Samsung Electronics Co., Ltd., today announced revenues of 17.11 trillion Korean won (won) for the first quarter of 2008 ended March 31, 2008. Operating profit and net income for the quarter were 2.15 trillion won and 2.19 trillion won on a parent basis. Operating profit on a consolidated basis reached 2.57 trillion won.

A reduction in marketing expenses of approximately 0.3 trillion won improved Samsung’s operating profits for the quarter. A depreciation of the won also contributed more than 0.3 trillion won to the increase in Samsung’s operating profit .

"Despite challenging external conditions including an economic slowdown in developed markets, a stagnant semiconductor market globally, and a surge in raw-material prices, Samsung demonstrated solid performance due to its competitive advantage in supply chain management (SCM) and it strategic positioning in emerging markets,” said Dr. Woosik Chu, executive vice president of investor relations. “Other external factors such as the lagging performance of several competitors also helped our first quarter performance.”

In addition to first quarter earnings, Samsung also announced its capital expenditure plan for calendar year 2008. On a consolidated basis, capital expenditures will reach more than 11 trillion won this year, comprised of approximately 7.0 trillion won for the company’s memory business, and approximately 3.7 trillion won for the LCD Business.

Robust Performance in Telecommunication
The Telecommunication Business posted record-high quarterly revenues of 5.55 trillion won. Operating profit reached 920 billion won, growing 57 percent quarter on quarter, while the operating margin was 16 percent. On a consolidated basis, operating profits were 1.06 Trillion won on revenues of 6.65 Trillion won.

Sales of handsets overall achieved similar volume as last quarter’s record of 46.3 million units sold, although handset markets globally contracted by about 13 percent. Reduction in marketing expenses and favorable currency exchange rates boosted first quarter results along with cost reduction efforts achieved through deployment of global SCM.

For the second quarter of 2008, the Telecommunication Business forecasts stagnant demand in developed markets such as the U.S. and Europe, and fierce competition in emerging markets. The business unit’s forward strategy includes strengthening its product portfolio by launching a new, high-end flagship model, the “Soul,” and by introducing a broader array of handsets for emerging markets. Additionally, the Business will continue to pursue ongoing cost reduction efforts.

Steady Growth in LCDs
The LCD Business posted quarterly revenues of 4.34 trillion won on a parent basis. Operating profit grew 10 percent over the last quarter, reaching 1.01 trillion won with a profit margin of 23 percent. Robust sales of TV panels sized 46 inches and above, reaching more than a million units worldwide, helped to drive steady growth in LCD revenues, aided by the favorable currency exchange rate. Throughout the quarter, prices for LCD panels have not declined as significantly as expected, further contributing to the division's favorable results. Operating profit for the quarter, on a consolidated basis, reached 1.08 trillion won on revenues of 3.65 trillion won.

For the second quarter, sales volume and panel prices are expected to increase due to pre-orders from set makers preparing for the high-demand season typical of the third and fourth quarters. Risks that the business may face in the next quarter include a decrease in demand resulting from a global recession, growing capacities of panel makers, and high inventory levels of leading set makers.

The LCD Business will enhance its competitive position by investing more than 3.7 trillion won in capital expenditures, as well as increasing sales of 46 inch and above TV panels and continued cost reduction efforts.

A Strategic Investment in Semiconductor
Weak prices amid weak seasonality diminished the semiconductor business unit’s overall results, contributing to lower revenue and profits compared with the fourth quarter of 2007. On a parent basis, operating profit of the Semiconductor Business in the first quarter was 190 billion won on revenue of 4.39 trillion won. Factors influencing sluggish demand for the industry overall included weak seasonality, oversupply of DRAM due to steady increases in 12” capacity, and over-emphasis on high-density products. In the case of NAND flash chips, the spot price for 8Gb MLC declined approximately 35 percent from the previous quarter, reflecting oversupply and slow demand for Card, USB, and MP3P products. At the same time, System LSI continued to demonstrate growth momentum due to strong demand for DDI, Smart Card IC and CIS.

The Semiconductor Business anticipates that the stagnant memory market will continue throughout the second quarter, with limited opportunities for increased demand. PC demand may remain sluggish due to low seasonality while oversupply of DRAM may continue due to production increases by competitors. The NAND flash market in particular may suffer if the global recession continues or worsens. Despite current conditions of oversupply and ongoing price pressures, Samsung will invest more than 7.00 trillion won in DRAM and NAND capital expenditures to solidify its market leadership and enhance future competitiveness.

Strong Seasonal Effects in Digital Media & Digital Appliance
The Digital Media Business posted an operating profit of 30 billion won on revenue of 1.83 trillion won on a parent basis. The unit’s operating profit and revenue on a consolidated basis reached approximately 210 billion won and more than 7.42 trillion won respectively. Sales of LCD TVs decreased approximately 15 percent quarter on quarter due to weak seasonal demand and severe competition. Nevertheless, Samsung expects to maintain its number one position globally in the Flat Panel TV market.

To achieve target sales of 18 million LCD TV units, the Business launched a new LCD TV with enhanced features and a new design. In addition, the Business anticipates greater sales of laser printers to the corporate market, following a significant expansion of the company’s printer product portfolio.
The Digital Appliance Division posted revenues of 820 billion won and continued to generate operating profits of 20 billion won. A modest increase in divisional revenues was attributed to seasonal sales of air-conditioners.