SAMSUNG ELECTRONICS Co., Ltd. 2019 BusinessReport

1 Sam sung Ele ctronics Business Report 1 / 261 SAMSUNG ELECTRONICS Co., Ltd. 2019 Business Report For the year ended December 31, 2019 C e r ta in s ta te m e n ts in the document, o ther than pure ly historica l in forma tion, including estima te s, proje ctions, sta te men ts rela ting to our busine ss plans, ob jectives and expecte d opera ting results, and the a ssu mp tions upon which tho se sta te men ts are ba sed, are forward-loo king sta temen ts.

2 Forward-looking sta te men ts are based on current expecta tion s and assu mp tions tha t are subje ct to risks and uncertain ties which may cau se actua l results to d iffer ma terially fro m the forward-looking sta te men ts. A de tailed discu ssion o f risks a nd uncer tain tie s tha t cou ld cau se actual results and events to differ materially from such forward-looking statements is included in our financial reports available on our website. See, also, Note on Forward-Looking Statements in preamble of II.

3 Business Overview . SAMSUNG ELECTRONICS Business Report 2 / 261 Table of Contents Certification .. 3 I. Corporate Overview .. 4 II. Businesses Overview .. 25 III. Financial Affairs .. 67 IV. Management Discussion and Analysis .. 169 V. Auditor s Report .. 183 VI. Corporate Governance .. 187 VII. Information on Shareholders .. 204 VIII. Executives and Employees .. 210 IX. Affiliates and Subsidiaries .. 221 X. Related Party Transactions .. 249 XI. Other Information .. 253 Sam sung Ele ctronics Business Report 3 / 261 Certification Letter of Certification We, Ki-na m K im a nd Yo o n-ho C ho i, as C EO a nd e xec ut ive of the company in c har ge o f repor t ing, cer t ify t hat we have reviewed the annual business report of SAMSUNG ELECTRONICS Co.

4 , Ltd. fo r t he yea r ended December 31, 2019. Based on our knowledge, this report does not contain any untrue statements of material facts or omit any material facts; and it does not contain any statements that are intentionally misleading. Based on o ur k nowled ge, the fina nc ia l sta te me nts, a nd othe r fina nc ia l informatio n inc luded in the repo rt, are fairly presented in a ll materia ls a nd respec t the fina nc ia l co nd itio n, res ults o f ope ratio ns, a nd cas h flow s of t he company as of, and for, the periods presented in this report.

5 We confirm that SAMSUNG ELECTRONICS operates the Internal Controls over Financial Reporting, as defined in Artic le 8 of the Act on External Audit of Stock Companies. Date: Mar 30, 2020 Sam sung Ele ctronics Business Report 4 / 261 I. Corporate Overview 1. Overview A. Le gal, commercial name : - SAMSUNG ELECTRONICS Co., Ltd. B . Date of e stablishment: - SAMSUNG ELECTRONICS Co., Ltd. ( SEC or the Company ) was established as SAMSUNG ELECTRONICS Industry Co., Ltd. on January 13, 1969, and held an initia l public offering on June 11, 1975.

6 - SEC changed its name from SAMSUNG E lectronics Industry Co., Ltd. to SAMSUNG E lectronics Co., Ltd. f o llow in g a resolution passed at the Annual General Meeting (AGM) of shareholders on February 28, 1984. C. Addre s s, phone numbe r, and Englis h language we bsite of the corpo rate headquarte r - Address: 129, SAMSUNG -ro, Yeongtong-gu, Suwon, Gyeonggi-do, Korea - P hone Number: 82-31-200-1114 - Website: https:// D. The Company is not s ubje ct to Article 2 of the Frame work Act on Small and M e dium Ente rpris es. E.

7 Core bus inesses - The Company (defined below) consists of business divis ions that operate independent ly: CE (Consumer ELECTRONICS ); IM (Information Technology & Mobile Communications); DS (Device Solut ions); and Harman (Harman International Industries, Inc. and its subsidiaries), which produces automotive ELECTRONICS components. P roducts in each Division are presented below: Divis ion Products CE TVs, monitors, refrigerators, washing machines, air conditioners, etc. IM HHPs, network systems, computers, etc. DS DRAM, NAND flash, mobile APs, OLED smartphone panels, LCD TV panels, etc.

8 Harman Head units, infotainment systems, telematics, speakers, etc. SEC is a globa l ELECTRONICS firm compr ised of the headquarters in Korea and 240 subsidiar ies (collectively, SAMSUNG ELECTRONICS or the Company ) across the world, inc luding 9 regional headquarters for the CE and IM Divis ions, 5 regional headquarters for the DS Division, and Harman s subsidiaries. [CE Divis ion] The C E Divis ion is leading the globa l d ig ita l e r a by continuously offering new products featuring innovative technology, unique designs, and enhanced value propositions.

9 TV is the core product of CE. The Company has maintained its pos it ion as the market leader for 14 consecutive years by leveraging competit ive advantages in hardware such as LCD/LED TVs as well as software driven product features within our Smart TV product portfolio. We will cont inue to expand our market leadership based on our competit ive edge in the premium segment through our 8K QLED and ultra-large products to name a few. Sam sung Ele ctronics Business Report 5 / 261 [IM Divis ion] The IM Divis ion operates the Mobile Communication Bus iness, which pr oduces and sells smart mobile devices such as smartphones, tablets, wearables, etc.

10 For smartphones, a key product of the bus iness, we have developed a lineup ranging from low-end right through to premium mode ls, and have achieved growth in both advanced and emerging markets with the Galaxy series. We will lead growth of the smartphone market and deliver exceptiona l user experiences by: 1) offering innovative hardware features such as new form factors (based on f le x ib le O LED technology), high-definition cameras, bio me tr ic sensors, and battery charger technologies; 2) improving software capabilities of mobile payment service SAMSUNG P ay and AI platform B ixby; and 3) investing in future growth drivers such as Cloud, IoT, healthcare, AR, and VR.