Cancellation, please press star two, star end two on your phone. Now we shall commence the presentation on the fiscal year 2015 fourth quarter earnings results by Samsung Electronics.
Good morning. This is Robert Yi from Investor Relations. Thank you for joining our call. Today, we have five gentlemen from the business units. Chun Se-won is the Senior Vice President of Memory Marketing. Mr. Hokuk, Vice President of System LSI Marketing. Lee Chang-hoon is the Vice President of Samsung Display. Lee Kyeong-tae, also Vice President of IT Mobile Businesses. Lee Yoon is a Senior Vice President of Visual Display Business. Also Mr. Kim Chang-young, Vice President of IR. I would like to remind you that some of the statements we'll be making today are forward-looking based on the environment as we currently see, and all such statements are subject to certain risks and uncertainties that could cause our actual results to be materially different from those expressed in today's discussion. Before we go into the fourth quarter results, I would like to update you on the shareholder return.
As you know, we announced in October of last year, 11.3 trillion KRW, or about $10 billion U.S., of special buyback program and three-year shareholder return policy. Under that special buyback program, we just completed the first phase on January 12th of this year. The total amount was 4.25 trillion KRW, and we repurchased and canceled 2.23 million common shares and 1.24 million preferred shares. We were able to reduce the total amount used in the buyback by increasing the proportion of preferred shares relative to the outstanding share ratio. Today, the board of directors approved the second phase of the buyback program. The total amount is approximately 3 trillion KRW, with 2.1 million common shares and 530,000 preferred shares. I assume it will take about three months to complete, starting tomorrow.
As I mentioned last year, the special buyback and cancellation program is currently being implemented over three to four phases and is expected to be completed within this year. Next, I would like to address the 2015 annual shareholder return. The board approved annual dividend of 3 trillion KRW, which is the same level as that of 2014, including the special dividend. This brings the 2015 annual dividend per share, including the interim dividend, to 21,000 KRW, which is 5% increase over 2014. Although a similar capital was allocated to 2015 annual dividend, the per share dividend amount increased due to a reduction in total number of outstanding shares, resulting from the first phase of the special buyback program. With the 1,000 KRW per share interim dividend already paid, the year-end dividend per share is 20,000 KRW for the ordinary shares.
With various capital expenditure opportunities to consider in 2016, we will review the ways to provide additional shareholder returns when we can get more visibility of 2016 free cash flow. Now I will go over our fourth quarter results. The overall revenue came in at approximately KRW 53.3 trillion, a 3% increase compared to the previous quarter. The increase mainly came from the consumer electronic business. Our SG&A expenditures increased Q on Q by half trillion KRW as marketing expenses increased from seasonality. But the ratio to revenue remained flat quarter-on-quarter. The overall operating profit decreased by KRW 1.3 trillion Q on Q to KRW 6.1 trillion. Amid unstable macroeconomic conditions, including a sharp fall on oil price, most of the earnings decline came from the component businesses. The continued weakness in PC demands and slowing IT demand continued to put pressure on DRAM prices.
LCD ASP also declined sharply due to supply and demand imbalance. The component businesses experienced another negative factor on their earnings this quarter, as the positive foreign currency impact that significantly contributed to the component business' earnings in the third quarter turned negative this quarter due to strong KRW. We estimate the strong KRW against major currencies in the Q4 brought approximately KRW 400 billion of negative impact to our fourth quarter operating profit, affecting mostly the said businesses. The non-operating profit for the quarter was negative KRW 1.4 trillion. The other non-operating loss was KRW 2.5 trillion. In accordance with international accounting standard, we recorded impairment losses on equity investments in several entities, including Samsung SDI and Samsung Card, whose share prices have declined this year for longer than six months, as well as reduction in some intangible assets.
On the other hand, we recorded approximately KRW 1 trillion equity income in this quarter. Biologics, which we own 47%, changed its accounting method of its investment on Bioepis, from a consolidation method to an equity method. In this process, Biologics recorded gains from the revaluation of its investment in Bioepis. For your reference, these transactions had no impact on our 2015 free cash flow. The fourth quarter ROE and EBITDA ratio decline, especially the ROE ratio decline mostly from the non-operating items. Without these non-operating items, the fourth quarter ROE should have been 10%. The business unit representatives will discuss their results in more detail shortly after. Now I would like to make a few comments on the future outlook. We expect difficult business conditions to continue into Q1, with weak seasonal demand and the IT industry slowdown.
Especially, we anticipate overall weak demand environment for our component businesses. For semiconductors, we will focus on reinforcing product competitiveness of high density and solution memory products, and the ramp-up of the second generation 14 nano process. For display panel, we expect steady earnings from OLED business driven by new product launches of major OLED customers. However, LCD profitability is expected to weaken due to continued weak supply and demand balance. For the set business, we expect handset shipments to decrease due to weak seasonality and discontinuation of old models. We'll strive to generate strong profit in mobile business by improving product mix through launches of various new products this quarter.
For 2016, although it is too early to provide the outlook in specific detail, it would be a challenge to maintain 2015 operating profit level, as we expect weak macroeconomic conditions and the IT demand to persist during the first half. However, we expect the business conditions to improve in the second half, driven by strong seasonality of the set businesses, and increasing mix of various strategic component products. Along with our efforts to secure profitability of each businesses in 2016, we'll also focus on reinforcing mid to long-term business competitiveness, including new business areas. For DRAM, as adoption of high density and high value-added products such as DDR4 and LPDDR4 in major applications increase, we plan to focus on reinforcing the differentiated product structure based on our successful 20 nano process.
In addition, we'll further solidify the dominant position in DRAM technology through the introduction of 10 nano class process. For NAND, we will extend our superior product competitiveness and technological leadership by expanding major production of the third generation vertical NAND, as the only company industry to do so. We'll also lead the growth of high-density storage market to strengthen the foundation for the mid to long-term growth. For system LSI, we'll secure a stable profit foundation by diversifying foundry customers and by expanding associate product lineups based on our 14 nano process competitiveness. We expect to continue to stay on leadership path on technologies by bringing 10 nano process within this year. In addition, we'll continue to strengthen competitiveness of the LSI products such as Bio-Processors and CIS products.
For the OLED business, we expect to secure mid to long-term growth capabilities in 2016 by enhancing technology level and productivity of the flexible display, and by expanding new applications including transparent, mirror, head mount devices, automotive, and OLED for personal computers. For our IM business, going beyond differentiation of hardware, we'll focus on reinforcing software competitiveness with a new R&D organization dedicated to the development of software and services. In addition, we'll continue to focus on strengthening our wearable products such as watch and VR. Our TV business will reinforce our premium market leadership with our SUHD TV, which is the only TV with eco-friendly Quantum Dot technology in the world. We plan to lead the era of smart home through our smart TV with a smart hub that provides connectivity with other devices with the controlling and monitoring functions.
For Internet of Things, we not only have a portfolio of cutting-edge devices that covers the whole spectrum of mobile, IT, TV, and consumer electronics, but also have innovative components such as flexible OLED and IoT exclusive chip solution we call ARTIK, as well as powerful IoT platforms such as SmartThings. Based on our competitiveness of the overall ecosystem, we plan to focus initially on smart home and smart health, which have high growth potential. Now I'd like to comment on our capital expenditure. The total capital expenditure for 2015 was KRW 25.5 trillion. KRW 14.7 trillion was for semiconductor, and KRW 4.7 trillion was for display. The rest was used for smartphone production line and the consumer electronic complex in Vietnam, as well as building R&D complex in Seoul. The capital expenditure in display business was lowered compared to the plan due to the timing of the investments.
We cannot provide any guidance on 2016 capital expenditure at this time as it has not been decided yet. As I mentioned earlier in my speech, we are reviewing various investment opportunities. Before the presentation of each business unit, I'd like to share several data points, as I always have done for key business areas for your reference. For DRAM, in Q4, our bit growth declined low single digits. We saw high single-digit decline of DRAM ASP. For NAND flash in Q4, our bit growth came in mid-teens, and ASP declined low teens. For first quarter 2016, we expect the market's DRAM bit growth to be low single digit, and we will probably outgrow that slightly. For NAND flash, for market bit growth in Q1, we expect again low single digit, and our bit growth will certainly outgrow that of the market.
For 2016, for the whole year, for DRAM market bit growth, we expect mid-20%, and our bit growth is expected to grow aligned with the market. NAND flash for 2016, we expect market bit growth would be around 40%, and we will outgrow that of the market growth. For our mobile businesses, our total handset shipment in Q4 was 97 million units, and we had tablet sales of 9 million units. The mix of the smartphone within total handset was roughly mid-80%. The blended ASP for our mobile businesses in Q4 was mid-KRW 180,000s. For Q1, we expect our handset shipment, as I indicated earlier, we expect it to see small decline, as well as tablet, we expect to see a decline.
The mix of the smartphone to total handset probably will remain flat from the Q4, but we do expect to see our blended ASP for handset to increase in Q1. For our LCD TV in Q4, we shipped 16 million units. For Q1, we expect to see a sizable decline. For the year in 2016, we expect the TV set sales to increase somewhere around mid-single digit. Now I will turn the conference call over to the gentlemen from the business units, starting with semiconductor.
Good morning. This is Sangwon Jang from the memory marketing team. I'm going to present our business results for the first quarter and the market outlook for the next quarter. In Q4, for DRAM, although PC demand remained weak, mobile demand increased, driven by smartphone launches and overall content growth. High-density server demand remained solid, mainly driven by data center. Although earnings decreased due to weak demand from certain applications, we focused on strengthening our market leadership by reinforcing cost competitiveness with 20 nanometer migration and by actively responding to demand for high value-added products such as DDR4, LPDDR4, with profit-focused product mix. Front-end, mobile storage demand increased due to high-density smartphone launches and content growth in all segments. Also, demand for solution products increased, driven by SSD attach rate growth in PC and high-density enterprise SSD market growth.
While we secured profitability by expanding solution products such as SSD, EMCP, we reinforced the product competitiveness by mass producing 3rd generation V-NAND and by expanding 10 nanometer class process migration. Next, I will comment on the memory market outlook and our strategy for Q1. For DRAM, even under weak seasonality, we expect the server DRAM demand to remain solid, mainly driven by data center. Mobile demand to increase with flagship smartphone launches from major mobile companies. For Samsung Electronics, with a flexible application mix strategy, we will reinforce competitiveness by expanding 20 nanometer process migration and by increasing sales of high value-added and differentiated products such as 8GB DDR4, LPDDR4. Front-end, although demand is expected to decrease under weak seasonality, the market condition may vary by each application due to overall SSD content and attach rate growth, as well as high-density mobile product launches.
We will continue to secure cost competitiveness by expanding 3rd generation V-NAND supply and 14 nanometer process migration. We will make our best effort to improve earnings by actively responding to demand for high value-added solution products such as enterprise SSD and high-density mobile storage. Despite expected uncertainties in 2016, including potential IT market slowdown, we expect a solid overall demand driven by content growth in each application, with high-density server demand increase and smartphone content growth. For DRAM, we are focused on maintaining our market leadership rather than on growth and continue to expand the sales of high value-added and differentiated products. We will concentrate on strengthening stable mid- to long-term profit generation basis through expansion of 20 nanometer migration and development of a 10 nano class process.
Front-end, we will lead high-end storage market growth, such as enterprise SSD and high-density mobile storage market, and we will reinforce our market leadership by strengthening product competitiveness, including ramping up of 3rd generation V-NAND. Moving on to the System LSI business. In Q4, earnings improved, driven by increase in 14 nanometer foundry supply despite the slow seasonal demand for SOC and LSI. In Q1, we expect earnings to be affected by slow mobile demand under weak seasonality. We will reinforce our leadership in process technology and product competitiveness by starting mass production of a 2nd generation 14 nanometer process and by supplying to new premium smartphones. In 2016, despite expected uncertainties in the global economy and IT demand, we will focus on retaining growth momentum and strengthening the foundation for long-term growth through diversifying customer base and product lineup. Thank you.
Morning. This is Chang-hoon Lee from the planning department of Samsung Display. For LCD panel in the first quarter, our earnings declined quarter-over-quarter due to decreased shipments of large size panels and continued ASP decline. In the first quarter, we expect a price competition among panel makers to intensify further due to slowdown of set demand from continued exchange rate fluctuations in the emerging markets and overall oversupply from a decrease in demand under a weak seasonality and an increase in the industrial capacity. In response to these tough market conditions of the first quarter, we will focus on cost reduction and inventory management, as well as expansion of the customer base.
For OLED panel in the fourth quarter, despite positive factors such as increased shipments and line utilization ratio, our earnings slightly decreased Q over Q due to ASP decline and increased shipment portion of mid to low-end display panels. In the fourth quarter, although we expect competition among panel makers to intensify further due to slowing growth of the smartphone market, we will make the best effort to reinforce cost competitiveness and customer base, and to increase the line utilization ratio. Now, I'd like to present the outlook for the display market and our core strategies in 2016. For LCD panel, while we expect overall shipment area to increase Y o Y, it seems that total shipments may decrease. Furthermore, we expect the industrial capacity to increase Y o Y.
We will appropriately respond to these tough market conditions in 2016 by continuously monitoring the market condition, as well as by focusing on cost reduction and inventory management. For OLED panel, we expect the smartphone market growth to slow down Y or Y, and that growth will come mostly from the emerging and low-end markets. Under these circumstance, we'll make effort to diversify product lineups and expand customer base. Furthermore, we'll reinforce our market and technology leadership through technological improvement and mass production of flexible displays, which is our mid to long-term growth engine. At the same time, we'll strive to secure new growth engines by reinforcing development of new applications such as transparent, mirror, head mount, and automotive display. Thanks for listening. Good morning, everyone. I'm Kyeong-tae Lee from the mobile communication business.
I would like to present the fourth quarter business result and our future outlook for the IT and mobile communication business. As for the mobile communication business in the fourth quarter, market demand for smartphone and tablets grew Q-on-Q in line with year-end seasonality. However, our revenue slightly decreased from the previous quarter as a result of inventory adjustment to cope with the slowdown of market growth and increased portion of mid to low-end smartphone sales. Profit of the IM division also slightly reduced Q-on-Q, mainly because of seasonally increased marketing expenditures. As for our smartphones, our product mix has somewhat worsened with the shipment growth of mid to low-end models, mainly in the emerging markets, including Southeast Asia and Latin America. On the other hand, our tablet shipment and revenue grew Q-on-Q thanks to strong sales of the Galaxy Tab A and Galaxy Tab S2.
For our network business, both revenue and profit improved compared to the third quarter, driven by the expansion of overseas LTE business. Now, let's turn to the outlook for the first quarter of 2016. The market demand for smartphone and tablets is expected to drop Q-on-Q under weak seasonality. In response, we plan for a global expansion of the 2016 edition of Galaxy A smartphones, which we initially launched in China last December. Brand new Galaxy A7 and Galaxy A5 of a trendy and sensible design, along with differentiated service and functionality, which can be found in our flagship models. Also, these two devices support Samsung Pay, which is a simple, safe, and virtually anywhere mobile payment service.
Our smartphone shipments for the first quarter is expected to slightly decline from the previous quarter under a weak market seasonal condition, as well as discontinuation of our long-standing mid to low-end models
With improved product mix and newly launched models, we expect our revenue and profit to slightly increase QOQ. Now let me discuss the outlook for the year 2016. As for the mobile communication business, we forecast a single-digit growth for the smartphone and tablet market this year. Accordingly, we believe competition among smartphone players will intensify even further as a consequence of market growth slowdown. In response to such challenging market circumstances, we will give our full efforts to increase our smartphone shipment and sustain a double-digit margin by continuously strengthening our product capability and maintaining streamlined product portfolio. For premium smartphones, we will lead the premium market and strengthen our position by leveraging our top-notch technology innovation. In the mid to low-end segment, with optimized lineups based on competitive products, we will expand our shipment volume while improving our profitability.
We will also expand our tablet and wearable devices contribution to the overall business performance. In addition, we will continue to develop and provide services like Samsung Pay that offer practical value to our customers in order to drive sales growth of our devices. As for our network business, we will aim to achieve revenue growth based on our LTE business experience and technology excellence. Lastly, we will actively seek for new business opportunities for future growth while making a continuous effort to deliver Samsung's new value and experience to our customers through acceleration of software and service innovations. Thank you for your attention.
Good morning. This is Yoon Lee, Senior VP of Visual Display Sales and Marketing Team. I would like to present the market conditions and our results for the fourth quarter. In the fourth quarter 2015, TV market grew substantially from the previous quarter, driven by increased demand during the year-end peak season. Global demand slightly decreased compared to the same period last year due to slower consumer confidence from major emerging markets, including South America, CIS, and Eastern Europe. We actively responded to Black Friday demand in North America through successful promotion activities of our premium flagship lineup, SUHD TV, and expected sales of premium products, including UHD and Curved TV. Our overall earnings improved from the previous quarter as well as the previous year.
In digital appliance business in the fourth quarter, the North American market continued its growth momentum, but in emerging markets, the demand decreased since consumer confidence dropped due to slow market growth in China, a decline in price of raw materials, and impact of weak exchange rate. Under these circumstances, we expanded sales of premium innovative lineups such as Chef Collection Refrigerator and ActiveWash washing machine, primarily in the North American market. As a result, our earnings improved compared to the previous quarter and the previous year. Next, let me brief you on the outlook for 2016. Due to the impact of sporting events such as Brazil Olympics and Euro Cup, we anticipate a slight increase in TV demand while consumer preference for large-inch TVs and increase in UHD content continue.
However, we expect to see limited TV demand growth as economic downturn risk exists due to currency headwinds in major emerging countries. In response, we plan to actively expand SUHD TV by further enhancing picture quality and design of the current SUHD TV. Also, we will focus on acquiring profitability by continuously increasing sales portion of Curved and large-inch TV. Meanwhile, we are going to introduce new smart TV lineups with a singular remote control and singular access, which offers smart user experience through consumer-centric user interface. Furthermore, entire SUHD TV lineups will be equipped with Internet of Things hub feature and become the central role of smart home by conveniently offering connectivity to home IoT gadget. While the year 2016 is expected to be difficult as economic recession risk from emerging countries increases, we aim to improve profitability by further strengthening premium product sales, optimizing lineups, and enhancing efficiency.
During the fourth quarter, we expect TV market demand to decrease from the previous quarter as TV market enters seasonally weak period after the year-end peak season. However, we will focus on securing profitability by expanding UHD and Curved premium product sales, and by successfully introducing our new lineups centering on SUHD TV. As for the digital appliance business in 2016, while U.S. market demand remains solid, we forecast limited digital appliance market growth due to growing global foreign currency risk. In response to this, we will actively seek to improve performance by introducing innovative products such as ActiveWash, and by launching new premium products, including Family Hub Refrigerator. Along with this, we will enhance competence of our B2B business, which includes system air conditioners. Thank you.
Thank you. That's the end of our prepared presentation. Now we'll take the moving to a Q&A session. As we have done in several quarters in the past, we will use the consecutive translation for Q&A. Okay? So why don't we start the Q&A session? Thank you.
Now Q&A session will begin. Please press star one, star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, star and two on your phone. The first question will be provided by Sacha Lee from NH Investment & Securities. Please go ahead, sir.
My first question is about your outlook on the 2016 Samsung, or excuse me, the 2016 DRAM market outlook in terms of demand and supply. There has been some concern with the weak demand, especially in the first quarter. For the full year 2016, what's the company outlook on the industry, the market situation of DRAM, especially the demand and supply side, and what is your strategical approach to this?
Our overall 2016 market outlook in terms of the demand side, we are expecting the set growth rate to decrease or to be lower than 2015 growth rates. On the other hand, we're expecting the content in servers and mobile devices to increase, and that would also be a plus factor in terms of demand in 2016. On the supply side, our industry outlook in 2016 is that with more producers migrating onto the 20 nano technology, this will be an increasing factor on the supply side versus 2015. The supply situation will differ for each application and product, depending on how the 20 nano migrations are going to unfold. Also, as the difficulty of the processes become more difficult or increases, this would also have an impact on the supply side.
We think that as the year unfolds, overall demand and supply situation will stabilize versus the early part of this year.
In terms of our strategy, we will be focusing on our 20 nano migration and also migrating further, as well as focusing on the DDR4 and also mobile-related applications. We will be able to grow our supply, we're planning, at market growth levels. This year, our main focus will be on profitability rather than increasing volume. Our main approach this year on the DRAM side is to maintain our leadership and also continue an operation that is sustainable and profitable.
Next,
The following question will be presented by Nicolas Gaudois from UBS. Please go ahead, sir.
Yes. Good morning. The first question is on the OLED side. Considering the slowdown we're seeing in high-end smartphone growth, we should expect potentially a pull-in of plastic OLED demand in order to help innovation in form factors. When, in that context, will we see Samsung Mobile releasing its initial product for foldable displays, and when can Samsung Display serve potential large-scale requirements from other high-end smartphone customers as well? Then I have a follow-up on semi. Thank you.
To answer your question regarding, first of all, the flexible OLED products, as you know, we are already mass producing flexible OLED products, it is already being used in several smartphone models that are already on the market. Regarding foldable OLED, that development process on our end is being carried out smoothly according to our schedule. However, the timing of mass production or product launches, that would depend on the customers, and we are in the process of discussing that with customers. That would depend on the results of the consultation that we have with customers. As far as the flexible OLED is concerned, already we are supplying that to not only captive, but also external customers, and various companies are using and producing products that use the flexible OLED we supply.
Okay. Thank you. A follow-up question is on LSI. You alluded earlier to the rollout of more process flavors for 14 nanometer plus your second generation for the main process, as well as customer diversification. If we look at the application fields on top of application processors and integrated modem and application processors, we, I guess, should see incremental demand this year for GPUs, semi-custom graphics for game consoles and networking. Is that the case, and is this sufficient to offset the possible loss of market share with your largest application processor external customer to support profitability for LSI this year? Thank you.
์ ๊ท ์์ฉ์ฒ ๋ค๋ณํ๋ฅผ ์ํด์ ๊ด๋ จ IP ๋ฐ ์ฌ์ ์ธํ๋ผ๋ฅผ ์ค๋นํ๊ณ ์์ต๋๋ค. ๊ทธ๋ฆฌ๊ณ ๊ธฐ์กด์ ์๋ ๋ชจ๋ฐ์ผ ๊ณ ๊ฐ ๋ง์ผ์ ฐ์ด ์ฆ๋๋ ๋ฌผ๋ก ์ง๊ธ ์ธ๊ธ๋๋ฆฐ ๋คํธ์ํฌ ์๋์ฐจ ์ ๊ท ํ์ฒด์ ๋ง์ผ์ ฐ์ด๋ ๋๋ฆฌ๋ ค๊ณ ์ฌ์ ์ญ๋์ ์ง์คํ๊ณ ์์ต๋๋ค.
The system LSI, in addition to our mobile application business already, it has been preparing intellectual property as well as business infrastructure on other application ends, such as network related businesses, automotive applications, as well as other multiple new applications. This year, our plan and focus is to not only increase the market share with existing mobile application customers, but also focus on increasing the market share in these other applications such as network, automotive, and other applications.
Right. To be clear, automotive is not 14 nano, obviously. Specifically for 14 nano logic process on the FinFET side, apart from networks, what are the applications you see expanding?
๊ทผ๋ฐ ์๋์ฐจ ๊ฐ์ ๊ฒฝ์ฐ๋ ์ฌ์ค 14๋๋ ธ๋ฅผ ์ฐ์๋ ์ ํ์ ์๋์์์? ๊ทธ๋์ 14๋๋ ธ FinFET์ ๊ฒฝ์ฐ์๋ ๋คํธ์ํฌ ์ธ์๋ ์ด๋ค ์ ํ๋ฆฌ์ผ์ด์ ๋ค์ ๊ฐ๋ฐ์ ํ๊ณ ๊ณ์๋ ๊ฑด๊ฐ์?
ํ์ฌ 14๋๋ ธ ์ ํ์ ์ง๊ธ ๋ง ์ถ์๋ ์ ํ์ด๊ธฐ ๋๋ฌธ์ ์๋์ฐจ์ ์ฌ์ฉํ๋ค๋ ๋ป์ ๋ฏธ๋์ ์๋์ฐจ ์์ฉ์ฒ๋ฅผ ์ํด์ ์ ํฌ๊ฐ ๊ณ ๊ฐ์ ํ๋ณดํ๊ณ try ํ๊ณ ์๋ค๋ ๋ป์ ๋๋ค. ๊ทธ๋ฆฌ๊ณ 14๋๋ ธ ๊ทธ ์ธ ์์ฉ์ฒ๋ก๋ ๋ชจ๋ฐ์ผ ์ธ์๋ ๊ฒ์์ด๋ผ๋ ์ง, ์๋๋ฉด ์จ์ด๋ฌ๋ธ์ด๋ผ๋ ์ง, ๊ทธ๋ฐ ๋ค์ํ ์์ฉ์ฒ๋ฅผ ์ ํฌ๊ฐ ๋ชฉํ๋ก ํ๋งค ํ๋์ ํผ์น๊ณ ์์ต๋๋ค.
Yes, because this 14 nano is relatively a new product. When I meant automotive, I meant that we are in the process of being assessed and qualified for automotive applications in the future. That trial process with potential customers have already started. In terms of 14 nano, other applications other than mobile, we are developing, for example, game or wearable as a target application.
Thank you.
๋ค, ๋ค์ ์ง๋ฌธ ๋ฐ๊ฒ ์ต๋๋ค. ๋ค์์ผ๋ก ์ง๋ฌธํด ์ฃผ์ค ๋ถ์ ํ๊ตญํฌ์์ฆ๊ถ์ ์ ์ข ์ฐ ๋์ ๋๋ค. The following question will be presented by Yoo Jong-woo from Korea Investment & Securities. Please go ahead, sir.
ํ๊ตญํฌ์์ฆ๊ถ ์ ์ข ์ฐ์ ๋๋ค. ์ ๋ ๊ฐ์ง ๋๋ฆฌ๊ฒ ๋๋ฐ์. IM ์ง๋ฌธ ๋จผ์ ๋๋ฆฌ๊ณ ๋์ค์ ๋์คํ๋ ์ด ์ชฝ ์ง๋ฌธ๋๋ฆฌ๋๋ก ํ๊ฒ ์ต๋๋ค. ์ ์๊ฐ ์๋ ์๋ ์ ํฌ ์ค์ ๊ฐ ์ชฝ์์ ์๋ก ๋ชจ๋ธ ์ถ์ํ๋ฉด์ ์ค์ ๊ฐ ๋ฌผ๋๋ ๋๊ณ ์์ต์ฑ๋ ํ๋ณตํ๊ณ ๋๋ฆ ์ฑ๊ณผ๊ฐ ์์๋ค๊ณ ๋ณด์ฌ์ง๋๋ฐ์. ์ฌํด๋ ๊ฒฝ์ ์ ์ฒด๋ค ์ชฝ์์๋ ๋์์ด ์์ ๊ฑธ๋ก ์์์ด ๋ฉ๋๋ค. ์ค๊ตญ ์ ์ฒด๋ค์ด ์ด๋ป๊ฒ ๋์ฌ์ง, ๊ทธ๋ค์์ ์ ํฌ๊ฐ ๊ทธ๊ฑฐ์ ๋ํด์ ์ด๋ป๊ฒ ์ค์ ๊ฐ ์ชฝ์์ ์ฐจ๋ณํ ์ ๋ต์ ๊ฐ์ ธ๊ฐ์ง์ ๋ํด์ ์ค๋ช ์ ๋ถํ๋๋ฆฌ๊ฒ ์ต๋๋ค.
I have one question first about the IM side, the mobile side, and then I'll ask another follow-up question or another question regarding with the DP side. First on the IM side, mobile side, last year, you were able to introduce new models on the mid to low-end side, which have brought positive performance results on both volume, shipment, as well as profitability. Looking into this year, we're expecting other companies to follow suit and become more active in the mid to low-end part of the market, especially the Chinese companies. I'm wondering, my question is: How does Samsung plan to differentiate itself in the mid to low-end space versus especially other companies, the Chinese makers?
์ค์ ๊ฐ ๋ชจ๋ธ ์ ๋ต์ ๋ํด์ ๋ง์๋๋ฆฌ๊ฒ ์ต๋๋ค. ์ค์ ๊ฐ ์ค๋งํธํฐ ์์ฅ์ ์ ์ฒด ์ค๋งํธํฐ ์์ฅ์ด ์ง๊ธ ์ด๋ ต์ง๋ง ์ฌ๊ธฐ๋ ์ฌ์ ํ ์ฑ์ฅ ์ค์ ์๊ณ , ๋ํ ๊ฒฝ์๋ ๋ ์น์ดํด์ง ๊ฒ์ผ๋ก ๋ณด๊ณ ์์ต๋๋ค. ์ ํฌ๋ค์ด ์๋ ์ Galaxy Aํ๊ณ J ์๋ฆฌ์ฆ๋ฅผ ๋์ ํด๊ฐ์ง๊ณ ์์ฅ์์ ์ข์ ๋ฐ์์ ์ป์๊ณ , ๊ทธ๋์ ์ฌํด๋ ํ์ ๋ชจ๋ธ์ ์ถ์๋ฅผ ํด์ ์ค์ ๊ฐ ์ ํ ์ชฝ์๋ ๋์ฑ ๊ฒฝ์๋ ฅ์ ๊ฐํํด ๋๊ฐ ๊ณํ์ด ์์ต๋๋ค. ์ข ์์ธํ ๋ง์๋๋ฆฌ๋ฉด 2016๋ ํ ์ ๊ท Galaxy A ์๋ฆฌ์ฆ๋ ๊ธ๋์คํ๊ณ ๋ฉํ์ ์กฐํ๋ฅผ ์์ผ์ ์์ฃผ ๊ณ ๊ธ์ค๋ฌ์ด ๋์์ธ์ ๋์ ์ ํ๊ณ , ๊ทธ๋ค์์ ์นด๋ฉ๋ผ๋ ๋ฉ๋ชจ๋ฆฌ ์ฑ๋ฅ๋ ๋๋ ธ๊ณ , ๊ทธ๋ค์์ ๊ธ์ ์ถฉ์ , Samsung Pay ๊ฐ์ ์ ๊ท ๊ธฐ๋ฅ๋ ๋ฃ์ด๊ฐ์ง๊ณ ์ฌ์ฉ์ฑ์ ๋ํญ ๊ฐ์ ์ ํ์ต๋๋ค. ๊ทธ๋ฆฌ๊ณ 2016๋ ํ J ์๋ฆฌ์ฆ๋ ๋์์ธ๋ฟ๋ง ์๋๊ณ ์นด๋ฉ๋ผํ๊ณ ๋ฐฐํฐ๋ฆฌ ๊ทธ๋ค์์ ์๋น์ ๋์ฆ๊ฐ ๋์ ๊ทธ๋ฐ ํต์ฌ ๊ธฐ๋ฅ ์ค์ฌ์ผ๋ก ์ฐจ๋ณํ๋ฅผ ๊ฐํํด ๋๊ฐ ๊ณํ์ด ์์ต๋๋ค. ์ด๋ ๊ฒ ํด์ ์ ๋ฐ์ ์ผ๋ก ์ค์ ๊ฐ ์ชฝ์ ๊ฒฝ์๋ ฅ์ ๋์ผ ๊ณํ์ ๋๋ค.
As you mentioned, while the entire smartphone market itself is weak in terms of growth, especially within that, the mid to low-end segment is where there is more growth, relatively speaking, versus the entire smartphone segment. Also, as you mentioned, we're expecting competition to get more fierce in this segment as well. Our plan and our response is to continue to launch new additions to the Galaxy A and J series, which we introduced last year with very positive market responses, and by introducing new additions to the A and J this year to enhance our competitiveness in the mid to low-end segment. More specifically, the Galaxy A series 2016 edition will have a design that uses both glass and metal, so it will be a very attractive design. Also, it would increase the specifications on the camera and memory side.
Add some new features such as the fast charge and Samsung Pay, which will all enhance the usability of the 2016 A series. The J series also will focus on enhancing the key features that the customers and the users really focus on, for example, screen as well as battery specifications. By introducing these new additions to the A and J series this year, we will focus on continuing to maintain our competitiveness in the mid to low-end segment. Regarding the display side, is that even though you said that this year's CapEx plan has not been decided, I'm assuming that your OLED-related CapEx spending would have to increase quite significantly this year. Could you at least give us some more color on your OLED-related CapEx spending plans? Especially, can you divide that into the mid-small size versus the large-size OLEDs?
Regarding our CapEx on the mid and small size OLEDs, we do expect to have investments related with the A3, but we have not yet been able to finalize the exact size of our facility investments related with A3 this year. Our basic policy and approach is that we will be making these investments ahead so that our capacity expansions would be leading, in order to maintain our competitive advantage on the display business, and also will respond flexibly to market and customer demands. I think you've also asked us about the large-size OLED-related investments. Our current activity related with a large-size OLED is to explore various manufacturing and mass production methods on the R&D side to find the optimal mass production method that will give us the strong cost competitiveness. We're also looking into the marketability of large-size OLEDs.
In addition to all of these manufacturing-related R&D efforts, we are also talking to customers to identify potential market needs.
The following question will be provided by Young Park from Hyundai Securities. Please go ahead, sir. Mr. Young Park, please go ahead, sir. The next question will be given by Seung Hyuk Lee from Korea Investment & Securities. Please go ahead, sir.
I have two questions related with the CE, specifically TV set business. First is, even though fourth quarter, the TV demand growth was relatively weak, it seems that your TV set business profitability has improved quite significantly. I'm sure that the decline in the panel prices have helped. Were there any other major factors that explain the significant improvement in your TV set profitability in the fourth quarter? The second question is about your 2016 product mix strategy. Since already you have SUHD Curved and UHD TVs out there, I don't see much more room for improving or enhancing your lineup on the TV side this year. What strategies do you have in terms of further improving your product mix on the TV this year? To answer your first question and give a bit more detail about our fourth quarter TV performance or results.
Actually, the improvement in the profitability can be explained by several factors. One is that we were able to very actively and successfully respond to the peak seasonality in the developed markets. For example, the U.S. Black Friday demand. We were able to launch very successful promotions with major distributors in these developed markets. This all helped in increasing the share or mix of our premium product lineup, such as SUHD Curved and UHD TVs. Also, even though the growth markets, developing markets, had various difficulties in terms of weak currency, we were able to leverage our strengths in the supply chain management side and enhance our operational efficiency so that actually the growth markets contributed to the better performance or profitability of our TV business in the fourth quarter.
Regarding the 2016 product lineup, our focus is to first of all, make our SUHD TV product the top and most premium product offering out there in the entire TV market. As you know, we have many strengths in the SUHD TV itself. Our Quantum Dot technology is environmentally friendly. Also, we offer the industry's best picture quality as well. The SUHD TVs that we will be introducing this year also has improved, for example, the color gamut as well as brightness, so that it will be the best display in terms of TVs in the market available, and we will make this very clear and strong positioning. Also, we are focusing on offering a differentiated consumer and viewer experience. For example, we will be featuring a one remote, one access point concept where our remote and access point will be the point of accessing all content for the viewers.
It will be a smart as well as a very seamless, and best viewer experience that will differentiate our TVs from other TV offerings. We will also be focusing on making our SUHD the focal point of the IoT service. As you know, IoT is a very hot topic in the industry. We will be offering an IoT hub service or a feature on all of our SUHD full lineup, so that the TV will be the focal point and the hub for the home IoT environment.
The following question will be provided by Marcus Shin from Goldman Sachs. Please go ahead, sir.
I have two questions. The first question is about Samsung Pay, which you launched last year with very positive market responses. Personally, I am also using Samsung Pay, and I find it very convenient. You've mentioned during your presentation that you plan to expand Samsung Pay onto more models and more regions this year. Specifically, which models and which areas and which timeline do you expect to roll out Samsung Pay? Also, have you found Samsung Pay to actually have a positive effect or a positive impact on the sales of Samsung handsets?
Samsung Pay ๊ด๋ จํด์ ๋จผ์ ํ์ฌ ๋ชจ๋ธ ์ชฝ ๋ง์๋๋ฆฌ๊ฒ ์ต๋๋ค. Samsung Pay๋ ํ์ฌ Galaxy S6 Edge, Note5 ๊ฐ์ ํ๋๊ทธ์ญ ๋จ๋ง์ ๋ค์ด๊ฐ ์๋๋ฐ, ์ด๊ฒ๋ฟ๋ง ์๋๊ณ ์์ ๋ง์๋๋ ธ๋ 2016๋ ํ Galaxy A5ํ๊ณ A7๊น์ง ์ ์ฉ ํ๋๋ฅผ ํ์์ต๋๋ค. ๊ทธ๋ค์์ ์ง์ญ์ ์ผ๋ก ๋ณด๋ฉด ์๋ ์ ํ๊ตญํ๊ณ ๋ฏธ๊ตญ์์ ๋จผ์ ์๋น์ค ๋ก ์นญ์ ํ์ต๋๋ค. ๊ธ๋ ์๋ ์ค๊ตญ, ์๊ตญ, ์คํ์ธ์ ํ๋๋ก ํด์ ๋์ ๊ตญ๊ฐ๋ฅผ ๊ณ์ ํ๋ํ ๊ณํ์ ์์ต๋๋ค. ๊ทธ๋ค์์ ์ ํฌ๋ค์ด ์๋ ํ๊ตญํ๊ณ ๋ฏธ๊ตญ์์ Samsung Pay์ ๋ํ ์๋น์ ๋ฐ์๋ค์ด ์ข์์ ์ ํฌ๋ค ์ค๋งํธํฐ ํ๋งคํ๋๋ฐ ๊ธ์ ์ ์ธ ์ํฅ์ ์ฃผ๊ณ ์๋ค๊ณ ๋ณด์ฌ์ง๊ณ ์๊ณ ์. ์ด๋ฅผ ๋ฐํ์ผ๋ก ํด์ Samsung Pay ์๋น์ค๋ ๊ธ๋ก๋ฒ๋ก ํ์ฐ์ ํ๊ณ , ๋ ๋ง์ ์๋น์๋คํํ Galaxy์ ์ฐจ๋ณํ๋ ๊ฒฝํ์ ์ ๊ณตํด ์ฃผ๋ ํค ์๋น์ค๋ก ํ๋๋ฅผ ํ ๊ณํ์ด ์์ต๋๋ค.
Regarding the models where the Samsung Pay will be supported. As you know, Samsung Pay is currently available on our flagship models S6 Edge, and the Note5, and the 2016 edition A5 and A7 also already support Samsung Pay. In terms of regional rollout, we launched Samsung Pay in Korea and the U.S. last year. We will continue to roll out the regions, starting with China, the U.K., and Spain this year, and also continue to increase the regional coverage of Samsung Pay. As you mentioned, the consumer response in the Korean and U.S. markets regarding Samsung Pay was very positive. Yes, indeed, it is positively helping and impacting our smartphone sales. We will continue to roll out Samsung Pay as a global service so that more consumers around the world can experience a differentiated service through Samsung Pay.
์, ๋ต๋ณ ๊ฐ์ฌ๋๋ฆฝ๋๋ค. ๋ ๋ฒ์งธ๋ ๋ฐ๋์ฒด ์ฌ์ ๋ถ ๊ด๋ จํด์ ์ข ์ฌ์ญค๋ณด๊ณ ์ถ์๋ฐ์. ์ต๊ทผ์ ํจํค์ง ๋ถ๋ถ์์ ๊ฒฝ์์ฌ InFO ๊ฐ์ ๊ธฐ์ ์ด ๋ง์ด ๊ด์ฌ ๋ฐ๊ณ ์๋๋ฐ์. ์ ํฌ ์ผ์ฑ์ ์ ๊ฐ์ ๊ฒฝ์ฐ์๋ InFO์ ๋ํด์ ์ด๋ป๊ฒ ๋์ ์ค๋นํ๊ณ ๊ณ์ ์ง, ๊ทธ๋ฆฌ๊ณ ํฅํ ํจํค์ง ์ชฝ ๋ก๋๋งต์ด ์ด๋ป๊ฒ ๋๋์ง ๋ง์์ ์ข ์ฌ์ญค๋ณด๊ณ ์ถ์ต๋๋ค. ๊ฐ์ฌํฉ๋๋ค.
On the semiconductor side, I have a question regarding the packaging, your packaging technology roadmap. Recently, your competitor has come out with new packaging technology, InFO, and it's getting a lot of attention in the market. What is your roadmap regarding packaging?
ํ์ฌ ๋น์ฌ๋ TSV๋ฅผ ์ ์ฉํ ๋ฉ๋ชจ๋ฆฌ๋ฅผ ์ด๋ฏธ ์์ฐํ๊ณ ์๋ ์ค์ด๊ณ ์. ํจํค์ง ๋ถ๋ถ์์๋ ์ ๊ณ ์ต๊ณ ์ ๊ธฐ์ ๋ ฅ์ ๋ณด์ ํ๊ณ ์๋ ์ํฉ์ ๋๋ค. ๊ธฐ์กด POP ๊ธฐ์ ๊ฐ์ ์ ์ ํตํด์ ๋๊ป๋ฅผ ์ค์ด๋ฉด์๋ ์๊ฐ ๊ฒฝ์๋ ฅ ์๋ ์๋ฃจ์ ์ ์ ๊ณตํ ๊ณํ์ด๊ณ ์. ๊ณ ๊ฐ์ด ์๊ตฌํ๋ ์ต์ ์ ์ฐจ๋ณํ๋ ํจํค์ง ์๋ฃจ์ ์ ์ ๊ณตํ๊ธฐ ์ํด์ ๋๊ป ์ถ์๋ ๋ฌผ๋ก ํฌ์๋น, ์ฌ๋ฃ๋น ์ ๊ฐ์ด ๊ฐ๋ฅํ ๊ธฐ์ ๊ฐ๋ฐํ๋ ๋ฑ ๊ด๋ จ ๊ฒฝ์๋ ฅ์ ์ง์ ๊ฐํํ ์์ ์ ๋๋ค.
As you know, already we are mass producing a TSV package memory product. In terms of packaging technology, we pride that we have the industry's best packaging technology. In addition to the TSV, we are continuing to improve and enhance our POP packaging so that we provide not only a thinner thickness, so that the products are thinner, but also that we are able to enhance our cost competitiveness. We continue to develop our technology and packaging processes so that we are able to meet the customers' demands with the optimized as well as differentiating packaging offerings, so that we not only have thin packaging, but also be able to achieve it with less investment as well as material cost.
๋ค, ๋ค์ ์ง๋ฌธ ๋ฐ๊ฒ ์ต๋๋ค.
๋ค์์ผ๋ก ์ง๋ฌธํด ์ฃผ์ค ๋ถ์ HSBC์ ์์ฃผ์ผ ๋์ ๋๋ค.
The next question will be given by Ricky Seo from HSBC. Please go ahead, sir.
๋ค, ๊ฐ์ฌํฉ๋๋ค. ๋ ๊ฐ์ง ์ง๋ฌธ๋๋ฆด ํ ๋ฐ์. ์ฒซ ๋ฒ์งธ๋ V-NAND ๊ด๋ จํด์ 2015๋ ๋์ ๋งค์ถ ๋น์คํ๊ณ 2016๋ ๋์ ๋งค์ถ ๋น์ค์ด ์ด๋ ์ ๋ ๋๋์ง ๊ฐ๋จํ ๊ทธ๋ฆผ์ผ๋ก ๊ทธ๋ ค์ฃผ์๋ฉด ์ข๊ฒ ๊ณ ์. ์ง๊ธ ๋ณด๋ฉด V-NAND๊ฐ 2D NAND ๋๋นํด์ ๋ง์ง์ด ์ข ๋ฎ์์ ์ ์ฒด ๋ง์ง์ ์ข ๊น์ ๋จน๋ ์์ค์ธ ๊ฒ ๊ฐ์๋ฐ, ์ด๊ฒ 2D NAND ๋ง์งํ๊ณ ๋น์ทํด์ง๋ ์๋๋ฉด ๊ทธ ์ด์์ผ๋ก ์ข์์ง๋ ์์ ์ด ์ธ์ ์ฏค์ผ ๊ฒ์ผ๋ก ํ์ฌ์์๋ ์๊ฐํ์๊ณ ๊ณ์๋์งํ๊ณ , ๊ทธ๊ฑฐ์ ๋ํ inflection point๊ฐ 48-layer ๋น์ค์ด ์ด๋ ์ ๋ ๊ฐ์ผ ๋๋ ๊ทธ๋ฐ ๊ตฌ์กฐ์ธ์ง ์ค๋ช ๋ถํ๋๋ฆฌ๊ฒ ์ต๋๋ค.
I have two questions regarding the V-NAND product. V-NAND, is it possible for you to give us a rough figure of the share of V-NAND in your 2015 revenue, as well as what you expect V-NAND to contribute in your revenue in 2016? Some say that because V-NAND versus 2D NAND has lower margins, the V-NAND itself is actually lowering your overall NAND margin mix. When do you think the margins on the V-NAND side would become similar or even higher than your 2D NAND? Is that a function, for example, of the mix of 48-layer V-NAND having to take up a certain portion of your V-NAND production? Well, with the 3D NAND production and demand increasing on both sides, actually, the 3D NAND has, as of last year, accounted for more than half of our SSD revenue.
We believe that the 3D NAND business will continue to grow in this year as well, as looking at the customers and the applications that we have already been designed into. As our 3D NAND production continues to ramp up, this also is a positive factor on our cost competitiveness. Our cost competitiveness on the 3D NAND will continue to improve, similar to a planar NAND level. We will also, this year, focus on increasing the revenue, for example, by developing and focusing on the increase of the enterprise SSD applications. I have a question about your future strategy. It seems even though you're currently focused on the existing foundries, the market, at least in the next three to four years, expected to move, shift towards more of the mid to low or analog and specialty foundry demands.
I'm wondering, strategically, what is your approach and what preparations are you making? Are you considering or have you considered, for example, starting eight-inch wafers? If you have, what has kept you from doing it already? What are the major obstacles if you have considered eight-inch in Samsung moving into, for example, analog or specialty foundry businesses? Currently, our foundry process is focused, as you know, on mobile applications. Currently, our focus is to continue to maintain that focus and expand mobile applications and to diversify our customers on those applications. Regarding eight-inch, we already do have the technologies. We have been trying to expand customers, but our major approach and strategy on the eight-inch is to respond to market demand and market situations so that we are able to supply products when the market requires them.
The following question will be provided by MS Hwang from Samsung Securities. Please go ahead, sir.
I have a question on the system LSI business. During your presentation and answer, you've mentioned you have plans of mass producing 10 nano before the end of this year. Is this for captive customer use or do you also have large external customers in mind when you talk about 10 nano mass production by end of year? Considering that it has not been long since you've mass produced 14 nano, what will be the impact of this in your profitability in terms of development cost as well as depreciation?
์ฐ์ ๊ณ ๊ฐ์ ๊ด๋ จ๋ ์ฌํญ์ ์์ธํ ๋ง์๋๋ฆด ์ ์๋ ์ ์ ์ํด ๋ถํ๋๋ฆฝ๋๋ค. ์ ํฌ 10๋๋ ธ ๊ณํ์ ๊ณํ๋๋ก 4๋ถ๊ธฐ ์์ฐ์ผ๋ก ๋์ด ์๊ณ ์. ์ ํฌ๊ฐ leading edge technology ์ชฝ, tech leadership ํ๋ณด ์ธก๋ฉด์์ ๊ณํ๋๋ก ์์ฐ์ ๊ณ ๋ คํ๊ณ ์์ต๋๋ค. 14๋๋ ธ ์ญ์ ํ์ฌ ramp up์ ๊ณ์ ๋ ธ๋ ฅ ์ค์ด๊ณ ์. 14๋๋ ธ ramp up ๊ทธ๋ฆฌ๊ณ ์์ต๋ฅ ๊ฐ์ ์ ์ํด์ ์ ํฌ๊ฐ ์ต์ฐ์ ์ ์ผ๋ก ๊ณ ๊ฐ ๋ค๋ณํ๋ฅผ ์ถ์งํ๊ณ ์์ต๋๋ค.
Please understand that it's difficult for us to disclose any specifics related with the customers. As we mentioned, our 10 nano plan is moving ahead smoothly. The target is to start mass production in fourth quarter. The pursuit of the 10 nano technology is a part of our focus on maintaining technology leadership in this space. Our current focus also includes the ramp-up of our 14 nano technology and a major focus to enhance the profitability of our 14 nano is to diversify our customer base.
๋ค์ ์ง๋ฌธ ์๋์?
๋ค์์ผ๋ก ์ง๋ฌธํด ์ฃผ์ค ๋ถ์ ํ๋์ฆ๊ถ์ ๋ฐ์์ฃผ ๋์ ๋๋ค.
The following question will be presented by Young Park from Hyundai Securities. Please go ahead, sir.
์ง๋ฌธ ๊ธฐํ ์ฃผ์ ์ ๊ฐ์ฌํฉ๋๋ค. ์ง๋ฌธ ๋ ๊ฐ์ง ๋๋ฆฌ๊ฒ ์ต๋๋ค. ์ฒซ ๋ฒ์งธ ์ง๋ฌธ, IM ์ฌ์ ๋ถ ๊ด๋ จ์ด๊ณ ์. ๋ ๋ฒ์งธ๋ ๋ฐ๋์ฒด Capa ๊ด๋ จ ์ง๋ฌธ ๋๋ฆฌ๊ฒ ์ต๋๋ค. ๋จผ์ ์ฒซ ๋ฒ์งธ ์ง๋ฌธ์ธ๋ฐ์. ๋ฌด์ ์ฌ์ ๋ถ์ ๊ฒฝ์ฐ์๋ ๋ฌด์ ์ฌ์ ๋ถ์ฅ๋ ๊ต์ฒด๋์ จ๊ณ ์ต๊ทผ์ ์กฐ์ง ๋ณํ๊ฐ ๋ง์ ๊ฒ ๊ฐ์๋ฐ์. ์ด๋ฌํ ์กฐ์ง์์์์ ๋ณํ๊ฐ ์ ํฌ๋ค์ด 2016๋ ์ ์ด๋ค ์ ๋ต ๋ณํ๋ฅผ ์๋ฏธ๋ฅผ ํ๋ ๊ฑด์ง, ๊ทธ๋ฆฌ๊ณ ์ด๋ฐ ์กฐ์ง ๋ณํ๋ฅผ ํตํด์ ์ค์ฅ๊ธฐ์ ์ด๋ค ์ ๋ต์ ์ธ ๋ณํ๋ฅผ ์ค๋นํ๊ณ ๊ณ์๋์ง ์ค๋ช ํด ์ฃผ์๋ฉด ๊ฐ์ฌ๋๋ฆฌ๊ฒ ์ต๋๋ค.
I have one question related with the mobile side, the other related with your semiconductor capacity. The mobile related question is the strategical implications of your recent organization change. There was a change of the head of the mobile business. You've also done some organizational changes. What is the implication of all of this change in your 2016 strategy as well as your mid to long term strategies on the mobile business?
๋จผ์ ์กฐ์ง ๋ณํ ๊ด๋ จํด์ ๋ค์ ํ๋ฒ ๋ง์์ ๋๋ฆฌ๋ฉด, ํฌ๊ฒ ์ ํฌ๋ค์ด ๊ฐ๋ฐ ์กฐ์ง์ ํ๋์จ์ดํ๊ณ ์ํํธ์จ์ด๋ก ์ด๋ ๊ฒ ๋ถ๋ฆฌ๋ฅผ ํ์ต๋๋ค. ๊ทธ๋์ ๊ฐ๋ฐ 1์ค, 2์ค๋ก ์ฌํธ์ ํ๋ค๋ ๋ถ๋ถํ๊ณ ๊ทธ๋ค์์ ์์ ๋ด์๋ ์ค๋งํธ ์์น๋ VR๊ณผ ๊ฐ์ ์ฌ๋ฌ ์ ๋ด ์กฐ์ง์ ๋ง๋ค์์ต๋๋ค. ๊ทธ๋์ ์๋ ์ฐ๋ง์ ํฌ๊ฒ ์กฐ์ง์ ์ฌํธํ๊ณ , ์ด๋ฐ ์กฐ์ง ๋ณํ์ ์๋ฏธ๋ ๊ฒฐ๊ตญ์ ์ ํฌ๋ค์ด ํ๋์จ์ด ์ฐจ๋ณํ๋ ๊ณ์ํ์ง๋ง, ์ ํฌ๋ค์ด ์กฐ๊ธ ์ํํ ํ๋ ์ํํธ์จ์ด๋ ์๋น์ค ์ชฝ์ ํ์ ์ ๋์ฑ ๊ฐ์ํํด ๋๊ฐ๊ฒ ๋ค๋ ์์ง๊ฐ ๋ฐ์์ด ๋ผ ์๊ณ , ๊ทธ๋ค์์ ์ค๋งํธ ํฌ์ค, ํด๋ผ์ฐ๋ ๊ฐ์ ์๋ก์ด ์ฌ์ ๋ถ์ผ์์๋ ์ฌ์ ๊ธฐํ๋ฅผ ์ ๊ทน์ ์ผ๋ก ๋ชจ์ํ๊ฒ ๋ค. ๊ทธ๋์ ๋ฏธ๋ ์ฑ์ฅ ๋๋ ฅ์ ๋ฐ๊ตดํ๊ณ ์ค๋น๋ฅผ ํ๊ฒ ๋ค๋ ๊ทธ๋ฐ ๋ด์ฉ์ ๋๋ค. ๊ฒฐ๊ตญ ์ ํฌ๋ค์ด ์์ฅ ๋ณํ๊ฐ ๊ธ๊ฒฉํ ๋ฐ๋๋ ์ด๋ฐ ์ชฝ์ ์ ํฌ๋ค ์ ๋ต๋ ์ ๋ง์ถฐ๊ฐ์ง๊ณ ์ง์์ ์ผ๋ก ์ฑ์ฅํ ์ ์๋ ๊ทธ๋ฐ ๋ฐํ์ ๋ง๋ จํ๋๋ก ๋ ธ๋ ฅ์ ๊ณ์ํ๊ฒ ์ต๋๋ค.
As you mentioned, we had some organizational changes at the end of last year. Major highlights being that we've actually split our development organization into division 1 and 2, so that we split the hardware development from the software development. On the sales side, we have launched a separate sales organization in charge of wearable sales, which would include smartwatches, VR, and other devices. The basic intention behind this organizational change is to put more focus on innovation of software and services while we continue to differentiate our hardware. We would like to use this new organization in order to accelerate innovation on the software and service side, and also to focus on developing and identifying new business opportunities, such as smart health or cloud businesses, which will give us the growth engines for future.
In terms of the longer term or mid to long term businesses, we would flexibly respond to the market, which has been rapidly changing, in order to continue to maintain a foundation for sustainable growth.
๋ ๋ฒ์งธ ์ง๋ฌธ์ ๋ฐ๋์ฒด Capa, ๊ณต๊ธ ๋ฅ๋ ฅ ๊ด๋ จํ ์ง๋ฌธ์ธ๋ฐ์. ์ฌํด ๋ง์ํ์ ๊ฒ์ฒ๋ผ ์ผ๋จ ์์ ์ ๋ง์ด ์๋นํ ๋ถํ์คํ๊ธฐ ๋๋ฌธ์ flexibleํ๋ค๋ ๊ฑฐ๋ 100% ์ดํด๋ฅผ ํ๊ณ ์. ๊ทผ๋ฐ ์ ๊ฐ ๊ตฌ์ฒด์ ์ผ๋ก ๊ถ๊ธํ ๋ถ๋ถ์ ๋จผ์ DRAM ๊ด๋ จํด์๋ 1x๋๋ ธ ๋น์ค์ด ์ฐ๋ง ์ ๋์๋ ์ด๋ ์ ๋๊น์ง ๋ผ ์์ ๊ฑด์ง, ์ง๊ธ ํ์ฌ ๊ณํ์ ๊ฐ๊ณ ๊ณ์๋ฉด ๊ทธ๊ฑฐ ๋ง์ํด ์ฃผ์๋ฉด ๊ณ ๋ง๊ฒ ๊ณ , ๊ทธ๋ฆฌ๊ณ NAND ์ชฝ์ 2017๋ ๋ ํํ ๋ผ์ธ์ด NAND๋ก ์์์ ํ๋ ๊ฑด์ง๊ฐ ๊ถ๊ธํ๊ณ , ๊ทธ๋ฆฌ๊ณ System LSI ๊ด๋ จํด์๋ Fab 17์ Phase 2์ ์ฅ๋น ๋ฐ์ ์ด ์ฌํด ์์์ด ๋๋ ๊ฑด์ง ์ด๋ฐ ๋ถ๋ถ์ด ๊ถ๊ธํฉ๋๋ค. ๊ฐ์ฌํฉ๋๋ค.
My second question was about your capacity plans this year and also going forward. I fully understand when you say your capacities will be operated flexibly given that 2016 demand is still quite uncertain. At least according to your current plan on the DRAM side, what is the share of 1x nano at the end of this year, according to your current plans? On the NAND side, are you expecting to start the Pyeongtaek facility in 2017 with NAND capacity? On the System LSI side, will the equipment for phase 2 Fab 17 be coming in this year?
๋ค, ๋ต๋ณ๋๋ฆฌ๊ฒ ์ต๋๋ค. 1x ๋๋ ธ์ ๋น์ค์ ๋ํด์ ๊ตฌ์ฒด์ ์ผ๋ก ๋ง์๋๋ฆฌ๊ธฐ๋ ์ด๋ ต์ง๋ง, ๋น์ฌ๋ 1x ๋๋ ธ์ ๊ฒฝ์ฐ์ ํ์ฌ ๊ณํ๋๋ก ๊ฐ๋ฐํ๊ณ ์์ผ๋ฉฐ, 20๋๋ ธ์ ์ด์ด ์ ๊ณ ๊ธฐ์ ๋ฆฌ๋์ญ์ ์ ๋ํ๊ณ ์ด๋ฅผ ๋ฐํ์ผ๋ก ์ ํ ๊ฒฝ์๋ ฅ์ ๋์ฑ ๊ฐํํ ์ ์๋๋ก ๋ ธ๋ ฅํ๊ฒ ์ต๋๋ค. ๊ทธ๋ฆฌ๊ณ ํํ ์บ ํผ์ค๋ ํ์ฌ ๊ธฐ๋ฐ ์์ค ๊ณต์ฌ ์ค์ผ๋ก ์์ง๊น์ง ๊ตฌ์ฒด์ ์ธ ์์ฐ ์ผ์ ๊ณผ ์ ํ ๋ฑ์ ๊ฒฐ์ ๋์ง ์์์ผ๋ฉฐ, ํฅํ ๊ณ ๊ฐ์ฌ์ ๋์ฆ์ ์ํฉ์ ๋ฐ๋ผ ๊ฒฐ์ ํ ์์ ์ ๋๋ค.
Regarding the 1x nano share, it's difficult for us to give you a number for the reasons that you've mentioned, I can give you an update saying that we are on plan and on track. We will continue to maintain our market and industry leadership as we had done on the 20 nano product, and the 1x nano, we believe, will continue to enhance our product competitiveness. Regarding the Pyeongtaek campus, it's still doing its groundwork and plans for what products or when to mass produce has not been decided yet. We will respond to customer demand as well as market situation flexibly.
System LSI ๊ด๋ จ ์ง๋ฌธ ๋ต๋ณ๋๋ฆฌ๊ฒ ์ต๋๋ค. Fab 17 ๊ด๋ จํด์๋ ํ์ฌ ๊ด๋ จ ์ฅ๋น๋ฅผ ๊ณต๋ ๊ฐ๋ฐ ์ค์ด๊ณ ์. ์์ฉํ ์์ ์ ์ฅ๋น ๊ฐ๋ฐ ์์ฑ๋, ๊ทธ๋ฆฌ๊ณ ๊ณ ๊ฐ ์์ ๋ฐ ์์ฅ ์ํฉ์ ๋ฐ๋ผ์ ๊ฒฐ์ ํ ๊ฒ์ผ๋ก ์ง๊ธ ๊ณํ๋์ด ์์ต๋๋ค.
Regarding the Fab 17 on the System LSI, actually, the equipment for Fab 17 is currently being co-developed, jointly developed. The timing of commercial operation will depend on when this equipment development is completed, as well as customer demand and market situation.
๋ค, ๋ค์ ์ง๋ฌธ ๋ฐ๊ฒ ์ต๋๋ค.
๋ค์์ผ๋ก ์ง๋ฌธํด ์ฃผ์ค ๋ถ์ JP Morgan์ ๋ฐ์ ์ค ๋์ ๋๋ค.
The following question will be given by J.J. Park from J.P. Morgan. Please go ahead, sir.
๋ค, ๋ ๊ฐ์ง ์ง๋ฌธ์ด ์์ต๋๋ค. ์ฒซ ๋ฒ์งธ๋ ์๋ 3๋ถ๊ธฐ์ ์ค์ ๋ฐํ ๋ ์ํ ์ฝ์ธ ๋๋ฌธ์ component ์ชฝ์ positive impact๊ฐ 8์กฐ ์ ๋๋ค๊ณ ๋ง์ํ์ จ๊ณ ์. ์ด๋ฒ์๋ negativeํ impact๊ฐ 4์ฒ์ต ์ ๋ ๋๋ค๊ณ ๋ง์ํ์ จ๋๋ฐ, ๋ฌผ๋ก ๋ค๋ฅธ currency๋๋ ์ํฅ๋ ฅ์ด ๋ง๊ฒ ์ง๋ง, swingingํ ๊ฒ 3๋ถ๊ธฐ ๋๋นํด์ ์ํ๊ฐ ํ 10์ ์ ๋๋ฐ์ ์ฝ์ธ๊ฐ ์ ๋๋๋ฐ negative impact๊ฐ 3๋ถ๊ธฐ ๋ positive impact๋ณด๋ค ํฐ ๊ฒ ๊ฐ์์ ์ด๋ค ์์ธ์ด ์๋์ง ๋ง์ํด ์ฃผ์๋ฉด ๊ฐ์ฌํ๊ฒ ์ต๋๋ค. ๊ทธ๋ค์์ ๋ ๋ฒ์งธ, DRAM ๊ด๋ จํด์ ์ง๋ฌธ๋๋ฆฌ๊ฒ ์ต๋๋ค.
First, I have a question regarding the impact of currency exchange rates on your business and profitability. During the third quarter conference call, you mentioned that due to the weak Korean won or increase of the Korean won versus U.S. dollar exchange rate, there was a positive impact on the parts business by about KRW 800 billion. This time you're saying that because of the currency, strong Korean won, there was a negative impact by about KRW 400 billion. Actually, when you look at the exchange rate, even though there are other exchange rates versus the Korean won other than the U.S. dollar, actually during the fourth quarter, the Korean won, there was only about a move of about KRW 10, which is a relatively small currency exchange rate difference versus the KRW 800 billion versus KRW 400 billion impact on your profits third quarter versus fourth quarter.
Are there other factors other than the KRW 10 movement in the exchange rate that explains the impact due to currency rate changes?
์ ์๋ ์์๋ค์ํผ ์๋ ๊ฑฐ๋ํ๋ ์ธํ ํตํ ์ข ๋ฅ๊ฐ ๋ง๊ธฐ ๋๋ฌธ์ ๋ฌ๋ฌ ๊ธฐ์ค๋ง ๋ณด๊ธฐ๋ ๊ต์ฅํ ์ด๋ ต๊ณ ์. ์๋ฅผ ๋ค๋ฉด ์ฐ๋ฆฌ๊ฐ 3๋ถ๊ธฐ์๋ ์์ด US ๋ฌ๋ฌ ๋๋น 6.7% ์ฝ์ธ๋ก ๊ฐ๋๋ฐ ๋ฐ๋๋ก ๋ง์ํ์ ๋๋ก 4๋ถ๊ธฐ์๋ 1% ๊ฐ์ธ๋ก ๊ฐ์ต๋๋ค. ๊ทธ๋ฐ ๋ถ๋ถ๋ค์ด ๋ณด๋๊น 3๋ถ๊ธฐ๋ 6.7%์ ๋ํด์ ์ฐ๋ฆฌ๊ฐ ๊ณ์ฐ์ ํด์ ๋ง์์ ๋๋ฆฐ ๊ฑฐ๊ณ , ๋ฌ๋ฌ๋ง ๋ณธ๋ค๊ณ ํ๋ฉด 4๋ถ๊ธฐ๋ 1%๊ฐ ์์๋๋ฐ์. ์๋์ ์ผ๋ก ๋ณด๋ฉด 4๋ถ๊ธฐ์๋ ์ ๋ก
2.4% ์ ๋ ๊ฐ์ธ, ๋ ๋ธ๋ผ์ง ๋ฆฌ์์ ๊ฑฐ์ 10% ์ ๋ ๊ฐ์ธ ๋ฑ๋ฑ ํด์ ์ฌ๋ฌ ๊ฐ์ง ๊ทธ๋ฐ multiple currency๊ฐ ์ํฅ์ ๋ง์ด ์คฌ๊ธฐ ๋๋ฌธ์ ๊ทธ๋ฐ ๋ถ๋ถ์ sector๋ก ๋ถ์ ์ ์ผ๋ก ๋ณด์๋ฉด ๋๋ ๊ฒ ๊ฐ๊ณ ์. ๋ ์๋์ ์ผ๋ก 3Q์๋ ์ ๋ก๋ ํ์ด๋๋ผ๋ ์ง, Chinese ์์์ด๋ผ๋ ์ง ๋ชจ๋ ๋ถ๋ถ์ด ์ํ๊ฐ ์ฝ์ธ๋ก ๊ฐ๊ธฐ ๋๋ฌธ์ ๋ง์๋๋ฆฐ ๊ทธ ์ ๋ ์์ค์ผ๋ก ๋ณด์๋ฉด ๋ ๊ฒ ๊ฐ๊ณ . ํ ๊ฐ์ง๋ง ๊ฐ์กฐํด์ ๋ง์๋๋ฆฌ๋ฉด, 3๋ถ๊ธฐ์ ์์๋ ํจ๊ณผ๋ ๋๋ถ๋ถ ๊ธ์ ์ ์ธ ๋ถ๋ถ์ component ์ชฝ์ ๋ง์ด ์์๋๋ฐ, 4๋ถ๊ธฐ์ ๋ฐ์ํ ์ด ๋ถ์ ์ ์ธ ํจ๊ณผ๋ ์๋์ ์ผ๋ก sector ์ชฝ์์ ๋ง์๋ค. ์๋ํ๋ฉด ์ด currency์ ๋ณํ๊ฐ emerging market ์ชฝ์์ ๋ง์ด ๋ฐ์ํ๊ธฐ ๋๋ฌธ์๋ผ๋ ๊ทธ๋ฐ ๋ถ๋ถ์ ๋ํด์ ์ถ๊ฐ ์ค๋ช ๋๋ฆฌ๊ฒ ์ต๋๋ค.
As you mentioned, our business itself, Samsung Electronics, deals not only in U.S. dollars but also in multiple currencies around the world. As you mentioned, there are other exchange rates, Korean won versus other currency exchange rates to consider. As you mentioned, if you just look at the Korean won versus U.S. dollar exchange rate, in the third quarter, Korean won turned weak by about 6.7%, but the value of the Korean won in the fourth quarter actually increased by about only 1%. On the other hand, during the fourth quarter, the Korean won was strong against the EUR. It appreciated by 2.4%. It appreciated by about 10% versus the BRL. Other currencies did impact the fourth quarter earnings. That's one factor.
By contrast, during the third quarter, the Korean won was weak, not only against the U.S. dollar, but also the EUR, GBP, and even the Chinese yuan or renminbi. Another factor to highlight related with exchange rate and currencies is that while the weak Korean won in the third quarter had a positive impact on the parts side of our business, the component business, the negative impact of the strong Korean won during the fourth quarter impacts mainly our set business. Because most of the emerging market currencies were relatively weak versus the Korean won in the fourth quarter.
๋ ๋ฒ์งธ ์ง๋ฌธ์ DRAM ์์ฅ ๊ด๋ จ๋ ๊ฑด๋ฐ์. ์ ํฌ๊ฐ ์ง๊ธ downturn cycle์ธ๋ฐ, ์ด DRAM ๊ฐ๊ฒฉ์ด stabilize๋๊ฑฐ๋ ์ด๋ค downturn cycle์ด turn around ํ๋ ค๊ณ ๊ทธ๋ฌ๋ฉด ์ด end market์ด ์ ๋ง ์ด์๋์ผ ๋๋์ง, ์๋๋ฉด ๋ ๋ฒ์งธ๋ ๊ณผ๊ฑฐ๊ฐ์ด DRAM ๊ฐ๊ฒฉ์ด ๋ง์ด ๋จ์ด์ง๋ฉด content growth๊ฐ accelerate ๋๋ฉด์ ์ ์ฒด์ ์ธ demand๊ฐ drive ๋ ์ง. ์ ๊ฐ ์ง๋ฌธ๋๋ฆฌ๋ ๊ฑฐ๋ ๊ณผ๊ฑฐ๋ณด๋ค ์ฌ๋ฌ ๋ช ๋ ์ ์๊ธฐํ์ง๋ง supply growth๋ ์ ์ ์ค์ด๋๋ ๊ฒ ๊ฐ์๋ฐ, ์ ๊ฐ ์๊ฐํ๋ ๊ฒ๋ณด๋ค ๊ฐ๊ฒฉ ํ๋ฝ์ด ์ข ์ฌํ ๊ฒ ๊ฐ์์ ์ ํฌ๊ฐ ์ด DRAM market์ ์ด๋ค turn around๋ฅผ ํ ์ ์๋ ์ด๋ค inflection point๊ฐ ๋ญ์ง์ ๋ํด์ ์ง๋ฌธ๋๋ฆฐ ๊ฒ๋๋ค.
I have a question. My second question is about the DRAM and your outlook, especially on the DRAM prices. It seems the DRAM market itself is in a downturn market, but what do you think needs to happen for the market to hit an inflection point, for example, for prices to stabilize and the downturn market to turn around? Do we need to wait until the end market itself turns around? Or do you think that with lower DRAM prices, this could drive an increase in content growth and that would be able to provide an inflection point on the DRAM market? The reason I'm asking this question is because even though the supply growth has sort of decelerated or has been picking off, the DRAM prices have continued to go down more than expected.
What do you think specifically would be an inflection point sufficient to turn around the DRAM prices?
๋น์ฌ์ ์ ๋ฐ์ ์ธ DRAM ์ํฉ์ ๋ํด์ ์ค๋ช ์ ๋๋ฆฌ๊ฒ ์ต๋๋ค. ์ต๊ทผ DRAM ์์ฅ์ ํฐ ํน์ง์ ์์ ๊ณผ ๋ฌ๋ฆฌ ์์ฉ์ฒ๊ฐ ๋ค์ํด์ก์ต๋๋ค. ์ด์ ๋ฐ๋ผ์ DRAM ์ ์ฒด ๊ฐ๊ฒฉ์ ์ฃผ๋์ ์ธ ์ํฅ์ ๋ฏธ์น๋ PC์ ๋น์ค์ด 20% ์ดํ๋ก ๋จ์ด์ก๋ค๋ ์ ์ ๋๋ค. ์ด์ ์์ฉ์ฒ๋ณ ์๊ธ์ ๋ฐ๋ผ ๊ฐ๊ฒฉ ๋ณ๋ํญ์ ์์ดํ๊ณ , ๋ชจ๋ฐ์ผ๊ณผ ๊ฐ์ ์ ํ์ sliding down ๊ฐ๊ฒฉ scheme์ด๊ธฐ ๋๋ฌธ์ ์ง์์ ์ผ๋ก ํ๋ฝํ๋ ๊ธฐ์กฐ์ ๋๋ค. ๊ฒฐ๊ตญ์ ์์ฉ์ฒ๋ณ ์๊ธ์ ๋ฐ๋ผ ๊ฐ๊ฒฉ ํ๋ฝ ๊ธฐ์กฐ์ ๋ณํ๊ฐ ์์ ๊ฒ์ผ๋ก ๋ณด์ด๊ณ , ์ด์ ๋ฐ๋ผ ๊ฐ ๊ณต๊ธ์์ ์ ํ, ์๊ฐ ๊ฒฝ์๋ ฅ์ ๋ฐ๋ผ์ ์์ต์ฑ์ ๋ค๋ฅธ ์ํฅ์ด ์์ ๊ฒ์ผ๋ก ์๊ฐ๋ฉ๋๋ค. ๋น์ฌ๋ ์ผ์ ํ ์์ค์ ์์ต์ ์งํค๋ฉด์ ๊ณต์ ์ ํ ๋ฐ ์์ฉ์ฒ๋ณ ์์์ ์ ์ ํ ๋์ํด ์ง์์ ์ผ๋ก ๊ฒฝ์๋ ฅ์ ์ง์ผ๋๊ฐ๋๋ก ํ๊ฒ ์ต๋๋ค.
As you mentioned, the DRAM market has changed overall versus the past. The major change being that the sources of applications, the sources of demand have itself become much more diverse. PC, for example, which used to be the majority of DRAM demand, now accounts for only about 20%, whereas there are other applications that drive demand in the DRAM market. We think that the price curve or the decline will differ from application to application. For example, on the mobile side, because it's a sliding down scheme, the prices on the DRAM for mobile applications will follow that curve, whereas other applications, each application will show a different price declining trend, depending on specific applications.
That would mean that for each supplier, the situation, the prices, and the profitability will be a factor of not only their cost competitiveness, but also how well they meet specific application demand. Given that industry situation, our approach is to maintain a certain level of profitability, but also be able to maintain competitiveness in specific application demand going forward. Even though the conference call has been going on for some time, we still have many people waiting to ask questions. Perhaps we will be able to entertain three or four more people before closing the call.
The following question will be presented by Peter Yoo from BNP Paribas. Please go ahead, sir.
My first question goes to the System LSI business. Even though your fourth quarter revenue increased quite significantly versus third quarter, your operating margin has remained flat quarter-on-quarter. What is the specific reason of your profitability being low despite the growth in revenue? In 2016, what do you expect to happen to your profitability, and what would you think in the mid- to long-term will be a normal level of profitability for the LSI business? Also, you mentioned that the CapEx on the semiconductor side decreased in 2015. Specifically, what part of the semiconductor business was the main reason for the decrease in CapEx last year? Regarding our System LSI fourth quarter revenue and profitability that you asked about, our revenue in fourth quarter grew significantly, especially thanks to the increase in supply of our 14 nano foundry operation.
We actually took some one-off costs in the fourth quarter too, in order to prepare for 2016 operations. For example, we cleared out some long-term inventory, so that one-off cost in fourth quarter kept our profitability from increasing in line with our revenue. In 2016, even though there are many uncertainties in the market, we believe that by stabilizing our 14 nano operation and by diversifying our customers, we will be able to grow similar levels as we saw in 2015. To clarify the second question, which was about semiconductor CapEx decreasing, actually, that was a reference to what we mentioned in the third quarter, that the entire company enterprise level, Samsung Electronics' entire company level CapEx will be KRW 27 trillion, which was mentioned during the third quarter conference call. Actually, that decrease is not attributed to the semiconductor.
That was because the display side CapEx was less than expected. A follow-up question was then why was display CapEx less than expected? That was because the timing of the CapEx execution changed. My second question related with the TV side is that while highlighting your SUHD TV, you emphasize the fact that the Quantum Dot technology is environmentally friendly, specifically that it's cadmium-free. Is this a technology that's unique to Samsung that other competitors will find difficult to emulate?
์ผ๋จ์ ์ ํฌ๊ฐ eco-friendly๋ผ๋ ๋ง์ ์ผ๋๋ฐ ์ง๊ธ ๋ค๋ฅธ ์ค๊ตญ ์ ์ฒด๋ Quantum Dot์ด๋ผ๋ ๋ง์ ์ฐ๊ธฐ ์์ํ๋๋ฐ, ๋ค Cadmium์ ์ฐ๋ ๊ฑธ๋ก ์ ํฌ๊ฐ ํ์ธ์ ํ๊ณ ์๊ณ ์. ์นํ๊ฒฝ ์์ฌ๋ฅผ ํ์ฉํด์ ์ฐ๋ ์ ์ฒด๋ ์ ํฌ๋ง ์๋ ๊ฑธ๋ก ์ ํฌ๋ ์๊ณ ์์ต๋๋ค. ๊ทธ๋ค์์ ์ด Quantum Dot์ด๋ผ๋ ๊ฒ์ด ๊ธฐ๋ณธ์ ์ผ๋ก ์นํ๊ฒฝ ์์ฌ๋ ์ค์ํ์ง๋ง, ํ๋๋ผ๋ ์ง ์๊น ๋ง์๋๋ฆฐ ๋๋ก ์ ์ฌํ๋ ฅ ์ธก๋ฉด์์ ๋ค๋ฅธ ๋์คํ๋ ์ด ์ฌํ ๊ธฐ์ ์ ์์๋ ๊ฑธ๋ก ์ ํฌ๋ ํ๋จํ๊ณ ์์ต๋๋ค.
Our environmental friendly or eco-friendly Quantum Dot technology, which is cadmium free. As far as we know, we are the only maker who does Quantum Dot TVs with no cadmium included. We have already seen some Chinese company mention that they have Quantum Dot technology, according to what we have found out, these other technologies do use cadmium, whereas we don't. We are in that sense, eco-friendly. Quantum Dot as a technology, the value of it or the importance of it is not only that it's eco-friendly, that also compared to other display technologies, it provides a better picture quality in terms of supporting color gamut as well as supporting better brightness.
๋ค, ๊ฐ์ฌํฉ๋๋ค. ์ด์ ์ธ ์ง๋ฌธ ๋ ๋ฐ๊ฒ ๋๋ฐ์. ๋ถํ๋๋ฆฌ๋ ๊ฑฐ๋ ํ ๋ถ์ด ๋ ์ ์์ผ๋ฉด ์ ์ผ ์ค์ํ ํ ๊ฐ์ง ์ง๋ฌธ๋ง ์ข ํด์ฃผ์ จ์ผ๋ฉด ์ข๊ฒ ์ด์. ์ ๊ทธ๋ฌ๋ฉด ์๊ฐ์ด ๋๋ฌด ์ค๋ ๊ฐ ๊ฒ ๊ฐ์ต๋๋ค.
We will take three more questions. I would like to kindly ask that each person limits their questions to one question, given the fact that this conference call has been going on for some time.
๋ค์์ผ๋ก ์ง๋ฌธํด ์ฃผ์ค ๋ถ์ SIG์ Mehdi Hosseini์ ๋๋ค.
The following question will be presented by Mehdi Hosseini Same from SIG. Please go ahead, sir.
Thank you. Looking at your semiconductor business, specifically in the memory, can you help us understand the mix of DRAM and NAND revenues? Also, how should we think about operating profit in the memory broken by DRAM and NAND?
๋ฐ๋์ฒด์์ ๊ตฌ์ฒด์ ์ผ๋ก ๋ฉ๋ชจ๋ฆฌ ์ฌ์ ์์ DRAM ๋ NAND ๋งค์ถ ๊ตฌ์ฑ๊ณผ ์์ต ๊ตฌ์ฑ์ ๋ง์ํด ์ฃผ์ค ์ ์์ผ์ ๊ฐ์? ๋น์ค์.
๋ฉ๋ชจ๋ฆฌ์์ ๋งค์ถ ๋น์ค์ ๊ตฌ์ฒด์ ์ผ๋ก ๋ง์๋๋ฆด ์ ์์์ ์ํด ๋ถํ๋๋ฆฌ๊ฒ ์ต๋๋ค.
Please understand that it's difficult for us that we're not able to give you the specific breakdown of revenue in DRAM versus NAND.
ํ ๊ฐ์ง ์ฒจ์ธ์ ํ๋ฉด DRAM ์ชฝ์ ๋น์ค์ด ํฌ๋ค๋ ๊ฒ์ ๋ง์๋๋ฆด ์ ์์ต๋๋ค.
DRAM is a larger share of our revenue in the memory side versus NAND.
Sure. Doesn't it imply that it is very important for your DRAM business to maintain profitability? In that context, what are the key variables or what are the key contingency plans in case demand weren't to pick up, in case price erosion for some of these other segments outside of PC were to continue to weaken? Is there anything that you can do with the bit supply that could help you better manage profitability of the DRAM that could have a material impact for your overall memory and semiconductor division profitability?
๊ทธ๋ฌ๋ฉด ์ฌ์ค์ ์ด DRAM์ด ์์ต์ฑ์ ์ ์ง๋ฅผ ํด์ฃผ๋ ๊ฒ ๋ฉ๋ชจ๋ฆฌ๋ ์ ์ฒด ๋ฐ๋์ฒด์ ์ฌ์ ์ ์์ด์ ๊ต์ฅํ ์ค์ํ ์์ธ์ธ๋ฐ ์์ผ๋ก DRAM์ ์์๊ฐ ํ๋ณต์ด ๋์ง ์๋๋ค๊ฑฐ๋ PC๋ฅผ ์ ์ธํ ๋ค๋ฅธ ์ชฝ์์์ ๊ฐ๊ฒฉ ํ๋ฝ์ด ๋ ๊ฐ์๋๋ค๋ผ๊ณ ๊ฐ์ ์ ํ์ ๋ ๋์ ๋ฐฉ์์ ๊ฐ๊ณ ๊ณ์๋์ง, ์ด๋ค ๋์ ๋ฐฉ์์ด ์๋์ง. ๊ฒฐ๊ตญ์ ์ด๋ฐ DRAM์ ๊ณต๊ธ์ ์ด๋ป๊ฒ ๋ค๋ฅธ ์ชฝ์ผ๋ก ํด๊ฒฐ์ ํ์ค ๊ฒ์ธ์ง ๊ณํ์ด ์์ด์ผ์ง ๊ฒฐ๊ตญ์ ์ด๋ฌํ ์์ฅ ์ํฉ์ด ์ ํ๊ฐ ๋๋๋ผ๋ ์์ต์ฑ์ ๊ด๋ฆฌ๋ฅผ ํ์ค ์ ์๊ณ , ๊ทธ๊ฒ ๊ฒฐ๊ตญ ๋ฉ๋ชจ๋ฆฌ ๋ด์ง๋ ๋ฐ๋์ฒด ์ฌ์ ์ ์์ต์ฑ์ ์ ์งํ๋ ๋ฐ์ ํ์ํ ๊ฒ์ด๋ผ๊ณ ์๊ฐ์ ํ๋๋ฐ์. ์ด๋ป๊ฒ ๋์์ ํ์ค ๋ฐฉ์์ด ์์ผ์ญ๋๊น?
์ผ๋จ ๋ฉ๋ชจ๋ฆฌ ์ฌ์ ์์ ๊ฐ์ฅ ์ค์ํ ๊ฑฐ๋ contingency plan์ธ๋ฐ, ๊ทธ contingency plan์ ๋ํด์๋ ๋น์ฌ๋ ๋ชจ๋ฐ์ผ ๋ฉ๋ชจ๋ฆฌ๋ผ๊ณ ์๊ฐํ๊ณ ์์ต๋๋ค. ๋น์ฌ๊ฐ ์๊ฐํ๊ณ ์๋ ๋ถ๋ถ์ demand creation์ ํตํด์ ์์๋ฅผ ํ๋ณดํ๊ณ , ํนํ ์๊น ๋ง์๋๋ฆฐ ๊ฒ์ฒ๋ผ ๋ฐ์ดํฐ ์ผํฐ๋ ์๋ฒ ์ชฝ์ ๋ฐ์ดํฐ ์ผํฐ, ๊ทธ๋ฆฌ๊ณ ๋ชจ๋ฐ์ผ์์์ ๊ณ ๋์ญํญ ๋ฉ๋ชจ๋ฆฌ, ๊ฐ์ฑ๋น์ ์ํ ๋ชจ๋ฐ์ผ ๋ฉ๋ชจ๋ฆฌ๊ฐ ์ ๊ทน์ ์ผ๋ก ํ์ฐ๋๊ณ ์๋ ์ํฉ์ ๋๋ค. ๊ทธ๋ ๊ธฐ ๋๋ฌธ์ ๋น์ฌ๋ DDR4๋ผ๋ ๊ฐ LPDDR4๊ฐ ์ ํฌ๊ฐ ๋น์ฌ๋ฅผ ์ค์ฌ์ผ๋ก 15๋ ์ด๋ถํฐ ์์ฐ์ ์์ํด์ ์ ๊ท ์นฉ์ ์ถ์์ ํจ๊ป ์ง์ ํ์ฐ ์ค์ ์๊ณ , ๊ณต๊ธ ๋น์ค์ ์์ฉ์ฒ ๋ณ๋ก ์์ดํ์ง๋ง ์ ๋ฐ ์์ค ์ ๋ ๊ณต๊ธ๋๊ณ ์์ต๋๋ค. ์ด๋ฐ ์ฐ์ ๋ก ๊ฐ๊ฒฉ์ ๊ฒฝ์ฐ์๋ ์ ์ ํ์์ ์ฃผ๋ ฅ ์์ฐ ์ ํ์ผ๋ก ํ์ฐ ์์๋ ํ๋ฆฌ๋ฏธ์์ด ์ข ์ฝ๊ฐ ์๊ธฐ๊ฒ ์ง๋ง ์ ํฌ๋ ์ด ํ๋ฆฌ๋ฏธ์์ ์ค์ด๋ ๋ถ๋ถ์ ๋ชจ๋ฐ์ผ ๋ฉ๋ชจ๋ฆฌ๋ก ํด์ demand๋ฅผ creation ํด์ contingency plan์ ๊ฐ๊ณ ์์ต๋๋ค.
Our major contingency plan on the memory business is basically to derive more memory demand, to create demand for more memory content on the device level or on the set level, not only for servers, for data centers, but also on mobile. We believe that there will be more content being put on mobile devices, which will demand more memory, and this will drive up demand for memory. That is in line with the type of memory products that we offer, DDR4 and LPDDR4, that we started mass production in early 2015. We continue to expand on that level, and this is where we enjoy the benefits of the increased memory content on the mobile side and other devices.
Of course, as this becomes more of a mass market, there may be some price erosions there. We believe that we will be able to compensate for any price erosion or decrease in price premium by increasing the amount of memory. Therefore, by leveraging the trend of more memory content on the device.
๊ฐ์ฌํฉ๋๋ค. ๋ง์ง๋ง ๋ ๋ถ ์ค์ ์ง๋ฌธ ๋ฐ๊ฒ ์ต๋๋ค.
๋ค์์ผ๋ก ์ง๋ฌธํด ์ฃผ์ค ๋ถ์ ๋ฏธ๋์์ ์ฆ๊ถ์ ๋ํ์ฐ ๋์ ๋๋ค.
The next question will be presented by Do Hyun-woo from Mirae Asset Securities. Please go ahead, sir.
์๋ ํ์ธ์. ๋ฏธ๋์์ ์ฆ๊ถ ๋ํ์ฐ์ ๋๋ค. ์ง๋ฌธ ํ ๊ฐ์ง๋ง ๋๋ฆฌ๊ฒ ์ต๋๋ค. ์๊น 2016๋ ๋ NAND shipment guidance๋ฅผ 40% ์ํฅ์ด๋ผ๊ณ ์ฃผ์ จ๋๋ฐ ์ ๊ฐ ๊ณ์ฐ์ ํด๋ณด๋๊น CAPA ์ฆ๊ฐ๊ฐ ์์ผ๋ฉด ๋ง์ํ์ ์ซ์๊ฐ ๋ฌ์ฑํ๊ธฐ๊ฐ ์ข ํ๋ค ๊ฒ ๊ฐ์ต๋๋ค. ๊ทธ๋์ ์ ๊ฐ ์๊ธฐ๋ก๋ ์ค๊ตญ Xi'an์๋ ๋ ์ด์ CAPA๋ฅผ ๋๋ฆด ์ ์๋ ๊ณต๊ฐ์ด ์๋ ๊ฑธ๋ก ์๋๋ฐ, ๊ตญ๋ด 2D ๋ผ์ธ์ 3D๋ก CAPA ์ ํ ๊ณํ์ด ํน์ ์๋์ง ๊ถ๊ธํฉ๋๋ค.
My question is related with your NAND capacity plan for this year. You mentioned during the guidance that you plan to grow NAND shipment in 2016 by about 40%. I've crunched some numbers, and it seems without additional capacity expansions, you cannot meet this 40% increase in shipment NAND this year. Given that there's no further room for capacity on the Xi'an side, does that mean that you're planning on or do you have any plans of converting any of your 2D lines in Korea to 3D?
๋ค, ๋ง์๋๋ฆฌ๊ฒ ์ต๋๋ค. ๋น์ฌ๋ planar ๊ฒฝ์๋ ฅ์ ์ง์ ํ๋ณดํ๊ณ ๊ธฐ์กด NAND ๋ผ์ธ ์ด์ ํจ์จ ํฅ์์ ์ํด์ 1z nano๋ฅผ ์์ฐ ์ค์ด๊ณ , ์ดํ ์ถ๊ฐ shrink๋ฅผ ํตํด์ ๊ธฐ์กด ์ค๋น๋ฅผ ํ์ฉ, ๊ทน๋ํ๋ฅผ ๊ฒํ ํ๊ณ ์์ต๋๋ค. V-NAND๋ 3์ธ๋ ์ ํ์ ์์ฐํ์ฌ ๋ณธ๊ฒฉ ํ๋งค๋ฅผ ํ๊ณ ์์ผ๋ฉฐ, 3์ธ๋ ์ดํ ์ง์์ ์ผ๋ก ๊ฐ๋ฐ์ ํด์ cost ๋ฐ ์ ํ ๊ฒฝ์๋ ฅ์์ ์ต๊ณ ์์ค์ ์ ์งํ ์ ์๋๋ก ํ ๊ฒ์ ๋๋ค.
1z nano? 1z. Well, regarding our planar operation, our 2D NAND, we continue to enhance our competitiveness of our existing 2D NANDs. We, for example, have started the 1z nano and will continue to migrate and further scale down to maintain our competitiveness on the planar NAND operation. On the V-NAND, we've already started our 3G, third generation V-NAND, and we'll continue to expand the sales of our V-NAND. Overall, the strategy is to enhance our cost competitiveness as well as product competitiveness on both the 2D and 3D NAND operations.
NAND CAPA๋ ๋น์ฌ๊ฐ ๊ณํํ ๋๋ก ํ์ฌ ์งํ ์ค์ ์์ต๋๋ค.
Our NAND capacity overall is being managed as planned.
๋ค, ์ด์ ๋ถํฐ ๋ง์ง๋ง ์ง๋ฌธ ๋ฐ๊ฒ ์ต๋๋ค.
๋ง์ง๋ง์ผ๋ก ์ง๋ฌธํด ์ฃผ์ค ๋ถ์ Bernstein์ Mark Newman์ ๋๋ค.
The last question will be given by Mark Newman from Bernstein. Please go ahead, sir.
Hi, thanks for squeezing me in. My question is actually on the shareholder returns. Correct me if I'm wrong, but I understood that the policy you announced in the last quarter was to return 30%-50% of free cash flow to shareholders, if any risk, that was in addition to the KRW 11 trillion one-time accelerated buyback program. Could you clarify that? If so, this KRW 21,000 dividend for 2015 does not meet the 30%-50% free cash flow. It's actually something like 22% of free cash flow for last year. Does that mean that there's going to be additional money for buyback that's in addition to the KRW 11 trillion one-time buyback program?
์ฃผ์ฃผ ํ์์ ๋ํ ๋ง์ง๋ง ์ง๋ฌธ์ ๋๋ค. ์ง๋ฌธ ๋ฐ์์ฃผ์ ์ ๊ฐ์ฌํ๊ณ ์. ์ฌ์ค์ ์ง๋ ๋ถ๊ธฐ์ ๋ฐํ๋ฅผ ํ์ จ๋ ์ฃผ์ฃผ ํ์ ํ๋ก๊ทธ๋จ์ ์ ๊ฐ ์ดํด๋ฅผ ํ๊ธฐ๋ก๋ ์ด 11์กฐ์ ํน๋ณ ๋งค์ ์๊ฐ ํ๋ก๊ทธ๋จ ์ธ์ free cash flow์ 30์์ 50%๋ฅผ ์ฃผ์ฃผ ํ์์ ์ฐ๊ฒ ๋ค๋ผ๊ณ ๋ง์ํ์ ๊ฑธ๋ก, ์ด ๋ ๊ฐ์ง๊ฐ ๋ณ๊ฐ์ธ ๊ฑธ๋ก ์ ๋ ์ดํด๋ฅผ ํ๊ณ ์์๋๋ฐ, ์ฌ์ค์ ์ค๋ ๋ง์ํ์ ๊ฑฐ๋ฅผ ๋ณด๋ฉด์ ์ด๊ฒ 30์์ 50%๊ฐ ์๋๋ผ ์ง๊ธ free cash flow์ ํ 22% ์ ๋์ ํด๋นํฉ๋๋ค. ๊ทธ๋ ๋ค๋ฉด์ ์ค๋ ๋ง์ํ์ ์ฃผ์ฃผ ํ์ ์ธ์ ๊ทธ ๋งค์ ์๊ฐ์ฉ์ผ๋ก ๋ ๋ง์ ์๊ธ์ ์ฐ์๊ฒ ๋ค๋ ๊ฒ์ผ๋ก ํด์์ ํด๋ ๋๋์?
์ฃผ์ฃผํ์ ์ ์ฑ ์ ์ง๋๋ฒ์ ๋ง์๋๋ฆฐ ๋๋ก free cash flow์ ๊ธฐ์ค์ ๋๊ณ ๊ฒฐ์ ํ๊ธฐ๋ก ํ๊ธฐ ๋๋ฌธ์ free cash flow์ ์ํฅ์ ์ฃผ๋ ๊ฒ ์ ์ผ ์ค์ํ ๋ถ๋ถ ์ค์ ํ๋๊ฐ ์์คํฌ์์ ๋ณ๋์ฑ์ ๋๋ค. ๊ทธ๋ฌ๋ค ๋ณด๋๊น ์ด๋ฐ ๋ถ๋ถ์ ๋ณ๋์ฑ์ด ์ฌ์ค 2016๋ ์ ์๊น ์ด์ ๋ง์๋๋ฆฐ ๊ฒ์ฒ๋ผ ํ์ฌ ๋ณ๋์ฑ์ ๋ํ ๊ณ์ฐ์ด ์ฌ์ค ์ข ์ด๋ ค์ด ๋ถ๋ถ์ด ์์ด์ ์ฐ์ ์ ์ผ๋ก ์ง์์ฑ์ด ์ค์ํ๋ค๊ณ ์๊ฐํ๋ ๋ฐฐ๋น์ ๋จผ์ ๊ฒฐ์ ํ์ต๋๋ค. ๊ทธ๋์ 2015๋ ๋๋น ์ํญ ์ฆ๊ฐํ๋ ๋ฐฐ๋น์ ๊ฒฐ์ ํ๊ณ , ๊ทธ๋ค์์ ์ถ๊ฐ์ ์ธ ์ฃผ์ฃผํ์ ์ํ์ ๋ํด์๋ 2016๋ free cash flow๊ฐ ์ด๋ ์ ๋ ๋๋ต์ ์ธ ์์ค์ ๊ฐ๋ ํ ์ ์๋ ํ๋ฐ๊ธฐ์ ๊ตฌ์ฒด์ ์ธ ๋ฐฉ๋ฒ์ ๋ํ ๊ฒํ ํ ๊ฒ์ ๋๋ค.
Our basic shareholder return policy is based on the free cash flow available. Given the fact that the key factor that impacts free cash flow is CapEx, and that given all of the variability and uncertainty in the market currently, it's difficult for us to have sufficient visibility of our CapEx needs and plans for 2016 as of yet. Given that, first of all, we have announced today our plans for dividends, which is more important in terms of maintaining sustainability. We first of all announced the dividends, which have increased slightly versus the dividend of 2015. Additional shareholder return for 2016, we will be announcing that closer to the second half of this year as we get more visibility of our CapEx needs. That is the free cash flow for 2016.