785,525,893

(298,901,352)

1,003,631

(6,556,876)

3,110,418

(68,652,265)



1,415,529,449

Thousands of Won

2000 1999

(F) Convertible bonds

On September 24, 1996, the Company issued foreign currency convertible bonds of US$150 million for the expansion of its manufacturing

facilities. The bonds are listed on the London Stock Exchange and will mature on December 31, 2006. A summary of the terms of these

bonds is as follows:

• Interest: 0.25% per annum payable annually in arrears on December 31.

• Conversion period: On or after November 24, 1996 through December 15, 2006.

• Conversion price: Subject to adjustment based on certain events, 65,499 per share, with a fixed exchange rate applicable to the

conversion of 827.3 to US$1.00.

• Redemption: Redeemable at the option of the bondholders on September 24, 2001 at 131.1% of the principal amount, and at the option of

the Company at any time on or after October 24, 1996 at a declining redemption price. However, no such redemption may be made prior to

September 24, 2001 unless the closing price of the Company’s common stock has reached 135% of the conversion price for a stipulated

period.

The Company recorded

51,969 million of consideration for conversion rights, the difference between the nominal value and the

discounted present value at a 5.796% guaranteed return rate, as an adjustment to debentures and shareholders’ equity related to the

issuance of foreign currency convertible bonds. The conversion rights account is amortized using the effective interest method, and

amortization of

225 million was recognized as interest expense during 2000.

During 1997 and 1999, US$72,440,000 and US$54,620,000 worth of convertible bonds were converted into 823,352 and 689,856 shares of

common stock at the conversion price of 72,784 and 65,499 per share, respectively.

During 2000, US$15,640,000 of convertible bonds were converted into 197,540 shares of common stock at the conversion price of 65,499

per share. In relation to the conversion to common stock, the Company recorded 1,398 million as other capital surplus, the difference

between the conversion right price and the related consideration for conversion rights.

(G) Convertible bonds

On June 26, 1997, the Company issued foreign currency convertible bonds of US$300 million for the expansion of its manufacturing

facilities. The bonds are listed on the London Stock Exchange and will mature on December 31, 2007. A summary of the terms of these

bonds is as follows:

• Interest: 0%

• Conversion period: On or after July 26, 1997 through December 15, 2007.

• Conversion price: Subject to adjustment based on certain events, 113,351 per share, with a fixed exchange rate applicable to the

conversion of 888.5 to US$1.00.

• Redemption: Redeemable at the option of the bondholders on June 26, 2002 at 131.1% of the principal amount, and at the option of the

Company at any time on or after June 26, 1999 at a declining redemption price. However, no such redemption may be made prior to June

26, 2002 unless the closing price of the Company’s common stock has reached 135% of the conversion price for a stipulated period.

The Company recorded 115,678 million of consideration for conversion rights, the difference between the nominal value and the

discounted present value at a 5.558% guaranteed return rate, as an adjustment to debentures and shareholders’ equity related to the

issuance of foreign currency convertible bonds. The conversion rights account is amortized using the effective interest method, and

amortization of 2,236 million was recognized as interest expense during 2000.

During 1998 and 1999, US$500,000 and US$98,430,000 worth of convertible bonds were converted into common stock at the conversion

price of 123,635 and 113,351 per share, respectively.

During 2000, US$131,290,000 worth of convertible bonds were converted into 1,029,067 shares of common stock at the conversion price of

113,351 per share. In relation to the conversion to common stock, the Company recorded 9,647 million as other capital surplus, the

difference between the conversion right price and the related consideration for conversion rights.

(H) Convertible bonds

On February 1, 1999, the Company issued foreign currency convertible bonds of US$100 million to Intel Corporation which will mature on

February 1, 2004. A summary of the terms of these bonds is as follows:

• Interest: 5% per annum payable annually in arrears on February 1.

• Conversion period: On or after May 2, 1999 through January 21, 2004.

• Conversion price: Subject to adjustment based on certain events,

108,465 per share, with a fixed exchange rate applicable to the

conversion of

1,173 to US$1.00.

(I) Convertible bonds

On July 30, 1999, the Company issued foreign currency convertible bonds of US$100 million to Apple Computer, Inc. which will mature on

July 30, 2002. A summary of the terms of these bonds is as follows:

• Interest: 2% per annum payable annually in arrears on December 31.

• Conversion period: On or after July 30, 2000 through July 20, 2002.

• Conversion price: Subject to adjustment based on certain events, 219,050 per share, with a fixed exchange rate applicable to the

conversion of 1,204.7 to US$1.00.

The Company recognized interest expense using a 5% effective interest rate. The difference between the effective and guaranteed return

rate was credited to long-term accrued interest expense. The additional interest expense of 3,690 million was credited to long-term

accrued interest expense during 2000.

(J) Convertible bonds

On October 15, 1999, the company issued foreign currency convertible bonds of US$200 million to Dell Computer Corporation which will

mature on January 31, 2003. A summary of the terms of these bonds is as follows:

• Interest: 2% per annum payable annually in arrears on December 31.

• Conversion period: On or after October 15, 2000 through January 16, 2003.

• Conversion price: Subject to adjustment based on certain events, 260,000 per share, with a fixed exchange rate applicable to the

conversion of 1,203.2 to US$1.00.

The Company recognized interest expense using a 5% effective interest rate. The difference between the effective and guaranteed rate was

credited to long-term accrued interest expense. The additional interest expense of 7,218 million was credited to long-term accrued

interest expense during 2000.

14. Commitments and Contingencies

• At December 31, 2000, the Company is contingently liable for guarantees of indebtedness, principally for related parties, approximating

54,183 million and US$1,565,857,000. In addition, at December 31, 2000, the Company provided guarantees of contract fulfillment for

Iljin Heavy Industries Co., Ltd. in the amount of 1,678 million.

• At December 31, 2000, the Company has a total 142 of technical assistance agreements with certain foreign companies. Total royalty

expense incurred in relation to these agreements for the year ended December 31, 2000 and 1999 amounts to approximately 774, 118

million and 743,418 million, respectively.

• The Company provided product warranties for certain goods sold and is insured for the fulfillment of such warranties.

• At December 31, 2000, the Company has entered into lease agreements with several leasing companies that are recognized as direct

financing leases. These lease agreements are summarized as follows:

• Scheduled future lease payments, net of interest, which are also included in long-term debt (see Note 12), are as follows:

Account

Machinery and equipment

Acquisition Cost



712,678

Depreciation Expense Charged to

2000 Operations



137,187

Millions of Won

Lease Payment Schedule

2001

2002

2003

Total

Thousands of Won



238,001,939

92,129,257

2,066,818



332,198,014

• In addition, at December 31, 2000, the Company has entered into lease agreements that were recognized as operating leases. Related

rental payments were charged to operations as incurred. Rental expense incurred under these operating lease agreements amounts to

407 million for the year ended December 31, 2000, and future rental payments of US$108,000 are due within a year.

• As of December 31, 2000, the Company has entered into seven forward exchange contracts with various foreign and Korean financial

institutions to hedge currency risk on foreign currency long-term debts. In addition, the Company has entered into three interest rate swap

contracts with various foreign and Korean financial institutions to hedge interest rate risk on floating-rate foreign currency long-term

debts.

• For the year ended December 31, 2000, the Company recognized gains of 9,069 million and losses of 8,971 million, charged to current

operations, from the valuation of forward exchange contracts. In addition, from the valuation of interest rate swap contracts, the Company

recognized losses of 83 million, charged to current operations, and deferred 3,272 million, charged to capital adjustment, of which

127 million is expected to be realized by December 31, 2001.

• As of December 31, 2000, the Company has entered into an agreement to issue asset backed securities based on export accounts and

notes receivable with Atlantic Asset Securitization Corporation for up to US$100 million, an agreement to discount trade notes receivable

with three Korean banks for up to 300,000 million and a credit sales facility agreement with Hanvit Bank for up to 200,000 million (see

Note 6).

• At December 31, 2000 the Company has been named as a defendant in three legal actions for alleged patent infringements and one legal

action for breach of contract, and as the plaintiff for two legal actions for patent infringements and two for unpaid debts in a foreign

country. In addition, the Company is a party to various other legal claims and proceedings in Korea, all of which are pending as of

December 31, 2000. The Company’s management believes that, although the outcome of these matters is uncertain, the resolution of

these matters will not have a material adverse effect on the operations or financial position of the Company.

• At December 31, 2000, six promissory notes totaling 14,175 million, and 15 blank notes and checks were provided to financial

institutions as collateral for bank borrowings and for the fulfillment of certain contracts.

• In June 1999, Samsung Motors Inc. (“SMI”), an affiliate of the Company, filed a petition for court receivership. In connection with this

petition, the Company and 30 Samsung Group affiliates (the “Affiliates”) entered into an agreement with the institutional creditors (“the

Creditors”) of SMI in August, 1999. In accordance with this agreement, the Company and the Affiliates agreed to sell 3,500,000 shares of

Samsung Life Insurance Co., Ltd. stock and transfer the proceeds to the Creditors in connection with the petition for court receivership of

SMI by December 31, 2000. In the event that the sale proceeds fall short of 2,450,000 million, the Company and the Affiliates have

agreed to compensate the Creditors for the shortfall by other means, including participation in any equity offering or subordinated

debentures issued by the Creditors. Any proceeds in excess of 2,450,000 million are to be distributed to the Company and the Affiliates.

• As of December 31, 2000, the shares in Samsung Life Insurance Co., Ltd. were not sold and certain shareholders of the Company have

filed an injunction against the directors of the Company, alleging that the directors were acting in contravention to the law when entering

into this agreement and accordingly, that this agreement is void. The ultimate effect of these matters on the financial position of the

Company as of the balance sheet date cannot reasonably be determined, and accordingly, no adjustments have been made in the

accompanying financial statements in relation to these matters.

• Beginning in 1997, Korea and other countries in the Asia Pacific region experienced a severe contraction in substantially all aspects of

their economies. This situation is commonly referred to as the 1997 Asian financial crisis. In response to this situation, the Korean

government and the private sector began implementing structural reforms to historical business practices.

• The Korean economy is currently experiencing additional difficulties, particularly in the areas of restructuring private enterprises and

reforming the banking industry. The Korean government continues to apply pressure to Korean companies to restructure into more

efficient and profitable firms. The banking industry is currently undergoing consolidations and significant uncertainty exists with regard to

the availability of short-term financing during the coming year. The Company may be either directly or indirectly affected by the situation

described above.

• The accompanying financial statements reflect management’s current assessment of the impact to date of the economic situation on the

financial position of the Company. Actual results may differ materially from management’s current assessment.

15. Retained Earnings

Retained earnings as of December 31, 2000 and 1999 consist of the following:

(A) The Korean Commercial Code requires the Company to appropriate as a legal reserve an amount equal to a minimum of 10% of annual

cash dividends declared until the reserve equals 50% of capital stock. This reserve is not available for the payment of cash dividends,

but may be transferred to capital stock or used to reduce the accumulated deficit, if any.

(B) Pursuant to the Tax Exemption and Reduction Control Law, the Company is required to appropriate as a reserve for business

rationalization an amount equal to the exemption of income taxes resulting from investment tax credits and certain deductions from

taxable income specified by such law. This reserve may be used for the reduction of the accumulated deficit, if any, or transferred to

capital stock.

(C) In accordance with the Regulation for Securities Issuance and Disclosure, the Company is required to appropriate as a reserve for

improvement of financial structure an amount equal to at least 50% of the net extraordinary gain on disposal of property, plant and

equipment and 10% of net earnings for each year until shareholders’ equity equals 30% of total assets. This reserve is not available for

payment of cash dividends, but may be transferred to capital stock or used to reduce the accumulated deficit, if any.

(D) Pursuant to Korean tax law, the Company is allowed to claim a tax deduction in determining taxable income for the amounts of retained

earnings appropriated to reserves for overseas market development, overseas investment losses, technology development, export

losses and losses on disposal of treasury stock. These amounts are not available for dividends until used for the specified purposes or

reversed.

(E) The reserve for facilities represents amounts appropriated by the Company for capital expenditures and may be used for any purpose

through a shareholders’ resolution.

16. Dividends

On June 30, 2000 and 1999, the Company declared a 10% cash dividend to shareholders of common stock and preferred stock as an interim

dividend for the six-month period ended June 30, 2000 and 1999. A cash dividend of 85,886 million and 84,664 million was paid on June

30, 2000 and 1999 respectively.

Retained Earnings

Appropriated:

Legal reserve

Reserve for business rationalization

Reserve for improvement of financial structure

Reserve for overseas market development

Reserve for overseas investment losses

Reserve for technology development

Reserve for export losses

Reserve for loss on disposal of treasury stock

Reserve for facilities investment

Unappropriated:

Total

Reference

(A)

(B)

(C)

(D)

(E)



440,789,000

2,512,100,829

204,815,000

510,750,423

164,982,454

3,838,397,908

167,749,074

200,000,000

2,714,811,000



10,754,395,688

31,409



10,754,427,097



387,789,000

1,512,100,829

204,815,000

548,741,108

213,382,454

2,023,097,908

217,118,059

–

134,615,000



5,241,659,358

31,989



5,241,691,347

Thousands of Won

2000 1999

The year-end cash dividend for the prior fiscal year was 342,729 million. For the year ended December 31, 2000, a cash dividend of

422,670 million (common stock: 50%, preferred stock: 51%) excluding the interim dividend is proposed for the general shareholders’

meeting to be held on March 16, 2001. Including this proposed final dividend, the dividend payout ratio is approximately 8.46% and 13.48%

at December 31, 2000 and 1999, respectively.

17. Treasury Stock

During the year ended December 31, 2000, the Company has acquired 3,000,000 shares of its own common stock and 400,000 shares of its

own non-voting preferred stock. As of December 31, 2000, the Company holds 6,449,625 shares of its own common stock and 1,269,693

shares of its own preferred stock. This treasury stock is recorded as a capital adjustment .

18. Stock Option Plan

The Company has a stock option plan that provides for granting stock purchase options to employees or directors who have contributed or

are expected to contribute to the management and technology innovation of the Company.

The Company granted such options on March 16, 2000, which can be exercised for up to 1,500,000 common shares (see Note 1) at an

exercise price of 272,700 per share. This price will be adjusted in the event of a new share offering, stock dividend, stock split or stock

merger. These options, with a service period of two years from the date of the grant, can be exercised after three and within seven years

from the date of the grant.

The Company recognized the compensation cost for these options using the fair value method based on an expected stock price volatility of

69.48%, estimated risk-free interest rates of 9.08%, expected exercise term of four years and expected dividend yield of 0.39%. The cost of

the stock option plan was 93,746 million for the year ended December 31, 2000, and will be 141,424 million from the following year.

19. Income Tax Expense

The statutory income tax rate applicable to the Company, including resident surtax, is approximately 30.8%. Income tax expense for the

year ended December 31, 2000 and 1999 consists of the following:

The following table reconciles the expected amount of income tax expense based on statutory rates to the actual amount of taxes recorded

by the Company:

Income Taxes

Current income taxes

Deferred income taxes

Total

1,186,607,415

899,310,939

2,085,918,354

658,526,912

199,038,851

857,565,763

Thousands of Won

2000 1999

Tax Rate Calculation

Income before taxes

Statutory tax rate

Expected taxes at statutory rate

Tax credit

Others, net

Actual taxes

Effective tax rate



8,100,448,546

30.8%



2,494,938,152

(455,027,917)

46,008,119



2,085,918,354

25.8%



4,027,968,337

30.8%



1,240,614,248

(403,263,139)

20,214,654



857,565,763

21.3%

Thousands of Won

2000 1999

Components of deferred taxes as of December 31, 2000 are as follows:

The Company periodically assesses its ability to recover deferred tax assets. In the event of significant uncertainty regarding the Company’s

ultimate ability to recover such assets, a valuation allowance is recorded to reduce the asset to its estimated net realizable value.

The Company has not recognized the income tax effect of a temporary difference of 415,090 million resulting from the revaluation of land

it has no immediate plans to dispose of. In addition, a change in accounting policy in the current year (see Note 2) resulted in a cumulative

increase in deferred income tax of 3,009 million that was adjusted to opening retained earnings.

20. Earnings Per Share

Earnings per share and diluted earnings per share are calculated as follows:

Deferred Tax Asset Calculation

Deferred tax assets:

Loss on valuation of investments using the equity method

Deferred foreign exchange losses

Investment stock reduction losses

Depreciation

Other

Tax credits

Total deferred tax assets

Deferred tax liabilities:

Special reserves appropriated for tax purposes

Capitalized interest expense

Accrued income

Gain on valuation of investments using the equity method

Other

Total deferred tax liabilities

Net deferred tax assets

Beginning

Balance



320,422,447

236,486,776

85,782,593

311,472,320

89,287,880

240,187,881



1,283,639,897



160,301,578

34,669,575

4,031,119

–

4,110,702



203,112,974



1,080,526,923

Increase

(Decrease)



(320,422,447)

(104,366,080)

(80,546,470)

(165,310,076)

17,817,975

(240,187,881)



(893,014,979)



(49,322,141)

20,141,152

4,948,678

35,918,457

(2,380,699)



9,305,447



(902,320,426)

Ending

Balance



–

132,120,696

5,236,123

146,162,244

107,105,855

–



390,624,918



110,979,437

54,810,727

8,979,797

35,918,457

1,730,003



212,418,421



178,206,497

EPS Calculation

Net income

Adjustments:

Dividends for preferred stock

Undeclared participating preferred stock dividend

Net income available for common stock

Weighted average number of shares of common stock

Earnings per share in Korean Won



6,014,530,192

(69,202,389)

(738,754,987)



5,206,572,816

148,735,383



35,006

Thousands of Won

21. Related Party Transactions

Significant transactions with related parties for the years ended December 31, 2000 and the 1999 and the related receivables and payables

at December 31, 2000 and 1999 are as follows:

During 2000 and 1999 Samsung Corporation exported 21,559,951 million and 15,782,247 million worth of goods and imported

3,727,413 million and 4,516,849 million worth of goods on behalf of the Company.

28,793,503

130,501,116

56,334,467

91,541,195

37,108,881

3,609,217

2,542,910

12,978,039

961,821

8,526,218

1,212,420

16,818,904

122,275,922

196,412,048

544,364,061

73,615,997

$13,533,592

1,327,596,719

$13,533,592

40,403,924

77,470,578

91,092,651

89,062,680

113,570,242

15,357,953

930,863

19,843,835

1,393,555

4,326,609

863,025

25,682,263

105,369,817

46,303,308

$10,678,976

631,671,303

$10,678,976

1,157,468,843

1,550,459,715

814,221,910

298,140,093

782,325,532

187,041,979

124,882,862

121,463,67430

30,108,821

151,182,121

111,146,302

3,157,127

172,262,778

2,531,563

1,905,131

577,595,366

$6,119,476

6,085,893,817

$6,119,476

625,112,597

987,862,496

724,502,937

272,211,537

667,459,514

162,368,633

94,919,970

95,803,645

44,292,171

119,891,015

101,364,743

2,695,194

124,600,307

318,196,254

$4,141,759

4,341,281,013

$4,141,759

72,366,272

13,165,784

6,747,530

3,716,739

12,665,328

994,946

5,500

620,024

5,267,064

88,034

115,380,900

52,651,475

41,288,409

1,337,916

39,633,044

583,236,542

$162,185

949,165,507

$162,185

72,017,084

10,238,439

8,910,815

29,833,411

21,741,911

1,468,672

37,927

6,208,306

5,337,569

97,653

112,901,005

158,751,364

31,008,173

86,429,814

$156,532

544,982,143

$156,532

419,022,525

119,351,143

78,607,286

46,475,852

171,160,367

35,672,995

102,867,427

25,480,211

9,049,606

45,899,927

13,422,658

5,210,222

40,862,672

711,234

37,084,362

119,485,693

$182,903

1,270,364,180

$182,903

198,836,293

176,395,225

130,437,215

28,926,439

170,879,386

10,543,300

93,004,770

21,518,655

14,903,224

43,546,741

20,037,500

7,086,126

31,673,599

55,263,314

$582,616

1,003,051,787

$582,616

Company

Samsung Corporation

Samsung SDI

Samsung Electro-Mechanics

Samsung SDS

Samsung Kwangju Electronics

Samsung Techwin

Cheil Communications

Seoul Commtech

Samsung Heavy Industries

Novita

Samsung Everland

Samsung Life Insurance

Samsung Electronics Service

Samsung Thales

Korea Electronics &

Information Distribution

Other local subsidiaries

and affiliated companies

Foreign subsidiaries and

affiliated companies

Total Won currency

Total foreign currency

Sales

2000 1999

Purchases

2000 1999

Receivables

2000 1999

Payables

2000 1999

Thousands of Won, Thousands of U.S. Dollars

Diluted EPS Calculation

Net income available for common stock

Adjustment:

Interest expense on convertible bonds

Net income available for common stock & common equivalent share

Weighted average number of common stock & common equivalent shares

Diluted earnings per share in Korean Won



5,206,572,816

18,855,974



5,225,428,790

151,931,513



34,393

Thousands of Won

22. Research and Development Costs

Research and development costs incurred for the year ended December 31, 2000 and 1999 comprise the following:

23. Foreign Currency Translation

At December 31, 2000 and 1999, assets and liabilities denominated in foreign currencies and foreign exchange gains (losses) are as follows:

R&D Costs

Research expenses

Ordinary development expenses

Total



946,629,028

1,072,726,375



2,019,355,403



806,465,213

785,874,334



1,592,339,547

Thousands of Won

2000 1999

Account

Foreign currency deposits

Trade accounts and

notes receivable

Other accounts and

notes receivable

Guarantee deposits

Continued;

Translation

Gain



6,478,630

–



6,478,630



29,636

–

17,384

805

1,979

67,982

4,488,983

1,780



4,608,549



–

151,392

145,790

6,371,655

13,829



6,682,666



118,798

41,961

3,138



163,897

Korean Won

(translated)



145,812,900

144,717

318,723

47,461



146,323,801



1,461,811

41,982

2,441,005

4,580,424

26,928

1,767,271

279,857,711

5,662,639



295,839,771



10,910,778

1,318,342

–

47,220,183

277,211



59,726,514



–

185,235

82,299



267,534

Translation

Loss



–



–



4,587

–

26,022

–

107

15,116,562

845



15,148,123



–

79,331

240,082

–



319,413



–

281



281

Korean Won

(translated)



328,769,533

4,574,615

392,688



333,736,842



2,478,096

651,208

4,861,825

2,539,155

838,233

7,410,415

259,015,161

880,654



278,674,747



3,670,447

2,082,855

4,283,766

142,051,380

1,063,091



153,151,539



145,051

178,407

30,040



353,498

Foreign

Currencies

USD 260,990,341.23

JPY 415,300,244.00

MYR 1,184,580.36

Other

DEM 4,082,260.80

ESP 91,261,878.00

EUR 4,094,961.90

GBP 1,349,996.80

ITL 1,366,980,767.00

JPY 672,744,496.00

USD 205,616,544.68

Other

EUR 3,091,501.51

ITL 3,396,697,478.00

JPY 388,895,890.00

USD 112,766,039.62

Other

IRR 190,856,450.00

USD 141,626.72

Other

Thousands of Won

2000 1999

23. Foreign Currency Translation, Continued

Account

Other assets

Trade accounts and

notes payable

Short-term borrowings

Other accounts payable

Accrued expenses

Continued;

Translation

Gain



13,652

18,925

–

205,722

19,300

8,770

–

6,620

1,648,062

60,746



1,981,797

–

–

6,614

10,497

–

216,751

–



233,862

–



210

43,525

–

117

–



43,852

–

–

Korean Won

(translated)



48,726

538,095

36,413

–

3,954

–

62,066

5,068,007

492,447



6,249,708

–

5,368,382

–

691,898

138,965,381

255,006

280,536,231

140,616



425,957,514



44,465



3,998,912

461,168,949

115,520

233,160,149

24,359,216

1,663,782

24,292,366

721,230

625,164

4,642,158



754,747,446



2,965,923

3,127,050

856,646

3,834,139

Translation

Loss

–

–

6,000

–

1,663

–

4,393

–

27,753



39,809



11,784

68,208

266,779

49,658

4,596,760

98,332

16,546,478

5,176



21,643,175

–



23,969

3,209,743

115,586

1,326,815

1,073,515

10,029

13,230

2,403

27,493

1,082



5,803,865



83,568

113,898

25,033

53,743

Korean Won

(translated)



59,014

201,178

50,454

8,684,500

595,447

74,662

51,192

78,045

55,317,612

1,237,686



66,349,790



214,074

1,046,315

3,199,168

697,653

156,212,281

1,400,776

397,663,284

203,959



560,637,510

–



1,185,315

99,548,610

2,857,628

92,152,161

12,376,188

368,234

324,762

162,728

639,820

455,226



210,070,672



5,248,275

6,941,893

1,819,178

3,044,465

Foreign

Currencies

ATS 683,987.39

CNY 1,321,890.96

COP 98,929,825.82

EUR 7,314,679.65

INR 22,029,097.30

MYR 225,224.48

SAR 152,425.00

TWD 2,048,975.00

USD 43,913,322.10

Other

BEF 7,274,000.00

DEM 1,723,633.82

EUR 2,694,557.92

FRF 3,854,435.40

JPY 14,181,520,180.00

NLG 2,600,000.00

USD 315,680,942.70

Other

USD

GBP 630,198.46

USD 79,025,648.57

EUR 2,406,890.17

JPY 8,365,909,054.00

AUD 17,591,306.82

DEM 606,606.45

NLG 602,795.44

FRF 899,050.00

ITL 1,043,411,328.00

Other

AUD 7,459,809.88

DEM 11,435,644.18

ESP 254,943,961.00

FRF 16,820,246.50

Thousands of Won

2000 1999

23. Foreign Currency Translation, Continued

24. Accounts Relating to Gross Added Value

The accounts required for the calculation of gross added value for the year ended December 31, 2000 and 1999 are as follows:

Account

Wages and salaries

Provision for severance benefits

Welfare expenses

Rental expenses

Depreciation expenses

Taxes and dues

Total



834,611,555

77,271,611

139,507,030

98,510,754

2,229,728,643

39,423,541



3,419,053,134

Thousands of Won

Totals

2000 1999



600,713,891

53,661,311

107,439,899

70,316,803

2,272,587,224

29,944,096



3,134,663,224



369,566,573

35,441,860

54,162,467

14,666,185

112,347,734

56,790,194



642,975,013



248,352,155

36,742,659

35,691,475

11,503,433

119,256,530

65,584,747



517,130,999



1,204,178,128

112,713,471

193,669,497

113,176,939

2,342,076,377

96,213,735



4,062,028,147



849,066,046

90,403,970

143,131,374

81,820,236

2,391,843,754

95,528,843



3,651,794,223

Selling, General and

Administrative Expenses

2000 1999

Manufacturing Cost

2000 1999

Account

Accrued expenses

Advances from customers

Long-term other accounts payable,

including current maturities

Foreign currency notes

and bonds, including

current maturities

Long-term debt, including

current maturities

Translation

Gain

–

–

20,929

–

20,929

–



7,326,412

101,038



7,427,450

–

3,005,328

–



3,005,328



3,474,720

–



3,474,720



34,121,680

Korean Won

(translated)



7,973,785

574,917

4,762,907

3,133,840

772,647

2,291,291

257,403,820

1,548,181



289,245,146

–



157,771,148

–



157,771,148



352,962,000

165,920,136

1,266,643,757



1,785,525,893



191,834,640

1,395,446,144



1,587,280,784

Translation

Loss



54,908

21,495

33,897

735,444

92,814

8,713

16,461,750

21,743



17,707,006



422,404



27,374,670

2,096,550



29,471,220



5,631,000

–

46,726,983



52,357,983

–

94,925,046



94,925,046



237,838,325

Korean Won

(translated)



8,410,791

2,604,824

4,327,893

18,243,103

2,213,500

3,184,221

332,646,460

1,707,739



390,392,342



4,948,179



335,488,920

10,170,465



345,659,385



182,112,000

162,914,808

1,061,405,607



1,406,432,415



188,359,920

1,046,168,677



1,234,528,597

Foreign

Currencies

GBP 4,471,779.31

HKD 16,127,945.39

ITL 7,057,881,785.00

JPY 1,656,175,340.00

NLG 4,108,509.05

SGD 4,381,875.66

USD 264,068,000.03

Other

USD 3,928,061.09

USD 266,324,459.00

EUR 8,566,261.00

DEM 300,000,000.00

JPY 14,790,000,000.00

USD 885,890,000.00

JPY 17,100,000,000.00

USD 830,490,336.87

Thousands of Won

2000 1999

25. Environmental Standards and Policies

Building on its philosophy of “Green Management,” the Company continues to promote an abundant life as well as the protection of the

global environment through corporate activities that benefit both people and nature. The Company is committed to environment protection

and preservation in all aspects of its corporate activities, including product development, production, marketing and disposal.

The Company has been recognized as one of the most environment-friendly companies and has acquired ISO 14001 certification for its

environmental management system. In addition to engaging in development and research activities for environment-friendly products, the

Company operates waste treatment facilities for its own use and a recycling center to collect and recycle waste electronic goods. The

Company actively participates in community environmental protection programs. In addition, the Company supports community programs

to clean, protect and preserve the natural environment, including mountains, streams and parks.

26. Employee Benefits and Public Donations

A) Details of the Company’s employee benefits are listed below.

B) Details of public donations made by the Company during the years ended December 31, 2000 and 1999 are as follows:

27. Cultivation of Professional Human Resources and Professional Training

The Company operates a leadership development center, a high technology institute and a global marketing institute. The Company has

cultivated domestic and overseas experts in each area of business through the operation of these professional institutes and overseas

assignments. The Company also provides employees with access to higher education programs at domestic and overseas universities,

academic research programs, the in-house College of Technology and the 21st Century Academy program.

Support of employee

wealth accumulation

Living support

Support for commuting, meals, etc.

Medical support

Support for leisure activities

• Allots a portion of newly issued shares to the employee stock ownership association.

• Operates a mutual savings scheme to assist employees in urgent need of funds.

• Individual pension plans to support a comfortable retirement.

• Provides housing for employees assigned to factories or provincial office jobs.

• Provides academic tuition support.

• Provides commuter buses for employees.

• Operates in-house restaurants and provides work clothing.

• Support for congratulations and condolences.

• Finances annual medical check-ups for employees.

• Provides assistance for employee medical expenses.

• Operates condominium and resort facilities for employees.

• Provides paid summer or winter vacations and half-day holidays.

BenefitsArea

Donations of land for local roads

Contributions to the employee welfare fund

Donations to support universities and help the less fortunate

–

80,000

90,533



170,533



54,182

54,000

30,874



139,056

Millions of Won

2000 1999

Donations

28. Segment Information

A summary of the Company’s operations by business segment and geographic area as of December 31, 2000 and for the year then ended is

as follows (in millions of Won):

29. Discontinued Operations

On January 11, 2000, the Company established Samsung Thales Co., Ltd. (formerly Samsung Thomson-CSF Co., Ltd.), a 50:50 joint venture

with Thomson-CSF International with capital stock of 270 billion. Pursuant to the joint venture agreement, the Company sold its defense

electronics division to the joint venture on February 28, 2000. Components of amounts reflected in the income statement and balance sheet

are as follows:

Discontinued operation information for the year ended December 31, 2000 and 1999 is as follows:

30. Reclassification of 1999 Amounts

Certain amounts in the 1999 financial statements have been reclassified to conform to the 2000 presentation. These reclassifications had

no effect on previously reported net income or shareholders’ equity.

Financial Data by Business Segment

1. Sales

Sales to unaffiliated customers

Intersegment sales

2. Operating profit (loss)

3. Tangible and intangible assets

4. Depreciation

Semiconductors



12,953,399

1,081,049



14,034,448



6,057,705



10,016,939



2,308,874

Other Areas



1,625,331

217,619



1,842,950



(242,854)



128,100



64,450

Information &

Communications



7,610,397

22,160



7,632,557



908,401



1,598,400



188,767

Home

Appliances



2,745,049

18,202



2,763,251



187,309



412,787



36,786

Digital Media



9,349,576

50,154



9,399,730



524,594



453,619



67,352

Financial Data by Geographic Area

1. Sales

2. Tangible and intangible assets

3. Depreciation

America



9,916,847



4,820,126



1,078,890

Africa



88,827



10,492



891

Europe



5,834,774



2,311,339



501,984

Asia



7,539,921



3,580,267



787,489

Domestic



10,903,384



1,867,621



296,975

Gain on Disposal of Discontinued Operation

Assets

Liabilities

Net assets of discontinued operations

Proceeds from disposal

Gain on disposal

Millions of Won



122,991

64,512



58,479

211,758



153,279

Discontinued Operation Information

Sales

Operating loss

Tangible assets



2,645

(698)



13,412



166,731

(4,852)



13,580

Millions of Won

2000 1999

Five-Year Financial Summary

As of December 31, 1996~2000

Sales

Domestic

Export

Cost of sales

Gross profit

Selling, general and administrative expenses

Operating profit

Non-operating income

Interest and dividend income

Gain on foreign currency transactions

Gain on foreign currency translation

Gain on valuation of investments

using the equity method

Other

Non-operating expenses

Interest expenses

Amortization of deferred charges

Loss on foreign currency transactions

Loss on foreign currency translation

Other

Ordinary profit

Extraordinary income

Extraordinary loss

Net income before income taxes

Income tax expense

Net income

Earnings per share

(in Korean Won and U.S. Dollars)

Thousands of U.S. Dollars

$ 8,660,353 $7,029,885 $5,380,693 $5,663,406 $7,206,351

18,570,586 13,714,980 11,259,056 7,386,318 11,602,350

$27,230,939 $20,744,865 $16,639,749 $13,049,724 $18,808,701

17,468,926 14,027,936 11,578,914 8,976,018 14,126,196

$9,762,013 $6,716,929 $5,060,835 $4,073,706 $4,682,505

3,856,410 3,157,358 2,492,518 2,055,176 2,968,229

$5,905,603 $3,559,571 $2,568,317 $2,018,530 $1,714,276

$124,247 $180,890 $279,383 $120,977 $244,520

237,546 212,448 863,231 1,321,352 –

27,102 207,638 – – –

692,079 236,888

515,843 470,591 371,563 290,965 333,951

$1,596,817 $1,308,455 $1,514,177 $1,733,294 $578,471

$272,730 $572,835 $924,894 $536,428 $480,852

- - 1,559,267 1,117,517 912,283

221,643 222,788 857,732 1,478,708 –

188,911 84,666 – – –

507,131 576,914 375,354 508,878 634,647

$1,190,415 $1,457,203 $3,727,247 $3,641,531 $2,027,782

$6,312,005 $3,410,823 $365,247 $110,293 $264,965

122,029 – 235,068 46 12,647

– 211,484 259,920 1,773 30,546

$6,434,034 $3,199,339 $340,395 $108,566 $247,066

1,656,806 681,148 80,895 21,283 52,569

$4,777,228 $2,518,191 $259,500 $87,283 $194,497

$28 $15 $2 $1 $2

2000 1999 1998 1997 1996

Thousands of Korean Won



10,903,383,976



8,850,624,784



6,494,496,605



8,013,718,934



6,082,160,483

23,380,368,303 17,267,160,967 13,589,679,922 10,451,640,507 9,792,383,336



34,283,752,279



26,117,785,751



20,084,176,527



18,465,359,441



15,874,543,819

21,993,377,770 17,661,171,944 13,975,748,868 12,701,065,224 11,922,509,430



12,290,374,509



8,456,613,807



6,108,427,659



5,764,294,217



3,952,034,389

4,855,219,849 3,975,113,690 3,008,468,868 2,908,073,790 2,505,185,220



7,435,154,660



4,481,500,117



3,099,958,791



2,856,220,427



1,446,849,169



156,427,345



227,740,962



337,215,452



171,182,036



206,374,901

299,070,108 267,472,334 1,041,919,177 1,869,713,309 –

34,121,680 261,416,440 – – –

871,326,886 298,242,218 – – –

649,446,121 592,472,848 448,477,112 411,715,036 281,854,160



2,010,392,140



1,647,344,802



1,827,611,741



2,452,610,381



488,229,061



343,367,140



721,198,940



1,116,346,994



759,045,307



405,838,831

– – 1,882,034,879 1,581,287,365 769,966,975

279,048,744 280,490,610 1,035,283,230 2,092,372,147 –

237,838,325 106,594,502 – – –

638,478,440 726,334,345 453,052,701 720,061,983 535,642,340



1,498,732,649



1,834,618,397



4,486,717,804



5,152,766,802



1,711,488,146



7,946,814,151



4,294,226,522



440,852,728



156,064,006



223,630,084

153,634,395 – 283,726,603 65,610 10,674,208

– 266,258,185 313,723,010 2,508,902 25,780,500



8,100,448,546



4,027,968,337



410,856,321



153,620,714



208,523,792

2,085,918,354 857,565,763 97,640,283 30,115,805 44,368,311



6,014,530,192



3,170,402,574



313,216,038



123,504,909



164,155,481



35,006



19,214



2,832



1,232



1,784

2000 1999 1998 1997

1996

Yoon-Woo Lee

• President, Semiconductor Business Group,

Samsung Electronics [1995-present]

• Executive VP, Semiconductor Business Group,

Samsung Electronics [1993-1995]

• Executive VP, Semiconductor Business Group,

Samsung Electronics [1992-1993]

• Managing director, Kiheung Plant, Samsung

Semiconductor & Telecommunication [1987-1992]

Over the years, Samsung Electronics’ Board of Directors has played a crucial leadership role in maximizing corporate value. Founded on the

values of transparency and responsibility, the decision-making and corporate governance framework provided by the Board continues to

provide a fertile environment for the creative, progressive entrepreneurial spirit that has helped the company emerge as an international

electronics leader.

The Board is currently composed of three standing committees: the Management Committee, the Audit Committee, and the Outside

Director Recommendation Committee. The Management Committee is in charge of evaluating and making recommendations on issues

related to improving the professionalism and efficiency of administrative processes. The Audit Committee replaces the former outside

auditor’s position in 2000 and uses a system of checks and balances to supervise and support the management team in its quest to

maximize corporate value. The Outside Director Recommendation Committee is in charge of impartially and independently selecting

outside directorship candidates for the Board.

Samsung Electronics’ 20-member Board of Directors took up a total of 34 agenda items over the course of 12 meetings in 2000,

including the approval of the year 2000 business and management plan, the declaration of a 10% interim cash dividend of 500 won per

share in July, and the repurchase of 2% of the total outstanding stock—3 million common shares and 400,000 preferred shares—valued at

534.4 billion won in October. In addition to the 12 general meetings, the Management Committee met 31 times and the Audit Committee

nine times during the year.

The Board will undergo a fundamental change in fiscal 2001 with a reduction in membership from 20 directors—including six outside

directors—to 14, half of which will be outside directors. This change is intended to accelerate decision-making as well as respond to

shareholder concerns that a large board is inefficient in managing the company.

Kun-Hee Lee

• Chairman, Samsung Electronics [1997-present]

• Member, International Olympic Committee

[1996-present]

• Vice chairman, Federation of Korean Industries

[1987-present]

• Vice chairman, Korea-Japan Economic Committee

[1981-present]

• Chairman, Samsung Group [1987-1998]

Jong-Yong Yun

• Vice chairman & CEO, Samsung Electronics

[1999-present]

• President & CEO, Samsung Electronics [1996-1999]

• President & CEO, Samsung Japan Headquarters

[1995-1996]

• President & CEO, Samsung Display Devices [1993-1995]

• President & CEO, Samsung Electro-Mechanics

[1992-1993]

Board of Directors

Management Committee

Jong-Yong Yun [chair]

Yoon-Woo Lee

Dae-Je Chin

Doh-Seok Choi

Outside Director Recommendation Committee

Franz-Hermann Hirlinger [chair]

Sung-Lark Rim

Jong-Yong Yun

Doh-Seok Choi

Audit Committee

Sung-Lark Rim [chair]

Jae-Sung Hwang

Kap-Hyun Lee

2001 Board Members

Committees

Hak-Soo Lee

• President, Chief of staff Samsung Electronics

[1998-present]

• President & CEO, Samsung Fire & Marine

Insurance [1995-1998]

• Vice president, Samsung Fire & Marine

Insurance [1993-1995]

• Executive director, Cheil Foods & Chemicals

[1984-1993]

Franz-Hermann Hirlinger

• Outside director, Samsung Electronics [1998-present]

• Chief representative and first vice president, Bayerische

Landesbank, Seoul & Tokyo offices [1995-present]

• Senior investment manager and head of international

marketing, Credit Suisse [1991-1995]

• Senior portfolio manager, Hilti AG, Liechtenstein

[1990-1991]

Sung-Lark Rim

• Outside director, Samsung Electronics [2000-present]

• Chief consultant, Korea Financial Planner Association

[2000-present]

• Outside auditor, Samsung Electronics [1998-2000]

• President & CEO, Kookmin Investment Trust

Management [1998-2000]

• Managing director, Korea Long Term Credit Bank [1998]

• General manager/director, Korea Long Term Credit

Bank [1988-1998]

Kap-Hyun Lee

• Outside director, Samsung Electronics [2001]

• President, Korea Exchange Bank [1998-2000]

• Executive director, Korea Exchange Bank

[1997-1999]

• Managing director, Korea Exchange Bank

[1996-1997]

• Senior manager, Korea Exchange Bank [1991-1996]

Jae-Sung Hwang

• Outside director, Samsung Electronics

[2000-present]

• Examiner, National Tax Tribunal [2000-present]

• Advisor, Kim & Chang Law Firm [1999-present]

• President, Kyung-In/Seoul Regional Tax Offices

[1996-1999]

• Head of Investigation Bureau, National Tax Service

[1995-1998]

Suk-Soo Kim

• Outside director, Samsung Electronics

[1999-present]

• President, Law Office of Suk-Soo Kim [1997-present]

• Chairman, Supreme Court Ethics Committee

[1997-present]

• Chairman, Central Election Management

Commission [1993-1997]

• Justice, Supreme Court [1991-1997]

Goran S. Malm

• Outside director, Samsung Electronics [2001]

• President & CEO, Icon Medialab Asia [2000-present]

• President/Senior vice president, Dell Computer

Asia Pacific/Dell Computer [1999-2000]

• President/Senior vice president, GE Asia-Pacific/GE

[1997-1999]

• President & CEO, GE Medical Systems Asia

[1992-1997]

Tetsuo Iwasaki

• Outside director, Samsung Electronics

[2000-present]

• Co-founder/Chairman, Applied Materials Japan

[1979-present]

• President & CEO, Applied Komatsu Technology

[1994-present]

• Member, OCEO Committee [1994-present]

In-Joo Kim

• Executive VP, Financial Management Division,

Samsung Electronics [1999-present]

• Managing director, Financial Control Task Force,

Samsung Electronics [1998-1999]

• Managing director, Financial Management Dept.,

Samsung Group Restructuring Headquarters [1998]

• General manager, Financial Management Dept.,

Samsung Group [1991-1999]

Dae-Je Chin

• President, Digital Media System Business Group,

Samsung Electronics [2000-present]

• Executive VP & CTO, Samsung Electronics

[1998-2000]

• Executive VP, System LSI Division,

Samsung Electronics [1997-1998]

• General manager, Memory Division,

Samsung Electronics [1987-1997]

Doh-Seok Choi

• President & CFO, Samsung Electronics

[1999-present]

• Vice president & corporate controller,

Samsung Electronics [1997-1999]

• Managing director & corporate controller,

Samsung Electronics [1994-1997]

• Executive director & corporate controller,

Samsung Electronics [1991-1994]

Head Office

Samsung Main Building

250-2 ga, Taepyong-ro, Chung-gu

Seoul, Korea

Tel: 82-2-727-7114

Fax: 82-2-727-7985

www.samsungelectronics.com

KOREAN PRODUCTION BASES

Suwon Complex

416, Maetan 3-dong, Paldal-gu

Suwon, Kyonggi-do, Korea

Tel: 82-31-200-1114

Fax: 82-31-200-1530

Kiheung Plant

San-24, Nongsu-ri, Kiheung-eup

Yongin-gun, Kyonggi-do, Korea

Tel: 82-2-760-7114

Fax: 82-2-760-7049

Onyang Plant

San-74, Buksu-ri, Paebang-myon

Asan-gun, Chungchongnam-do

Korea

Tel: 82-41-540-7114

Fax: 82-41-548-7049

Kumi Plant

259, Kongdan-dong, Kumi

Kyongsangbuk-do, Korea

Tel: 82-54-460-2114

Fax: 82-54-460-2111

Kwangju Plant

217, Osan-dong, Kwangsan-gu

Kwangju, Korea

Tel: 82-62-950-6114

Fax: 82-62-950-6019

Chonan Plant

San 33-11, Sungsung-dong

Chonan, Chungchongnam-do

Korea

Tel: 82-41-529-7114

Fax: 82-41-529-6049

OVERSEAS NETWORK

CHINA

Production Bases

Tianjin Tongguang Samsung Electronics

Co., Ltd. (TTSEC)

Tianjin, China

Tel: 86-22-2296-2400

Tianjin Samsung Electronics Co., Ltd. (TSEC)

Tianjin, China

Tel: 86-22-2532-1234

Huizhou Samsung Electronics Co., Ltd. (SEHZ)

Guangdong, China

Tel: 86-752-332-1401

Shandong Samsung Telecommunications

Co., Ltd. (SST)

Shandong, China

Tel: 86-631-562-6868

Suzhou Samsung Electronics Co., Ltd. (SSEC)

Jiangsu, China

Tel: 86-512-532-1234

Tianjin Samsung Electronics Display

Co., Ltd. (TSED)

Tianjin, China

Tel: 86-22-2455-6242

Samsung Electronics Suzhou Semiconductor

Co., Ltd. (SESS)

Jiangsu, China

Tel: 86-512-761-2297

China Customer Satisfaction (CCS)

Tel: 8610-6497-3366

ASIA

Production Bases

Samsung Electronics Indonesia (SEIN)

West Jawa, Indonesia

Tel: 62-21-893-4005

Samsung Electronics Display (M)

Sdn. Bhd. (SDMA)

Seremban Negeri Sembilan

Darul Khusus, Malaysia

Tel: 60-6-670-3000

Samsung Electronics (M) Sdn. Bhd. (SEMA)

Port Klang, Selangor, Malaysia

Tel: 60-3-3176-2050

Samsung India Electronics (SIEL)

Noida, India

Tel: 91-11-8-456-8251

Samsung Vina Electronics Co., Ltd. (SAVINA)

Ho Chi Min City, Vietnam

Tel: 84-8-896-5500

Thai Samsung Electronics Co., Ltd. (TSE)

Sriracha Cholburi, Thailand

Tel: 66-2-681-0501

Sales Bases

Samsung Asia Private Ltd.

(Semiconductor Division), (SAPL)

UE Square, Singapore

Tel: 65-833-3200

Samsung Electronics Australia Pty. Ltd. (SEAU)

NSW, Australia

Tel: 61-2-9638-5200

Samsung Electronics India Information &

Telecommunication Ltd. (SEIIT)

Lajpat Nagar-III New Delhi

Tel: 91-11-6932517

Samsung Electronics Philippines Co. (SEPCO)

Manila, Philippines

Tel: 63-2-526-3796

Samsung Electronics H.K. Co., Ltd. (SEHK)

Hong Kong

Tel: 852-2862-6900

Samsung Japan Corporation (SJC)

Tokyo, Japan

Tel: 81-3-5641-9800

Samsung Electronics Taiwan Co., Ltd. (SET)

Taipei, Taiwan

Tel: 886-2-2758-9588

Asia Customer Satisfaction (ACS)

Tel: 65-568-7500

GLOBAL NETWORK

󳀎

CIS

Production Base

Uzbekistan Samsung Electronica Co., Ltd. (USE)

Tashkent, Uzbekistan

Tel: 7-371-180-0909

Sales Bases

Samsung Electronics Moscow Co., Ltd. (SEMCO)

Moscow, Russia

Tel: 7-095-797-2385

Samsung Russia Service Center (SRSC)

Tel: 7502-564-8210

EUROPE

Production Bases

Samsung Wynyard Park (SEMUK)

Cleveland, U.K.

Tel: 44-1740-660000

Samsung Electronica Espanola, S.A. (SESA)

Barcelona, Spain

Tel: 34-93-862-9600

Samsung Electronics Hungarian Co., Ltd. (SEH)

Budapest, Hungary

Tel: 36-1-250-2311

Sales Bases

Samsung Electronics GmbH (SEG)

Schwalbach/TS., Germany

Tel: 49-6196-66-1000

Samsung Semiconductor Europe GmbH (SSEG)

Schwalbach/TS., Germany

Tel: 49-6196-66-3300

Samsung Semiconductor Europe Limited (SSEL)

Middlesex, U.K.

Tel: 44-181-380-7200

Samsung Electronics U.K. Ltd. (SEUK)

Surbiton Surrey, U.K.

Tel: 44-181-391-0168

Samsung Electronics France S.A. (SEF)

Cedex, France

Tel: 33-1-4938-6525

Samsung Electronics Italia S.p.A. (SEI)

Cernusco sul Naviglio, Italy

Tel: 39-2-921891

Samsung Electronics Svenska AB (SESAB)

Vasby, Sweden

Tel: 46-8-590-966-00

Samsung Electronics Polska Sp.Zo.O (SEPOL)

Warsaw, Poland

Tel: 48-22-608-4400

Samsung Electronica Portuguesa S.A. (SEP)

Linda-a-Velha, Portugal

Tel: 351-1-414-8100

Samsung Electronics Benelux B.V. (SEN)

Rijswijk, The Netherlands

Tel: 31-70-307-2910

Samsung Electronics Overseas B.V. (SEO)

Amsterdam, The Netherlands

Tel: 31-20-575-3012

Europe Customer Satisfaction (ECS)

Tel: 441-95-220-7126

MIDDLE EAST & AFRICA

Sales Bases

Samsung Electronics South Africa Ltd. (SSA)

Johannesburg, South Africa

Tel: 27-11-254-3668

Samsung Gulf Electronics FZE (SGE)

Dubai, U.A.E.

Tel: 9714-881-3335

Gulf Customer Satisfaction (GCS)

Tel: 9714-883-8416

AMERICA

Production Bases

Samsung Mexicana S.A. de. C.V. (SAMEX)

Tijuana, Mexico

Tel:1-619-671-6000

Samsung Electronica da Amazonia, Ltda. (SEDA)

Sao Paulo, Brazil

Tel: 55-11-5644-6400

Samsung Austin Semiconductor (SAS)

Texas, U.S.A.

Tel: 1-512-672-1000

Sales Bases

Samsung Electronics America, Inc. (SEA)

New Jersey, U.S.A.

Tel: 1-201-229-4000

Samsung Telecommunications

America, Inc. (STA)

Texas, U.S.A.

Tel: 1-972-761-7000

Samsung Semiconductor Inc. (SSI)

California, U.S.A.

Tel: 1-408-544-4000

Alpha Processor, Inc. (API)

Massachusetts, U.S.A.

Tel: 1-978-318-1100

Samsung Electronics Canada Inc. (SECA)

Ontario, Canada

Tel: 905-819-5056

Samsung Electronics Mexicana S.A. (SEM)

Mexico D.F., Mexico

Tel: 525-747-5100

Samsung Information Systems

America, Inc. (SISA)

California, U.S.A.

Tel: 1-408-544-5435

Samsung Electronics Latinoamerica

(Zona Libre), S.A. (SELA-Panama)

Panama City, Panama

Tel: 507-210-1122

Samsung Electronics Latinoamerica

Miami Inc. (SELA-Miami)

Miami, U.S.A.

Tel: 1-305-594-1090

Samsung Electronics Latinoamerica

Colombia S.A. (SELA-Colombia)

Santafe de Bogota, Colombia

Tel: 571-633-4470

Samsung Electronics Argentina S.A. (SEASA)

Buenos Aires, Argentina

Tel: 54-11-4308-4668

Global Service Network

󳀎

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SAMSUNG ELECTRONICS CO., LTD. Samsung Main Bldg., 250-2 ga, Taepyung-ro, Chung-gu, Seoul, Korea 100-742 Tel: 82-2-727-7114 Fax: 82-2-727-7985