HDD backgrounder_feb05 2/25/05 5:25 PM Page 1

SAMSUNG SEMICONDUCTOR, INC.

STORAGE BUSINESS

Q1-2005
HDD backgrounder_feb05 2/25/05 5:25 PM Page 2

Storage Market Share and Supplier Ranking

According to the research firm Gartner Group, Samsung is the world’s 5th largest manufacturer of hard disk
drives, with 6% of the worldwide market. When it comes to optical storage devices, TSST, the Samsung/
Toshiba joint venture formed in April 2004, is the world leader. TSST had 20% of the market and $1.8B in
revenue in 2003, according to internal analysis.

HARD DISK DRIVE BACKGROUND

WORLDWIDE 2003 HARD DISK DRIVE MARKET SHARE AND RANKING
Rank Worldwide HDD Units (M) Market Share
2003 Company 2003 2003
1 Seagate 69.5 27.7%
2 Maxtor 54.2 21.6%
3 Western Digital 44.9 17.9%
4 HGST 41.4 16.5%
5 Samsung 15.1 6.0%
6 Toshiba 13.1 5.2%
7 Fujitsu 10.8 4.3%
Source: Gartner, Units

Global Hard Disk Drive (HDD) Market

MOBILE HDDs
According to International Data Corp. (IDC), the worldwide HDD market will reach 260 million units by the
beginning of ‘05. Samsung is focusing on mobile HDDs and consumer HDDs, the fastest-growing segments
of the overall HDD market, with 15% and 25% CAGR predicted, respectively, through 2007.
During that time, 2.5-inch drive performance and density will change as shown in the table below.

2.5-INCH MOBILE HDD UNIT FORECAST 2.5-INCH MOBILE HDD TECHNOLOGY TRENDS
140
126.5
120 Parameter 2004 2007
CAGR 29.6% Density 40GB 80GB
100 RPM 4200 5400
90.7
Interface Serial ATA Parallel ATA
80
66.4
60 55.5
48.9
40 34.5

20

0
2002 2003 2004 2005 2006 2007

2 STORAGE BUSINESS © 2005 Samsung Semiconductor, Inc.

HDD backgrounder_feb05 2/25/05 5:25 PM Page 3

Consumer HDDs
Samsung has announced future plans to introduce sub-1-inch HDDs (beginning with .85-inch models) with
densities up to 4GB for consumer products. Devices such as MP3 players, video cameras, and advanced
multimedia cell phones are continuing to increase their use of storage products.

While some consumer applications will use Samsung NAND Flash for solid state storage (Samsung’s
state-of-the-art NAND Flash component technology has reached 1GB densities) the price/MB of rotating
media is still often more attractive. Samsung will offer both rotating sub-1-inch HDDs and NAND Flash for
mobile consumer applications, enabling the market to decide when to transition between technologies.

Samsung HDD Business Overview

With headquarters located in Suwon, South Korea, Samsung is a leading provider of 2.5-inch hard disk drives
for mobile markets. The business unit was launched in 1988 when it shipped the world’s first 20MB and
40MB hard drives. In 1990, Samsung opened its principal research and development center in San Jose,
Calif. According to market research firm IDC, Samsung has climbed to number five among HDD suppliers
today with 9% market share.

MANUFACTURING CENTERS

In 1996, Samsung opened a state-of-the-art Class-10 HDD facility and

logistics center in Kumi, South Korea. After investments of nearly
$200M, this facility is the world’s most automated HDD factory and
has ISO 9001 and ISO 14001 certifications. The Kumi plant not only
makes products with the highest quality levels, but the advanced
automation enables rapid adaptation to future technologies. Today,
this manufacturing center ships 2.5 million 2.5-inch HDDs monthly.

In 2002, Samsung added local manufacturing and logistics in

Manaus, Brazil. Additional logistic centers are located in Los Angeles
and Amsterdam.

3 STORAGE BUSINESS © 2005 Samsung Semiconductor, Inc.

HDD backgrounder_feb05 2/25/05 5:25 PM Page 4

HDD RESEARCH AND DEVELOPMENT CENTERS

Samsung’s principal HDD research and development center is

located in San Jose, Calif. Almost 300 engineers are developing
advanced mobile 2.5-inch hard drives, new consumer drives under
1 inch and are facilitating the transfer of designs from R&D to mass
production at Kumi and Manaus.

Samsung Advanced Institute of Technology (SAIT) conducts related

R&D on drive heads, motors, servos, vibration control, factory
automation, and home multimedia products.

Samsung HDD Business Core Strengths

Leading application of sophisticated storage technologies
• Vibration suppression
• Head stack, read channel, spindle motor, servo control, and optical technology research
• Product development is located in the US, the center of HDD innovation
• Vertical R&D at Samsung Advanced Institute of Technology

Quietest HDDs in the industry

• Advanced acoustic noise suppression
• Patented NoiseGuard™ and SilentSeek™ technologies

Cost Effectiveness
• Most highly automated HDD factories in the world
• Productivity efficiencies translate into consistently lower cost/MB
• Strengthens OEM customer’s business
Quality
• Built in ISO 9001–and ISO 14001–certified factories
• Samsung maintains a full 3-year warranty

Focus on Growth Markets

• 2.5-inch HDD for mobile notebook computer applications
• Sub-1-inch HDD for consumer applications including cell phones (4GB)

4 STORAGE BUSINESS © 2005 Samsung Semiconductor, Inc.

HDD backgrounder_feb05 2/25/05 5:25 PM Page 5

Samsung Noise Suppression Technology

As increasing multimedia functions have been added to PCs, acoustic
noise levels generated by the CPU cooling fan and hard drive have
become important issues. Samsung has developed technologies to
reduce HDD noise. Noise Guard™ helps eliminate each noise source
or minimize energy transmission, including modification of the spindle
motor’s design to minimize noise and redesign of the cover to optimize
and quiet air flow. In addition, the drive’s damper uses vibration-
absorbing material in the areas of highest density. Meanwhile,
Silentseek™ technology smooths the movement of the head actuator
to minimize data-seeking noise.

Samsung HDD North American Distributors

Samsung’s line of hard drives is sold exclusively through distributors, who supply these drives to many of the
leading PC and storage vendors.

OPTICAL DRIVE BACKGROUND

Global Optical Disk Drive (ODD) Market
DESKTOP AND NOTEBOOK ODD TRENDS
TSR, an industry analyst firm, said the ODD market would reach to 240 units by the end of 2004.
Optical drives include the following products for desktop and notebook applications:

OPTICAL DISK DRIVE TYPES

Type Desktop PC Notebook PC

DVD-W DVD-W
DVD DVD-ROM DVD-ROM
Combo Combo
CD-ROM
CD CD-ROM
CD-RW

5 STORAGE BUSINESS © 2005 Samsung Semiconductor, Inc.

HDD backgrounder_feb05 2/25/05 5:25 PM Page 6

ODD Forecast
Writeable DVDs (DVD-W) are the fastest-growing segment, which will account for 51% of all ODD devices
sold by 2007. The Half-Height (HH) and Slim Line (SL) versions of DVD-W will lead the market growth.

OPTICAL DISK DRIVE UNIT FORECAST

M Units
300
258 262
240 250
250 228
27 53 77
200 105
135
37
45 DVD-W
150 51
55 COMBO
48 51
100 40 45 CD-RW
35 30
35 23 DVD-ROM
34
50 32
74 30 CD-ROM
60 49 40 30
0
2003 2004 2005 2006 2007
(Source : TSR, Mar 2004)

Samsung/TSST ODD Business

In April 2004, Samsung and Toshiba formed a joint venture called Toshiba Samsung Storage Technology Korea
Corporation (TSST). With combined sales of $1.8 billion, TSST has jumped ahead to become the top
ODD supplier, with 20% market share.
About TSST
• Combines the global ODD assets of both companies into a world leader
• Samsung manufacturing expertise, global sales and marketing are combined
with Toshiba’s core optical technology and ODD format leadership

• Capitalization of $86M

• Headquartered in Suwon, South Korea

• 384 employees
TSST has 40 offices in 39 countries. There are 30 service centers in 26 countries that provide after-sales support.
Manufacturing is performed at Samsung’s Kumi facility in Suwon, supported by four logistic centers located in
Korea, Europe, and the United States.

6 STORAGE BUSINESS © 2005 Samsung Semiconductor, Inc.

HDD backgrounder_feb05 2/25/05 5:25 PM Page 7

Samsung/TSST ODD Business Core Strengths

Major player with comprehensive line of award-winning products

• Business storage devices

• Consumer applications

State-of-the-art manufacturing facility

• TSST manufacturers ODDs at Samsung’s Kumi facility in Suwon

• High volume translates into cost/MB benefits to OEMs

Lead-edge technology

• DVD-RW technology includes Partial CAV Technology Optimized Firmware for lightning-fast drives

• ODD technologies include Speed Adjustment Technology (SAT), Tilt Actuator Compensation (TAC),
double-optimum power control, Silent PWM technology, and Automatic Ball Balancing System (ABS)
Quality

• Built in ISO901–and ISO14001–certified factories

• Samsung maintains a full 3-year warranty compared to some others, offering just at 1-year warranties

Samsung/TSST ODD Strategic OEMs

These leading notebook and consumer manufacturers depend on TSST ODDs:

Samsung Storage Product Line

HARD DISK DRIVES (HDD)
Form Factor RPM Density
20 30 40 60 80 120 160 200 250
2.5” 5400 • • • •
3.5” 7200 IDE • • • • • •
SATA • • • • •
3.5” 5400 IDE • • • • • •
Drives are available in Slim and Light form factors. Visit www.samsung.com for more information.

7 STORAGE BUSINESS © 2005 Samsung Semiconductor, Inc.

HDD backgrounder_feb05 2/25/05 5:25 PM Page 8

OPTICAL DISK DRIVES (ODD)

Type Format Speed
4x 5x 8x 12x 16x 24x 32x 40x 48x 52x
CD-ROM H/H CD Read •
Slim CD Read •
DVD-ROM H/H CD Read •
DVD Read •
Combo H/H CD Read •
DVD Read •
CD Write •
CD Re Write •
Slim CD Read •
DVD Read •
CD Write •
CD Re Write •
CD-RW H/H CD Read •
CD Write •
CD Re Write •
DVD-W H/H CD Read •
DVD Read •
CD Write •
CD Re Write •
DVD+R Write •
DVD+R Write Dual Layer •
DVD+Re Write •
DVD-R Write
DVD-Re Write •
Slim CD Read •
DVD Read •
CD Write •
CD Re Write •
DVD+R Write •
DVD+Re Write •
DVD-R Write •
DVD-Re Write •

The previous product matrixes represent Samsung’s most popular storage solutions. Other combinations not
shown may be available and those shown may not be available in all markets.

Samsung and TSST are also continuing to develop new products. For specific device information, visit
http://www.samsung.com/Products/index.htm and select the appropriate link under Computers and
Related Products.

8 STORAGE BUSINESS © 2005 Samsung Semiconductor, Inc.