Good morning. Welcome to Samsung Electronics Investors Forum 2019. I'd like to thank all of you for making time in your busy schedule to be with us this morning. My name is Ben Suh, and I'm with the investor relations team in Samsung Electronics. I've been with Samsung for over 25 years, but I'm relatively new to IR. I joined the IR team in December of last year, but I've spent many years in mainly semiconductor side of electronics, and I'm looking forward to meeting many more of you in the near future. Today, we'd like to give you several presentations. We are in the age of data. I believe this data explosion is actually just in the beginning stage. This is because AI is now just starting to emerge. It's going to require much more data.
We still have this upcoming age of autonomous driving, which will be a lot of servers on wheels that'll handle a lot of data. Also, of course, currently, people are watching more and more high-resolution video content, and that's a tremendous driver of data as well. Fortunately, but not by coincidence, Samsung is involved in many areas to be able to participate in this future data explosion. First of all, more products are going to need more memory that are higher density, higher speed, lower power. With all this data for communication, you're going to need more advanced high-speed networks, such as 5G and beyond. To interface with the usage of this data, you'll need a lot of personal terminal devices with much more advanced capabilities.
That's why today, we have invited some key experts in these businesses related to this data explosion, such as from our network, our mobile, and semiconductor businesses. In the first section, we have Mr. Woojune Kim. He's Senior Vice President of Sales and Marketing for the network division. He's going to talk about 5G, which is widely considered the fundamental technology behind the Fourth Industrial Revolution. In this session, he will share the status of our network technology development and strategies for the 5G era. Following Mr. Kim, we will have Mr. Jongmin Lee. He's Vice President of the Strategic Planning Group of our mobile division. Mr. Lee will walk you through our business direction and strategic priorities for differentiation in this very competitive smartphone market. He will also include coverage of growth areas such as 5G and foldable devices.
Last but not least, in the final session, Dr. Kyoungsup Shin of Samsung Semiconductor R&D Center will address memory process technology. This section will focus on our technology leadership that enables us to drive leading-edge technologies for our memory products. He will share our current status in developing these technologies and present future process directions. Without further delay, let's proceed to the first presentation. Please give me a hand in giving a warm welcome to Mr. Woojune Kim from our network division. Thank you.
Hello. Good morning. Everyone can hear me. Thank you for all making the time here. As Ben Suh explained, I'm Woojune Kim. I've been with Samsung Electronics. Well, I joined in 1999, but in the middle, I went off somewhere, then I came back, so I'm the prodigal son. Preparing for this presentation with our marketing team, they made wonderful slides. One thing I did not really look at was the title. I just saw it right now, it says, "For a better tomorrow." Some of you might remember this. Chow Yun-fat launched his career with the movie "A Better Tomorrow" around 20 years ago. It was one of my favorite movies when I was in high school and college.
In the same manner, I think, I hope today can be the day when we can launch Samsung 5G in your minds and in investment community. First of all, I'd like to just give an overview about what 5G is for you. Because 5G has become this buzzword. I like to sort of get through to what really why I think people are so excited about 5G. From a technical point of view, if you talk with engineers, in fact, if you talk with a lot of marketers, if you ask them, "What does 5G do for you?" They'll come up with these 3 main characteristics. They'll say it's ultra-fast, it's instantaneous, and enables massive connectivity. What does that mean? If you look at it, 4G was maybe max 1 gig speeds.
5G will allow you to get up to 20 gigabit EPS speeds. This is speed that is what fiber connectivity allows you to do. Many of you live in Asia right now. I know that a lot of you have maybe up to 1 gig speeds or internet access at home. People who are using 5G say, "Wow, this is faster than the internet I have at home." It's not just that. It's also instantaneous. This is the other aspect of 5G, that it allows you to be instantaneous, in that it's as if it's real-time. It's as if you no longer have that annoying click-and-wait problem. Even with 4G, even though it was much faster than 3G, you still had that delay.
With 5G, with the changes that 5G bring, you have the potential for things to be instantaneous, to be there, and that will enable a lot of new applications that I'll show you later on. A 3rd characteristic they talk about is massive connectivity, which is connecting everything. This is not just about connecting people now, it's about connecting devices. 4G was the start of this. 4G enabled, it has IoT, it has up to over 100,000 devices, but 5G will expand this enormously. A million-plus going forward. What that means is that every one of you can be connected, not just with your phone, not just with your watches, your glasses, your shoes, health, everything. Not just you, actually more than that. I'll talk about that more later.
That being said, these three items are rather dry, sometimes I wonder, is this why people can be so excited about it? I don't think it's really because of these things. It's because what these three things mean, the way I like to look at it is I go back and I look at it a different way, that many of you have probably read the book, "Sapiens" by Yuval Noah Harari. What he says there is that, it's interesting. He says, why did the Homo sapiens become the number one in the food chain? His ideas were very simple. The key idea he had was, it was language, because people were able to tell stories, build communities, build culture, that is what differentiated us from the apes and the other animals.
That's how we humans were able to create bigger units of communities, cooperation, we were able to make societies that are 1 million or 50 million strong. His key message was always that humans made their leap with language to communicate. Now, why do I bring this up while we're talking about 5G? Well, it's because if you think about it, all communications with phones that we've talked about, wireless communications, is about communicating. 2G was really about human to human. By that I mean it basically put a phone in your pocket that previously had already been wired up so that you can talk with people. 3G, 4G, I'd say many times it put the internet in your pocket. You could carry around the internet in your pocket, in your smartphone because it's really, in many cases, human to machine.
You are talking with servers that Google has or Apple has or somewhere. It was great because it allowed you a lot of things to do. When we get to 5G, what changes? Well, 5G, I think, unfortunately for us humans, we now become the second-tier citizens. The most important thing in 5G will be machine-to-machine communications. It will be about things talking to things, cars talking to the servers at Audi. It will be about not humans talking to humans, but it will be our, what is it? The machines at, let's say, a CVS, talking with their centers elsewhere, saying that we need more products. We think this is going to be the key driver. Many of you heard about IoT as a buzzword. Well, this is when IoT will become real.
Why did I just bring up the human discussion was because machines, we think, will be able to make their leap to become really different in 5G when it gets tied with AI and it is used so that the machines can start communicating with each other. You could say that 5G will become the basis for us that will allow humans to bring together all the buzzwords that are going on today, cloud, AI, big data, IoT, et cetera, 5G is the fabric that will tie it all together. That is why I am a real firm believer that 5G will be a fundamental changer in how the world works. 5G, as I said, will be this catalyst for innovation, it can really change things fundamentally. For example, we talk about how 5G can really change many things.
It won't be just about phones or anything, or machines. It will be about improving your quality of life. It can change your industries and societies. I think the best way to look at it is our marketing team has made a great video that can show you very quickly what it's like. If you take a moment.
5G allows you to experience gigabit speed without fiber. Enjoy thrilling moments at home. Combine imagination with reality. Be a part of the breathtaking scene without going there. Take lessons beyond time and space limits. Bring medical treatment to the cutting-edge level. 5G will be the power to pave the way for new industries. Build up millions of connections in factories. Enable real-time control. Automate manufacturing with AI. Accelerate transport speed with less resources. Grow more crops with less soil. 5G will make our society a safer place for everyone. Immediately connect every service in an emergency. Rescue people without human involvement within golden hours. Maintain city sustainability by efficient management of public resources. Deliver tons of information. The 5G world responds to every need before you ask.
If you look at what we just saw, you sort of can say that's a 5G vision, and many people ask, "Okay, that's the vision. We've seen a lot of that sort of stuff. We've seen marketing stuff. When does it become reality?" I think today the message we'd like to get to you is that 5G is real, and it is starting, and it's here now. To just give an example, how it's becoming real and how it's been accelerated, I'll discuss it here now. 5G has already been, 224 operators in 88 countries in the world have already announced that they're either carrying out 5G trials or investing in pilots or are going to do planned and actual deployments. Among them, 86 have already committed to launching 5G between 2018 and 2022.
We already have over 10 operators in the world who all actually said they have launched. Three of them are in Korea. I think some of you are already based in Korea, and you could already experience 5G speeds, with the Samsung Galaxy S10 and the other phones out there. How did 5G accelerate so much? Because this was not the original plan. The industry sort of it goes from 2G to 3G to 4G around every 10 years. If you follow that schedule, 5G was supposed to arrive around 2020. For various reasons, it got accelerated. One of the key things that had to happen at that time was, what they call 5G global standards. This is because from technical point of view, for people to make 5G work across the world, you have to have standards aligned.
We show here that the first 5G standards were made in 2017. The original schedule, as I said, the standards team were working was more 2020. This was an acceleration of three years, and this happened for multiple reasons. One of the key things was that I think, we work with Verizon and KT in Korea, multiple countries and companies in Korea to accelerate this significantly. This really helped a lot because the industry managed to pull up the standards in three years. It became a more of a staged effort in that initially we just went for enhanced mobile broadband. What I call this is really simple. It's just wireless fiber. It's fiber-like speeds, fiber-like connectivity, but wireless.
This is why the early applications of 5G, for example, in the U.S., have been fixed wireless access, and it's been discussed a lot. That is not all that it gives you because that's just giving the raw muscle power. The next one after that will be about new vertical services, and this will allow V2X connectivity to cars, factories, and also use of other spectrum, et cetera. Then the others will be, there are more expanded services such as going to public safety, broadcast, multicast, IoT. Basically, the way I look at it is this. In many ways, from a service perspective, the telecommunications industry 30 years ago divided into two streams. It was wireline and wireless. People said, on phones, I can talk with people.
If I want to go to internet or something or get video or something, I would go on my wired service. There is a dichotomy between wireline and wireless. You still see that everywhere in the world. The U.S., there's the cable industry, there's the wireless phone industry. In Korea and other places, you see people who give you fiber connections and then people who do wireline, wireless services. Now with 5G, what's happening is, it's converging back. 30 years ago, they separated. They're coming back. Now that's why in the industry you'll see a lot of cases where it seems now Verizon is saying they're doing FWA. Basically, they're saying, "I'm going back into the wireline business, but doing it in a wireless manner." That is sort of a trend that's going to happen everywhere.
That is what really what 5G enables in many ways. From an industry perspective, there's going to be a massive change there. Another thing is that how could this be rolled out quickly? The industry also has an issue with that because this is such a big infrastructure thing. To roll out new technology is very hard, and the industry has had problem before when they did 2G, 3G, 4G migrations because they have to set up a whole new network. For the early commercial networks, technologists have been smart about it. What they created is what's called, from a techie term, non-standalone. That really means they built 5G so that it works on 4G networks, on top of 4G networks.
This allows the rollout of 5G to be accelerated quite a bit, and this has really happened already in the world. For example, Korea, we have just launched 5G in, I think, the five major cities already in a matter of 3 months or so. This would have been unheard of if you were doing 4G or 3G. You would spend years just building out the towers. This has been really helpful. But the problem is all good things come with some issues. This is 5G built on 4G means that we are sort of tied to 4G. There is some limitations there. Speeds, instantaneous access, et cetera, are some problems. Long term, we want to go to what's called a standalone architecture, where the 5G and 4G networks are separate, and you can get completely different services.
The 4G network will run by itself, LTE, which has been a good sort of long-term basis. But 5G, when it's run as a separate network, is what will really allow you to do different, innovative stuff. The other part that is important for 5G has been spectrum allocation. This is again the techie stuff. I am sorry I go into techie stuff. The first thing about 5G was for every wireless technology, what you need is new spectrum. Traditionally, it has gone from like 700, 800, 900 MHz, gone up to 2.1. Now we are getting up to what's called the millimeter wave spectrum, 24, 47 GHz.
What this means is that this is really going to spectrum that is traditionally was viewed as doesn't work for wireless, because it's spectrum that has very wide bandwidth, can give you massive bandwidth, but really they say goes only 5 meters and drops dead. And that's one of the key challenges that we have to solve. But as you can see, the U.S. has been a major leader in allocating millimeter wave spectrum. Korea, Japan has followed up. Italy has also jumped on the bandwagon for, I don't know, for some strange reasons. Usually, it's the Asian countries that jump ahead. Mid-band 3.5 is another major spectrum. As you can see, a lot of countries in the world have been starting to allocate 3.5 GHz for 5G. And then the last one is low-band, which is a 600 and 700, and again, multiple countries have allocated the spectrum.
Now, I know there's a lot of arguments in the industry about which spectrum to use for 5G and which one is true 5G. And I know there are a lot of countries that are saying 600 is going to be their 5G band. But let's make it clear. If you want to get the benefits that I talked about before about with 5G, which is the massive bandwidth, the ultra-fast speeds, the instantaneous communications, and the massive connectivity, you need a lot of capacity. The problem with the low bands is that actually, you only have very little spectrum, usually around 20 MHz or 30 MHz, which is a very small amount actually. So if you really want 5G, I think the nations you have to concentrate on, the technology you have to concentrate on will be the mid-band and the millimeter wave.
As you can see here, that is again where the traditional Asian countries, Korea, Japan, and probably China, are going to take the lead in that all three countries have become very aggressive on allocating a lot of mid-band spectrum. For example, all three operators in Korea have gotten anywhere from 80 MHz to 100 MHz of 3.5 spectrum, which if you compare with the LTE spectrum, is a huge amount because, for example, SK Telecom had only about 120 MHz or 130 MHz of LTE spectrum as a whole before they got the 3.5 5G spectrum. They basically doubled their capacity almost in one go. This is going to be a major thing, and this is what Korea, Japan, et cetera, are doing with China and the U.K. have done. The other one will be millimeter wave.
As I said, millimeter wave, we'll talk about more, but this is the key to allowing you to get to the widest fiber-like speeds. That being said, how has this commercial rollout worked out? Well, we've been in a sort of unusual situation this time. Traditionally, whenever new wireless technology is rolled out, Korea, Japan have sort of led the way. This year it's become an interesting race in that the U.S. has become very aggressive and it's rolled out the networks very aggressively. We have worked with Verizon, for example, and we at Samsung are the team who have worked with Verizon very closely to launch a 5G service in October 2018, the first fixed wireless access business. Very closely after that, Korea launched their mobile services. In April, we have Korea, U.S. all launching smartphone-based solutions.
Also Swisscom in Europe also came up. Afterwards, you can see China, Japan all coming along, and the U.S. operators have all been also active, Verizon have been launching. As I said, the big picture, if you look at it, the amount that's going to be rolled out over the next couple of years, pop-wise, coverage-wise, will be, I think the major countries will be Korea, the U.S., probably China, and Japan. This is being driven really by the fact that we have a lot of 5G devices coming out today. In April of this year, and some of you might have already have it, is the Galaxy S10 5G was launched in Korea and in the U.S. and in other places in the world now. This is becoming the de facto 5G phone.
Not just us, but a lot of other vendors are creating phones, 5G phones now. Motorola, LG, Xiaomi, Oppo, they've all been announcing 5G devices, and this has really Being expand. For consumers, this is a key thing. For consumer 5G to develop, you need the 5G devices out there. 2019, as I said, we have 39 devices have been announced, and probably more will come out. This will lead to enormous exponential subscriber growth, we believe. What this is showing here is that, for example, how long did it take to get to 500 million subscribers? 3G took 10 years, 4G took five years, 5G is getting to three years. This is also, I talk about this a lot with my team, is that this is also based on people, subscribers. This is not talking about machines, as I was saying.
Going forward, you will see 5G cars, 5G streetlamps, et cetera, and those are not counted here. Actually, there's an exponential growth here that we have not really covered. As I said, that's going to be the fundamental difference. Everything is going to get connected, every data is all going to go up to the cloud, and you're going to have AI picking through it to figure out what's happening in the world. This will obviously lead, hopefully, for Samsung Networks, which I'm part of, a very large increase in the mobile infrastructure market growth. A lot of will be focused on 5G. This chart shows significant growth, actually, I think it doesn't do justice to the issue, in that the potential growth is that this is just the mobile infrastructure.
As I was saying, going forward, if you think about it, the wireless and wireline worlds are converging. Telecom is converging. There are new services that are being developed that are going to extend to a lot of other devices at the end. If you start tying that together, the potential for 5G to make changes. Earlier I talked about how 5G is expected to create $12.3 trillion of business. Well, that's the reason. If you look at just this, you say, "Oh, it's only $54 billion." Actually, we think it's much more than that. Based on this, you can see like the U.S., Korea, they've all been announcing major investments. In the U.S., they've said they will invest $275 billion in 5G. In Korea, $26 billion. The numbers keep on going up and up and up.
As I said, this is because it won't be just about the mobile infrastructure, it's also about the devices, the services, and how it's going to change the whole telecommunications industry. As I said, in the U.S. already, last year, if you look at the picture on the left, these are all Samsung devices, actually. The Verizon launched 5G home broadband, which was fixed wireless access, a replacement for fiber services, in October 2018 in four major cities, Sacramento, Houston, Indianapolis and Los Angeles. Samsung was the provider of the network equipment for two of those cities. Our competitor provided for two others. Then we provided all of the, what we call the 5G routers and outdoor routers for the all four markets. Even at that time, we were viewed by Verizon as the leader for 5G.
If you go to Sacramento, Houston, you might see some of those 5G boxes at the top. Also, in April of 2019, this year, we just launched the 5G smartphones with Verizon, and they've been very successful, I think, and they've been getting, as I was saying, if you look up in the trade press, there'll be a lot of comments about getting gigabit speeds faster than the internet they have at home. If you want to really see what 5G is doing, I think the best thing to look at is looking at this video, which shows you what 5G is, how it's being used in Korea right now, today. If we can show the video.
Korea, always on the cutting edge of telecommunications. Who's always at the forefront? Samsung. With industry-leading mobile technologies and key partnerships with Korean carriers, Samsung is ahead of the game, bringing commercial 5G to life before the rest. From seven cities in December 2018 to major regions of 85 cities nationwide, Korea is now a 5G mecca. Supporting 4G and 5G NSA mode, Samsung's virtualized 5G core solutions are in play on all three carriers. Samsung incorporates key 5G network technologies that give partners the speed to expand their network and provide new services, such as control and user plane separation. The jump to SA mode is a simple software upgrade away. Samsung's 5G equipment is also the industry's most compact and lightweight, making it easy to install onto existing sites.
Thanks to Samsung 5G tech, our partners are up and running faster, establishing tens of thousands of wireless 5G connections. Now, with the world's number one 5G smartphone, our vision has come to life. Real-time sports anytime you want it, no matter where you are. Zoom in, zoom out, jog back and forth, because super low latency means zero lag. Music. VR. AR. Games. 5G powers it all with ease. From super bandwidth-heavy VR art galleries and tours to long-distance full HD group video calls, Samsung 5G technology is radically enhancing the way we connect, entertain, learn, and communicate. This is 5G. It's the way forward.
I think I always tell operator friends who comes to Korea, it's like, Korea is interesting because we're sort of like a nationwide mobile lab. I think this 5G really showed it. When 4G happened, the same thing happened. With 5G, it's really happening a lot because we've got a nationwide network now. As we're showing, people are developing all sorts of interesting apps and different applications and services that are being enabled by 5G. Which one will succeed? No one knows. Unless you have the playground where you can play and experiment, you can't make it succeed. The tactic or strategy that the current operators have taken is the Field of Dreams strategy, build it and they will come.
They say, "We'll just roll it out nationwide, start with phones, afterwards, we expect a lot more to happen." If you go on YouTube and other places, you'll see how SK Telecom is working on factory innovations. KT is working on, I think, AR and VR studios. You saw a lot sports stadiums. You saw that dragon flying around the baseball stadium. A lot of new services are being developed. I think that is one of the key things about Korea right now is that we're at the forefront of enabling these experiments. Now, that being said, okay, I've talked about vision, I've talked about how things are standing up, being sped up. What about Samsung Networks and Samsung devices? How are we increasing our 5G leadership? This is where I'll talk about that a bit.
First of all, technology milestones. We started 5G research 10 years ago in 2009. Over the years, we've had a lot of interesting milestones, like 2014, 2015, we're showing that. This was with millimeter wave technology, which at that time, a lot of people were saying is crazy. It will never work for mobile because millimeter wave technology, at that time, basically went like five meters and dropped dead. Unless you had a cell station every five meters, they said it would never work. We managed to get it to work, and this was what drove the industry to accelerate 5G. As you can see, this is where we ended up at on the long and winding path to getting 5G commercial. Now, that was only enabled because we have such strong research and patent leadership.
We're the leading 5G patent holder, more than 4,000 essential patents, indicated by ETSI. This is their official technology group in, well, it's called European, but it's actually the worldwide leader in this. We've also now initiated 6G research. The reason is because, as I said, 5G started 10 years ago. We argue is that now that we're starting to 5G deployment, we now have to start doing 6G research. This is sort of like an accelerating, you're like a squirrel on a wheel, and you have to run faster and faster. It's an unfortunate thing in some ways. This is also how we maintain our leadership. Doing all this research, what did that get us? Well, as I was saying earlier, the key thing enabled us to do from when we started 10 years ago was millimeter wave 5G-based systems.
What the key thing is, what radio waves are is that when you talk about millimeter wave, the signal is what sends the data, and it's the amount of times it bounces that dictates what its frequency is, how much data you can send. The higher the frequency, because it bounces more, the more signal you can send, the message you can send. Millimeter wave is sort of the ultimate speeds right now. This is where we have had major gains. Samsung, because we're recognized as in the technology world as 5G leaders because we have put so much effort and technology into creating millimeter wave systems. This has been beneficial because this is what gets you to the 10 gig and 20 gig speeds that we were talking earlier.
There is a problem with millimeter wave, in that conventional networks are built on towers, and they have big radios, we call them, you can have a sort of regular pattern. With 5G, because the propagation speed distance is so low, you need to create a lot of dense networks. It becomes a much more messy network size as we show on the left. As you can see, on the right, you can say you can have type 1 network cell site that's sort of built out throughout the nation. With 5G, you need many types: small, big, medium, facing one way, facing another. What we call them, you need big and small cells. That's our challenge as an industry. To make those, basically, you have to make it smaller.
To do that, you have to do, I think, they call them small cells. I say they're small for a reason, right? Because you have to minimize the power. You have to have small power, minimize the amount of backhaul they need, and minimize their size. Then you have to maximize the distance that they can cover. How do you do that? Well, in electronics, there's only one way you can achieve these sort of things, size and power minimization, better performance. The answer to that is chips. That is where we think Samsung's biggest advantage comes into play for 5G. You all will be talking about our memory team division, but it is not just about the memory team or other things. It's that Samsung has built in, its DNA is around chips. We create chips.
That has been the basis for us in that we have created our own 5G modems, our 5G RFICs, for example, and this has led us to be able to create products that are higher performance, lower power consumption, smaller, and better performing than others. This is all due to the fact that we're able to work with our own. We actually work not just with our own semiconductor brethren in Samsung, but also other companies. As you probably can know, our foundry division, our LSI division, are industry-leading. Actually, we do probably more work with them than with other customers, with other partners. That has become a key advantage.
One of the benefits, as you can see, is that if you integrate with chips, for every generation of product, you can get anywhere from 25% or more smaller size, better weight, better power consumption, or better performance, depending on how to do it. This will allow the key thing for operators, that it allows quick and easy installation for mass deployment. If you look here, that's the small base station we've created for millimeter wave technology that was used by Verizon. I'm not sure if any one of you have seen real cellular base stations, if you walk around Asian cities or let's say Seoul, and you look up, you see these big antennas and stuff that are hanging all over the place. Installing them is very painful.
As you can see, that's small enough that one person, you see that little handle at the top? You can just go up in a bucket truck, install it, finish it in 2 hours. This is a huge difference. This is an industry-changing moment right now for us. This was all due to the fact that we made our own chips, around four chips that go into that product. We need many different types of radios for this, for 5G. As I said, the product we just showed you was the smallest one on the right. We also need, as I was saying, the 3.5 mid-band. We also need what are called MMUs, which are slightly bigger, they also need to be more lighter, more compact. We have the traditional ones for, let's say, the 600, 700 megahertz.
We need all of these, and all of them have to meet various criteria. They have to be. The key point is operators want smaller, better performing, lower power. The only way, as I said, you can do that is to use chips. By this, we're able to help operators with their CapEx. CapEx not just from an equipment cost perspective, but also installation services, because that's also a big item for them on a CapEx line. It's not just the CapEx of the product, but also the installation, which is also counted as CapEx for them. That being said, if we can control the cost for operators, they will love us. The other part that they also need is, how do I grow the top line?
Because if you can't grow the top line, just cutting costs will only get you a certain amount. That's another area that we've been really focused on, in that if you think about it, 2G, 3G, 4G is very limited services mainly. It's about voice and some data. It's about, as I was talking about, people to people or people to the internet or Google. For operators, for 5G to become the big change for them, it has to be something that enables new services. That's what 5G is going to do. It's going to allow us to do unlimited services in that it's not just telecom services, which is the basis, but it will allow us to do immersive services, things like smart factory, smart city, autonomous driving, drone-based solutions, et cetera.
These are what we think will really enable operators to see revenue growth from 5G. What will enable this? Well, if you think about it, the reason they were tied like that was multiple things, was they were a telecom infrastructure. What they need to get to is what's called an internet infrastructure, i.e., you could say Verizon wants to become like Google. Now, to do that, what's holding them back? Well, telecom operators have always had what are called dedicated networks for telecom services. Nice big iron boxes specifically made for voice or data or what they're doing. Going forward, what we are developing at Samsung is a completely cloud-based solution. We're showing, we're giving to people like Verizon, SK Telecom, others, the option to renovate their core and their services so that they become a flexible network for internet services.
They can really now become a company that can be as agile, as efficient as the big internet companies in creating new services. For example, we've already deployed it in Korea with SKT, KT, and LG U+. We have some 80% of the market, and the reason they want to do this is because they want to create new services. Another part is operations. How do you simplify the operations for them? One of the key things we think that is going to be important for simplifying operations and decreasing their OpEx will be the introduction of AI. Again, this is another big area where Samsung is putting a lot of focus. Because if you listen to what Samsung, we are putting out, is that we're investing a lot in chips, 5G, and also AI.
This is not just as a general AI, because AI is a tool. People have to use it. We use it in the Networks division to simplify the operations of networks for operators. We think this is another big point. As I was saying, we recently said we're investing more than $22 billion in 5G and AI and future growth engines. There's a reason why we talk about 5G and AI. As I was saying, 5G plus AI allows machines to communicate, but they also allow you to do a lot of things to simplify. Why Samsung 5G? I think there are four things that I've talked about here. In-house chipsets. They allow you to make products that are smaller, better performing, lower power, and ultimately lowers the CapEx for operators. This will lead to best-in-class 5G radios.
The other part is we create cloud-native core, software-based solutions that are services that enable you to increase your revenue, in which for operators, the top line is just as important as the bottom line is the cost basis. AI-based operations, as I said. AI, we're putting a huge amount of effort to AI. For operators going forward, I was showing you how the network went from what I said, the cookie-cutter conventional network to the messy 5G network, which had a lot of different types of products in there. Well, operating that is going to be hell if you do it the traditional way. What you need will be AI. That is another part where we, as Samsung, as a group, have huge advantages.
If you put all of these together, I think that is why Samsung, as a network infrastructure company, is really now coming to the forefront of 5G. We're able to bring all of these to reduce costs for operators, but also giving the operators to increase revenue. This is leading to major engagements, 5G engagements. We have more than 20 plus operators engaged in the world. We're slowly developing our other channels across the world. For example, we don't have places somewhere like the South Americas. We're concentrating more on the advanced nations, but we will be going out elsewhere as well. As an early indicator of this already, Dell'Oro already announced that we have 37% of the 5G market in late 2018, early 2019. Based on this, our goal is to grow our business.
We started in the 2000s, from 2G, 3G, gone to 4G, and with 5G, we really expect and we really hope to grow the business. That, I think, brings me to the end of my presentation. Thank you. If you have any questions, I think Yes. Yes. There is, yes. Sure.
It's an interesting point you made about your proprietary chipsets for this RFIC thing that you described.
I mean, one of the big things that changes in 5G is the RF front end radio frequencies componentry. Is that something that you can do yourselves, or is this something that you're developing in your ecosystem, or you're relying on your partner ecosystem for it?
That's a very good question. The question was about the RF front end. I think that is really one of the critical advantages that we have. RF is a black magic sort of thing, black art. You need to have two things. You have to have chipset manufacturing capability, also you have to sort of try out a lot of things. We have created our own chipsets for RFIC, and they are industry-leading. If you compare our chipsets against even the ones that are being created by all the fancy startups out there, and we constantly do benchmarking, we are consistently the lowest power and the best performing. We've created 24, 37, 28, 47 gigahertz chipsets right now. They're the ones that we're using in our own products. Also, the lower-band ones, we're making them as well.
In there, it's more like the beamforming technology and other technology, and we're creating them as well.
Just to make sure I understand. This is the logic behind it or the actual.
The actual analog, what's called the analog front end, and which is the black magic part, as I said. No one has a textbook for that, and that's just experience, and that's where we have a lot of advantages. Also, the digital back end as well. That's again, where I think we have a huge advantage in that we create, as I said, it's the end-to-end aspect. Samsung has always said that we have end-to-end, but when does that advantage come into play? We think 5G is where the advantage is coming into play, because we're going really from the front end of the radio all the way up to the core, up to the services. Yes.
Sure.
Yeah. Thank you very much. It's a great presentation. My simple question is how difficult or easy to install Samsung's equipment on top of your competitors, European or Chinese equipment. By the way, my name is Simon Wu from Bank of America. Thank you.
Oh, thank you, Simon. Okay. That is a very good question, actually, again. That is something that we get a lot of questions. As I was saying, I showed earlier the non-standalone and the standalone architecture. As the industry has gone forward, they've realized the key technology that's needed will be the interoperations in between different generations of products from different companies. Because that's really what held back a lot of the 2G, 3G, 4G migrations, because an operator would have vendor A, he wants to go to vendor B because their 3G solution looks great. It's going to be hell. They just stick with the vendor A. It's suboptimal. One of the key things that happened in 5G standardization was make sure that 4G and 5G are not tied together.
They're tied together, but they can work together. When I talk about non-standalone, they made it such that you can work on top of each other so that they can roll it out quickly, but also it's completely standardized so it's that easy. Actually in Korea right now, I can't exactly say where, but in one of the operators, two major regions of Korea are actually run in that mode right now. Also in the U.S. also, we are actually running in that mode right now in field trials, and that's going to be rolled out by the second half of this year. Is it easy? No, it's never easy. Our competitors will not want us to come in, we will not want our competitors to come in, but the operators want that to happen.
If your customers want it to happen, it happens. Okay. Yes.
Hi, Nick Goodwin from UBS. How have things changed in your view for the outlook for networks for 5G post the Huawei situation developing in May? Historically, you haven't had a lot of overlap with customers for 5G between Huawei and Samsung Networks. Nevertheless, there's arguably a business continuity risk much higher now for Huawei. How can your business take advantage of that going forward?
Yes, that's another very good question. To be clear, I think our view is this really. Political things can change. It can change in a month, in a time, Trump makes an announcement, everything can change immediately. Our view is that we shouldn't rely on that sort of stuff or political climate. Our view is that, best just make sure that you make the best damn stuff. My view is, I tell my team, your goal should be that when the Verizon supply chain guy clicks up and says, "Okay, which vendor should I bring up?" The first name on his list should be Samsung. That is the only way we can win in the market. We have to become that first vendor, the default choice, and then the others have to be the ones they might consider. That's the only way we think we can win.
Yes, we know there are some political winds that are changing, blowing this way and that way, but our fundamental direction is not to base ourselves on that sort of stuff because it can change. Who knows? They might say they become the preferred vendor or preferred country of partnership. We will not base it on that. We have to make sure that we have the best product that we can beat everyone. As I said, I think the full range of our story, the chip space solutions, etc., really bring us that advantage today. Another question? Got another one.
Just a quick follow-up. All these interesting new services, especially the vertical specific new services. Telecom industry hasn't had a great record in innovating in service.
A lot of 4G value that has been created was created for other players taking advantage of their basic infrastructure. In your conversations with telecom companies this time, do you sense that that's going to change? Are we still going to see the Googles and Facebooks of this world doing all this exciting new stuff?
I think that's another very good question. I'd say it's true. It's interesting that the I've had discussions with operators and a lot of them, all the major ones have said the same thing. They say, "Hell, no, this time, no way I'm going to allow those guys in San Francisco to take all the revenue." They've all been very anxious to create new services, and one of the key things they've been, if you see a lot of telco communicators working on, is what they call the mobile edge computing, MEC services. That's really because they want to be in the value chain for new services. The way they think they can really have an advantage is what they call edge computing. Edge computing is the concept, really, to make 5G successful.
It's not just the radio technology, it's not just the core that I talked about services, it's also about can you place servers and data closer to the user so that they can get better experience? For that, you need real estate. That is where operators think they have the trump card in that, for example, AT&T has over 4,000 central offices in the U.S. Central offices are sort of an old legacy phone offices. They're probably one of the biggest real estate owners in the U.S. right now beside the federal government. That means they have these little places all over the world, all over the U.S., and they're going to put their base stations there, and they'll put edge computing platforms there so that people can get instantaneous services which Google or Amazon cannot match. That is their goal.
Of course, the other companies, the FANGs, have their own goals and strategies for attacking that market. It's a very long, interesting conversation there as well. This time around, I think, as you said, to what the investor community calls the FANGs, I guess, they know they want to replay the 4G book. The operators say, "No, that book has to be torn up, and I'm going to create a new one." It's going to be a very interesting one, and we're stuck in the middle of that right now. Any questions? Okay. I guess. Oh, yes.
Hi. Thanks a lot for this. Just a quick question. A naive question, but what is this in terms of relative to maybe your devices business or overall Samsung? Let's say in three to five years, how big is this opportunity for you? There are no numbers, I know, but I'm just curious to things like relative to scale of devices business, how do you think about this?
I don't know. Well, scale-wise, I can't say numbers, but this is the way I put it. I talked about machine to machine. It's about IoT. It's about things. If you really think 5G is a business about things, my simple answer to you is that really, who makes the most things in the world? Samsung makes more than 500 million things per year. Think about it, 500 million things. We have seven billion people in the world right now. Samsung probably has more things out there than people now. If it goes in that world, what we'll do for 5G, for Samsung as a whole, devices or consumer electronics, I think it's going to be enormous. I just can't say how or why. I can't put numbers to it. The simple way to think is, who makes the most things?
If this becomes a game where things is important, then I think the person who makes the most things has an advantage. Yes.
We already know that Samsung is the leader in the mmWave. What about mid-band? What's the competitive situation over there?
Mid-band is tough, but Korea right now, we have 70% of the market in Korea, and it's all mid-band, 3.5. I think that by itself can tell you where we are with that. I think mmWave, I think in many ways ahead in the technology, but mid-band, we're up there as well.
Okay. I guess, this is the end of the first session.
Sure.
Please, thank you.
Thank you.
We are having the second session without a break. After the second one, we will have a 10 minutes break, okay? Please give a big welcome to Mr. Jongmin Lee from Samsung Mobile.
Hello, everyone. My name is Jongmin Lee . I'm head of product strategy planning group in Samsung Mobile. Let me just show you our history, the smartphone history in Samsung. Actually, no. Let me explain myself with Samsung history. Actually, we start from 1989. It's a very bulky phone, maybe you already have that one now. But no. Actually, I joined around here, 2001, when we launched first camera phone, actually. Then we launched in 2010 Galaxy brand. This year, 2019, is the 10th anniversary of the Galaxy brand. As you see, we have a many historical and remarkable phone so far. I'm also aligned within Samsung history. This year is very important for us. Let me explain. Okay. I will explain mobile market trend and current business status. Our strategy this year. Okay. Actually, we had to have a very nice performance from 2008.
It's like a rocket. As it goes up like that. Last year, I think it's like a BTS, you guys could take a picture. Right? Anyway, last year is the first year, have a downturn status in market. We expect 2019 is also downturn by 5%. The reason are, I think four reason, and market also think this reason is right. The first one is replacement cycle. It's two years, we expect it's almost under three years. Nowadays, it's over three years. People doesn't change their phone a lot. They are satisfied with their old phone. That's why this is one of issue. Second one is the market, the biggest market like U.S. and China. They account for 40% of total smartphone market. The market are already saturated. That means most of guys have a smartphone.
Third reason is the carrier. They doesn't spend money. There is a trend in subsidy. Final reason is economic hazard and uncertainties. As you see, the market is going down. You can say like this, "Wow." Like mobile industry has completely fallen, right? No, I want to say, no, it's not like that. Okay? There are very distinct reasons here. Maybe you can see these kinds of reach in your family or in your Okay? Like they are immersed in the smartphone, like this. Right? In my family, I want to have a dinner with conversation, they just look at their smartphone. When they come back home, they, "Oh, father," "Give me your phone" or something like that. This is almost the same situation in every family.
The other one is, I thought this one. Do you know market capitalization of Uber? Do you know? Or Lyft? 20. Right. Lyft is 20. Uber is currently 70-something. Maybe the expectation of their evaluation was KRW 100 trillion or something like that before IPO. That amount, they don't have any driver, they don't have any car. They just have a very nice system. Who make that kind of new industry? I think mobile. Without mobile, they can't. Without LTE, they can't make such a big kingdom. That is a power of mobile. Right? In the coming future, we have tons of opportunity to bring up our mobile business again. The first one is, as Woojune already told you, the 5G era. Okay? We already starting 5G, April of this year. Actually, it was a very good start, right?
Surely in 5G era, surely the equipment that in important, smartphone is very, very important, the smartphone is located in the center, right? 5G have two meanings in smartphone. First one is, they, like 5G, stimulate the demand for replacement. Okay? Like just my father bought new phone, that's 5G phone, right? I asked him, "Oh, do you know what is good in 5G?" He said, "Oh, just it is affordable." He doesn't know anything about 5G. He just know like, "Oh, it's fast." No, he's replaced, because they have a better feature, big screen, big display, big camera, with affordable price. That stimulate the demand for replacement. Second, the ASP of a 5G device is higher than the normal devices. Currently, ASP of most of the devices, around KRW 200 or KRW 300, something like that.
Even in 2022, we expect ASP will be over $500. That is a very nice signal to us. The second reason is foldable. I can say, new form factor. Okay. You guys are our normal customer. Fed up with using just a plate-type smartphone, all smartphone look same and they can't find any distinct features on the smartphone. In foldable or new form factor phone, it's totally different. Okay. I'm beta tester of a foldable phone, so I'm using a Galaxy Fold. That's a total different experience. When I come here, usually I bring the briefcase with the tablet. With a fold phone, no, I just bring just my phone, right? I have a folder phone here, then I can just like this, and I can see my email or whatever, like watch or video or whatever. Okay.
Maybe you saw in the Unpacked event. I think you guys have many questions about the foldable. Let me answer later on. Please remember, foldable is very useful. It's different from the normal smartphone. Once I use this one, I can't back to a normal plate phone. Yeah. Actually, you look old, you look like 20 or 30 like that, but now I can't see exactly what I saw, because my eyes is getting worse. Foldable is the best for that, really. Yeah. We think that foldable demand will rise the market, right? That's the second reason. Third reason is, maybe all company have said now, "Oh, AI, AR, robot," or whatever. Now, under a 5G circumstance, we can make a real AI, AR robot industry. Okay.
Maybe Woojune already told we have three aspect, the three, what is the Friends of 5G is a low latency, high speed, and multi device connections, okay. Actually, this area, like AI, AR, robot, they need that kind of features, right? That's why now, I absolutely sure this kind of the technology will be flourish in 5G era, right? There is a, just in the funniest for you. Actually, in my family, with my wife, all the time issue is, who turn off the light before going to bed? Do you understand? Usually, we just go to bed and lay down and turn off the light. Who? The last person or you are the closest to the light. These days, no, we just using the Bixby, like, "Hi, Bixby, turn off the light." That's it.
Actually, my wife doesn't know anything about technology. She just use that kind of IoT features, and she think, "Wow, this is really useful." The other, like a neighborhood, coming to my home and, "Wow, this is fascinating," something like that. They already use IoT or AI already. That means, that would be the part of your life in coming future. The other, the good thing of 5G is, they will make a totally different experience. The one of big area is game. Let me show one video. It's like a game of tag.
It was pretty crazy playing that game. I was probably over the top. The key to that experience, it's incredibly simple. Shared experience and movement. In order to really create that magical experience, you have to have incredibly low latency and incredibly high bandwidth. 5G
You don't know what they are doing. It's like crazy guys. No, it's like this. In offline, with 100 guys, we shoot each other, right? There is a monster. We kill this monster with a collaboration of 100 guys. This is just under a 5G era. First one, low latency. If there is a long latency, you can't, right? Second one, multi connection, like 100 guys simultaneously, right? They will download in the tons of data, okay? That's why now it will work. Actually, do you know the company name Niantic? They can't, because the latency is too long, right? That's why now we are working with Niantic, right? Let me briefly go over current business status. Fortunately, actually, we had a constant, really 5G devices working fine in sales.
In Korea, we already sold 1 million devices in Korea. In Korea, totally 1.3 million devices are registered, almost Samsung account for 80% of 5G device. Initially, there is some issue, like in the quality or whatever. We all fixed, working with our carriers or the equipment company or other devices. Actually, as I said, 5G will stimulate the demand for replacement. It's working like this, right? As you know, we are the company which have all from chipset, devices and chipset, and the core and software tools. We are the company, and we have worked with the many carriers already in Korea, in the U.S. That's why now we have experience, right? That's why we have many carriers, they want to work with Samsung because we have a very strong experience in Samsung.
We launched in the first, the two big countries, right? Flagship, as you know, we have launched four kinds of S10 series, S10E, S10, and S10 Plus, and S10 5G model. The good news over here is, surely the S10 Plus is the most expensive model. Sales of S10 Plus is almost major, majority of whole sales. That means, our profit is good, and market response is very nice. They think, S10 shows you some innovative features, and they shows innovation. That's why we are happy to have that kind of positive feedback, right? For mass device, last year, we realized Samsung mass device, mass device means mid-range price or low price device. They don't have a competitiveness compared to The other brands. That's why now we change our strategy now. We put new innovative features, mass device first, right?
That's why, you remember last year, we launched Galaxy A9 and Galaxy A8s, Galaxy A80, like that. The quad camera and the punch hole first, and the rotating camera this year. Okay. That means, usually we put new features in flagship device first, and then we just download to the mass device. That was usually our steps, but we change our direction. That's why the market thought, "Oh, what is this? What is the direction of Samsung? They are a little bit crazy?" Or something like that. Actually, our strategy was right. I will show the sales performance. We realized in India, the online market is very important. That's why now we have worked with Flipkart and Amazon, and we launched an online-focused model, is Galaxy M series. Right? After launching Galaxy M series, we have almost 10 times sales, but all sold out. Okay?
We found out, oh, with the competitiveness of performance and reasonable price, customer still like Samsung. Right? That's why, as a result, we guys have almost 1.6 times than our predecessor's models. Okay? We call this is a new Galaxy A series. Right? I'm not sure, like you have seen this, guys, Galaxy A80 models. If you have time, please look at your YouTube video. That's to make the full screen experience, and we have a camera up there. It's rotating like that. Okay? It will be launched, coming soon. Right. We also launched a new, Galaxy Watch and a Galaxy Buds. Right? Actually, many people thought, okay, Galaxy Watch is a super hit, that's for man, something like that. We targeting female. Right? The response from female was very nice. Actually, the market share of Galaxy Watch was almost 15%.
With the Galaxy Buds, actually, the wearable market is a very rapidly growing market. It's almost over 10%. Right? That's why the Galaxy Buds also have almost more than double record. Surely, I can say, this is the nice result for Samsung. Our goal is more than this. I'm very happy to have a very positive and promising result from this. Right? This is our 2019 business strategy. Okay. We have three strategy. Surely, the Samsung Mobile is a mobile company, so we have to strengthen our smartphone lineup to secure shipment and profitability. Right? That's the number one. Second, we have to launch successfully, commercialize 5G and foldable smartphone. Right? Third, we want to pioneer new business, like a 5G related service and wearable or no more services. Okay? We have three pillars.
The first thing, our flagship, I already explained many things about flagship. We will launch in August new Galaxy Note10 series. Okay? I can say, Galaxy Note10 is the most powerful device ever. That will provide now the highest productivity with the S Pen. Okay? You will see how S Pen is changing. Right. Second, for mass device, we have two things important: how the team responds to rapidly changing market. Okay? Our product planning, they are very working how to catch the user's trend. Once they think, oh, user's trend is, goes different direction, we just give up. Okay, let's do the other model. That's why now we have no rule, like just a lifetime of one model is one year. Okay? It could be just six months. Okay? We response very quickly, and we change our organization to response the mass model.
The second one is secure the profitability. That's why now we are focusing on including effective marketing campaigns. Second one is component standardization, as that's very important for us. For foldable, Galaxy Fold was launched in Samsung Unpacked event. That's the first model, and we are preparing various kinds of foldable model. Okay? You will see many kinds of foldable model in coming future. This is a tablet type, and we are testing, we are preparing different kinds of, you know. We think the approach in folding way is very, how to say, is working really. Think of then if I do a unfolding like this, how can I put it here or something like that? This is expensive device. Okay? That's why we are sure this will be driving force of Samsung mobile industry.
Let me explain some core parts, like a camera or display, chipset or whatever. Maybe, you know that we have a Infinity-O Display. Actually, our goal is to make a perfect full display experience. That's why we are trying Infinity-O, like this, and with a fingerprint scanner with ultrasonic technology. As I said, like in Galaxy A80, we have a full screen with a rotating camera. Okay? Unfortunately, I can open here, but we will show a new full screen experience without that kind of barriers. I'm pretty okay. I also use that kind of Galaxy S10 5G models, even though there is a two holes, I don't care. There's nothing that bother me to enjoy my contents. Okay, this is a kind of a quiz, you know. Actually, this picture is from the YouTube. Actually, we didn't take these pictures.
Please guess which one is by Galaxy and which one is by DSLR. Okay? Gentlemen? Gentlemen? Could you guess which one, left or right, by Galaxy?
Galaxy is left side. Right.
Right side. Okay. How about lady? Left side. Okay. One more pictures. Okay? How about this? Lady first, which one? Same? Wow. How about you? You don't know? Okay, there's one more picture. Yes, one more. Yeah. Actually, I download this one from the YouTube, and the one YouTube compared Galaxy and DSLR, actually Canon model. Yeah. Left side is Galaxy. All left side is Galaxy. So that means, in normal condition, we cannot distinguish which one is which one, right? That's why, actually, I'm pretty okay with these kinds of picture with the S10. So actually, this kind of technology, the picture is based on our technology, like the three cameras, they provide a ultra wide, wider angle and the telephoto. Actually, this is very useful. Okay?
Next one is we have a dual aperture, that's why now we can have a very nice image from even a low light condition. Right? Look at this. This is a video. We have a very nice and super steady mode. Please see which one is better. Actually, they just like this. Okay?
Yeah. Okay. I don't want to show. Okay. Actually, the other model is our competitor, and the other one is the Galaxy S10. In video, our super steady mode, we are improving those features more and more. In Note 10 and in S11, you're going to see a better quality of camera functions. For the other chipset, as you know, we have an Exynos chip. Which one have the NPU functions? Maybe you heard from the news, they will getting stronger, something like that. We first launch biometric authentication. That's getting better, and it's very easier to see and very secure, right? Third one is wireless power share. I'm not sure you guys are familiar with these features. Currently, just the S10 support in that features. In my company, there are many guys to use the S10.
We just when in the get together at the dinner time, when I doesn't have from the battery life, you know. Give me your phone, I can charge your battery. Okay, you guys have, like 60% only, give me your phone. Or my watch or earbuds. It's very convenient, right? I think that this kind of, the distinguished and the new feature will help the people, "Wow, Galaxy is really nice in life." Okay? We will keep showing these kinds of new features. Right? As I said, this is the 10th anniversary of Galaxy. We have many considerations of how we have to go. Okay? I think our competitor goes through a very close way, right? They make their own Netflix, right? We don't make our own Netflix. That means, we are working together with our ecosystem. That's very important, you know? Yeah.
That's why we have tons of C devices. The first one is experience to connect those devices. That's why we spend time and effort to make it. As you know, we have a very secure element called Knox. As you know, security is very important these days. That's why we keep focusing on the Knox. The other one is Android. We have a very close partnership with Google. For example, like in Galaxy Fold, there is continuity features, like that, when I see like this. Where is a good example? Okay. When I see a map like this, then, oh, I can see a map like this, but I can open, they show like bigger pictures, bigger maps, something like that. Okay. Usually, I'm using like this, in the subway, I'm looking, oh, okay.
Then in out of the subway, I just open my window. I can see the bigger one. Like that. Actually, to make these kinds of features, you have to make a very strong partnership with Google. Okay. That's why they support continuity features. Samsung, internally, we have these kinds of devices, and we have communication and health, and wellness, and entertainment thing with Knox and Android. Maybe you guys remember, we acquired Harman, Joyent, Viv Labs, and SmartThings. In 5G era, they will brighten very shining. Okay. They have the capability to make a better service in the 5G era. If we don't have a capability, we will work with Google, Spotify, or Instagram, or Netflix, those guys, very closely. Okay. As I said, we are mobile company. We are just a mobile company. We think the most important in mobile is experience.
In the next 5 years, we're going to have a new mobile experience. Please think of Samsung Mobile as an innovator of a new mobile experience. That's what we're trying to do. If you think Samsung is an innovator, we are very happy and thanks to you. Right. Thank you. Question. Yep.
Thank you for letting me ask a question. My name is Claire Kim from Hana Financial Investment. I have one question on smartphone platform strategy. 5 years ago, when I searched for Galaxy phone, there were more than 120 models.
Okay. Right.
Last year, when I searched with the same brand, the number of models were only 50-60 models.
Right.
Now it seems that Samsung Mobile is set to increase the number of models. Can you tell me the background?
I lost, like, last one. Currently, this year?
it seems that now more and more models are coming out, it seems like it is going back to the previous strategy of-
Oh, you mean our models is getting-
Yeah, diversified
increased. Right. Yeah.
What is the background for these changes?
Okay. The background I already explained. Hold on. Okay. Okay. Okay. Okay. Flagship, we already launched four series. Maybe two years ago, we just launched Galaxy S8, and all Galaxy S7, just one model. Right? That is one of the reasons. The other reason is for mass device, yes, right, we just launched, okay, from KRW 200-KRW 250, just we launched just one model. Okay? We realized that model doesn't have a competitiveness. It's expensive, more expensive, and their feature, the specs, is behind the other competitors. That's why we respond to them very rapidly in a mass device. That's why we increase our models. I think this year is a very special year. Next year, we're going to have a very stable product organization, reorganization. Yeah. Right. Like M series, we add in the M series this year.
That's why it looks, oh, Samsung has many models. Like this, in every country, they don't select these kinds of old models. This is for just India. Some of the series is not picked up in South Asia, or in China, or like that. Depending on country, we provide the future models. That's our strategy. Right. Other questions? Yep.
First of all, thank you for the presentation. This is JJ Park from JPMorgan.
Okay.
My question is that, you mentioned about the new technology now applied to the Galaxy A series instead of the high-end Galaxy S series and the Galaxy Note series. The issue of the smartphone industry is a lack of the differentiation between the high-end, mid-range, even low-end segment.
You drive the foldable smartphone for the high-end, clearly differentiated form factor, even compared to high-end segment. Next 5 to 10 years, do you believe the foldable smartphone remain the high-end segment as a niche product and a differentiation factor? Will foldable smartphone become the mass model, there's no differentiation by the brand and by the company?
Okay. At first, no, I don't want to say we adopt new technologies just in mass model first. Surely, look at this, some of features is for camera or hole, or this is also camera. These kinds of feature is very good for young guys. That's why we focus on such a phone. Their other feature is surely less than, the worse than our flagship device. That means we focus on, okay, what is the important feature for youngster? Oh, camera. Okay, we put nice camera features in mass device. We also tried in the flagship. That's why, please don't think we just adopt new technology in mass device. That's first answer. Second answer is, surely, foldable will expand to the mid-stack devices. Yeah? We think that usage will be different. Actually, my Galaxy Fold is for replacement of tablet.
There are many types, various types of form factor. In some form factor, we're going to focus on surely the mass device. I think the impact of new technology last just one or two year. That's it. We have to expand those new technology to mass device, like 5G. This year, 5G is just launched in the premium stack, we're going to launch the mass device as well. Otherwise, the technology doesn't expand to the normal people. Right? Here. Other question? I think everybody want to have a break, coffee. Okay? Okay, thank you.
Sir. Everyone. Before we start, I would like to make a quick comment. For the Q&A session, please ask a question that is only related to the contents that presented today, okay? For example, memory price outlook, CapEx plan, those kind of thing, he cannot answer the question. Okay? Let's start the last session of today. Please give a big welcome to Dr. Shin from Samsung Semiconductor R&D Center.
Thank you. Hi, everyone. I'm Kyoungsup Shin from Samsung Semiconductor R&D Center. As the head of the process development team, I am responsible for the development of fabrication process, almost for all kinds of semiconductors in Samsung Electronics. First of all, it's a great honor for me to be here and give you a presentation in front of such a distinguished audience from all over the world. Thank you so much being here together with us today. The title of my presentation is Samsung Memory Technology Leadership. As a fabrication process expert, I'll especially focus on the innovative fabrication process, which I believe the key factor of Samsung memory technology leadership. My presentation consists of three parts. In the first part, I'll talk about the position of Samsung in memory business, review the history of our DRAM and NAND flash memory briefly.
Secondly, I'll introduce Samsung memory fabrication process, especially the leading-edge technology and innovative approaches. Finally, I would like to talk about consistent leadership in future memory business based on synergetic and collaborative ecological systems inside Samsung. All right. I'll go into my first part, the position of Samsung in memory business. Let me start with the history of industrial revolution. As you can see, now we live in the era of fourth industrial revolution. In this era, thanks to the smart devices and wireless communication technology, people are connected quite well almost all the time. Under this hyper-connected society, we create a lot of information and share it with many people every day. As a result, we need to handle and store a lot of data, which is very crucial for memory business. In addition, our history tells us that the speed of changes will be so fast.
Actually, it is happening now. As you can see in the graph, annually created data as of today is about 60 zettabytes, and it is expected to surpass 160 zettabytes in 2025. 1 zettabyte is equivalent to 1 billion SSDs with 1 terabyte capacity. If you line these SSDs up, it is long enough to go around the Earth twice. This huge amount of data is created and utilized mainly by internet, automotive, AR/VR, and data centers, as you can see. I will review the history of our DRAM and NAND flash memory briefly. I'll start with DRAM first. So far, we have successfully developed each generation to maintain the world's number one position since 1992. The 3rd generation of 10 nanometer class DRAM product, we call D1z, will be released this year as planned.
There are a lot of factors for the success of DRAM scaling, but I think that the excellent Samsung fabrication process technology is a key factor. Actually, we have developed a lot of innovative fabrication processes for cell capacitors and cell transistors, which are the most critical components in DRAM. I'll explain the detail later in my talk. In NAND flash memory history, the most significant achievement, I can say, is V-NAND. As you know, Samsung developed and produced V-NAND for the first time in the world in 2013, and we are still maintaining the world's number one position. Thanks to this innovation, we could overcome the scaling limit over the previous 2D planar NAND flash memory, and we opened a new paradigm of 3D vertical era.
The fifth generation of V-NAND, V5, has already been in production since last year, and we will also start V6 production as scheduled this year. Again, our excellent fabrication process technology played an important role for the success. As you can see from the history of Samsung memory scaling, although it was so challenging, we have been successfully overcoming the limitation and maintaining the world's largest memory market share for more than 25 years. We believe that our excellent fabrication process enabled this achievement. In addition, Samsung will maintain the world's best position as long as we keep developing the leading-edge process technologies and introducing new innovative approaches. Okay. I'll move on to the second part of my presentation. It might be a little bit difficult for you, but I think I'll try my best to let you understand. Okay.
I'll briefly explain the semiconductor fabrication process for those who might not be familiar with it. The picture looks so complex, but I think I'll try my best. Okay. Simply to say, the fabrication process is just a repetition of sequential processes called unit processes. Each unit process has its own function. For example, the CVD, chemical vapor deposition, process deposits a thin film, very thin film. Dry etcher process makes a permanent structure by chemical and physical reactions using plasma. Yeah, we have other processes, but I think we can divide their functions mainly into just two parts, as you can see in the green ladder and blue ladder, the material process and patterning process. CVD and diffusion implant, implantation and metallization, that kind of thing, processes, unit processes, can be categorized as material process, for example.
CMP and cleaning is not that easy to be inside the patterning, but we put those unit process into the patterning, and definitely photolithography and etching process can be categorized patterning processes. Okay. On the silicon wafer, we form thin films by material process and then make them into a certain structure designed by designer by patterning process. We also insert specific ions sometimes by ion implantation process and apply heat to make the structure as a really working electronic device. This is just overall fabrication process. Okay. On the basis of this, now I'll go into Samsung's core fabrication process more deeply. Let me start with Samsung's material process technology. To help your understanding, I brought a specific application of ultrathin layer deposition process, especially for DRAM capacitor fabrication.
To make DRAM capacitors, we need to deposit very thin film over already patterned structure. We call the structure capacitor hole. However, since the patterned structures are so tiny, it's about nanometer scale right now, the more film is formed on the top, as you can see in the left figure. Especially as this dimension scales down more, these issues becomes even worse. We made a fundamental solution from 10x nanometer class DRAM. I'll not cover the technical details here, but by developing a specific surface activation process before the thin film deposition, we could successfully form ultra-thin and uniform film as shown in the right figure. For the material process, we also need high-performance material to meet the required electrical property.
For example, we have to continuously develop new materials with higher dielectric constant for manufacturing required electrical performance of transistors and capacitors, especially as their size scales down. So far, we have successfully developed high-K dielectric materials such as aluminum oxide, hafnium oxide, and zirconium oxide with Samsung's unique fabrication process. RC delay is another critical issue. It becomes higher as the dimension of device shrinks. To reduce it, we have developed ultra-low-K intermetal dielectric and introduced metals with low resistivity, such as copper. As air gap and new metal materials are also under development for the future RC delay reduction. In fact, material development, especially new material development, requires huge resources, because we need almost boundless material sensing and screening activities to meet the targeting specification. It's not that simple.
Therefore, Samsung is closely collaborating with a lot of external partners from academia, consortium, equipment companies, and material suppliers. We are also extensively utilizing internal facilities, and recently, we organized Samsung Material Exploring project, we call it SMEP, in Samsung Advanced Institute of Technology. Fast and rigorous screening of new material is being performed actively there. We are expecting that our material process will become even better in near future. Now, I'll talk about patterning process technology. I'll introduce two main patterning processes, closely related to lateral and vertical scaling, respectively. First, let me introduce EUV technology. As you know, EUV is a key patterning technology for lateral scaling. When there is no EUV technology, we introduced multiple patterning technology, MPT, to extend the resolution of the previous lithography technology, which was ARF.
MPT requires high complexity in process steps, it can enhance the resolution by sometimes double or even quadruple. We call the double, the DPT quadruple, QPT technology, respectively. Anyway, as you can see in the graph, the number of additional manufacturing steps due to this kind of QPT or DPT processes in DRAM has continuously increased. That is kind of real data in our DRAM history. Now, in DRAM, I mean D1A. D1A is the first generation of 10-nanometer class DRAM in Samsung. Okay. Yeah, excuse me. Yeah. Sorry. If we still use MPT technologies with ARF for D1A, the process steps complexity is too much. If we introduce EUV in D1A, we can dramatically reduce the number of additional manufacturing steps almost by 50%, as you can see. Actually, we will apply EUV, as many layers possible from D1A production.
In addition, EUV allows fine patterning, as you can see in the small picture in the graph, comparing MPT due to it has extremely high resolution. Therefore, I think it is the right time to move on to the new role of EUV. Let me talk a little bit more about EUV technology. As you know, the resolution of patterning or minimum feature size is proportional to the wavelength of the light source we use. Since EUV has a very small wavelength, it is 13.5 nanometer, currently, we can pattern the minimum feature size of around 18 nanometer with EUV. With the help of new material and process development, we are expecting to reduce the minimum feature size further down to 14 nanometer. MPT will extend the resolution even more, so sub five nanometer patterning, technically, might be possible.
In return, as you can see in the right picture, EUV becomes extremely complex system. First of all, the laser-based light source is changed to the plasma-based source. Because in order to generate EUV light, we have to make plasma, very special plasma with tiny tin droplets. By precisely heating the tiny tin droplets with CO2 laser 50,000 times per second. Surprisingly, the precision of the heating is almost the same as that of heating a coin on the moon, way far from the Earth by shooting a gun, and 5,000 times per second. Conventional lens-based optical system will be replaced by mirrors, because EUV light, because of its high energy, is absorbed by most of the materials, so we cannot use conventional lens-based system. As a result, as you can see, the size of the equipment and number of parts inside the tools increase almost about three times.
It's very complex. However, to utilize this kind of complex EUV system, especially for production, we have prepared a lot. We have prepared Samsung's unique ecosystem for a long time. Samsung EUV ecosystem covers almost everything related with EUV technology, such as mask, photoresist materials, metrology and analysis, and EUV-specific processes, such as dry etching and photolithography. We are also studying even vacuum and plasma deeply. Thanks to the strong EUV ecosystem inside Samsung, as you might see, we could start the world-leading EUV mass production for logic devices from last April. It is so successful for now. I'm sure that we will continue to dominate the patterning technology in EUV era as well. Now, let me introduce another very complicated and difficult process, HARC dry etch process. HARC stands for high aspect ratio contact, and aspect ratio is defined by height divided by width.
During capacitors and fin and channel holes, those are very critical components in two devices, are typical HARC structures, and their aspect ratio becomes higher when next generation comes up. To help you understand the difficulties in HARC patterning, I would like to compare this concept with other well-known things to you. For example, can you see the hair? We can integrate more than millions of capacitor holes into the diameter of a human hair. Also, the latest channel hole in production will be seven times higher than Burj Khalifa, one of the tallest buildings in the world, under the same normalized scale. Actually, the real process of HARC patterning, dry etching, is very difficult and complicated. Generally, dry etching process is a process, is a procedure to figure out the relationship between adjustable input and visible output, which can be final profile.
By using plasma, we connect the input and the output. We have to figure out what is going to be the optimal input for the best output. The problem is inside the plasma, because plasma is so difficult. Let me talk about plasma more. Plasma is ionized gas, you might hear. So-called the fourth state of material. Solid, liquid, gas, and then fourth one is plasma. If we keep adding the energy, eventually the gas will become plasma. We use gas particles such as ions, radicals, and polymers. It is kind of a gaseous particles inside plasma for dry etching. Very small atomic level, sometimes molecular level particles. Unfortunately, precise control of etch gas species is so difficult because we use not just one sort of species.
There are a bunch of gaseous particles and species, and some of them are not used, and some are very critical. To control every species precisely is not that easy. They, I mean, the species, influences each other and respond to the input I put differently. That's why it's not that easy. In addition, it becomes more difficult to supply enough gas particles for etching into the deep bottom hole of the HARC, because it's too narrow and too deep. Especially as the aspect ratio increases, it becomes even more difficult. It's not that simple to design the optimal input recipe for the best output profile. That's why experts are so important in this area. We have been successfully developing as a real, the channel hole etch process for V-NAND. Maintaining the world's number one position since the beginning.
We are very proud of that as a process engineer inside Samsung. I believe that we will keep our leadership in V-NAND based on the strong HARC etching technologies, together with a lot of experienced experts inside Samsung. Finally, I will introduce the futuristic, innovative, and disruptive technologies to overcome the limitation of current fabrication process technology. We are also preparing a high-NA EUV system. NA stands for numerical aperture. With bigger mirrors, we can extend the resolution limit of current EUV further, theoretically. As I told you, we can enhance the resolution not only with smaller wavelengths light source, but also with higher NA, we can also enhance resolution. Because we can focus more light with more light. We expecting, we can extend more EUV lithography technology. I told you, 5 nanometer feature size theoretically possible if we introduce multi-patterning technology with EUV.
With this high NA, even the smaller feature size like 2 nanometer, even just less than 1 nanometer resolution might be possible. We are also developing a free electron laser based on high energy accelerator to provide high powers, which is expected to improve productivity. You might hear EUV productivity is not that high, but by introducing this kind of technology, we can improve productivity huge. That way, we expect to make the EUV technology much stronger. As a different approach, we are studying E-beam, electron beam lithography. Since the wavelengths of electron beam is really very small, as you can see, it's less than 1 angstrom. 1 nanometer is 10 angstrom, considering that, it's really small. Using that E-beam, we can draw custom patterns with a high resolution, even without mask. It's a very good point.
However, since we have to draw all patterns directly, throughput is very low. We have to overcome that. Okay. As a disruptive idea, bottom-up technologies, such as selective ALD and DSA processes, have been also being investigated. As you can see in the left figure, selective ALD, I mean atomic layer deposition, ALD process consists of three main steps. First, we change the substrate surface property, so-called by self-assembled monolayer, in short, SAM. Secondly, we do ALD, atomic layer deposition, on it. ALD will be only deposited on the specially treated surface. Finally, we remove SAM by strip. That way, we can deposit material only on the desired area selectively. However, it is essential to find out and develop the right materials that meet the selective characteristics for the mass production. That is also the homework we have to solve. DSA, direct self-assembly.
DSA can be also explained with three steps. First, we put a bunch of block copolymers on the guide patterns. Second, we anneal for self-assembly with heat. Since block copolymers consist of two different types of polymers with hydrophilic and hydrophobic characteristics, they are self-assembled by attractive and repulsive forces between the polymers and the guide patterns. Finally, we remove one type of polymers by develop process. That way, as you can see, we can form the smaller patterns and nice patterns, smaller than the original guide patterns. We can improve the resolution in this way. However, in this technology, defect is a major concern, so we have to solve that as well. Okay. Finally, I'll go into the last part of presentation. So far, I have talked about memory leadership of Samsung. The excellent fabrication process, I told, it was the key factor for the leadership.
How about the future? Now let me talk about how to keep consistent leadership even in the future memory business. Of course, the excellent fabrication processes that already we have developed and made is our number one asset, number one weapon. I'll just add two more things on it for our future. First one is synergy. I'm going to talk about synergy. It's a great advantage for us to develop many products, as you can see, at the same time. Logic and DRAM, flash, and seamless image sensor, new memories such as PRAM and MRAM. We are doing a lot of semiconductor products at the same time. That way, we can share the technologies between products and lessons learned from each product. I think it's a very strong point of us. For example, EUV was initially applied to logic devices.
However, now, as I told you, We are seriously considering to apply EUV technology into DRAM as well. It is already migrating to DRAM. As you can see, HARP, I told you, and HARP is a little bit different, but high aspect ratio trend instead of a contact, anyway, with similar process. HARP, HART, and new materials are also example of synergetic technologies used in more than two different products. I am very confident that these synergetic process technologies among products would guarantee our future leadership, not only in the memory business, but also in the general semiconductor businesses as well. Another one I want to add as our weapon is strong Samsung R&D ecosystem. Samsung Semiconductor R&D Center, where I work in, is playing an important role at the core of all these collaborative activities.
It looks very complicated, but anyway, if I explain, we are currently very closely working with world-class, external research institutes such as IBM, ISDA, imec, and SRC. In addition, we are jointly developing equipments and materials with partner companies. Industrial collaboration with various projects is also being performed actively. We also have a lot of business, test and package center, and LED and System LSI foundry and memory surrounding us. As long as we maintain this strong Samsung Semiconductor R&D ecosystem, the future of Samsung Semiconductor will be bright. Okay. Today, I have talked about Samsung's outstanding fabrication technology, which I believe is the key factor of our memory business leadership. In addition to fabrication technology, Samsung will continue to show consistent leadership with synergetic activities and a collaborative ecosystem, as I told just a second ago.
As a process expert, I will continue to develop this innovative and disruptive fabrication processes to guarantee you the successful growth of Samsung Semiconductor business. Thank you for your attention.
Thanks for the presentation. Two questions on EUV. You seem to suggest you will be adopting EUV for mass production for DRAM, for what you call D1a. I am assuming this is 1a nanometer, not 1Z, but 1a nanometer. Could you confirm that? And could you also clarify how many layers you're assuming it'll be doing using EUV in order to get to this number of incremental process steps of 60 or so you've shown on the slide, versus 120 you had for 1Z nanometer. Thank you.
For D1Z or D1a?
Yeah. On the slide, first of all, could you clarify, that when you talk about D1a, this is-
Yeah.
-1a nanometer, not Z.
50% of reduction. How many-
That's right. How many EUV layers are you assuming?
Okay. It's kind of complicated, I mean, internal security related. Anyway, more than one. More than one. I would say it that way.
We'll go with that. Again, that means no introduction later for D1Z nanometer, which is you're targeting a D1a nanometer EUV introduction.
Actually, we've already tested from D1X. We introduced only for one layer as a testing, we started test production, some customers already have it. We are doing for D1z definitely as well. I was talking about D1a because we can dramatically reduce the process steps and complexity when we use EUV technology in D1a. D1a will be the main technologies where we use EUV. I'm sorry that I cannot say the exact number of layers here.
Next time. Thank you.
Okay.
I have two questions. I'm Peter Lee from Citigroup. It's very impressive presentation by the way. I have a question about HARC in DRAM especially. In HARC, currently, most industries are using zirconium-based materials. Even in 1X and 1Y, it could be the zirconium-based materials. When do you think the new materials, such as ruthenium or other raw materials, could be coming out in the technical note? That's the first question. The high-K is very critical, as you mentioned that aspect ratio is getting bigger and bigger and higher and higher. The capacitor, the high-K materials, could be very critical. That's the first question. Second question is, talk about the EUV and the DSA, as you mentioned.
Understanding that the EUV is a kind of top-down approach technology, DSA is a kind of bottom-up in terms of patterning. Do you think that it could coexist or it could be maybe the DSA could be replace the EUV in the long term? Could you give some color to this?
All right. Thank you for your question. Firstly, the material existing, we can find in the periodic element table, does not help. Ruthenium and zirconium, the material itself does not help at all. Everybody in this field knows, it might be needed. The trend is well-known. The key point is how to uniquely and specifically combine the existing material and then meet our target specification as a new material. That's why I introduced, we are doing a lot of things internally and externally, and then I just introduced our SMEP facility. This is going to be our strong point because we can screen the materials out, and then we can eventually make our unique materials, very customized materials, very adapted for DRAM, high-K, or even other metals. Secondly, DSA. It has its own merit.
All the time there has been competition between existing technology and new innovative technologies. Sometimes existing technologies all the time win, quite often replace the previous one. At this moment, I'm not quite sure. I'm a little bit biased that EUV is going to be the winner because we can keep increase the resolution by introducing even higher NA system. Who knows? DSA can be applied to some applications. Personally, I don't think it will replace the mainstream. Okay?
You highlighted alternative memory technologies in your big slide, MRAM, ReRAM, et cetera. Over what period of time do you think they'll become commercial? Because obviously, Intel's 3D XPoint has been launched in the market, although in a very small way. Would that cause you to accelerate your alternative memory development, or you're sticking with the DRAM for now?
We are all the time ready, technically. Technologies, as an engineer in R&D center, we are supposed to do that. We have all the technologies. The point is business situation and strategies. We just follow smartly according to the situation. If we really have to release new memory products, we will do.
Okay.
Okay.
Thank you. Just one more follow-up, if I may. When you talk about your partner ecosystem, you mentioned leading international equipment suppliers like ASML, of course. You're also helping create a domestic smaller company ecosystem of Korean equipment suppliers. What are the advantages in that? What do you get out of smaller scale local suppliers that you don't get from the international suppliers?
Well, from my experience, I think we have done really huge things from the past. When I entered this company, I couldn't imagine that we can make such an excellent devices. To do that, I think the most important thing is being prepared. You mentioned about small companies, but who knows? That small companies make a real innovation. That will help to extend, and we make the sustainable growth together in this business. As an opportunity, I think it would be better to do that activities as well. Okay?
Okay. Thank you very much, Dr. Shin. Simon Wu from Bank of America. The question is EUV efficiency. EUV is a great technology, but in the actual production process, if EUV offers only 120 wafers, 130 wafers per hour versus a typical multi-patterning already offers over 200 wafers per hour, how are you going to overcome this kind of efficiency issue? You need to buy more EUV machines, so on and on. Second question, sorry. Regarding the synergy, I think that's a great idea. If you construct the EUV process, focus the facilities, is it possible to use the wafer for foundry today, but tomorrow you can also put the wafer process for the DRAM? My point is one fab for EUV can be used for both memory and the foundry.
If we can do that could have been a great differentiation versus the TSMC and others.
Let me answer your second question first. The answer is yes. Yeah, we can use both DRAM and memory and foundry. EUV technology, I mean. The first one, yeah, it is the problem of BEP. The answer is the BEP, we have a reasonably achievable BEP. That's why we are doing so seriously. If I approach theoretically, let me say it this way. As I told you, anyway, we have to make smaller. However, by using the previous technology such as ArF, we have to introduce more complexity. It becomes even harder. I'm talking about not the current status, the future. Anyway, we have to move by replacing EUV. The point is the value. Our customers will buy the value generated by new technology.
I didn't talk a lot about value yet, but we are also doing that kind of thing as, not just vertical scaling, lateral scaling, we are also doing value scaling to have another degree of freedom control now, such as EUV will be big chance for us. Okay?
Hi, thank you for your presentation. You mentioned a synergy among different products. I'm just wondering if it's possible to have a SOC with logic IC plus DRAM plus NAND in a single chip. If yes, how long will it come true? Thank you.
Well, you mean just one chip concept, right? We have experience, already have done that before. I don't think if we really have to do that, it won't take a long time. We already have some embedded devices in foundry business. Okay? All right. I think, yeah. Thank you.
That concludes all of our presentations for the Investors' Forum this year. Once again, I'd like to thank you for your participation. I can see many of you are eager to leave the room already. Anyways, I hope today's presentations helped you better understand Samsung's efforts to remain leaders in this new data world. We'll do that through technology leadership, as well as the relentless efforts to achieve sustained growth. Also, maybe you can better understand why we have the highest R&D budget of any electronics company in the world. Anyways, I know many of you have spent, it's now your third day here. I hope you can enjoy some of the weather outside before the rains come in. For those of you who have traveled from overseas, I wish you safe travels. Thank you very much.