Samsung Electronics Co. Ld — Call Transcript 2026

Hello everyone, welcome to the Samsung Electronics 2026 first quarter financial results conference call. I will be your coordinator. All participants will be in a listen-only mode until we open the question and answer session following the presentation. As a reminder, this call is being recorded. I would now like to turn the conference over to the investor relations team. Please go ahead. Good morning, good afternoon, and good evening everyone around the world, and thank you for joining Samsung Electronics' first quarter 2026 earnings call. I'm Daniel Oh, Head of Investor Relations. As a reference, all materials presented today, including the slide deck and this webcast, are available at samsung.com/global/ir. They will be accessible for your convenience even after the call. Please note that certain aspects of today's discussion may contain forward-looking statements from which actual results may vary. Please refer to the associated slide for our full legal disclaimer. For our meeting agenda, today's call agenda, EVP Soon-Cheol Park, our Head of Corporate Management Operations and Chief Financial Officer, will lead off the discussion with the company's first quarter 2026 financial results and outlook. I will follow up to address capital expenditures and shareholder returns before handing over to our executives for their own business segment updates. We will hold a Q&A session before completing the call today. The executives joining us today are as follows: EVP Soon-Cheol Park, our Head of Corporate Management Operations and Chief Financial Officer. EVP Jaejune Kim, Head of the Global Sales and Marketing Office Representing Memory. EVP Jason Shin, Head of the Sales Team for System LSI. EVP Sukchae Kang, Head of the sales and marketing office for Foundry. EVP Charles Hur, Head of the Corporate Strategy Team for Samsung Display Corporation. EVP Seong Cho, Head of the Strategic Marketing Office for Mobile Experience. Finally, VP Won-uk Kim, Head of the Sales Strategy Group for Visual Display. I would like to invite our CFO, Soon-Cheol Park, to present the first quarter financial performance and our outlook. Good morning. Thanks to our investors from around the world for joining us today for our first quarter 2026 earnings call. I am Soon-Cheol Park, CFO of Samsung Electronics. In the first quarter, we delivered our highest ever quarterly revenue and operating profit, driven by continued AI technology innovations and our proactive market response. Amid the challenging macro environment, this performance reflects the strength of our technology leadership within core businesses and the successful execution focused on our high value-added product portfolio. Looking ahead, we will continue to strengthen our competitive edge through innovation and lead the global market. Let me now go into the details of our first quarter 2026 results. Please be advised that the figures I'm about to present have been rounded for clarity. Total revenue reached a new high a new record high of KRW 134 trillion, up by 43% from the record set one quarter ago. Operating profit also reached a new all-time high of KRW 57 trillion of 185% QoQ, and the operating margin expanded from 21% in the previous quarter to 43%. Net profit recorded KRW 47 trillion, 2.4x that of the previous quarter. Earnings per share came in at KRW 7,123 for common shares and KRW 7,124 for preferred shares. In the DS Division, revenue increased from the previous quarter, driven by stronger sales of high value-added AI products and higher ASPs. The memory business posted its second straight quarterly earnings record. Operating profit rose sharply, led by the memory business, while system semiconductor delivered improved results thanks to expanded sales of flagship SOCs. In the DX Division, revenue grew from the previous quarter, supported by the launch of new flagship smartphones. Despite higher cost pressures, we limited the profit decline through expanded sales of high value-added products. Across businesses and improve the resource efficiency. On the currency front, the appreciation of major currencies, including the US dollar, had a positive impact of approximately KRW 1.8 trillion on operating profit quarter on quarter, mainly in component businesses. Additional details for each business will be provided shortly by the executives. Let me now turn to our outlook. In the second quarter, despite geopolitical headwinds, such as Middle East tensions and rising oil prices, semiconductor demand is expected to remain strong, supporting continued improvement in overall earnings. In the DS Division, we expect memory price to stay on the current upward trend driven by ongoing expansion in AI infrastructure. In memory, we'll continue to increase sales of HBM4, high density DDR5, and eSSD to expand profitability. System LSI will look to offset earnings pressure through volume jump project with a key customer. Foundry will drive earnings improvement through increased sales in advanced processes, while continuing to secure orders for leading-edge technologies based on our 2 nm technology. In display, amid demand uncertainties, we target performance improvement by ensuring stable supply to key customers with our leading technology and mass production expertise. In the DX Division, we expect profit to decline due to rising cost burdens. To mitigate the earnings impact, we enhance the product mix with the sales expansion of the S26 series and the launch of premium lineups, including Micro RGB TVs and AI Combo, while improving our cost structure and driving efficiencies. To strengthen our core businesses, we'll expand our market share and presence while enhancing our mid to long-term competitive position. At the same time, we aim to secure future growth drivers, including through M&A. In the second half of this year, we expect a mixed business environment with growth in semiconductor demand driven by AI expansion on one hand, and the rising cost for IT products on the other, despite continued external uncertainties such as geopolitical risks and global tariffs. Against this backdrop, we will remain agile in responding to market changes while maintaining a profitability-focused approach and expanding high value-added products to deliver stable business performance. Thank you. Thank you, CFO Park. Let me now walk you through our capital expenditures. CapEx in the first quarter totaled KRW 11.2 trillion, down KRW 9.2 trillion quarter-on-quarter, of which KRW 10.2 trillion was allocated to the DS Division and KRW 0.6 trillion was allocated to Display business. Now, I will discuss the CapEx by business segment in more detail. In the Memory business, CapEx declined quarter-on-quarter, reflecting the front-loaded nature of certain investments made last year, including the addition of new clean room space at the Pyeongtaek site. By strategically utilizing the fab and clean room space secured through our forward-thinking investments, we anticipate a significant increase in equipment expenditures as we progress with the deployment of this newly acquired capacity. This planned expansion is expected to contribute to a comprehensive increase in CapEx throughout the entire fiscal year, thereby reinforcing our commitment to sustainable growth and operational efficiency for the memory business. In the Foundry business, CapEx declined from the previous quarter due to the base effect set by major infrastructure investments at the Taylor Fab in the fourth quarter of 2025. However, investments to support the ramp-up of the Taylor Fab are expected to increase steadily throughout the year, starting in the second quarter. In the display business, CapEx remained roughly flat sequentially with investments focused on enhancing existing lines after completion of the Gen 8.6 line last year. Let me now turn to our full year CapEx outlook. In 2026, we anticipate a substantial year-on-year increase in CapEx driven by sustained demand related to AI. We'll further expand preemptive R&D investments in next generation processes and core technologies to solidify our technology leadership. Additionally, we'll strengthen strategic production hubs and secure additional infrastructure to stay ahead of future demand. As a result, our investment decisions will remain flexible, carefully adjust to the rapidly evolving market conditions. Moving on to shareholder returns. The board of directors today approved a quarterly dividend of KRW 372 per share for both common and preferred shares. Under our three-year shareholder return policy for 2024 to 2026, we are committed to ensuring an annual minimum payout of regular dividends totaling KRW 9.8 trillion through quarterly dividends of KRW 2.5 trillion. The distribution for the first quarter is scheduled for payment in May. Let me also address treasury shares. Following a board resolution in November 2024, the company announced a KRW 10 trillion share repurchase program aimed to enhance shareholder value, which was completed by September 2025. Of this amount, the first tranche worth KRW 3 trillion was canceled in February 2025. Subsequently, during the first quarter of this year, the board convened to deliberate on the remaining shares and ultimately resolved to proceed with their full cancellation. This resolution was made in accordance with the commitments communicated during the previous earnings call, thereby reinforcing the company's dedication to transparency. Notably, the board decided to retain only the KRW 1.6 trillion worth of shares specifically allocated for employee compensation. The cancellation of the remaining shares was completed earlier this month, marking a significant milestone in company's ongoing efforts to enhance shareholder value. To put into perspective, the cancellations in this round totaled 73.4 million common shares and 13.6 million preferred shares, representing 1.2% and 1.7% of total shares outstanding in each respective class. Based on the closing price on the date of the board resolution, the valuation of the canceled shares amounts to approximately KRW 14.6 trillion. Let's turn to our executives for commentaries on their respective business units. We'll begin with Jaejune Kim, EVP of Memory Business. Okay. Good morning. This is Jaejune Kim from Memory Global Sales and Marketing. In the memory market in the first quarter, robust demand focusing on server application became increasingly visible with the hyperscalers CapEx expansion to secure AI infrastructure and the initial demand for agentic AI. Under the strong demand from AI, while concentrating on expanding sales focus on server products, we started shipping industry's first mass-produced HBM4 and SOCAMM2. In addition, after the on-time development of PCIe Gen 6 SSD in the first quarter, we are now undergoing customer qualification. Also, we already got a positive feedback on our outstanding performance competitiveness. In the second quarter, we expect growth in the AI industry will drive demand for memory products following the previous quarter. In order to maintain technology leadership in the rapidly growing AI market, we will provide the first samples of HBM4E in the second quarter. In addition, from a product mix perspective and within the limited supply capability, we will continue our supply operation focusing on AI products for both DRAM and NAND, while planning to proactively respond to the initial demand for GPU and CPU that will be newly launched in the second half. In the second half, as hyperscalers expand their AI services and major LLM providers speed up the introduction of B2B services, the spread of agentic AI is likely to accelerate at a much faster pace than initially expected. Therefore, in addition to AI servers, the role of a general servers, tailored for various workloads also will be getting more important. We expect that the demand for DRAM and SSD for conventional servers will increase more sharply than previously anticipated. On the other hand, for mobile and PC, we expect some impact on demand due to price increases in end products and changes in memory contents per box, which is driven by the price increase of key components. Due to the server-oriented product mix execution in the industry, we expect that overall supply shortage situation will continue. Considering the additional increase in server demand for DRAM and NAND, we plan to actively accommodate the market changes through the flexible mix operation. For DRAM, we plan to expand HBM4 supply to multiple key customers and keep increasing the portion of AI-related products such as high performance and high density DDR5 and SOCAMM2. For NAND, while focusing on addressing the rising demand for key value share cache storage, we plan to lead the early PCIe Gen 6 server SSD market with the outstanding product performance. Thank you. Good morning. This is Jason Shin from the System LSI business. In the first quarter, despite weak demand in the smartphone market, our overall earnings improved quarter-over-quarter, driven by SoC sales on the back of flagship product launches from major customers and favorable seasonality. In the second quarter, revenue is expected to be lower compared to the previous quarter due to seasonal factors. In response, we will continue to focus on sales of SoCs and imaging sensors for high to mid-range smartphones for our major customers. In the second half, amid persistent cost pressures stemming from rising component prices, overall consumer market demand is expected to soften. In the light of this external environment, we will continue to strengthen our market leadership based on our technological edge. In particular, we plan to increase sales by securing new design wins for our flagship SoC and reinforce our product lineup centered on the 200 MP sensor. Looking ahead, we will concentrate on expanding high-value products and securing new growth drivers. We will continue to strengthen our image sensor competitiveness based on our ultra-high resolution and fine pixel technologies, and pursue growth opportunities in new business areas with a primary focus on custom SoC. Thank you. Hello, everyone, this is Sukchae Kang from the Foundry business. In the first quarter, although our earnings declined quarter-on-quarter due to seasonally weak customer demand aligning with the industry pattern of first half low, second half high, we achieved double-digit year-on-year revenue growth, maintaining the momentum of our business improvement. From an order perspective, we continued to expand our customer base and deepen engagement across high-performance computing applications, sustaining a solid order momentum throughout the quarter. Notably, we secured a strategic project from a leading optical communication module player, marking a significant milestone in establishing the foundation of our silicon photonics business. In the second quarter, our advanced nodes are expected to reach full utilization rates. We anticipate a sequential improvement in earnings supported by robust demand for leading-edge products, including HBM4 base die. The development of the 1.4 nm process is progressing as planned, ensuring the readiness for future technology. We are actively engaging with major customers for the 2 nm process. In the second half, we will start mass production of the second-generation 2 nm process. We will expand the application of the 4 nm process for memory products and APU products for AI applications. Through these initiatives, we expect to achieve double-digit revenue growth and earnings improvement. We are actively pursuing structural transformation by diversifying our application portfolio beyond mobile into AI HPC, automotive, and aerospace sectors. Thank you. Good morning. This is Charles Hur from Samsung Display. I will now brief you on our results for the first quarter of 2026. For the mobile display business, our performance declined quarter-over-quarter due to seasonality and memory price pressure. For the larger display business, we maintained stable sales thanks to strong demand in gaming monitors. Let me share the outlook for the second quarter and the second half. In the second quarter, the smartphone and IT market demand is likely to be weak, mainly due to memory supply and price. In response, we'll focus on high-end products where demand is expected to be relatively stable. For the larger display business, we anticipate the demand increase supported by sports events and our major customers' new product launches. In the second half, market environment is expected to be uncertain and difficult to predict. However, we aim to maintain profitability by focusing on premium product strategy. For smartphones, we'll secure a stable demand of differentiated technologies such as low power consumption and privacy solution, which are aligned with the major customers' premium smartphones. For IT products, we'll increase revenue through the ramp-up of brand-new 8.6-generation IT OLED line. For QD-OLED, we'll continue to strengthen our positioning in the premium segments while expanding our monitor business into the consumer and enterprise market. Lastly, 2026 will be a challenging year due to geopolitical risk, unpredictable market condition, and memory supply issues. We'll strive to achieve revenue growth by strengthening our premium portfolio based on our technology leadership. Thank you. Hi, this is Seong Cho from the MX division. Let me share our first quarter results as well, as well as the future outlook. The smartphone market declined quarter-on-quarter due to seasonality, with volume and revenue decreasing across premium and mass segments. For the MX business, Q1 revenue reached KRW 37.5 trillion, and we delivered a combined operating profit of KRW 2.8 trillion across the MX and the network businesses. Despite new model launch schedule adjustment and geopolitical uncertainties, we deliver quarter-over-quarter growth in both revenue and operating profit. On a year-on-year basis as well, we achieved solid ASP and revenue growth driven by a higher contribution from ultra models. While memory costs increased, we secure single-digit profitability through proactive resource efficiency improvements. Next, let me share the outlook for Q2. Overall, smartphone demand is expected to decrease quarter-on-quarter due to seasonality. For the MX business, we expect Q2 revenue to decline quarter-on-quarter. We plan to sustain flagship-centric sales supported by continued momentum of the S26 series, along with the solid sales of the foldable and M minus one and FE models. Also, through the successful launch of the new A series models, we will drive growth across all segments. However, cost pressure on key components in Q2 are expected to intensify. While we will ensure stable supply through strategic partnership with suppliers, a decline in profitability appears inevitable. Next, let me share the outlook for second half. The smartphone market is expected to decline in shipments due to rising costs, while revenue are projected to grow driven by expansion of super premium products. Tablets are expected to decline in volume and value due to cost pressures and reduced promotions. The note PC market is projected to see value growth driven by ASP increase, but shipments are expected to decline. MX will maintain our strategy focused on expanding flagship sales through our leadership in advancing AI capabilities and form factor innovations. For foldable devices, we plan to strengthen our product development to stay ahead of evolving customer needs. For eco-products, we'll drive premium sales with even more advanced Galaxy AI capabilities and health features and expand our TWS lineup. We also plan to deliver immersive multimodal AI experiences through diverse form factors such as AI glasses. 2026 will be a challenging year with ongoing geopolitical uncertainties and profitability impacted by rising cost pressures across the industry. Nevertheless, we'll maintain our focus on expanding flagship-led sales powered by AI leadership and pursue cost efficiency initiatives to minimize the impact on profitability. Thank you. Hello, everyone. I'm Won-uk Kim, Head of the Sales Strategy Group for Visual Display. I'd like to briefly explain the market conditions and share our first quarter results along with the outlook for the rest of the year. In the first quarter, overall TV demand declined after year-end peak season, but demand for QLED, OLED, and 75-in above remained solid. We focused on premium products such as Neo QLED, OLED, and larger sized TV, thereby solidifying our market leadership. In terms of profit, despite showing improvement versus last quarter, declined year-over-year due to stagnant demand and rising raw material cost. For the second quarter, while uncertainties in the external environment are likely to persist, TV demand is forecast to grow year-over-year, driven by a major international sporting event. Against this backdrop, we'll capture AI-related demand by deploying differentiated marketing strategies and maximize the launch impact of new models such as Micro RGB TVs to secure both sales and profitability. In the second half of 2026, following the sporting event, the market may see a downward trend compounded by macroeconomic and geopolitical risks. In response, we aim to reinforce sales leadership by expanding AI features to pioneer the AI TV market. On top of that, we'll drive growth momentum and elevate profitability by expanding advertising services such as TV Plus and performance-based advertisement, while also strengthening OS competitiveness to further broaden our licensing business. This is the end of my speech. Thank you for your attention. Thank you, all presenters. That brings our presentation on the first quarter performance of 2026 to a close. We'll now start the Q&A session, which will be conducted in Korean. Our CFO, Soon-Cheol Park, will address company-wide questions, while questions regarding the business segments will be answered by the respective business representatives. Thank you for your attention. We will now begin the Q&A session. If you have a question, press star and 1 on your phone. If you wish to withdraw your question, press star and two. The first question will be made by Seicheol Lee from Citigroup. Yes, good morning, this is Seicheol Lee from Citigroup. First, I'd like to congratulate you on record high quarterly performance. I have a question for semiconductor and then a company-wide question as well. The first question is about semiconductors versus specifically memory. There's a lot of talk in the sector about multi-year contracts and LTA. Are you also seeking this kind of multi-year contracting for your memory products? The second question is general. I do understand you're in talks with the labor union on bonus payouts. Will the payout be reflected in first quarter provisions? If so, what would be the expected size? Thank you. Yes. Let me take your first question regarding multi-year contracting for memory. First, due to our NDAs with customers, we are not able to go into too much detail on our multi-year contracts with customers. I seek your kind understanding. That said, major customers are quite confident in future AI and AI-related demand. They have been approaching us seeking supply volume commitments for the mid to longer term. Based on these requests, we have been pursuing multi-year supply agreements, of course, within our available supply capacity, and have already signed finalized contracts with some customers. Unlike existing supply contracts, which are based on mutual trust, these multi-year contracts present a higher level of binding commitments compared to the past in today's environment where investment size, timelines, and technical complexity have all increased significantly. Investment and capacity related operational risks are much more challenging. We expect multi-year agreements to help enhance business stability and visibility for both us and our customers. We will manage the size of our investments flexibly depending on the mid to long-term demand we see from our customers and, react proactively to changing market conditions. Let me address the question on provisions for 1Q. The incentive related provision you mentioned is under discussion between labor and management. As the specific amount, payment conditions and amounts have not been finalized, it hasn't been reflected in this quarter's results. Depending on the outcome of the negotiations, the related costs may be recognized in the future, and once finalized, it will be appropriately reflected in the financials. Thank you. We will move on to the next question, please. Yes, I'm Woo Dong-je from Bank of America. I would also like to congratulate you on delivering very strong performance despite the challenging business environment. During the first quarter, I think, your solid performance was in large part driven by the memory business. If you could provide more color, more details on the memory performance. The second question is company-wide. As the CFO mentioned, just now, there does seem to be a lot of labor union issues. According to the media reports, a general strike has been announced for May. Do you anticipate any disruptions to production or otherwise, any negative impact on performance, any other management issue? Yes. Let me provide the answer to the first question on first quarter memory performance. The adoption of agentic AI drove further growth in relevant demand, mostly for HBM, server DRAM, and server SSDs. That said, despite this rising demand, because of the industry-wide constraints in expanding capacity, the supply shortage has actually become more intense relative to robust demand. Under these circumstances, in line with growing AI demand trends, we focused on expanding sales for mostly server applications in the first quarter, resulting in server bit shipment growth in the low teens percentage QoQ for DRAM and low 20% Qoq for NAND, as we post a record high quarterly sales in the server segment. Consequently, we met our bit growth guidance for DRAM while exceeding guidance for NAND, with NAND bit growth increasing by a high single-digit percentage QoQ. Amid a sharp rise in market pricing and the effect of our improved product portfolio following expanded server application sales, our blended ASP rose by low 90% range QoQ for DRAM, high 80% QoQ for NAND. Overall, in the first quarter, thanks to strong market demand and the strength of our products, our memory business set another all-time high in quarterly performance following the previous quarter. We will continue to do our best to preemptively anticipate and identify market needs while developing products in a prompt, timely manner that meet customer requirements to deliver continued strong performance. Let me address this question. The labor union on April 23rd held a rally at the Pyeongtaek site and has announced a general strike from May 21st to June 7th. While it is difficult to comment further at this stage, even in the event of a strike, the company plans to respond through dedicated teams and response system within the legal framework to minimize potential production disruptions. Separately from our response to the potential strike, the company is addressing labor management issues in accordance with laws and procedures, and will continue to prioritize dialogue with the union to reach an amicable resolution. Thank you for the answer. We'll move on to the next question. The next question will be made by Kim Sun-woo from Meritz Securities. You may go ahead. I'd like to ask about the shareholder return policy. This year marks the final year of the three-year shareholder return policy. Will the company execute the previously announced policy as committed? Could you share the direction of the next shareholder return policy? Lastly, can you explain the details on the corporate value enhancement plan announced in March? Let me address your questions on shareholder returns. As previously committed to our shareholders, the company will faithfully execute its current shareholder return policy, which is one of our key management priorities aimed at enhancing shareholder value. Management and the board are currently gathering various views and engaging in deep discussions on the next shareholder return policy. Centered on the board, we will continue to carefully review and develop the optimal policy to enhance shareholder value, and we will share details once the direction is decided. Regarding our corporate value enhancement plan, the company plans to invest over KRW 110 trillion in facilities and R&D to strengthen our strategic production basis for future, including the Pyeongtaek site, the U.S. Taylor Fab, and the Yongin semiconductor cluster, as well as to advance R&D in next-generation technologies. In terms of M&A, to drive continued future growth and enhance shareholder value, we will continue to reassess our business portfolio. We will proactively pursue inorganic growth strategies to ensure mid to long-term growth. In addition to M&A, to identify new technologies and businesses and to discover and collaborate with promising tech companies, we are pursuing a wide range of investments, including venture and equity. Through these efforts, the company aims to strengthen the competitiveness of its established businesses while also responding to rapidly evolving global tech trends. In HVAC, automotive, electronics, medical technology, robotics and other future growth drivers, we'll continue investing to secure future technology leadership. We'll share updates as these initiatives progress. Thank you. We'll move on to the next question. The next question will be made by Nicolas Gaudois from UBS. You may go ahead. Good morning. Thanks for taking my questions. With the prolonged conflict in the Middle East, there are growing concerns about potential supply disruptions for raw materials that heavily depends on regions such as naphtha and helium gas. In addition, important energy and oil remain import, crucial for electricity supply, for your fab in South Korea. Are there any company-wide issues related to these? What measures is the company taking to address them? Secondly, with rising semiconductor costs and intensifying market headwinds expected in Q2, how does the company plan to secure profitability for MX specifically? Thank you. Let me address the Middle East related risks. Our semiconductor production lines are operating normally and there have been no supply chain issues to date. While we source some processed gases from Israel and the Middle East, we have secured sufficient safety stock and are responding in line with local logistics conditions. We have secured alternative logistic routes and diversified suppliers, including the U.S. and Japan, so the overall risk remains limited. Based on our past experience with export controls, natural disasters, trade disputes and wars, we are managing supply-demand balance flexibly from mid to long-term perspective. Regarding power supply, we are closely monitoring utility cost trends amid rising oil prices. Through close coordination with the government, we'll maintain a stable power supply system. However, oil price increases driven by the war are impacting global ocean and air freight costs, which is expanding the risk of higher shipping rates. In response, we are closely monitoring global inventory levels while optimizing supply chain operations to minimize cost burden from international transportation. Based on the mid to long-term partnerships with shipping and air freight providers, we're engaging in negotiations and utilizing alternative transportation options to mitigate the impact of high logistics costs. In case the war is prolonged, we are developing diverse scenarios, and through long-term contracts with logistics providers and fuel-linked freight rates, we plan to maintain cost competitiveness and supply capacity while strengthening our response capability to volatility. Thank you. I will take the next question. With the growing demand for AI seven memory supply shortages for mobile and upper trend in prices have persisted. In 1Q 2026, memory prices surged, weakening profitability year-over-year. In 2Q, prices are expected to rise further, adding to cost pressures. We will leverage our stable supply to expand sales of S26 and new A series. At the same time, across development, procurement and sales, we'll enhance cost efficiency to mitigate the impact of rising memory prices on profitability. Thank you. Thank you very much. We'll now move on to the next question, please. The next question will be by Mr. Kim Dong-won from KB Securities. Please go ahead. Yes, I would like to congratulate you on your all-time high performance as well. I have a question for memory and then company-wide question. The memory sector is expected to see a continued upcycle, what is your business outlook for the second quarter? If you could provide bit growth guidance for Q2. The second question, humanoid robotics and physical AI are sectors expected to see high growth, could you explain your strategy in addressing these growth markets? Yes. Let me address your question on the memory business outlook. We do expect AI-related demand to continue to drive growth momentum for a memory for the time being. With the spread of agentic AI, token processing is increasing in volume and technologies improving the efficiency of data processing are being introduced, and the AI ecosystem is growing even faster than ever. That said, although advancements in AI technology are a structural driver of increased memory demand, when you consider the lead time involved for new fab expansions, supply growth is expected to remain constrained within the industry for the time being. We also have very tight inventory and available supply is far short of customer demand. In fact, our demand fulfillment rate is now at a record low. Unlike previous years, customers who are concerned about supply shortages are actually bringing forward their demand for 2027 already. Currently, just based on pre-booked demand alone, the supply-demand gap is looking to widen further in 2027 versus this year. With available capacity under such constrained conditions, we plan to maintain our product mix focus on servers in the second quarter, and we're expecting DRAM bit growth to increase by single-digit percentage QoQ. While for NAND, considering limited available capacity, from a reduced inventory level in the first quarter, bit growth is expected to be constrained at a low single-digit level QoQ. Let me address our physical AI strategy. Over the past year, under the leadership of Jun-ho Oh, a leading robotics expert in Korea, we have made meaningful technological progress and established a foundation to catch up with global leaders. We are internalizing key robotics components and building capabilities to develop customized parts optimized for our own robots. The robotics industry, driven by technological developments such as physical AI, is becoming increasingly viable. Through the development of humanoid robots, the combination of advanced robotics technologies, we aim to innovate manufacturing productivity and daily experiences. With our manufacturing production bases, we plan to develop manufacturing robots, by leveraging the technologies we accumulate, we'll expand into home and retail applications. To accelerate technology advancement and deployment, we'll focus on securing our own technological capabilities, at the same time, we'll cooperate with competitive global partners as part of a two-track strategy. Where appropriate, we'll consider strategic investments or acquisitions. Thank you. We'll move on to the next question. Next question will be by Mr. [Kim Dong-gyu] from Daiwa Securities. Please go ahead. Yes, good morning. Thank you for the opportunity to ask some questions and also congratulations on strong performance as well. I have a question on memory and display. Let me start with HBM. In the first quarter of this year, you were the first in the industry to commence HBM4 mass production and shipments, and I understand you've already been receiving quite good feedback in terms of performance. Also, could you provide a status update on not only HBM4, but the HBM4E business as well? For display, amid shortages in memory supply, also, I think downward pricing pressure is likely to increase for displays. What measures are in place to defend against those trends and also to maintain profitability? Yes, let me address the HBM question first. First of all, as we explained at the last quarterly earnings call, we expect HBM sales to increase substantially by more than three-fold year on year in 2026. Leveraging our cutting-edge 1c nano processes, we have secured industry-leading product competitiveness. This has allowed us to play a leading role in raising the bar on performance requirements for HBM4. As customers adopt these enhanced specifications, our outstanding performance has been translating to actual premium on pricing. The differentiated performance of our HBM4 has led to concentration of demand, and our production-ready capacity is fully booked and sold out. After we became the world's first to commence commercial shipment of HBM4 in February, we are now proceeding with ramp-up as scheduled, with supply volume expected to scale meaningfully in the second half of the year. HBM4 sales are expected to exceed 50% of total HBM sales from the third quarter onwards and also account for roughly half on a full year basis. Going forward, based on the competitiveness of our 1c nanotechnologies accumulated through HBM4 mass production, we have been accelerating development of next-gen HBM4E products with pin speed of 16 Gbps and bandwidth of 4.0 TB per second, with samples set to start shipping within the second quarter. We will continue to build on our leading technology to provide HBM products optimized to customer needs on a timely basis as we carry forward our market leadership. Thank you. I'll take the display question. Rising memory prices driven by supply-demand imbalances have increased cost burdens for set manufacturers, which is expected to reduce overall set demand. Accordingly, display demand is likely to weaken and downside ASP pressure is expected to persist. We'll respond to such conditions by enhancing operational efficiency and strengthening competitiveness across our business. First, we'll drive extreme productivity improvements to strengthen cost competitiveness and accelerate the development of differentiated technologies. On the business side, our portfolio centered on premium products with relatively robust demand will be strengthened and also will expand our customer base. In particular, the performance of a new privacy protection technology introduced in smartphones this year, which is MDP, will be further enhanced and we will broaden its applications. We'll continually develop differentiated technologies to strengthen our leadership in high-end products, thereby securing stable profitability. Thank you. We'll move on to the next question. The next question will be by Mr. Lee Giuni from Goldman Sachs. Yes, congratulations on very good performance. I have a question on foundry and VD. First, for foundry, I think I would like to hear an update on new order wins for advanced 2 nm, 4 nm nodes and legacy processes. For VD business, amid reduced profitability, I do believe there have been growing concerns over performance. What kind of countermeasures are you getting ready? Let's cover the foundry question first. We have been diversifying our portfolio looking out to the mid to longer term across more end markets, and we've been working to expand project awards across diverse application areas, including AI, HPC, automotive, robotics, and aerospace as well. Amid recent increase in AI and data center demand, memory supply remains limited, clearly we're seeing demand for turnkey solutions that cover both memory and foundry together. In line with these market dynamics, we are in active talks with multiple large-scale AI and HPC customers on 2 nm process projects. Expect to secure more visible results in the near future for certain accounts. Our HBM4 base die, which is built on 4 nm processes, has been gaining recognition for differentiated and competitive performance, leading 4 nm demands. We have been actively considering possible expansion of supply in response. We are also in discussions with many automotive or robotics customers in the U.S. and wider China on adoption of 2 nm or 4 nm processes. Leveraging our products delivered to major large accounts, we've been validating our technology and establishing stronger reliability. For data centers, we are seeing growing demand for high bandwidth and low power data transmission, which has led to a rapid rise in demand for silicon photonics. We are developing not only silicon photonics components, but also technology for the CPO or co-packaged optics business based on advanced processes and three-D packaging. In parallel, we are engaged in discussions with several large scale global accounts on commercialization projects. We will be starting mass production for a major optical communications module player starting in the second half of this year. The TV market, amid rising raw material costs and an uncertain external business environment, is expected to face challenges in securing both revenue and profitability. The company will leverage differentiated product marketing strategies and proactive measures in its service business to further solidify its number one position. Of this year, the TV market, amid rising raw material costs and an uncertain external business environment, is expected to face challenges in securing both revenue and profitability. The company will leverage differentiated product marketing strategies and proactive measures in its service business to further solidify its number one position in the global TV markets. To this end, we'll reshape the Micro RGB, OLED, and Mini LED-centered competition landscape with the successful introduction of new models while maximizing launch effects. Compared to previous years, this year's World Cup will feature more participating teams on extended tournament period and a higher total number of matches, which is expected to drive TV demand in the second quarter. Accordingly, to capture this demand, we will use our differentiated marketing strategy to strengthen collaboration with key retail partners and expand strategic SKUs and promotions. Lastly, based on its leadership as the global number one TV brand, the company will proactively address market shift toward the service business as well as consumer trends. Samsung TV Plus as well as Samsung Art Store will be further advanced so that we can secure differentiated competitiveness. Thank you. Yes, we will move on to the next question, please. The next question will be by Chae Min-Suk from Korea Investment & Securities. Yes, this is Chae Min-Suk from Korea Investment & Securities. I have a question on memory and System LSI, one each. First, regarding memory. Recently there's been a rapid rise in conventional DRAM prices, and some have been suggesting that focusing on conventional DRAM sales over HBM may be better in terms of margins. What are your plans for product mix between HBM versus conventional DRAM? Regarding System LSI, can you provide an update on development of Exynos 2700? Do you believe that you will be able to increase market share on the next gen model? Any plans to expand beyond mobile into AI applications? Yes, let me comment on the question for DRAM sales mix. Recently, we have seen a rise in lower spec legacy memory prices. It is true that conventional DRAMs have higher margins versus HBM. We are aware of certain outside views that focusing our sales mix on conventional DRAMs may be more beneficial in terms of short-term performance versus HBM. Per industry practice for HBM, we negotiate projected pricing in advance on an annual basis, considering the lead time required to prepare back-end capacity for HBM. Whereas, for conventional DRAM, the negotiations are done on a quarterly basis. As conventional DRAM pricing has continued to rise sharply every quarter, this has resulted in inversion of margins between HBM and conventional DRAM. However, given the constrained supply conditions for HBM with a sustained widening of the supply-demand gap, the margin differential versus conventional DRAM is expected to be significantly reduced in 2027. With the spread of inference services and also agentic AI, the importance of not only AI servers, but conventional servers has also been growing in terms of AI infrastructure, which is indication of the close connection between HBM and conventional DRAM demand. If we were to focus our product portfolio on conventional DRAM, looking to achieve a short-term performance only, this could potentially pose constraints on the build-out of the underlying AI infrastructure itself. Which is why we believe a balance in supply between HBM and conventional DRAM is necessary in order to continue to generate AI-driven demand. In conclusion, we intend to take various factors into consideration, including mid to long-term growth potential, long-term customer engagement, technology competitiveness to execute a balanced product mix. Yes, let me answer from the System LSI side. First, regarding Exynos. Exynos 2700 is under smooth development as planned, building on the flagship technological competitiveness of the predecessor, Exynos 2600 model. We expect to be able to expand market share further by offering enhanced AI performance. In terms of expansion into new business areas, AI market trends are shifting quickly from training to inference, with the market for specialized inference solutions and customized offerings growing. In response to these market changes, we are advancing our business so that we can offer customer-optimized solutions and architectures from data center to on-device applications in order to shape differentiated competitiveness in the AI market. Thank you. We'll move on to the next question. The next question will be made by Young Ho Ryu from NH Investment & Securities. Hi, I am Young Ho Ryu. Thank you for the opportunity. I'd like to ask about the MX and DA businesses. Rising component costs and an overall slowdown in smartphone demand are raising concerns over a market contraction. Under such unfavorable conditions, what are the company strategies to defend market share and secure sales growth momentum? For the DA business, I have two questions: Recently, there have been multiple media reports on profitability-driven transformation in DA business. Can you share an update on the current initiatives? Additionally, the importance of the cooling solutions market is rising, and you acquired FläktGroup last year. Could you elaborate on your business strategy? I'll take the MX question. In value terms, the 2026 market is expected to see slight growth year-over-year, while volume is projected to decline significantly. Despite a contracting market, the company aims to expand flagship sales to drive revenue growth and leverage its full price tier portfolio to outperform the market in both value and volume. Despite price increases for new model launches, we improved performance and key customer experiences, thereby enhancing perceived consumer value with Galaxy S26 sales already expanding year-on-year in value terms. Alongside the Galaxy S26 series, leveraging foldables, showing strong sales predecessor, and FE models, we will drive revenue growth while promoting growth across all segments based on Galaxy A57 and Galaxy A37 launched in April. The impact of rising component costs will be mitigated through premium-focused sales and upselling. Through Galaxy AI leadership and a stable supply chain, we will pursue sales expansion. However, we expect to see a decline in profitability compared to the previous year. First, I will address the question regarding the structural improvement of the DA business, and then the question on cooling solutions will be answered by EVP Lee Sang-Jik, Head of Sales Marketing team of the DA business. Amid intensifying global competition, tariffs, geopolitical risks, followed by shifts in external environments, the DA business is facing increasing profitability pressure. In response, we are taking a selective and focused approach across the business. We are concentrating resources on core businesses with competitive advantages to build a foundation for sustainable growth while reviewing measures to diversify our profit structure. We'll share further details with our shareholders once these plans are developed. I'll proceed with the answer. The demand for generative AI and high-performance computing is growing rapidly. Accordingly, global data centers are expected to continue expanding through 2030. The data center cooling market is projected to grow from $4.7 billion in 2024 to $16.6 billion by 2030, growing at an average annual rate of around 24%. In response, the company successfully acquired FläktGroup, a Germany HVAC specialist last year, thereby establishing a strategic foothold for entering the data center cooling market. Currently, the company is operating the business centered on FläktGroup in Europe and plans to expand into the largest global data center market, North America. We plan to establish a Korean subsidiary and factory of FläktGroup to enter the Korean market. We'll strive to secure leadership in the data center market by expanding our product portfolio and diversifying our geographical footprint. Thank you for the answer. We'll move on to the next question. The next question will be by Mr. Taekwon from JPMorgan. Please go ahead. Yes, good morning. Thank you for the opportunity to ask a question on NAND. Amid expansion of AI infrastructure, it's mostly been DRAM and HBM drawing great interest, but recently, NAND has been gaining attention as well. Your outlook on the NAND market for AI applications? Let me take the question on NAND for AI. With proliferation of AI, this has led to higher data capacity and memory requirements to run large language models. To respond to these trends with high-priced HBMs and DRAM structure only, this will increase the cost and capacity burden, prompting the need to broaden the scope of use cases for storage. Recently at GTC, NVIDIA proposed an architecture such as CMX That extends AI inference data storage beyond HBM to NAND-based storage rather than relying solely on HBM. This will likely lead to rising demand for high performance storage, such as TLC-based PCIe Gen 6 SSDs. Further, as storage use cases increase in AI systems in the future, there will likely be growing requirements to reduce data transfer latency resulting from performance differences between HBM, DRAM and storage. For large scale inference and data intensive workloads in particular, requirements for high performance, low latency solutions are becoming more critical. We are production ready for super high performance NAND storage solutions, not only Gen 5, but Gen 6 as well, offering enhanced features. For Gen 6, we have received positive feedback from major customers for early sample shipments. We will be focusing on AI server and data center segments. We'll lock in preemptive lead in the early Gen 6 market in the second half of the year. We're focused on capturing QLC demand, which has been growing consistently while accelerating V9 migration within QLC as well. In March, we finished development of 2 Tb QLC, delivering differentiated performance and reliability features, with plans to strengthen our market response by expanding our super high capacity lineup, including the 256 TB server SSDs. Based on high-performance QLCs built on advanced nodes and the high capacity of QLC NAND, we will work in close collaboration with our major customers to proactively address and respond promptly to AI-driven NAND demand. Thank you. Because of the limited time, we will accept just one final question. The final question will be by Mr. Lee Jongwook from Samsung Securities. Please go ahead. Yes, thank you for the opportunity to ask questions. I have a question on DDI foundry. The TCL and Sony recently established a joint venture. How will it impact the TV industry, and what's your response? The next question is on foundry. Driven by a recent increase in orders, there are growing expectations for increased investments. Could you provide an update on the expansion status of the U.S. Taylor Fab and whether the company's considering the construction of new fabs too? On the other hand, mature nodes seem to have relatively low utilization rates. Could you elaborate on your operational strategy? Amid intensifying competition due to market stagnation, the TV industry continues to see shifts in the competitive landscape. The establishment of a joint venture between TCL and Sony, combining their manufacturing capabilities and brain strengths, is a scenario that could have been expected based on past precedents. Across all segments, from premium to entry-level, the company aims to strengthen its competitiveness to proactively reshape the competitive landscape and lead the market. Starting this year, we will introduce Micro RGB and other new form factor products to strengthen differentiated premium leadership. Also, in volume zone, where competition is intense, we will launch new Mini LED to expand our response capabilities to the market. Moreover, the company plans to further advance consumers' AI experiences and further complete a differentiated device experience with competitive services so consumers can be satisfied and make purchase decisions. Yes, let me answer the question on foundry. For Taylor Fab, as of last week, April 23 to be exact, we had a successful ceremony with the local community for Fab 1, commemorating the move-in of the equipment and lines. As scheduled, we plan to start operations in 2026 and commence mass production in 2027 and gradually expand to nano capacity. Fab 2 is in the early review phase, in parallel with discussions with global customers on potential awards. For mature process lines, we will focus capacity on high value add specialty demand, which have higher entry barriers, while boldly closing out uncompetitive processes. That is the baseline strategy. More specifically, for CIS and DDI product family, where process migration is expected to continue, capacity will be transitioned to the advanced 7nm nodes, while for PMIC, DDI, CIS, which are currently in mass production on 8-in wafers, well, these lines are scheduled for phased closeout. We will optimize our product portfolio reflecting profitability, investment efficiency, to continue to improve our business fundamentals while focusing on developing new specialty products to expand our share of global customers. Thank you. Thank you for the answer. I'd like to thank everybody who shared their valuable opinion. That completes our conference call for this quarter. We wish all of you and those close to you stay strong and in good health. We thank everyone for your participation today, and we look forward to speaking with all of you soon. Thank you.

Speaker 10: Hello everyone, welcome to the Samsung Electronics 2026 first quarter financial results conference call. I will be your coordinator. All participants will be in a listen-only mode until we open the question and answer session following the presentation. As a reminder, this call is being recorded. I would now like to turn the conference over to the investor relations team. Please go ahead. Hello everyone, welcome to the Samsung Electronics 2026 first quarter financial results conference call. hello everyone welcome to the samsung electronics 2026 first quarter financial results conference call I will be your coordinator. i will be your coordinator All participants will be in a listen-only mode until we open the question and answer session following the presentation. all participants will be in a listen-only mode until we open the question and answer session following the presentation As a reminder, this call is being recorded. as a reminder this call is being recorded I would now like to turn the conference over to the investor relations team. i would now like to turn the conference over to the investor relations team Please go ahead. please go ahead

Speaker 3: Good morning, good afternoon, and good evening everyone around the world, and thank you for joining Samsung Electronics' first quarter 2026 earnings call. I'm Daniel Oh, Head of Investor Relations. As a reference, all materials presented today, including the slide deck and this webcast, are available at samsung.com/global/ir. They will be accessible for your convenience even after the call. Please note that certain aspects of today's discussion may contain forward-looking statements from which actual results may vary. Please refer to the associated slide for our full legal disclaimer. For our meeting agenda, today's call agenda, EVP Soon-Cheol Park, our Head of Corporate Management Operations and Chief Financial Officer, will lead off the discussion with the company's first quarter 2026 financial results and outlook. Good morning, good afternoon, and good evening everyone around the world, and thank you for joining Samsung Electronics' first quarter 2026 earnings call. good morning good afternoon and good evening everyone around the world and thank you for joining samsung electronics' first quarter 2026 earnings call I'm Daniel Oh, Head of Investor Relations. i'm daniel oh head of investor relations As a reference, all materials presented today, including the slide deck and this webcast, are available at samsung.com/global/ir. as a reference all materials presented today including the slide deck and this webcast are available at samsung.com/global/ir They will be accessible for your convenience even after the call. they will be accessible for your convenience even after the call Please note that certain aspects of today's discussion may contain forward-looking statements from which actual results may vary. please note that certain aspects of today's discussion may contain forward-looking statements from which actual results may vary Please refer to the associated slide for our full legal disclaimer. please refer to the associated slide for our full legal disclaimer For our meeting agenda, today's call agenda, EVP Soon-Cheol Park, our Head of Corporate Management Operations and Chief Financial Officer, will lead off the discussion with the company's first quarter 2026 financial results and outlook. for our meeting agenda today's call agenda evp soon-cheol park our head of corporate management operations and chief financial officer will lead off the discussion with the company's first quarter 2026 financial results and outlook I will follow up to address capital expenditures and shareholder returns before handing over to our executives for their own business segment updates. We will hold a Q&A session before completing the call today. The executives joining us today are as follows: EVP Soon-Cheol Park, our Head of Corporate Management Operations and Chief Financial Officer. EVP Jaejune Kim, Head of the Global Sales and Marketing Office Representing Memory. EVP Jason Shin, Head of the Sales Team for System LSI. EVP Sukchae Kang, Head of the sales and marketing office for Foundry. EVP Charles Hur, Head of the Corporate Strategy Team for Samsung Display Corporation. EVP Seong Cho, Head of the Strategic Marketing Office for Mobile Experience. Finally, VP Won-uk Kim, Head of the Sales Strategy Group for Visual Display. I will follow up to address capital expenditures and shareholder returns before handing over to our executives for their own business segment updates. i will follow up to address capital expenditures and shareholder returns before handing over to our executives for their own business segment updates We will hold a Q&A session before completing the call today. we will hold a q&a session before completing the call today The executives joining us today are as follows: EVP Soon-Cheol Park, our Head of Corporate Management Operations and Chief Financial Officer. the executives joining us today are as follows evp soon-cheol park our head of corporate management operations and chief financial officer EVP Jaejune Kim, Head of the Global Sales and Marketing Office Representing Memory. evp jaejune kim head of the global sales and marketing office representing memory EVP Jason Shin, Head of the Sales Team for System LSI. evp jason shin head of the sales team for system lsi EVP Sukchae Kang, Head of the sales and marketing office for Foundry. evp sukchae kang head of the sales and marketing office for foundry EVP Charles Hur, Head of the Corporate Strategy Team for Samsung Display Corporation. evp charles hur head of the corporate strategy team for samsung display corporation EVP Seong Cho, Head of the Strategic Marketing Office for Mobile Experience. evp seong cho head of the strategic marketing office for mobile experience Finally, VP Won-uk Kim, Head of the Sales Strategy Group for Visual Display. finally vp won-uk kim head of the sales strategy group for visual display I would like to invite our CFO, Soon-Cheol Park, to present the first quarter financial performance and our outlook. I would like to invite our CFO, Soon-Cheol Park, to present the first quarter financial performance and our outlook. i would like to invite our cfo soon-cheol park to present the first quarter financial performance and our outlook

Speaker 15: Good morning. Thanks to our investors from around the world for joining us today for our first quarter 2026 earnings call. I am Soon-Cheol Park, CFO of Samsung Electronics. In the first quarter, we delivered our highest ever quarterly revenue and operating profit, driven by continued AI technology innovations and our proactive market response. Amid the challenging macro environment, this performance reflects the strength of our technology leadership within core businesses and the successful execution focused on our high value-added product portfolio. Looking ahead, we will continue to strengthen our competitive edge through innovation and lead the global market. Let me now go into the details of our first quarter 2026 results. Please be advised that the figures I'm about to present have been rounded for clarity. Good morning. good morning Thanks to our investors from around the world for joining us today for our first quarter 2026 earnings call. thanks to our investors from around the world for joining us today for our first quarter 2026 earnings call I am Soon-Cheol Park, CFO of Samsung Electronics. i am soon-cheol park cfo of samsung electronics In the first quarter, we delivered our highest ever quarterly revenue and operating profit, driven by continued AI technology innovations and our proactive market response. in the first quarter we delivered our highest ever quarterly revenue and operating profit driven by continued ai technology innovations and our proactive market response Amid the challenging macro environment, this performance reflects the strength of our technology leadership within core businesses and the successful execution focused on our high value-added product portfolio. amid the challenging macro environment this performance reflects the strength of our technology leadership within core businesses and the successful execution focused on our high value-added product portfolio Looking ahead, we will continue to strengthen our competitive edge through innovation and lead the global market. looking ahead we will continue to strengthen our competitive edge through innovation and lead the global market Let me now go into the details of our first quarter 2026 results. let me now go into the details of our first quarter 2026 results Please be advised that the figures I'm about to present have been rounded for clarity. please be advised that the figures i'm about to present have been rounded for clarity Total revenue reached a new high a new record high of KRW 134 trillion, up by 43% from the record set one quarter ago. Operating profit also reached a new all-time high of KRW 57 trillion of 185% QoQ, and the operating margin expanded from 21% in the previous quarter to 43%. Net profit recorded KRW 47 trillion, 2.4x that of the previous quarter. Earnings per share came in at KRW 7,123 for common shares and KRW 7,124 for preferred shares. In the DS Division, revenue increased from the previous quarter, driven by stronger sales of high value-added AI products and higher ASPs. The memory business posted its second straight quarterly earnings record. Total revenue reached a new high a new record high of KRW 134 trillion, up by 43% from the record set one quarter ago. total revenue reached a new high a new record high of krw 134 trillion up by 43% from the record set one quarter ago Operating profit also reached a new all-time high of KRW 57 trillion of 185% QoQ, and the operating margin expanded from 21% in the previous quarter to 43%. operating profit also reached a new all-time high of krw 57 trillion of 185% qoq and the operating margin expanded from 21% in the previous quarter to 43% Net profit recorded KRW 47 trillion, 2.4x that of the previous quarter. net profit recorded krw 47 trillion 2.4x that of the previous quarter Earnings per share came in at KRW 7,123 for common shares and KRW 7,124 for preferred shares. earnings per share came in at krw 7,123 for common shares and krw 7,124 for preferred shares In the DS Division, revenue increased from the previous quarter, driven by stronger sales of high value-added AI products and higher ASPs. in the ds division revenue increased from the previous quarter driven by stronger sales of high value-added ai products and higher asps The memory business posted its second straight quarterly earnings record. the memory business posted its second straight quarterly earnings record Operating profit rose sharply, led by the memory business, while system semiconductor delivered improved results thanks to expanded sales of flagship SOCs. In the DX Division, revenue grew from the previous quarter, supported by the launch of new flagship smartphones. Despite higher cost pressures, we limited the profit decline through expanded sales of high value-added products. Operating profit rose sharply, led by the memory business, while system semiconductor delivered improved results thanks to expanded sales of flagship SOCs. operating profit rose sharply led by the memory business while system semiconductor delivered improved results thanks to expanded sales of flagship socs In the DX Division, revenue grew from the previous quarter, supported by the launch of new flagship smartphones. in the dx division revenue grew from the previous quarter supported by the launch of new flagship smartphones Despite higher cost pressures, we limited the profit decline through expanded sales of high value-added products. despite higher cost pressures we limited the profit decline through expanded sales of high value-added products Across businesses and improve the resource efficiency. On the currency front, the appreciation of major currencies, including the US dollar, had a positive impact of approximately KRW 1.8 trillion on operating profit quarter on quarter, mainly in component businesses. Additional details for each business will be provided shortly by the executives. Let me now turn to our outlook. In the second quarter, despite geopolitical headwinds, such as Middle East tensions and rising oil prices, semiconductor demand is expected to remain strong, supporting continued improvement in overall earnings. In the DS Division, we expect memory price to stay on the current upward trend driven by ongoing expansion in AI infrastructure. In memory, we'll continue to increase sales of HBM4, high density DDR5, and eSSD to expand profitability. System LSI will look to offset earnings pressure through volume jump project with a key customer. Across businesses and improve the resource efficiency. across businesses and improve the resource efficiency On the currency front, the appreciation of major currencies, including the US dollar, had a positive impact of approximately KRW 1.8 trillion on operating profit quarter on quarter, mainly in component businesses. on the currency front the appreciation of major currencies including the us dollar had a positive impact of approximately krw 1.8 trillion on operating profit quarter on quarter mainly in component businesses Additional details for each business will be provided shortly by the executives. additional details for each business will be provided shortly by the executives Let me now turn to our outlook. let me now turn to our outlook In the second quarter, despite geopolitical headwinds, such as Middle East tensions and rising oil prices, semiconductor demand is expected to remain strong, supporting continued improvement in overall earnings. in the second quarter despite geopolitical headwinds such as middle east tensions and rising oil prices semiconductor demand is expected to remain strong supporting continued improvement in overall earnings In the DS Division, we expect memory price to stay on the current upward trend driven by ongoing expansion in AI infrastructure. in the ds division we expect memory price to stay on the current upward trend driven by ongoing expansion in ai infrastructure In memory, we'll continue to increase sales of HBM4, high density DDR5, and eSSD to expand profitability. in memory we'll continue to increase sales of hbm4 high density ddr5 and essd to expand profitability System LSI will look to offset earnings pressure through volume jump project with a key customer. system lsi will look to offset earnings pressure through volume jump project with a key customer Foundry will drive earnings improvement through increased sales in advanced processes, while continuing to secure orders for leading-edge technologies based on our 2 nm technology. In display, amid demand uncertainties, we target performance improvement by ensuring stable supply to key customers with our leading technology and mass production expertise. In the DX Division, we expect profit to decline due to rising cost burdens. To mitigate the earnings impact, we enhance the product mix with the sales expansion of the S26 series and the launch of premium lineups, including Micro RGB TVs and AI Combo, while improving our cost structure and driving efficiencies. To strengthen our core businesses, we'll expand our market share and presence while enhancing our mid to long-term competitive position. At the same time, we aim to secure future growth drivers, including through M&A. Foundry will drive earnings improvement through increased sales in advanced processes, while continuing to secure orders for leading-edge technologies based on our 2 nm technology. foundry will drive earnings improvement through increased sales in advanced processes while continuing to secure orders for leading-edge technologies based on our 2 nm technology In display, amid demand uncertainties, we target performance improvement by ensuring stable supply to key customers with our leading technology and mass production expertise. in display amid demand uncertainties we target performance improvement by ensuring stable supply to key customers with our leading technology and mass production expertise In the DX Division, we expect profit to decline due to rising cost burdens. in the dx division we expect profit to decline due to rising cost burdens To mitigate the earnings impact, we enhance the product mix with the sales expansion of the S26 series and the launch of premium lineups, including Micro RGB TVs and AI Combo, while improving our cost structure and driving efficiencies. to mitigate the earnings impact we enhance the product mix with the sales expansion of the s26 series and the launch of premium lineups including micro rgb tvs and ai combo while improving our cost structure and driving efficiencies To strengthen our core businesses, we'll expand our market share and presence while enhancing our mid to long-term competitive position. to strengthen our core businesses we'll expand our market share and presence while enhancing our mid to long-term competitive position At the same time, we aim to secure future growth drivers, including through M&A. at the same time we aim to secure future growth drivers including through m&a In the second half of this year, we expect a mixed business environment with growth in semiconductor demand driven by AI expansion on one hand, and the rising cost for IT products on the other, despite continued external uncertainties such as geopolitical risks and global tariffs. Against this backdrop, we will remain agile in responding to market changes while maintaining a profitability-focused approach and expanding high value-added products to deliver stable business performance. Thank you. In the second half of this year, we expect a mixed business environment with growth in semiconductor demand driven by AI expansion on one hand, and the rising cost for IT products on the other, despite continued external uncertainties such as geopolitical risks and global tariffs. in the second half of this year we expect a mixed business environment with growth in semiconductor demand driven by ai expansion on one hand and the rising cost for it products on the other despite continued external uncertainties such as geopolitical risks and global tariffs Against this backdrop, we will remain agile in responding to market changes while maintaining a profitability-focused approach and expanding high value-added products to deliver stable business performance. against this backdrop we will remain agile in responding to market changes while maintaining a profitability-focused approach and expanding high value-added products to deliver stable business performance Thank you. thank you

Speaker 3: Thank you, CFO Park. Let me now walk you through our capital expenditures. CapEx in the first quarter totaled KRW 11.2 trillion, down KRW 9.2 trillion quarter-on-quarter, of which KRW 10.2 trillion was allocated to the DS Division and KRW 0.6 trillion was allocated to Display business. Now, I will discuss the CapEx by business segment in more detail. Thank you, CFO Park. thank you cfo park Let me now walk you through our capital expenditures. let me now walk you through our capital expenditures CapEx in the first quarter totaled KRW 11.2 trillion, down KRW 9.2 trillion quarter-on-quarter, of which KRW 10.2 trillion was allocated to the DS Division and KRW 0.6 trillion was allocated to Display business. capex in the first quarter totaled krw 11.2 trillion, down krw 9.2 trillion quarter-on-quarter of which krw 10.2 trillion was allocated to the ds division and krw 0.6 trillion was allocated to display business Now, I will discuss the CapEx by business segment in more detail. now i will discuss the capex by business segment in more detail In the Memory business, CapEx declined quarter-on-quarter, reflecting the front-loaded nature of certain investments made last year, including the addition of new clean room space at the Pyeongtaek site. By strategically utilizing the fab and clean room space secured through our forward-thinking investments, we anticipate a significant increase in equipment expenditures as we progress with the deployment of this newly acquired capacity. This planned expansion is expected to contribute to a comprehensive increase in CapEx throughout the entire fiscal year, thereby reinforcing our commitment to sustainable growth and operational efficiency for the memory business. In the Foundry business, CapEx declined from the previous quarter due to the base effect set by major infrastructure investments at the Taylor Fab in the fourth quarter of 2025. In the Memory business, CapEx declined quarter-on-quarter, reflecting the front-loaded nature of certain investments made last year, including the addition of new clean room space at the Pyeongtaek site. in the memory business capex declined quarter-on-quarter reflecting the front-loaded nature of certain investments made last year including the addition of new clean room space at the pyeongtaek site By strategically utilizing the fab and clean room space secured through our forward-thinking investments, we anticipate a significant increase in equipment expenditures as we progress with the deployment of this newly acquired capacity. by strategically utilizing the fab and clean room space secured through our forward-thinking investments we anticipate a significant increase in equipment expenditures as we progress with the deployment of this newly acquired capacity This planned expansion is expected to contribute to a comprehensive increase in CapEx throughout the entire fiscal year, thereby reinforcing our commitment to sustainable growth and operational efficiency for the memory business. this planned expansion is expected to contribute to a comprehensive increase in capex throughout the entire fiscal year thereby reinforcing our commitment to sustainable growth and operational efficiency for the memory business In the Foundry business, CapEx declined from the previous quarter due to the base effect set by major infrastructure investments at the Taylor Fab in the fourth quarter of 2025. in the foundry business capex declined from the previous quarter due to the base effect set by major infrastructure investments at the taylor fab in the fourth quarter of 2025 However, investments to support the ramp-up of the Taylor Fab are expected to increase steadily throughout the year, starting in the second quarter. In the display business, CapEx remained roughly flat sequentially with investments focused on enhancing existing lines after completion of the Gen 8.6 line last year. Let me now turn to our full year CapEx outlook. In 2026, we anticipate a substantial year-on-year increase in CapEx driven by sustained demand related to AI. We'll further expand preemptive R&D investments in next generation processes and core technologies to solidify our technology leadership. Additionally, we'll strengthen strategic production hubs and secure additional infrastructure to stay ahead of future demand. As a result, our investment decisions will remain flexible, carefully adjust to the rapidly evolving market conditions. Moving on to shareholder returns. However, investments to support the ramp-up of the Taylor Fab are expected to increase steadily throughout the year, starting in the second quarter. In the display business, CapEx remained roughly flat sequentially with investments focused on enhancing existing lines after completion of the Gen 8.6 line last year. however investments to support the ramp-up of the taylor fab are expected to increase steadily throughout the year starting in the second quarter. in the display business capex remained roughly flat sequentially with investments focused on enhancing existing lines after completion of the gen 8.6 line last year Let me now turn to our full year CapEx outlook. let me now turn to our full year capex outlook In 2026, we anticipate a substantial year-on-year increase in CapEx driven by sustained demand related to AI. in 2026 we anticipate a substantial year-on-year increase in capex driven by sustained demand related to ai We'll further expand preemptive R&D investments in next generation processes and core technologies to solidify our technology leadership. we'll further expand preemptive r&d investments in next generation processes and core technologies to solidify our technology leadership Additionally, we'll strengthen strategic production hubs and secure additional infrastructure to stay ahead of future demand. additionally we'll strengthen strategic production hubs and secure additional infrastructure to stay ahead of future demand As a result, our investment decisions will remain flexible, carefully adjust to the rapidly evolving market conditions. as a result our investment decisions will remain flexible carefully adjust to the rapidly evolving market conditions Moving on to shareholder returns. moving on to shareholder returns The board of directors today approved a quarterly dividend of KRW 372 per share for both common and preferred shares. Under our three-year shareholder return policy for 2024 to 2026, we are committed to ensuring an annual minimum payout of regular dividends totaling KRW 9.8 trillion through quarterly dividends of KRW 2.5 trillion. The distribution for the first quarter is scheduled for payment in May. Let me also address treasury shares. Following a board resolution in November 2024, the company announced a KRW 10 trillion share repurchase program aimed to enhance shareholder value, which was completed by September 2025. Of this amount, the first tranche worth KRW 3 trillion was canceled in February 2025. The board of directors today approved a quarterly dividend of KRW 372 per share for both common and preferred shares. the board of directors today approved a quarterly dividend of krw 372 per share for both common and preferred shares Under our three-year shareholder return policy for 2024 to 2026, we are committed to ensuring an annual minimum payout of regular dividends totaling KRW 9.8 trillion through quarterly dividends of KRW 2.5 trillion . under our three-year shareholder return policy for 2024 to 2026 we are committed to ensuring an annual minimum payout of regular dividends totaling krw 9.8 trillion through quarterly dividends of krw 2.5 trillion The distribution for the first quarter is scheduled for payment in May. the distribution for the first quarter is scheduled for payment in may Let me also address treasury shares. let me also address treasury shares Following a board resolution in November 2024, the company announced a KRW 10 trillion share repurchase program aimed to enhance shareholder value, which was completed by September 2025. following a board resolution in november 2024 the company announced a krw 10 trillion share repurchase program aimed to enhance shareholder value which was completed by september 2025 Of this amount, the first tranche worth KRW 3 trillion was canceled in February 2025. of this amount the first tranche worth krw 3 trillion was canceled in february 2025 Subsequently, during the first quarter of this year, the board convened to deliberate on the remaining shares and ultimately resolved to proceed with their full cancellation. This resolution was made in accordance with the commitments communicated during the previous earnings call, thereby reinforcing the company's dedication to transparency. Notably, the board decided to retain only the KRW 1.6 trillion worth of shares specifically allocated for employee compensation. The cancellation of the remaining shares was completed earlier this month, marking a significant milestone in company's ongoing efforts to enhance shareholder value. To put into perspective, the cancellations in this round totaled 73.4 million common shares and 13.6 million preferred shares, representing 1.2% and 1.7% of total shares outstanding in each respective class. Subsequently, during the first quarter of this year, the board convened to deliberate on the remaining shares and ultimately resolved to proceed with their full cancellation. subsequently during the first quarter of this year the board convened to deliberate on the remaining shares and ultimately resolved to proceed with their full cancellation This resolution was made in accordance with the commitments communicated during the previous earnings call, thereby reinforcing the company's dedication to transparency. this resolution was made in accordance with the commitments communicated during the previous earnings call thereby reinforcing the company's dedication to transparency Notably, the board decided to retain only the KRW 1.6 trillion worth of shares specifically allocated for employee compensation. notably the board decided to retain only the krw 1.6 trillion worth of shares specifically allocated for employee compensation The cancellation of the remaining shares was completed earlier this month, marking a significant milestone in company's ongoing efforts to enhance shareholder value. the cancellation of the remaining shares was completed earlier this month marking a significant milestone in company's ongoing efforts to enhance shareholder value To put into perspective, the cancellations in this round totaled 73.4 million common shares and 13.6 million preferred shares, representing 1.2% and 1.7% of total shares outstanding in each respective class. to put into perspective the cancellations in this round totaled 73.4 million common shares and 13.6 million preferred shares representing 1.2% and 1.7% of total shares outstanding in each respective class Based on the closing price on the date of the board resolution, the valuation of the canceled shares amounts to approximately KRW 14.6 trillion. Let's turn to our executives for commentaries on their respective business units. We'll begin with Jaejune Kim, EVP of Memory Business. Based on the closing price on the date of the board resolution, the valuation of the canceled shares amounts to approximately KRW 14.6 trillion. based on the closing price on the date of the board resolution the valuation of the canceled shares amounts to approximately krw 14.6 trillion Let's turn to our executives for commentaries on their respective business units. let's turn to our executives for commentaries on their respective business units We'll begin with Jaejune Kim, EVP of Memory Business. we'll begin with jaejune kim evp of memory business

Speaker 6: Okay. Good morning. This is Jaejune Kim from Memory Global Sales and Marketing. In the memory market in the first quarter, robust demand focusing on server application became increasingly visible with the hyperscalers CapEx expansion to secure AI infrastructure and the initial demand for agentic AI. Under the strong demand from AI, while concentrating on expanding sales focus on server products, we started shipping industry's first mass-produced HBM4 and SOCAMM2. In addition, after the on-time development of PCIe Gen 6 SSD in the first quarter, we are now undergoing customer qualification. Also, we already got a positive feedback on our outstanding performance competitiveness. In the second quarter, we expect growth in the AI industry will drive demand for memory products following the previous quarter. Okay. okay Good morning. good morning This is Jaejune Kim from Memory Global Sales and Marketing. this is jaejune kim from memory global sales and marketing In the memory market in the first quarter, robust demand focusing on server application became increasingly visible with the hyperscalers CapEx expansion to secure AI infrastructure and the initial demand for agentic AI. in the memory market in the first quarter robust demand focusing on server application became increasingly visible with the hyperscalers capex expansion to secure ai infrastructure and the initial demand for agentic ai Under the strong demand from AI, while concentrating on expanding sales focus on server products, we started shipping industry's first mass-produced HBM4 and SOCAMM2. under the strong demand from ai while concentrating on expanding sales focus on server products we started shipping industry's first mass-produced hbm4 and socamm2 In addition, after the on-time development of PCIe Gen 6 SSD in the first quarter, we are now undergoing customer qualification. in addition after the on-time development of pcie gen 6 ssd in the first quarter we are now undergoing customer qualification Also, we already got a positive feedback on our outstanding performance competitiveness. also we already got a positive feedback on our outstanding performance competitiveness In the second quarter, we expect growth in the AI industry will drive demand for memory products following the previous quarter. in the second quarter we expect growth in the ai industry will drive demand for memory products following the previous quarter In order to maintain technology leadership in the rapidly growing AI market, we will provide the first samples of HBM4E in the second quarter. In addition, from a product mix perspective and within the limited supply capability, we will continue our supply operation focusing on AI products for both DRAM and NAND, while planning to proactively respond to the initial demand for GPU and CPU that will be newly launched in the second half. In the second half, as hyperscalers expand their AI services and major LLM providers speed up the introduction of B2B services, the spread of agentic AI is likely to accelerate at a much faster pace than initially expected. In order to maintain technology leadership in the rapidly growing AI market, we will provide the first samples of HBM4E in the second quarter. in order to maintain technology leadership in the rapidly growing ai market we will provide the first samples of hbm4e in the second quarter In addition, from a product mix perspective and within the limited supply capability, we will continue our supply operation focusing on AI products for both DRAM and NAND, while planning to proactively respond to the initial demand for GPU and CPU that will be newly launched in the second half. in addition from a product mix perspective and within the limited supply capability we will continue our supply operation focusing on ai products for both dram and nand while planning to proactively respond to the initial demand for gpu and cpu that will be newly launched in the second half In the second half, as hyperscalers expand their AI services and major LLM providers speed up the introduction of B2B services, the spread of agentic AI is likely to accelerate at a much faster pace than initially expected. in the second half as hyperscalers expand their ai services and major llm providers speed up the introduction of b2b services the spread of agentic ai is likely to accelerate at a much faster pace than initially expected Therefore, in addition to AI servers, the role of a general servers, tailored for various workloads also will be getting more important. We expect that the demand for DRAM and SSD for conventional servers will increase more sharply than previously anticipated. On the other hand, for mobile and PC, we expect some impact on demand due to price increases in end products and changes in memory contents per box, which is driven by the price increase of key components. Due to the server-oriented product mix execution in the industry, we expect that overall supply shortage situation will continue. Considering the additional increase in server demand for DRAM and NAND, we plan to actively accommodate the market changes through the flexible mix operation. Therefore, in addition to AI servers, the role of a general servers, tailored for various workloads also will be getting more important. therefore in addition to ai servers the role of a general servers tailored for various workloads also will be getting more important We expect that the demand for DRAM and SSD for conventional servers will increase more sharply than previously anticipated. we expect that the demand for dram and ssd for conventional servers will increase more sharply than previously anticipated On the other hand, for mobile and PC, we expect some impact on demand due to price increases in end products and changes in memory contents per box, which is driven by the price increase of key components. on the other hand for mobile and pc we expect some impact on demand due to price increases in end products and changes in memory contents per box which is driven by the price increase of key components Due to the server-oriented product mix execution in the industry, we expect that overall supply shortage situation will continue. due to the server-oriented product mix execution in the industry we expect that overall supply shortage situation will continue Considering the additional increase in server demand for DRAM and NAND, we plan to actively accommodate the market changes through the flexible mix operation. considering the additional increase in server demand for dram and nand we plan to actively accommodate the market changes through the flexible mix operation For DRAM, we plan to expand HBM4 supply to multiple key customers and keep increasing the portion of AI-related products such as high performance and high density DDR5 and SOCAMM2. For NAND, while focusing on addressing the rising demand for key value share cache storage, we plan to lead the early PCIe Gen 6 server SSD market with the outstanding product performance. Thank you. For DRAM, we plan to expand HBM4 supply to multiple key customers and keep increasing the portion of AI-related products such as high performance and high density DDR5 and SOCAMM2. for dram we plan to expand hbm4 supply to multiple key customers and keep increasing the portion of ai-related products such as high performance and high density ddr5 and socamm2 For NAND, while focusing on addressing the rising demand for key value share cache storage, we plan to lead the early PCIe Gen 6 server SSD market with the outstanding product performance. for nand while focusing on addressing the rising demand for key value share cache storage we plan to lead the early pcie gen 6 server ssd market with the outstanding product performance Thank you. thank you

Speaker 7: Good morning. This is Jason Shin from the System LSI business. In the first quarter, despite weak demand in the smartphone market, our overall earnings improved quarter-over-quarter, driven by SoC sales on the back of flagship product launches from major customers and favorable seasonality. In the second quarter, revenue is expected to be lower compared to the previous quarter due to seasonal factors. In response, we will continue to focus on sales of SoCs and imaging sensors for high to mid-range smartphones for our major customers. In the second half, amid persistent cost pressures stemming from rising component prices, overall consumer market demand is expected to soften. In the light of this external environment, we will continue to strengthen our market leadership based on our technological edge. Good morning. good morning This is Jason Shin from the System LSI business. this is jason shin from the system lsi business In the first quarter, despite weak demand in the smartphone market, our overall earnings improved quarter-over-quarter, driven by SoC sales on the back of flagship product launches from major customers and favorable seasonality. in the first quarter despite weak demand in the smartphone market our overall earnings improved quarter-over-quarter driven by soc sales on the back of flagship product launches from major customers and favorable seasonality In the second quarter, revenue is expected to be lower compared to the previous quarter due to seasonal factors. in the second quarter revenue is expected to be lower compared to the previous quarter due to seasonal factors In response, we will continue to focus on sales of SoCs and imaging sensors for high to mid-range smartphones for our major customers. in response we will continue to focus on sales of socs and imaging sensors for high to mid-range smartphones for our major customers In the second half, amid persistent cost pressures stemming from rising component prices, overall consumer market demand is expected to soften. in the second half amid persistent cost pressures stemming from rising component prices overall consumer market demand is expected to soften In the light of this external environment, we will continue to strengthen our market leadership based on our technological edge. in the light of this external environment we will continue to strengthen our market leadership based on our technological edge In particular, we plan to increase sales by securing new design wins for our flagship SoC and reinforce our product lineup centered on the 200 MP sensor. Looking ahead, we will concentrate on expanding high-value products and securing new growth drivers. We will continue to strengthen our image sensor competitiveness based on our ultra-high resolution and fine pixel technologies, and pursue growth opportunities in new business areas with a primary focus on custom SoC. Thank you. In particular, we plan to increase sales by securing new design wins for our flagship SoC and reinforce our product lineup centered on the 200 MP sensor. in particular we plan to increase sales by securing new design wins for our flagship soc and reinforce our product lineup centered on the 200 mp sensor Looking ahead, we will concentrate on expanding high-value products and securing new growth drivers. looking ahead we will concentrate on expanding high-value products and securing new growth drivers We will continue to strengthen our image sensor competitiveness based on our ultra-high resolution and fine pixel technologies, and pursue growth opportunities in new business areas with a primary focus on custom SoC. we will continue to strengthen our image sensor competitiveness based on our ultra-high resolution and fine pixel technologies and pursue growth opportunities in new business areas with a primary focus on custom soc Thank you. thank you

Speaker 16: Hello, everyone, this is Sukchae Kang from the Foundry business. In the first quarter, although our earnings declined quarter-on-quarter due to seasonally weak customer demand aligning with the industry pattern of first half low, second half high, we achieved double-digit year-on-year revenue growth, maintaining the momentum of our business improvement. From an order perspective, we continued to expand our customer base and deepen engagement across high-performance computing applications, sustaining a solid order momentum throughout the quarter. Notably, we secured a strategic project from a leading optical communication module player, marking a significant milestone in establishing the foundation of our silicon photonics business. In the second quarter, our advanced nodes are expected to reach full utilization rates. We anticipate a sequential improvement in earnings supported by robust demand for leading-edge products, including HBM4 base die. Hello, everyone, this is Sukchae Kang from the Foundry business. hello everyone this is sukchae kang from the foundry business In the first quarter, although our earnings declined quarter-on-quarter due to seasonally weak customer demand aligning with the industry pattern of first half low, second half high, we achieved double-digit year-on-year revenue growth, maintaining the momentum of our business improvement. in the first quarter although our earnings declined quarter-on-quarter due to seasonally weak customer demand aligning with the industry pattern of first half low second half high we achieved double-digit year-on-year revenue growth maintaining the momentum of our business improvement From an order perspective, we continued to expand our customer base and deepen engagement across high-performance computing applications, sustaining a solid order momentum throughout the quarter. from an order perspective we continued to expand our customer base and deepen engagement across high-performance computing applications sustaining a solid order momentum throughout the quarter Notably, we secured a strategic project from a leading optical communication module player, marking a significant milestone in establishing the foundation of our silicon photonics business. notably we secured a strategic project from a leading optical communication module player marking a significant milestone in establishing the foundation of our silicon photonics business In the second quarter, our advanced nodes are expected to reach full utilization rates. in the second quarter our advanced nodes are expected to reach full utilization rates We anticipate a sequential improvement in earnings supported by robust demand for leading-edge products, including HBM4 base die. we anticipate a sequential improvement in earnings supported by robust demand for leading-edge products including hbm4 base die The development of the 1.4 nm process is progressing as planned, ensuring the readiness for future technology. We are actively engaging with major customers for the 2 nm process. In the second half, we will start mass production of the second-generation 2 nm process. We will expand the application of the 4 nm process for memory products and APU products for AI applications. Through these initiatives, we expect to achieve double-digit revenue growth and earnings improvement. We are actively pursuing structural transformation by diversifying our application portfolio beyond mobile into AI HPC, automotive, and aerospace sectors. Thank you. The development of the 1.4 nm process is progressing as planned, ensuring the readiness for future technology. the development of the 1.4 nm process is progressing as planned ensuring the readiness for future technology We are actively engaging with major customers for the 2 nm process. we are actively engaging with major customers for the 2 nm process In the second half, we will start mass production of the second-generation 2 nm process. in the second half we will start mass production of the second-generation 2 nm process We will expand the application of the 4 nm process for memory products and APU products for AI applications. we will expand the application of the 4 nm process for memory products and apu products for ai applications Through these initiatives, we expect to achieve double-digit revenue growth and earnings improvement. through these initiatives we expect to achieve double-digit revenue growth and earnings improvement We are actively pursuing structural transformation by diversifying our application portfolio beyond mobile into AI HPC, automotive, and aerospace sectors. we are actively pursuing structural transformation by diversifying our application portfolio beyond mobile into ai hpc automotive and aerospace sectors Thank you. thank you

Speaker 2: Good morning. This is Charles Hur from Samsung Display. I will now brief you on our results for the first quarter of 2026. For the mobile display business, our performance declined quarter-over-quarter due to seasonality and memory price pressure. For the larger display business, we maintained stable sales thanks to strong demand in gaming monitors. Let me share the outlook for the second quarter and the second half. In the second quarter, the smartphone and IT market demand is likely to be weak, mainly due to memory supply and price. In response, we'll focus on high-end products where demand is expected to be relatively stable. For the larger display business, we anticipate the demand increase supported by sports events and our major customers' new product launches. In the second half, market environment is expected to be uncertain and difficult to predict. Good morning. good morning This is Charles Hur from Samsung Display. this is charles hur from samsung display I will now brief you on our results for the first quarter of 2026. i will now brief you on our results for the first quarter of 2026 For the mobile display business, our performance declined quarter-over-quarter due to seasonality and memory price pressure. For the larger display business, we maintained stable sales thanks to strong demand in gaming monitors. for the mobile display business our performance declined quarter-over-quarter due to seasonality and memory price pressure. for the larger display business we maintained stable sales thanks to strong demand in gaming monitors Let me share the outlook for the second quarter and the second half. let me share the outlook for the second quarter and the second half In the second quarter, the smartphone and IT market demand is likely to be weak, mainly due to memory supply and price. in the second quarter the smartphone and it market demand is likely to be weak mainly due to memory supply and price In response, we'll focus on high-end products where demand is expected to be relatively stable. in response we'll focus on high-end products where demand is expected to be relatively stable For the larger display business, we anticipate the demand increase supported by sports events and our major customers' new product launches. for the larger display business we anticipate the demand increase supported by sports events and our major customers' new product launches In the second half, market environment is expected to be uncertain and difficult to predict. in the second half market environment is expected to be uncertain and difficult to predict However, we aim to maintain profitability by focusing on premium product strategy. For smartphones, we'll secure a stable demand of differentiated technologies such as low power consumption and privacy solution, which are aligned with the major customers' premium smartphones. For IT products, we'll increase revenue through the ramp-up of brand-new 8.6-generation IT OLED line. For QD-OLED, we'll continue to strengthen our positioning in the premium segments while expanding our monitor business into the consumer and enterprise market. Lastly, 2026 will be a challenging year due to geopolitical risk, unpredictable market condition, and memory supply issues. We'll strive to achieve revenue growth by strengthening our premium portfolio based on our technology leadership. Thank you. However, we aim to maintain profitability by focusing on premium product strategy. however we aim to maintain profitability by focusing on premium product strategy For smartphones, we'll secure a stable demand of differentiated technologies such as low power consumption and privacy solution, which are aligned with the major customers' premium smartphones. for smartphones we'll secure a stable demand of differentiated technologies such as low power consumption and privacy solution which are aligned with the major customers' premium smartphones For IT products, we'll increase revenue through the ramp-up of brand-new 8.6-generation IT OLED line. for it products we'll increase revenue through the ramp-up of brand-new 8.6-generation it oled line For QD-OLED, we'll continue to strengthen our positioning in the premium segments while expanding our monitor business into the consumer and enterprise market. for qd-oled we'll continue to strengthen our positioning in the premium segments while expanding our monitor business into the consumer and enterprise market Lastly, 2026 will be a challenging year due to geopolitical risk, unpredictable market condition, and memory supply issues. lastly 2026 will be a challenging year due to geopolitical risk unpredictable market condition and memory supply issues We'll strive to achieve revenue growth by strengthening our premium portfolio based on our technology leadership. we'll strive to achieve revenue growth by strengthening our premium portfolio based on our technology leadership Thank you. thank you

Speaker 14: Hi, this is Seong Cho from the MX division. Let me share our first quarter results as well, as well as the future outlook. The smartphone market declined quarter-on-quarter due to seasonality, with volume and revenue decreasing across premium and mass segments. For the MX business, Q1 revenue reached KRW 37.5 trillion, and we delivered a combined operating profit of KRW 2.8 trillion across the MX and the network businesses. Despite new model launch schedule adjustment and geopolitical uncertainties, we deliver quarter-over-quarter growth in both revenue and operating profit. On a year-on-year basis as well, we achieved solid ASP and revenue growth driven by a higher contribution from ultra models. While memory costs increased, we secure single-digit profitability through proactive resource efficiency improvements. Next, let me share the outlook for Q2. Overall, smartphone demand is expected to decrease quarter-on-quarter due to seasonality. Hi, this is Seong Cho from the MX division. hi this is seong cho from the mx division Let me share our first quarter results as well, as well as the future outlook. let me share our first quarter results as well as well as the future outlook The smartphone market declined quarter-on-quarter due to seasonality, with volume and revenue decreasing across premium and mass segments. the smartphone market declined quarter-on-quarter due to seasonality with volume and revenue decreasing across premium and mass segments For the MX business, Q1 revenue reached KRW 37.5 trillion, and we delivered a combined operating profit of KRW 2.8 trillion across the MX and the network businesses. for the mx business q1 revenue reached krw 37.5 trillion and we delivered a combined operating profit of krw 2.8 trillion across the mx and the network businesses Despite new model launch schedule adjustment and geopolitical uncertainties, we deliver quarter-over-quarter growth in both revenue and operating profit. despite new model launch schedule adjustment and geopolitical uncertainties we deliver quarter-over-quarter growth in both revenue and operating profit On a year-on-year basis as well, we achieved solid ASP and revenue growth driven by a higher contribution from ultra models. on a year-on-year basis as well we achieved solid asp and revenue growth driven by a higher contribution from ultra models While memory costs increased, we secure single-digit profitability through proactive resource efficiency improvements. while memory costs increased we secure single-digit profitability through proactive resource efficiency improvements Next, let me share the outlook for Q2. next let me share the outlook for q2 Overall, smartphone demand is expected to decrease quarter-on-quarter due to seasonality. overall smartphone demand is expected to decrease quarter-on-quarter due to seasonality For the MX business, we expect Q2 revenue to decline quarter-on-quarter. We plan to sustain flagship-centric sales supported by continued momentum of the S26 series, along with the solid sales of the foldable and M minus one and FE models. Also, through the successful launch of the new A series models, we will drive growth across all segments. However, cost pressure on key components in Q2 are expected to intensify. While we will ensure stable supply through strategic partnership with suppliers, a decline in profitability appears inevitable. Next, let me share the outlook for second half. The smartphone market is expected to decline in shipments due to rising costs, while revenue are projected to grow driven by expansion of super premium products. Tablets are expected to decline in volume and value due to cost pressures and reduced promotions. For the MX business, we expect Q2 revenue to decline quarter-on-quarter. for the mx business we expect q2 revenue to decline quarter-on-quarter We plan to sustain flagship-centric sales supported by continued momentum of the S26 series, along with the solid sales of the foldable and M minus one and FE models. we plan to sustain flagship-centric sales supported by continued momentum of the s26 series along with the solid sales of the foldable and m minus one and fe models Also, through the successful launch of the new A series models, we will drive growth across all segments. also through the successful launch of the new a series models we will drive growth across all segments However, cost pressure on key components in Q2 are expected to intensify. however cost pressure on key components in q2 are expected to intensify While we will ensure stable supply through strategic partnership with suppliers, a decline in profitability appears inevitable. while we will ensure stable supply through strategic partnership with suppliers a decline in profitability appears inevitable Next, let me share the outlook for second half. next let me share the outlook for second half The smartphone market is expected to decline in shipments due to rising costs, while revenue are projected to grow driven by expansion of super premium products. the smartphone market is expected to decline in shipments due to rising costs while revenue are projected to grow driven by expansion of super premium products Tablets are expected to decline in volume and value due to cost pressures and reduced promotions. tablets are expected to decline in volume and value due to cost pressures and reduced promotions The note PC market is projected to see value growth driven by ASP increase, but shipments are expected to decline. MX will maintain our strategy focused on expanding flagship sales through our leadership in advancing AI capabilities and form factor innovations. For foldable devices, we plan to strengthen our product development to stay ahead of evolving customer needs. For eco-products, we'll drive premium sales with even more advanced Galaxy AI capabilities and health features and expand our TWS lineup. We also plan to deliver immersive multimodal AI experiences through diverse form factors such as AI glasses. 2026 will be a challenging year with ongoing geopolitical uncertainties and profitability impacted by rising cost pressures across the industry. Nevertheless, we'll maintain our focus on expanding flagship-led sales powered by AI leadership and pursue cost efficiency initiatives to minimize the impact on profitability. Thank you. The note PC market is projected to see value growth driven by ASP increase, but shipments are expected to decline. the note pc market is projected to see value growth driven by asp increase but shipments are expected to decline MX will maintain our strategy focused on expanding flagship sales through our leadership in advancing AI capabilities and form factor innovations. mx will maintain our strategy focused on expanding flagship sales through our leadership in advancing ai capabilities and form factor innovations For foldable devices, we plan to strengthen our product development to stay ahead of evolving customer needs. for foldable devices we plan to strengthen our product development to stay ahead of evolving customer needs For eco-products, we'll drive premium sales with even more advanced Galaxy AI capabilities and health features and expand our TWS lineup. for eco-products we'll drive premium sales with even more advanced galaxy ai capabilities and health features and expand our tws lineup We also plan to deliver immersive multimodal AI experiences through diverse form factors such as AI glasses. 2026 will be a challenging year with ongoing geopolitical uncertainties and profitability impacted by rising cost pressures across the industry. we also plan to deliver immersive multimodal ai experiences through diverse form factors such as ai glasses 2026 will be a challenging year with ongoing geopolitical uncertainties and profitability impacted by rising cost pressures across the industry Nevertheless, we'll maintain our focus on expanding flagship-led sales powered by AI leadership and pursue cost efficiency initiatives to minimize the impact on profitability. nevertheless we'll maintain our focus on expanding flagship-led sales powered by ai leadership and pursue cost efficiency initiatives to minimize the impact on profitability Thank you. thank you

Speaker 19: Hello, everyone. I'm Won-uk Kim, Head of the Sales Strategy Group for Visual Display. I'd like to briefly explain the market conditions and share our first quarter results along with the outlook for the rest of the year. In the first quarter, overall TV demand declined after year-end peak season, but demand for QLED, OLED, and 75-in above remained solid. We focused on premium products such as Neo QLED, OLED, and larger sized TV, thereby solidifying our market leadership. In terms of profit, despite showing improvement versus last quarter, declined year-over-year due to stagnant demand and rising raw material cost. For the second quarter, while uncertainties in the external environment are likely to persist, TV demand is forecast to grow year-over-year, driven by a major international sporting event. Hello, everyone. hello everyone I'm Won-uk Kim, Head of the Sales Strategy Group for Visual Display. i'm won-uk kim head of the sales strategy group for visual display I'd like to briefly explain the market conditions and share our first quarter results along with the outlook for the rest of the year. i'd like to briefly explain the market conditions and share our first quarter results along with the outlook for the rest of the year In the first quarter, overall TV demand declined after year-end peak season, but demand for QLED, OLED, and 75-in above remained solid. in the first quarter overall tv demand declined after year-end peak season but demand for qled oled and 75-in above remained solid We focused on premium products such as Neo QLED, OLED, and larger sized TV, thereby solidifying our market leadership. we focused on premium products such as neo qled oled and larger sized tv thereby solidifying our market leadership In terms of profit, despite showing improvement versus last quarter, declined year-over-year due to stagnant demand and rising raw material cost. For the second quarter, while uncertainties in the external environment are likely to persist, TV demand is forecast to grow year-over-year, driven by a major international sporting event. in terms of profit despite showing improvement versus last quarter declined year-over-year due to stagnant demand and rising raw material cost. for the second quarter while uncertainties in the external environment are likely to persist tv demand is forecast to grow year-over-year driven by a major international sporting event Against this backdrop, we'll capture AI-related demand by deploying differentiated marketing strategies and maximize the launch impact of new models such as Micro RGB TVs to secure both sales and profitability. In the second half of 2026, following the sporting event, the market may see a downward trend compounded by macroeconomic and geopolitical risks. In response, we aim to reinforce sales leadership by expanding AI features to pioneer the AI TV market. On top of that, we'll drive growth momentum and elevate profitability by expanding advertising services such as TV Plus and performance-based advertisement, while also strengthening OS competitiveness to further broaden our licensing business. This is the end of my speech. Thank you for your attention. Against this backdrop, we'll capture AI-related demand by deploying differentiated marketing strategies and maximize the launch impact of new models such as Micro RGB TVs to secure both sales and profitability. against this backdrop we'll capture ai-related demand by deploying differentiated marketing strategies and maximize the launch impact of new models such as micro rgb tvs to secure both sales and profitability In the second half of 2026, following the sporting event, the market may see a downward trend compounded by macroeconomic and geopolitical risks. in the second half of 2026 following the sporting event the market may see a downward trend compounded by macroeconomic and geopolitical risks In response, we aim to reinforce sales leadership by expanding AI features to pioneer the AI TV market. in response we aim to reinforce sales leadership by expanding ai features to pioneer the ai tv market On top of that, we'll drive growth momentum and elevate profitability by expanding advertising services such as TV Plus and performance-based advertisement, while also strengthening OS competitiveness to further broaden our licensing business. on top of that we'll drive growth momentum and elevate profitability by expanding advertising services such as tv plus and performance-based advertisement while also strengthening os competitiveness to further broaden our licensing business This is the end of my speech. this is the end of my speech Thank you for your attention. thank you for your attention

Speaker 3: Thank you, all presenters. That brings our presentation on the first quarter performance of 2026 to a close. We'll now start the Q&A session, which will be conducted in Korean. Our CFO, Soon-Cheol Park, will address company-wide questions, while questions regarding the business segments will be answered by the respective business representatives. Thank you for your attention. Thank you, all presenters. thank you all presenters That brings our presentation on the first quarter performance of 2026 to a close. that brings our presentation on the first quarter performance of 2026 to a close We'll now start the Q&A session, which will be conducted in Korean. we'll now start the q&a session which will be conducted in korean Our CFO, Soon-Cheol Park, will address company-wide questions, while questions regarding the business segments will be answered by the respective business representatives. our cfo soon-cheol park will address company-wide questions while questions regarding the business segments will be answered by the respective business representatives Thank you for your attention. thank you for your attention

Speaker 10: We will now begin the Q&A session. If you have a question, press star and 1 on your phone. If you wish to withdraw your question, press star and two. The first question will be made by Seicheol Lee from Citigroup. We will now begin the Q&A session. we will now begin the q&a session If you have a question, press star and 1 on your phone. if you have a question press star and 1 on your phone If you wish to withdraw your question, press star and two. if you wish to withdraw your question press star and two The first question will be made by Seicheol Lee from Citigroup. the first question will be made by seicheol lee from citigroup

Speaker 13: Yes, good morning, this is Seicheol Lee from Citigroup. First, I'd like to congratulate you on record high quarterly performance. I have a question for semiconductor and then a company-wide question as well. The first question is about semiconductors versus specifically memory. There's a lot of talk in the sector about multi-year contracts and LTA. Are you also seeking this kind of multi-year contracting for your memory products? The second question is general. I do understand you're in talks with the labor union on bonus payouts. Will the payout be reflected in first quarter provisions? If so, what would be the expected size? Thank you. Yes, good morning, this is Seicheol Lee from Citigroup. yes good morning this is seicheol lee from citigroup First, I'd like to congratulate you on record high quarterly performance. first i'd like to congratulate you on record high quarterly performance I have a question for semiconductor and then a company-wide question as well. i have a question for semiconductor and then a company-wide question as well The first question is about semiconductors versus specifically memory. the first question is about semiconductors versus specifically memory There's a lot of talk in the sector about multi-year contracts and LTA. there's a lot of talk in the sector about multi-year contracts and lta Are you also seeking this kind of multi-year contracting for your memory products? are you also seeking this kind of multi-year contracting for your memory products The second question is general. the second question is general I do understand you're in talks with the labor union on bonus payouts. i do understand you're in talks with the labor union on bonus payouts Will the payout be reflected in first quarter provisions? will the payout be reflected in first quarter provisions If so, what would be the expected size? if so what would be the expected size Thank you. thank you

Speaker 6: Yes. Let me take your first question regarding multi-year contracting for memory. Yes. yes Let me take your first question regarding multi-year contracting for memory. let me take your first question regarding multi-year contracting for memory First, due to our NDAs with customers, we are not able to go into too much detail on our multi-year contracts with customers. I seek your kind understanding. That said, major customers are quite confident in future AI and AI-related demand. They have been approaching us seeking supply volume commitments for the mid to longer term. Based on these requests, we have been pursuing multi-year supply agreements, of course, within our available supply capacity, and have already signed finalized contracts with some customers. Unlike existing supply contracts, which are based on mutual trust, these multi-year contracts present a higher level of binding commitments compared to the past in today's environment where investment size, timelines, and technical complexity have all increased significantly. Investment and capacity related operational risks are much more challenging. First, due to our NDAs with customers, we are not able to go into too much detail on our multi-year contracts with customers. first due to our ndas with customers we are not able to go into too much detail on our multi-year contracts with customers I seek your kind understanding. i seek your kind understanding That said, major customers are quite confident in future AI and AI-related demand. that said major customers are quite confident in future ai and ai-related demand They have been approaching us seeking supply volume commitments for the mid to longer term. they have been approaching us seeking supply volume commitments for the mid to longer term Based on these requests, we have been pursuing multi-year supply agreements, of course, within our available supply capacity, and have already signed finalized contracts with some customers. based on these requests we have been pursuing multi-year supply agreements of course within our available supply capacity and have already signed finalized contracts with some customers Unlike existing supply contracts, which are based on mutual trust, these multi-year contracts present a higher level of binding commitments compared to the past in today's environment where investment size, timelines, and technical complexity have all increased significantly. unlike existing supply contracts which are based on mutual trust these multi-year contracts present a higher level of binding commitments compared to the past in today's environment where investment size timelines and technical complexity have all increased significantly Investment and capacity related operational risks are much more challenging. investment and capacity related operational risks are much more challenging We expect multi-year agreements to help enhance business stability and visibility for both us and our customers. We will manage the size of our investments flexibly depending on the mid to long-term demand we see from our customers and, react proactively to changing market conditions. We expect multi-year agreements to help enhance business stability and visibility for both us and our customers. we expect multi-year agreements to help enhance business stability and visibility for both us and our customers We will manage the size of our investments flexibly depending on the mid to long-term demand we see from our customers and, react proactively to changing market conditions. we will manage the size of our investments flexibly depending on the mid to long-term demand we see from our customers and react proactively to changing market conditions

Speaker 15: Let me address the question on provisions for 1Q. The incentive related provision you mentioned is under discussion between labor and management. As the specific amount, payment conditions and amounts have not been finalized, it hasn't been reflected in this quarter's results. Depending on the outcome of the negotiations, the related costs may be recognized in the future, and once finalized, it will be appropriately reflected in the financials. Let me address the question on provisions for 1Q. let me address the question on provisions for 1q The incentive related provision you mentioned is under discussion between labor and management. the incentive related provision you mentioned is under discussion between labor and management As the specific amount, payment conditions and amounts have not been finalized, it hasn't been reflected in this quarter's results. as the specific amount payment conditions and amounts have not been finalized it hasn't been reflected in this quarter's results Depending on the outcome of the negotiations, the related costs may be recognized in the future, and once finalized, it will be appropriately reflected in the financials. depending on the outcome of the negotiations the related costs may be recognized in the future and once finalized it will be appropriately reflected in the financials

Speaker 10: Thank you. We will move on to the next question, please. Thank you. thank you We will move on to the next question, please. we will move on to the next question please

Speaker 20: Yes, I'm Woo Dong-je from Bank of America. Yes, I'm Woo Dong-je from Bank of America. yes i'm woo dong-je from bank of america I would also like to congratulate you on delivering very strong performance despite the challenging business environment. During the first quarter, I think, your solid performance was in large part driven by the memory business. If you could provide more color, more details on the memory performance. The second question is company-wide. As the CFO mentioned, just now, there does seem to be a lot of labor union issues. According to the media reports, a general strike has been announced for May. Do you anticipate any disruptions to production or otherwise, any negative impact on performance, any other management issue? I would also like to congratulate you on delivering very strong performance despite the challenging business environment. i would also like to congratulate you on delivering very strong performance despite the challenging business environment During the first quarter, I think, your solid performance was in large part driven by the memory business. during the first quarter i think your solid performance was in large part driven by the memory business If you could provide more color, more details on the memory performance. if you could provide more color more details on the memory performance The second question is company-wide. the second question is company-wide As the CFO mentioned, just now, there does seem to be a lot of labor union issues. as the cfo mentioned just now there does seem to be a lot of labor union issues According to the media reports, a general strike has been announced for May. according to the media reports a general strike has been announced for may Do you anticipate any disruptions to production or otherwise, any negative impact on performance, any other management issue? do you anticipate any disruptions to production or otherwise any negative impact on performance any other management issue

Speaker 6: Yes. Let me provide the answer to the first question on first quarter memory performance. The adoption of agentic AI drove further growth in relevant demand, mostly for HBM, server DRAM, and server SSDs. Yes. yes Let me provide the answer to the first question on first quarter memory performance. let me provide the answer to the first question on first quarter memory performance The adoption of agentic AI drove further growth in relevant demand, mostly for HBM, server DRAM, and server SSDs. the adoption of agentic ai drove further growth in relevant demand mostly for hbm server dram and server ssds That said, despite this rising demand, because of the industry-wide constraints in expanding capacity, the supply shortage has actually become more intense relative to robust demand. Under these circumstances, in line with growing AI demand trends, we focused on expanding sales for mostly server applications in the first quarter, resulting in server bit shipment growth in the low teens percentage QoQ for DRAM and low 20% Qoq for NAND, as we post a record high quarterly sales in the server segment. Consequently, we met our bit growth guidance for DRAM while exceeding guidance for NAND, with NAND bit growth increasing by a high single-digit percentage QoQ. That said, despite this rising demand, because of the industry-wide constraints in expanding capacity, the supply shortage has actually become more intense relative to robust demand. that said despite this rising demand because of the industry-wide constraints in expanding capacity the supply shortage has actually become more intense relative to robust demand Under these circumstances, in line with growing AI demand trends, we focused on expanding sales for mostly server applications in the first quarter, resulting in server bit shipment growth in the low teens percentage QoQ for DRAM and low 20% Qoq for NAND, as we post a record high quarterly sales in the server segment. under these circumstances in line with growing ai demand trends we focused on expanding sales for mostly server applications in the first quarter resulting in server bit shipment growth in the low teens percentage qoq for dram and low 20% qoq for nand as we post a record high quarterly sales in the server segment Consequently, we met our bit growth guidance for DRAM while exceeding guidance for NAND, with NAND bit growth increasing by a high single-digit percentage QoQ. consequently we met our bit growth guidance for dram while exceeding guidance for nand with nand bit growth increasing by a high single-digit percentage qoq Amid a sharp rise in market pricing and the effect of our improved product portfolio following expanded server application sales, our blended ASP rose by low 90% range QoQ for DRAM, high 80% QoQ for NAND. Overall, in the first quarter, thanks to strong market demand and the strength of our products, our memory business set another all-time high in quarterly performance following the previous quarter. We will continue to do our best to preemptively anticipate and identify market needs while developing products in a prompt, timely manner that meet customer requirements to deliver continued strong performance. Amid a sharp rise in market pricing and the effect of our improved product portfolio following expanded server application sales, our blended ASP rose by low 90% range QoQ for DRAM, high 80% QoQ for NAND. amid a sharp rise in market pricing and the effect of our improved product portfolio following expanded server application sales our blended asp rose by low 90% range qoq for dram high 80% qoq for nand Overall, in the first quarter, thanks to strong market demand and the strength of our products, our memory business set another all-time high in quarterly performance following the previous quarter. overall in the first quarter thanks to strong market demand and the strength of our products our memory business set another all-time high in quarterly performance following the previous quarter We will continue to do our best to preemptively anticipate and identify market needs while developing products in a prompt, timely manner that meet customer requirements to deliver continued strong performance. we will continue to do our best to preemptively anticipate and identify market needs while developing products in a prompt timely manner that meet customer requirements to deliver continued strong performance

Speaker 15: Let me address this question. The labor union on April 23rd held a rally at the Pyeongtaek site and has announced a general strike from May 21st to June 7th. Let me address this question. let me address this question The labor union on April 23rd held a rally at the Pyeongtaek site and has announced a general strike from May 21st to June 7th. the labor union on april 23rd held a rally at the pyeongtaek site and has announced a general strike from may 21st to june 7th While it is difficult to comment further at this stage, even in the event of a strike, the company plans to respond through dedicated teams and response system within the legal framework to minimize potential production disruptions. Separately from our response to the potential strike, the company is addressing labor management issues in accordance with laws and procedures, and will continue to prioritize dialogue with the union to reach an amicable resolution. While it is difficult to comment further at this stage, even in the event of a strike, the company plans to respond through dedicated teams and response system within the legal framework to minimize potential production disruptions. while it is difficult to comment further at this stage even in the event of a strike the company plans to respond through dedicated teams and response system within the legal framework to minimize potential production disruptions Separately from our response to the potential strike, the company is addressing labor management issues in accordance with laws and procedures, and will continue to prioritize dialogue with the union to reach an amicable resolution. separately from our response to the potential strike the company is addressing labor management issues in accordance with laws and procedures and will continue to prioritize dialogue with the union to reach an amicable resolution

Speaker 3: Thank you for the answer. We'll move on to the next question. Thank you for the answer. thank you for the answer We'll move on to the next question. we'll move on to the next question

Speaker 10: The next question will be made by Kim Sun-woo from Meritz Securities. You may go ahead. The next question will be made by Kim Sun-woo from Meritz Securities. the next question will be made by kim sun-woo from meritz securities You may go ahead. you may go ahead

Speaker 17: I'd like to ask about the shareholder return policy. This year marks the final year of the three-year shareholder return policy. Will the company execute the previously announced policy as committed? Could you share the direction of the next shareholder return policy? Lastly, can you explain the details on the corporate value enhancement plan announced in March? I'd like to ask about the shareholder return policy. i'd like to ask about the shareholder return policy This year marks the final year of the three-year shareholder return policy. this year marks the final year of the three-year shareholder return policy Will the company execute the previously announced policy as committed? will the company execute the previously announced policy as committed Could you share the direction of the next shareholder return policy? could you share the direction of the next shareholder return policy Lastly, can you explain the details on the corporate value enhancement plan announced in March? lastly can you explain the details on the corporate value enhancement plan announced in march

Speaker 15: Let me address your questions on shareholder returns. As previously committed to our shareholders, the company will faithfully execute its current shareholder return policy, which is one of our key management priorities aimed at enhancing shareholder value. Management and the board are currently gathering various views and engaging in deep discussions on the next shareholder return policy. Centered on the board, we will continue to carefully review and develop the optimal policy to enhance shareholder value, and we will share details once the direction is decided. Let me address your questions on shareholder returns. let me address your questions on shareholder returns As previously committed to our shareholders, the company will faithfully execute its current shareholder return policy, which is one of our key management priorities aimed at enhancing shareholder value. as previously committed to our shareholders the company will faithfully execute its current shareholder return policy which is one of our key management priorities aimed at enhancing shareholder value Management and the board are currently gathering various views and engaging in deep discussions on the next shareholder return policy. management and the board are currently gathering various views and engaging in deep discussions on the next shareholder return policy Centered on the board, we will continue to carefully review and develop the optimal policy to enhance shareholder value, and we will share details once the direction is decided. centered on the board we will continue to carefully review and develop the optimal policy to enhance shareholder value and we will share details once the direction is decided Regarding our corporate value enhancement plan, the company plans to invest over KRW 110 trillion in facilities and R&D to strengthen our strategic production basis for future, including the Pyeongtaek site, the U.S. Taylor Fab, and the Yongin semiconductor cluster, as well as to advance R&D in next-generation technologies. In terms of M&A, to drive continued future growth and enhance shareholder value, we will continue to reassess our business portfolio. We will proactively pursue inorganic growth strategies to ensure mid to long-term growth. In addition to M&A, to identify new technologies and businesses and to discover and collaborate with promising tech companies, we are pursuing a wide range of investments, including venture and equity. Through these efforts, the company aims to strengthen the competitiveness of its established businesses while also responding to rapidly evolving global tech trends. Regarding our corporate value enhancement plan, the company plans to invest over KRW 110 trillion in facilities and R&D to strengthen our strategic production basis for future, including the Pyeongtaek site, the U.S. regarding our corporate value enhancement plan the company plans to invest over krw 110 trillion in facilities and r&d to strengthen our strategic production basis for future including the pyeongtaek site the u.s Taylor Fab, and the Yongin semiconductor cluster, as well as to advance R&D in next-generation technologies. taylor fab and the yongin semiconductor cluster as well as to advance r&d in next-generation technologies In terms of M&A, to drive continued future growth and enhance shareholder value, we will continue to reassess our business portfolio. in terms of m&a to drive continued future growth and enhance shareholder value we will continue to reassess our business portfolio We will proactively pursue inorganic growth strategies to ensure mid to long-term growth. we will proactively pursue inorganic growth strategies to ensure mid to long-term growth In addition to M&A, to identify new technologies and businesses and to discover and collaborate with promising tech companies, we are pursuing a wide range of investments, including venture and equity. in addition to m&a to identify new technologies and businesses and to discover and collaborate with promising tech companies we are pursuing a wide range of investments including venture and equity Through these efforts, the company aims to strengthen the competitiveness of its established businesses while also responding to rapidly evolving global tech trends. through these efforts the company aims to strengthen the competitiveness of its established businesses while also responding to rapidly evolving global tech trends In HVAC, automotive, electronics, medical technology, robotics and other future growth drivers, we'll continue investing to secure future technology leadership. We'll share updates as these initiatives progress. Thank you. In HVAC, automotive, electronics, medical technology, robotics and other future growth drivers, we'll continue investing to secure future technology leadership. in hvac automotive electronics medical technology robotics and other future growth drivers we'll continue investing to secure future technology leadership We'll share updates as these initiatives progress. we'll share updates as these initiatives progress Thank you. thank you

Speaker 3: We'll move on to the next question. We'll move on to the next question. we'll move on to the next question

Speaker 10: The next question will be made by Nicolas Gaudois from UBS. You may go ahead. The next question will be made by Nicolas Gaudois from UBS. the next question will be made by nicolas gaudois from ubs You may go ahead. you may go ahead

Speaker 9: Good morning. Thanks for taking my questions. With the prolonged conflict in the Middle East, there are growing concerns about potential supply disruptions for raw materials that heavily depends on regions such as naphtha and helium gas. In addition, important energy and oil remain import, crucial for electricity supply, for your fab in South Korea. Are there any company-wide issues related to these? What measures is the company taking to address them? Secondly, with rising semiconductor costs and intensifying market headwinds expected in Q2, how does the company plan to secure profitability for MX specifically? Thank you. Good morning. good morning Thanks for taking my questions. thanks for taking my questions With the prolonged conflict in the Middle East, there are growing concerns about potential supply disruptions for raw materials that heavily depends on regions such as naphtha and helium gas. with the prolonged conflict in the middle east there are growing concerns about potential supply disruptions for raw materials that heavily depends on regions such as naphtha and helium gas In addition, important energy and oil remain import, crucial for electricity supply, for your fab in South Korea. in addition important energy and oil remain import crucial for electricity supply for your fab in south korea Are there any company-wide issues related to these? are there any company-wide issues related to these What measures is the company taking to address them? what measures is the company taking to address them Secondly, with rising semiconductor costs and intensifying market headwinds expected in Q2, how does the company plan to secure profitability for MX specifically? secondly with rising semiconductor costs and intensifying market headwinds expected in q2 how does the company plan to secure profitability for mx specifically Thank you. thank you

Speaker 15: Let me address the Middle East related risks. Our semiconductor production lines are operating normally and there have been no supply chain issues to date. While we source some processed gases from Israel and the Middle East, we have secured sufficient safety stock and are responding in line with local logistics conditions. We have secured alternative logistic routes and diversified suppliers, including the U.S. and Japan, so the overall risk remains limited. Based on our past experience with export controls, natural disasters, trade disputes and wars, we are managing supply-demand balance flexibly from mid to long-term perspective. Regarding power supply, we are closely monitoring utility cost trends amid rising oil prices. Through close coordination with the government, we'll maintain a stable power supply system. Let me address the Middle East related risks. let me address the middle east related risks Our semiconductor production lines are operating normally and there have been no supply chain issues to date. While we source some processed gases from Israel and the Middle East, we have secured sufficient safety stock and are responding in line with local logistics conditions. our semiconductor production lines are operating normally and there have been no supply chain issues to date. while we source some processed gases from israel and the middle east we have secured sufficient safety stock and are responding in line with local logistics conditions We have secured alternative logistic routes and diversified suppliers, including the U.S. and Japan, so the overall risk remains limited. we have secured alternative logistic routes and diversified suppliers including the u.s and japan so the overall risk remains limited Based on our past experience with export controls, natural disasters, trade disputes and wars, we are managing supply-demand balance flexibly from mid to long-term perspective. based on our past experience with export controls natural disasters trade disputes and wars we are managing supply-demand balance flexibly from mid to long-term perspective Regarding power supply, we are closely monitoring utility cost trends amid rising oil prices. regarding power supply we are closely monitoring utility cost trends amid rising oil prices Through close coordination with the government, we'll maintain a stable power supply system. through close coordination with the government we'll maintain a stable power supply system However, oil price increases driven by the war are impacting global ocean and air freight costs, which is expanding the risk of higher shipping rates. In response, we are closely monitoring global inventory levels while optimizing supply chain operations to minimize cost burden from international transportation. Based on the mid to long-term partnerships with shipping and air freight providers, we're engaging in negotiations and utilizing alternative transportation options to mitigate the impact of high logistics costs. In case the war is prolonged, we are developing diverse scenarios, and through long-term contracts with logistics providers and fuel-linked freight rates, we plan to maintain cost competitiveness and supply capacity while strengthening our response capability to volatility. Thank you. However, oil price increases driven by the war are impacting global ocean and air freight costs, which is expanding the risk of higher shipping rates. however oil price increases driven by the war are impacting global ocean and air freight costs which is expanding the risk of higher shipping rates In response, we are closely monitoring global inventory levels while optimizing supply chain operations to minimize cost burden from international transportation. in response we are closely monitoring global inventory levels while optimizing supply chain operations to minimize cost burden from international transportation Based on the mid to long-term partnerships with shipping and air freight providers, we're engaging in negotiations and utilizing alternative transportation options to mitigate the impact of high logistics costs. based on the mid to long-term partnerships with shipping and air freight providers we're engaging in negotiations and utilizing alternative transportation options to mitigate the impact of high logistics costs In case the war is prolonged, we are developing diverse scenarios, and through long-term contracts with logistics providers and fuel-linked freight rates, we plan to maintain cost competitiveness and supply capacity while strengthening our response capability to volatility. in case the war is prolonged we are developing diverse scenarios and through long-term contracts with logistics providers and fuel-linked freight rates we plan to maintain cost competitiveness and supply capacity while strengthening our response capability to volatility Thank you. thank you

Speaker 14: I will take the next question. With the growing demand for AI seven memory supply shortages for mobile and upper trend in prices have persisted. I will take the next question. i will take the next question With the growing demand for AI seven memory supply shortages for mobile and upper trend in prices have persisted. with the growing demand for ai seven memory supply shortages for mobile and upper trend in prices have persisted In 1Q 2026, memory prices surged, weakening profitability year-over-year. In 2Q, prices are expected to rise further, adding to cost pressures. We will leverage our stable supply to expand sales of S26 and new A series. At the same time, across development, procurement and sales, we'll enhance cost efficiency to mitigate the impact of rising memory prices on profitability. Thank you. In 1Q 2026, memory prices surged, weakening profitability year-over-year. in 1q 2026 memory prices surged weakening profitability year-over-year In 2Q, prices are expected to rise further, adding to cost pressures. in 2q prices are expected to rise further adding to cost pressures We will leverage our stable supply to expand sales of S26 and new A series. we will leverage our stable supply to expand sales of s26 and new a series At the same time, across development, procurement and sales, we'll enhance cost efficiency to mitigate the impact of rising memory prices on profitability. at the same time across development procurement and sales we'll enhance cost efficiency to mitigate the impact of rising memory prices on profitability Thank you. thank you

Speaker 3: Thank you very much. We'll now move on to the next question, please. Thank you very much. thank you very much We'll now move on to the next question, please. we'll now move on to the next question please

Speaker 10: The next question will be by Mr. Kim Dong-won from KB Securities. Please go ahead. The next question will be by Mr. Kim Dong-won from KB Securities. the next question will be by mr kim dong-won from kb securities Please go ahead. please go ahead

Speaker 4: Yes, I would like to congratulate you on your all-time high performance as well. I have a question for memory and then company-wide question. The memory sector is expected to see a continued upcycle, what is your business outlook for the second quarter? If you could provide bit growth guidance for Q2. The second question, humanoid robotics and physical AI are sectors expected to see high growth, could you explain your strategy in addressing these growth markets? Yes, I would like to congratulate you on your all-time high performance as well. yes i would like to congratulate you on your all-time high performance as well I have a question for memory and then company-wide question. i have a question for memory and then company-wide question The memory sector is expected to see a continued upcycle, what is your business outlook for the second quarter? the memory sector is expected to see a continued upcycle what is your business outlook for the second quarter If you could provide bit growth guidance for Q2. if you could provide bit growth guidance for q2 The second question, humanoid robotics and physical AI are sectors expected to see high growth, could you explain your strategy in addressing these growth markets? the second question humanoid robotics and physical ai are sectors expected to see high growth could you explain your strategy in addressing these growth markets

Speaker 6: Yes. Let me address your question on the memory business outlook. We do expect AI-related demand to continue to drive growth momentum for a memory for the time being. With the spread of agentic AI, token processing is increasing in volume and technologies improving the efficiency of data processing are being introduced, and the AI ecosystem is growing even faster than ever. That said, although advancements in AI technology are a structural driver of increased memory demand, when you consider the lead time involved for new fab expansions, supply growth is expected to remain constrained within the industry for the time being. We also have very tight inventory and available supply is far short of customer demand. In fact, our demand fulfillment rate is now at a record low. Yes. yes Let me address your question on the memory business outlook. let me address your question on the memory business outlook We do expect AI-related demand to continue to drive growth momentum for a memory for the time being. we do expect ai-related demand to continue to drive growth momentum for a memory for the time being With the spread of agentic AI, token processing is increasing in volume and technologies improving the efficiency of data processing are being introduced, and the AI ecosystem is growing even faster than ever. with the spread of agentic ai token processing is increasing in volume and technologies improving the efficiency of data processing are being introduced and the ai ecosystem is growing even faster than ever That said, although advancements in AI technology are a structural driver of increased memory demand, when you consider the lead time involved for new fab expansions, supply growth is expected to remain constrained within the industry for the time being. that said although advancements in ai technology are a structural driver of increased memory demand when you consider the lead time involved for new fab expansions supply growth is expected to remain constrained within the industry for the time being We also have very tight inventory and available supply is far short of customer demand. we also have very tight inventory and available supply is far short of customer demand In fact, our demand fulfillment rate is now at a record low. in fact our demand fulfillment rate is now at a record low Unlike previous years, customers who are concerned about supply shortages are actually bringing forward their demand for 2027 already. Currently, just based on pre-booked demand alone, the supply-demand gap is looking to widen further in 2027 versus this year. With available capacity under such constrained conditions, we plan to maintain our product mix focus on servers in the second quarter, and we're expecting DRAM bit growth to increase by single-digit percentage QoQ. While for NAND, considering limited available capacity, from a reduced inventory level in the first quarter, bit growth is expected to be constrained at a low single-digit level QoQ. Unlike previous years, customers who are concerned about supply shortages are actually bringing forward their demand for 2027 already. unlike previous years customers who are concerned about supply shortages are actually bringing forward their demand for 2027 already Currently, just based on pre-booked demand alone, the supply-demand gap is looking to widen further in 2027 versus this year. currently just based on pre-booked demand alone the supply-demand gap is looking to widen further in 2027 versus this year With available capacity under such constrained conditions, we plan to maintain our product mix focus on servers in the second quarter, and we're expecting DRAM bit growth to increase by single-digit percentage QoQ. with available capacity under such constrained conditions we plan to maintain our product mix focus on servers in the second quarter and we're expecting dram bit growth to increase by single-digit percentage qoq While for NAND, considering limited available capacity, from a reduced inventory level in the first quarter, bit growth is expected to be constrained at a low single-digit level QoQ. while for nand considering limited available capacity from a reduced inventory level in the first quarter bit growth is expected to be constrained at a low single-digit level qoq

Speaker 15: Let me address our physical AI strategy. Over the past year, under the leadership of Jun-ho Oh, a leading robotics expert in Korea, we have made meaningful technological progress and established a foundation to catch up with global leaders. We are internalizing key robotics components and building capabilities to develop customized parts optimized for our own robots. The robotics industry, driven by technological developments such as physical AI, is becoming increasingly viable. Let me address our physical AI strategy. let me address our physical ai strategy Over the past year, under the leadership of Jun-ho Oh, a leading robotics expert in Korea, we have made meaningful technological progress and established a foundation to catch up with global leaders. over the past year under the leadership of jun-ho oh a leading robotics expert in korea we have made meaningful technological progress and established a foundation to catch up with global leaders We are internalizing key robotics components and building capabilities to develop customized parts optimized for our own robots. we are internalizing key robotics components and building capabilities to develop customized parts optimized for our own robots The robotics industry, driven by technological developments such as physical AI, is becoming increasingly viable. the robotics industry driven by technological developments such as physical ai is becoming increasingly viable Through the development of humanoid robots, the combination of advanced robotics technologies, we aim to innovate manufacturing productivity and daily experiences. With our manufacturing production bases, we plan to develop manufacturing robots, by leveraging the technologies we accumulate, we'll expand into home and retail applications. To accelerate technology advancement and deployment, we'll focus on securing our own technological capabilities, at the same time, we'll cooperate with competitive global partners as part of a two-track strategy. Where appropriate, we'll consider strategic investments or acquisitions. Thank you. We'll move on to the next question. Through the development of humanoid robots, the combination of advanced robotics technologies, we aim to innovate manufacturing productivity and daily experiences. through the development of humanoid robots the combination of advanced robotics technologies we aim to innovate manufacturing productivity and daily experiences With our manufacturing production bases, we plan to develop manufacturing robots, by leveraging the technologies we accumulate, we'll expand into home and retail applications. with our manufacturing production bases we plan to develop manufacturing robots by leveraging the technologies we accumulate we'll expand into home and retail applications To accelerate technology advancement and deployment, we'll focus on securing our own technological capabilities, at the same time, we'll cooperate with competitive global partners as part of a two-track strategy. to accelerate technology advancement and deployment we'll focus on securing our own technological capabilities at the same time we'll cooperate with competitive global partners as part of a two-track strategy Where appropriate, we'll consider strategic investments or acquisitions. where appropriate we'll consider strategic investments or acquisitions Thank you. thank you We'll move on to the next question. we'll move on to the next question

Speaker 10: Next question will be by Mr. [Kim Dong-gyu] from Daiwa Securities. Please go ahead. Next question will be by Mr. [Kim Dong-gyu] from Daiwa Securities. next question will be by mr [kim dong-gyu] from daiwa securities Please go ahead. please go ahead

Speaker 21: Yes, good morning. Thank you for the opportunity to ask some questions and also congratulations on strong performance as well. I have a question on memory and display. Let me start with HBM. In the first quarter of this year, you were the first in the industry to commence HBM4 mass production and shipments, and I understand you've already been receiving quite good feedback in terms of performance. Also, could you provide a status update on not only HBM4, but the HBM4E business as well? For display, amid shortages in memory supply, also, I think downward pricing pressure is likely to increase for displays. What measures are in place to defend against those trends and also to maintain profitability? Yes, good morning. yes good morning Thank you for the opportunity to ask some questions and also congratulations on strong performance as well. thank you for the opportunity to ask some questions and also congratulations on strong performance as well I have a question on memory and display. i have a question on memory and display Let me start with HBM. let me start with hbm In the first quarter of this year, you were the first in the industry to commence HBM4 mass production and shipments, and I understand you've already been receiving quite good feedback in terms of performance. in the first quarter of this year you were the first in the industry to commence hbm4 mass production and shipments and i understand you've already been receiving quite good feedback in terms of performance Also, could you provide a status update on not only HBM4, but the HBM4E business as well? also could you provide a status update on not only hbm4 but the hbm4e business as well For display, amid shortages in memory supply, also, I think downward pricing pressure is likely to increase for displays. for display amid shortages in memory supply also i think downward pricing pressure is likely to increase for displays What measures are in place to defend against those trends and also to maintain profitability? what measures are in place to defend against those trends and also to maintain profitability

Speaker 6: Yes, let me address the HBM question first. Yes, let me address the HBM question first. yes let me address the hbm question first First of all, as we explained at the last quarterly earnings call, we expect HBM sales to increase substantially by more than three-fold year on year in 2026. Leveraging our cutting-edge 1c nano processes, we have secured industry-leading product competitiveness. This has allowed us to play a leading role in raising the bar on performance requirements for HBM4. As customers adopt these enhanced specifications, our outstanding performance has been translating to actual premium on pricing. The differentiated performance of our HBM4 has led to concentration of demand, and our production-ready capacity is fully booked and sold out. After we became the world's first to commence commercial shipment of HBM4 in February, we are now proceeding with ramp-up as scheduled, with supply volume expected to scale meaningfully in the second half of the year. First of all, as we explained at the last quarterly earnings call, we expect HBM sales to increase substantially by more than three-fold year on year in 2026. first of all as we explained at the last quarterly earnings call we expect hbm sales to increase substantially by more than three-fold year on year in 2026 Leveraging our cutting-edge 1c nano processes, we have secured industry-leading product competitiveness. leveraging our cutting-edge 1c nano processes we have secured industry-leading product competitiveness This has allowed us to play a leading role in raising the bar on performance requirements for HBM4. this has allowed us to play a leading role in raising the bar on performance requirements for hbm4 As customers adopt these enhanced specifications, our outstanding performance has been translating to actual premium on pricing. as customers adopt these enhanced specifications our outstanding performance has been translating to actual premium on pricing The differentiated performance of our HBM4 has led to concentration of demand, and our production-ready capacity is fully booked and sold out. the differentiated performance of our hbm4 has led to concentration of demand and our production-ready capacity is fully booked and sold out After we became the world's first to commence commercial shipment of HBM4 in February, we are now proceeding with ramp-up as scheduled, with supply volume expected to scale meaningfully in the second half of the year. after we became the world's first to commence commercial shipment of hbm4 in february we are now proceeding with ramp-up as scheduled with supply volume expected to scale meaningfully in the second half of the year HBM4 sales are expected to exceed 50% of total HBM sales from the third quarter onwards and also account for roughly half on a full year basis. Going forward, based on the competitiveness of our 1c nanotechnologies accumulated through HBM4 mass production, we have been accelerating development of next-gen HBM4E products with pin speed of 16 Gbps and bandwidth of 4.0 TB per second, with samples set to start shipping within the second quarter. We will continue to build on our leading technology to provide HBM products optimized to customer needs on a timely basis as we carry forward our market leadership. Thank you. HBM4 sales are expected to exceed 50% of total HBM sales from the third quarter onwards and also account for roughly half on a full year basis. hbm4 sales are expected to exceed 50% of total hbm sales from the third quarter onwards and also account for roughly half on a full year basis Going forward, based on the competitiveness of our 1c nanotechnologies accumulated through HBM4 mass production, we have been accelerating development of next-gen HBM4E products with pin speed of 16 Gbps and bandwidth of 4.0 TB per second, with samples set to start shipping within the second quarter. going forward based on the competitiveness of our 1c nanotechnologies accumulated through hbm4 mass production we have been accelerating development of next-gen hbm4e products with pin speed of 16 gbps and bandwidth of 4.0 tb per second with samples set to start shipping within the second quarter We will continue to build on our leading technology to provide HBM products optimized to customer needs on a timely basis as we carry forward our market leadership. we will continue to build on our leading technology to provide hbm products optimized to customer needs on a timely basis as we carry forward our market leadership Thank you. thank you

Speaker 2: I'll take the display question. Rising memory prices driven by supply-demand imbalances have increased cost burdens for set manufacturers, which is expected to reduce overall set demand. Accordingly, display demand is likely to weaken and downside ASP pressure is expected to persist. We'll respond to such conditions by enhancing operational efficiency and strengthening competitiveness across our business. First, we'll drive extreme productivity improvements to strengthen cost competitiveness and accelerate the development of differentiated technologies. On the business side, our portfolio centered on premium products with relatively robust demand will be strengthened and also will expand our customer base. In particular, the performance of a new privacy protection technology introduced in smartphones this year, which is MDP, will be further enhanced and we will broaden its applications. We'll continually develop differentiated technologies to strengthen our leadership in high-end products, thereby securing stable profitability. Thank you. I'll take the display question. i'll take the display question Rising memory prices driven by supply-demand imbalances have increased cost burdens for set manufacturers, which is expected to reduce overall set demand. rising memory prices driven by supply-demand imbalances have increased cost burdens for set manufacturers which is expected to reduce overall set demand Accordingly, display demand is likely to weaken and downside ASP pressure is expected to persist. accordingly display demand is likely to weaken and downside asp pressure is expected to persist We'll respond to such conditions by enhancing operational efficiency and strengthening competitiveness across our business. we'll respond to such conditions by enhancing operational efficiency and strengthening competitiveness across our business First, we'll drive extreme productivity improvements to strengthen cost competitiveness and accelerate the development of differentiated technologies. first we'll drive extreme productivity improvements to strengthen cost competitiveness and accelerate the development of differentiated technologies On the business side, our portfolio centered on premium products with relatively robust demand will be strengthened and also will expand our customer base. on the business side our portfolio centered on premium products with relatively robust demand will be strengthened and also will expand our customer base In particular, the performance of a new privacy protection technology introduced in smartphones this year, which is MDP, will be further enhanced and we will broaden its applications. in particular the performance of a new privacy protection technology introduced in smartphones this year which is mdp will be further enhanced and we will broaden its applications We'll continually develop differentiated technologies to strengthen our leadership in high-end products, thereby securing stable profitability. we'll continually develop differentiated technologies to strengthen our leadership in high-end products thereby securing stable profitability Thank you. thank you

Speaker 3: We'll move on to the next question. We'll move on to the next question. we'll move on to the next question

Speaker 10: The next question will be by Mr. Lee Giuni from Goldman Sachs. The next question will be by Mr. Lee Giuni from Goldman Sachs. the next question will be by mr lee giuni from goldman sachs

Speaker 5: Yes, congratulations on very good performance. I have a question on foundry and VD. First, for foundry, I think I would like to hear an update on new order wins for advanced 2 nm, 4 nm nodes and legacy processes. For VD business, amid reduced profitability, I do believe there have been growing concerns over performance. What kind of countermeasures are you getting ready? Yes, congratulations on very good performance. yes congratulations on very good performance I have a question on foundry and VD. i have a question on foundry and vd First, for foundry, I think I would like to hear an update on new order wins for advanced 2 nm, 4 nm nodes and legacy processes. first for foundry i think i would like to hear an update on new order wins for advanced 2 nm 4 nm nodes and legacy processes For VD business, amid reduced profitability, I do believe there have been growing concerns over performance. for vd business amid reduced profitability i do believe there have been growing concerns over performance What kind of countermeasures are you getting ready? what kind of countermeasures are you getting ready

Speaker 16: Let's cover the foundry question first. We have been diversifying our portfolio looking out to the mid to longer term across more end markets, and we've been working to expand project awards across diverse application areas, including AI, HPC, automotive, robotics, and aerospace as well. Let's cover the foundry question first. let's cover the foundry question first We have been diversifying our portfolio looking out to the mid to longer term across more end markets, and we've been working to expand project awards across diverse application areas, including AI, HPC, automotive, robotics, and aerospace as well. we have been diversifying our portfolio looking out to the mid to longer term across more end markets and we've been working to expand project awards across diverse application areas including ai hpc automotive robotics and aerospace as well Amid recent increase in AI and data center demand, memory supply remains limited, clearly we're seeing demand for turnkey solutions that cover both memory and foundry together. In line with these market dynamics, we are in active talks with multiple large-scale AI and HPC customers on 2 nm process projects. Expect to secure more visible results in the near future for certain accounts. Our HBM4 base die, which is built on 4 nm processes, has been gaining recognition for differentiated and competitive performance, leading 4 nm demands. We have been actively considering possible expansion of supply in response. We are also in discussions with many automotive or robotics customers in the U.S. and wider China on adoption of 2 nm or 4 nm processes. Leveraging our products delivered to major large accounts, we've been validating our technology and establishing stronger reliability. Amid recent increase in AI and data center demand, memory supply remains limited, clearly we're seeing demand for turnkey solutions that cover both memory and foundry together. amid recent increase in ai and data center demand memory supply remains limited clearly we're seeing demand for turnkey solutions that cover both memory and foundry together In line with these market dynamics, we are in active talks with multiple large-scale AI and HPC customers on 2 nm process projects. in line with these market dynamics we are in active talks with multiple large-scale ai and hpc customers on 2 nm process projects Expect to secure more visible results in the near future for certain accounts. expect to secure more visible results in the near future for certain accounts Our HBM4 base die, which is built on 4 nm processes, has been gaining recognition for differentiated and competitive performance, leading 4 nm demands. our hbm4 base die which is built on 4 nm processes has been gaining recognition for differentiated and competitive performance leading 4 nm demands We have been actively considering possible expansion of supply in response. we have been actively considering possible expansion of supply in response We are also in discussions with many automotive or robotics customers in the U.S. and wider China on adoption of 2 nm or 4 nm processes. we are also in discussions with many automotive or robotics customers in the u.s and wider china on adoption of 2 nm or 4 nm processes Leveraging our products delivered to major large accounts, we've been validating our technology and establishing stronger reliability. leveraging our products delivered to major large accounts we've been validating our technology and establishing stronger reliability For data centers, we are seeing growing demand for high bandwidth and low power data transmission, which has led to a rapid rise in demand for silicon photonics. We are developing not only silicon photonics components, but also technology for the CPO or co-packaged optics business based on advanced processes and three-D packaging. In parallel, we are engaged in discussions with several large scale global accounts on commercialization projects. We will be starting mass production for a major optical communications module player starting in the second half of this year. For data centers, we are seeing growing demand for high bandwidth and low power data transmission, which has led to a rapid rise in demand for silicon photonics. for data centers we are seeing growing demand for high bandwidth and low power data transmission which has led to a rapid rise in demand for silicon photonics We are developing not only silicon photonics components, but also technology for the CPO or co-packaged optics business based on advanced processes and three-D packaging. we are developing not only silicon photonics components but also technology for the cpo or co-packaged optics business based on advanced processes and three-d packaging In parallel, we are engaged in discussions with several large scale global accounts on commercialization projects. in parallel, we are engaged in discussions with several large scale global accounts on commercialization projects We will be starting mass production for a major optical communications module player starting in the second half of this year. we will be starting mass production for a major optical communications module player starting in the second half of this year

Speaker 19: The TV market, amid rising raw material costs and an uncertain external business environment, is expected to face challenges in securing both revenue and profitability. The company will leverage differentiated product marketing strategies and proactive measures in its service business to further solidify its number one position. The TV market, amid rising raw material costs and an uncertain external business environment, is expected to face challenges in securing both revenue and profitability. the tv market amid rising raw material costs and an uncertain external business environment is expected to face challenges in securing both revenue and profitability The company will leverage differentiated product marketing strategies and proactive measures in its service business to further solidify its number one position. the company will leverage differentiated product marketing strategies and proactive measures in its service business to further solidify its number one position Of this year, the TV market, amid rising raw material costs and an uncertain external business environment, is expected to face challenges in securing both revenue and profitability. The company will leverage differentiated product marketing strategies and proactive measures in its service business to further solidify its number one position in the global TV markets. To this end, we'll reshape the Micro RGB, OLED, and Mini LED-centered competition landscape with the successful introduction of new models while maximizing launch effects. Compared to previous years, this year's World Cup will feature more participating teams on extended tournament period and a higher total number of matches, which is expected to drive TV demand in the second quarter. Accordingly, to capture this demand, we will use our differentiated marketing strategy to strengthen collaboration with key retail partners and expand strategic SKUs and promotions. Of this year, the TV market, amid rising raw material costs and an uncertain external business environment, is expected to face challenges in securing both revenue and profitability. of this year the tv market amid rising raw material costs and an uncertain external business environment is expected to face challenges in securing both revenue and profitability The company will leverage differentiated product marketing strategies and proactive measures in its service business to further solidify its number one position in the global TV markets. the company will leverage differentiated product marketing strategies and proactive measures in its service business to further solidify its number one position in the global tv markets To this end, we'll reshape the Micro RGB, OLED, and Mini LED-centered competition landscape with the successful introduction of new models while maximizing launch effects. to this end we'll reshape the micro rgb oled and mini led-centered competition landscape with the successful introduction of new models while maximizing launch effects Compared to previous years, this year's World Cup will feature more participating teams on extended tournament period and a higher total number of matches, which is expected to drive TV demand in the second quarter. compared to previous years this year's world cup will feature more participating teams on extended tournament period and a higher total number of matches which is expected to drive tv demand in the second quarter Accordingly, to capture this demand, we will use our differentiated marketing strategy to strengthen collaboration with key retail partners and expand strategic SKUs and promotions. accordingly to capture this demand we will use our differentiated marketing strategy to strengthen collaboration with key retail partners and expand strategic skus and promotions Lastly, based on its leadership as the global number one TV brand, the company will proactively address market shift toward the service business as well as consumer trends. Samsung TV Plus as well as Samsung Art Store will be further advanced so that we can secure differentiated competitiveness. Thank you. Lastly, based on its leadership as the global number one TV brand, the company will proactively address market shift toward the service business as well as consumer trends. lastly based on its leadership as the global number one tv brand the company will proactively address market shift toward the service business as well as consumer trends Samsung TV Plus as well as Samsung Art Store will be further advanced so that we can secure differentiated competitiveness. samsung tv plus as well as samsung art store will be further advanced so that we can secure differentiated competitiveness Thank you. thank you

Speaker 3: Yes, we will move on to the next question, please. Yes, we will move on to the next question, please. yes we will move on to the next question please

Speaker 10: The next question will be by Chae Min-Suk from Korea Investment & Securities. The next question will be by Chae Min-Suk from Korea Investment & Securities. the next question will be by chae min-suk from korea investment & securities

Speaker 1: Yes, this is Chae Min-Suk from Korea Investment & Securities. I have a question on memory and System LSI, one each. First, regarding memory. Recently there's been a rapid rise in conventional DRAM prices, and some have been suggesting that focusing on conventional DRAM sales over HBM may be better in terms of margins. What are your plans for product mix between HBM versus conventional DRAM? Yes, this is Chae Min-Suk from Korea Investment & Securities. yes this is chae min-suk from korea investment & securities I have a question on memory and System LSI, one each. i have a question on memory and system lsi one each First, regarding memory. first regarding memory Recently there's been a rapid rise in conventional DRAM prices, and some have been suggesting that focusing on conventional DRAM sales over HBM may be better in terms of margins. recently there's been a rapid rise in conventional dram prices and some have been suggesting that focusing on conventional dram sales over hbm may be better in terms of margins What are your plans for product mix between HBM versus conventional DRAM? what are your plans for product mix between hbm versus conventional dram Regarding System LSI, can you provide an update on development of Exynos 2700? Do you believe that you will be able to increase market share on the next gen model? Any plans to expand beyond mobile into AI applications? Regarding System LSI, can you provide an update on development of Exynos 2700? regarding system lsi can you provide an update on development of exynos 2700 Do you believe that you will be able to increase market share on the next gen model? do you believe that you will be able to increase market share on the next gen model Any plans to expand beyond mobile into AI applications? any plans to expand beyond mobile into ai applications

Speaker 6: Yes, let me comment on the question for DRAM sales mix. Recently, we have seen a rise in lower spec legacy memory prices. It is true that conventional DRAMs have higher margins versus HBM. We are aware of certain outside views that focusing our sales mix on conventional DRAMs may be more beneficial in terms of short-term performance versus HBM. Per industry practice for HBM, we negotiate projected pricing in advance on an annual basis, considering the lead time required to prepare back-end capacity for HBM. Yes, let me comment on the question for DRAM sales mix. yes let me comment on the question for dram sales mix Recently, we have seen a rise in lower spec legacy memory prices. recently we have seen a rise in lower spec legacy memory prices It is true that conventional DRAMs have higher margins versus HBM. it is true that conventional drams have higher margins versus hbm We are aware of certain outside views that focusing our sales mix on conventional DRAMs may be more beneficial in terms of short-term performance versus HBM. we are aware of certain outside views that focusing our sales mix on conventional drams may be more beneficial in terms of short-term performance versus hbm Per industry practice for HBM, we negotiate projected pricing in advance on an annual basis, considering the lead time required to prepare back-end capacity for HBM. per industry practice for hbm we negotiate projected pricing in advance on an annual basis considering the lead time required to prepare back-end capacity for hbm Whereas, for conventional DRAM, the negotiations are done on a quarterly basis. As conventional DRAM pricing has continued to rise sharply every quarter, this has resulted in inversion of margins between HBM and conventional DRAM. However, given the constrained supply conditions for HBM with a sustained widening of the supply-demand gap, the margin differential versus conventional DRAM is expected to be significantly reduced in 2027. With the spread of inference services and also agentic AI, the importance of not only AI servers, but conventional servers has also been growing in terms of AI infrastructure, which is indication of the close connection between HBM and conventional DRAM demand. If we were to focus our product portfolio on conventional DRAM, looking to achieve a short-term performance only, this could potentially pose constraints on the build-out of the underlying AI infrastructure itself. Whereas, for conventional DRAM, the negotiations are done on a quarterly basis. whereas for conventional dram the negotiations are done on a quarterly basis As conventional DRAM pricing has continued to rise sharply every quarter, this has resulted in inversion of margins between HBM and conventional DRAM. as conventional dram pricing has continued to rise sharply every quarter this has resulted in inversion of margins between hbm and conventional dram However, given the constrained supply conditions for HBM with a sustained widening of the supply-demand gap, the margin differential versus conventional DRAM is expected to be significantly reduced in 2027. however given the constrained supply conditions for hbm with a sustained widening of the supply-demand gap the margin differential versus conventional dram is expected to be significantly reduced in 2027 With the spread of inference services and also agentic AI, the importance of not only AI servers, but conventional servers has also been growing in terms of AI infrastructure, which is indication of the close connection between HBM and conventional DRAM demand. with the spread of inference services and also agentic ai the importance of not only ai servers but conventional servers has also been growing in terms of ai infrastructure which is indication of the close connection between hbm and conventional dram demand If we were to focus our product portfolio on conventional DRAM, looking to achieve a short-term performance only, this could potentially pose constraints on the build-out of the underlying AI infrastructure itself. if we were to focus our product portfolio on conventional dram looking to achieve a short-term performance only this could potentially pose constraints on the build-out of the underlying ai infrastructure itself Which is why we believe a balance in supply between HBM and conventional DRAM is necessary in order to continue to generate AI-driven demand. In conclusion, we intend to take various factors into consideration, including mid to long-term growth potential, long-term customer engagement, technology competitiveness to execute a balanced product mix. Which is why we believe a balance in supply between HBM and conventional DRAM is necessary in order to continue to generate AI-driven demand. which is why we believe a balance in supply between hbm and conventional dram is necessary in order to continue to generate ai-driven demand In conclusion, we intend to take various factors into consideration, including mid to long-term growth potential, long-term customer engagement, technology competitiveness to execute a balanced product mix. in conclusion we intend to take various factors into consideration including mid to long-term growth potential long-term customer engagement technology competitiveness to execute a balanced product mix

Speaker 7: Yes, let me answer from the System LSI side. First, regarding Exynos. Exynos 2700 is under smooth development as planned, building on the flagship technological competitiveness of the predecessor, Exynos 2600 model. Yes, let me answer from the System LSI side. yes let me answer from the system lsi side First, regarding Exynos. first regarding exynos Exynos 2700 is under smooth development as planned, building on the flagship technological competitiveness of the predecessor, Exynos 2600 model. exynos 2700 is under smooth development as planned building on the flagship technological competitiveness of the predecessor exynos 2600 model We expect to be able to expand market share further by offering enhanced AI performance. In terms of expansion into new business areas, AI market trends are shifting quickly from training to inference, with the market for specialized inference solutions and customized offerings growing. In response to these market changes, we are advancing our business so that we can offer customer-optimized solutions and architectures from data center to on-device applications in order to shape differentiated competitiveness in the AI market. Thank you. We expect to be able to expand market share further by offering enhanced AI performance. we expect to be able to expand market share further by offering enhanced ai performance In terms of expansion into new business areas, AI market trends are shifting quickly from training to inference, with the market for specialized inference solutions and customized offerings growing. in terms of expansion into new business areas ai market trends are shifting quickly from training to inference with the market for specialized inference solutions and customized offerings growing In response to these market changes, we are advancing our business so that we can offer customer-optimized solutions and architectures from data center to on-device applications in order to shape differentiated competitiveness in the AI market. in response to these market changes we are advancing our business so that we can offer customer-optimized solutions and architectures from data center to on-device applications in order to shape differentiated competitiveness in the ai market Thank you. thank you

Speaker 3: We'll move on to the next question. We'll move on to the next question. we'll move on to the next question

Speaker 10: The next question will be made by Young Ho Ryu from NH Investment & Securities. The next question will be made by Young Ho Ryu from NH Investment & Securities. the next question will be made by young ho ryu from nh investment & securities

Speaker 11: Hi, I am Young Ho Ryu. Thank you for the opportunity. I'd like to ask about the MX and DA businesses. Rising component costs and an overall slowdown in smartphone demand are raising concerns over a market contraction. Under such unfavorable conditions, what are the company strategies to defend market share and secure sales growth momentum? For the DA business, I have two questions: Recently, there have been multiple media reports on profitability-driven transformation in DA business. Can you share an update on the current initiatives? Additionally, the importance of the cooling solutions market is rising, and you acquired FläktGroup last year. Could you elaborate on your business strategy? Hi, I am Young Ho Ryu . hi i am young ho ryu Thank you for the opportunity. thank you for the opportunity I'd like to ask about the MX and DA businesses. i'd like to ask about the mx and da businesses Rising component costs and an overall slowdown in smartphone demand are raising concerns over a market contraction. rising component costs and an overall slowdown in smartphone demand are raising concerns over a market contraction Under such unfavorable conditions, what are the company strategies to defend market share and secure sales growth momentum? under such unfavorable conditions what are the company strategies to defend market share and secure sales growth momentum For the DA business, I have two questions: Recently, there have been multiple media reports on profitability-driven transformation in DA business. for the da business i have two questions recently there have been multiple media reports on profitability-driven transformation in da business Can you share an update on the current initiatives? can you share an update on the current initiatives Additionally, the importance of the cooling solutions market is rising, and you acquired FläktGroup last year. additionally the importance of the cooling solutions market is rising and you acquired fläktgroup last year Could you elaborate on your business strategy? could you elaborate on your business strategy

Speaker 14: I'll take the MX question. In value terms, the 2026 market is expected to see slight growth year-over-year, while volume is projected to decline significantly. I'll take the MX question. i'll take the mx question In value terms, the 2026 market is expected to see slight growth year-over-year, while volume is projected to decline significantly. in value terms the 2026 market is expected to see slight growth year-over-year while volume is projected to decline significantly Despite a contracting market, the company aims to expand flagship sales to drive revenue growth and leverage its full price tier portfolio to outperform the market in both value and volume. Despite price increases for new model launches, we improved performance and key customer experiences, thereby enhancing perceived consumer value with Galaxy S26 sales already expanding year-on-year in value terms. Alongside the Galaxy S26 series, leveraging foldables, showing strong sales predecessor, and FE models, we will drive revenue growth while promoting growth across all segments based on Galaxy A57 and Galaxy A37 launched in April. The impact of rising component costs will be mitigated through premium-focused sales and upselling. Through Galaxy AI leadership and a stable supply chain, we will pursue sales expansion. However, we expect to see a decline in profitability compared to the previous year. Despite a contracting market, the company aims to expand flagship sales to drive revenue growth and leverage its full price tier portfolio to outperform the market in both value and volume. despite a contracting market the company aims to expand flagship sales to drive revenue growth and leverage its full price tier portfolio to outperform the market in both value and volume Despite price increases for new model launches, we improved performance and key customer experiences, thereby enhancing perceived consumer value with Galaxy S26 sales already expanding year-on-year in value terms. despite price increases for new model launches we improved performance and key customer experiences thereby enhancing perceived consumer value with galaxy s26 sales already expanding year-on-year in value terms Alongside the Galaxy S26 series, leveraging foldables, showing strong sales predecessor, and FE models, we will drive revenue growth while promoting growth across all segments based on Galaxy A57 and Galaxy A37 launched in April. alongside the galaxy s26 series leveraging foldables showing strong sales predecessor and fe models we will drive revenue growth while promoting growth across all segments based on galaxy a57 and galaxy a37 launched in april The impact of rising component costs will be mitigated through premium-focused sales and upselling. the impact of rising component costs will be mitigated through premium-focused sales and upselling Through Galaxy AI leadership and a stable supply chain, we will pursue sales expansion. through galaxy ai leadership and a stable supply chain we will pursue sales expansion However, we expect to see a decline in profitability compared to the previous year. however we expect to see a decline in profitability compared to the previous year

Speaker 15: First, I will address the question regarding the structural improvement of the DA business, and then the question on cooling solutions will be answered by EVP Lee Sang-Jik, Head of Sales Marketing team of the DA business. Amid intensifying global competition, tariffs, geopolitical risks, followed by shifts in external environments, the DA business is facing increasing profitability pressure. In response, we are taking a selective and focused approach across the business. We are concentrating resources on core businesses with competitive advantages to build a foundation for sustainable growth while reviewing measures to diversify our profit structure. We'll share further details with our shareholders once these plans are developed. First, I will address the question regarding the structural improvement of the DA business, and then the question on cooling solutions will be answered by EVP Lee Sang-Jik, Head of Sales Marketing team of the DA business. first i will address the question regarding the structural improvement of the da business and then the question on cooling solutions will be answered by evp lee sang-jik head of sales marketing team of the da business Amid intensifying global competition, tariffs, geopolitical risks, followed by shifts in external environments, the DA business is facing increasing profitability pressure. amid intensifying global competition tariffs geopolitical risks followed by shifts in external environments the da business is facing increasing profitability pressure In response, we are taking a selective and focused approach across the business. in response we are taking a selective and focused approach across the business We are concentrating resources on core businesses with competitive advantages to build a foundation for sustainable growth while reviewing measures to diversify our profit structure. we are concentrating resources on core businesses with competitive advantages to build a foundation for sustainable growth while reviewing measures to diversify our profit structure We'll share further details with our shareholders once these plans are developed. we'll share further details with our shareholders once these plans are developed

Speaker 12: I'll proceed with the answer. The demand for generative AI and high-performance computing is growing rapidly. Accordingly, global data centers are expected to continue expanding through 2030. I'll proceed with the answer. i'll proceed with the answer The demand for generative AI and high-performance computing is growing rapidly. the demand for generative ai and high-performance computing is growing rapidly Accordingly, global data centers are expected to continue expanding through 2030. accordingly global data centers are expected to continue expanding through 2030 The data center cooling market is projected to grow from $4.7 billion in 2024 to $16.6 billion by 2030, growing at an average annual rate of around 24%. In response, the company successfully acquired FläktGroup, a Germany HVAC specialist last year, thereby establishing a strategic foothold for entering the data center cooling market. Currently, the company is operating the business centered on FläktGroup in Europe and plans to expand into the largest global data center market, North America. We plan to establish a Korean subsidiary and factory of FläktGroup to enter the Korean market. We'll strive to secure leadership in the data center market by expanding our product portfolio and diversifying our geographical footprint. The data center cooling market is projected to grow from $4.7 billion in 2024 to $16.6 billion by 2030, growing at an average annual rate of around 24%. the data center cooling market is projected to grow from $4.7 billion in 2024 to $16.6 billion by 2030 growing at an average annual rate of around 24% In response, the company successfully acquired FläktGroup, a Germany HVAC specialist last year, thereby establishing a strategic foothold for entering the data center cooling market. in response the company successfully acquired fläktgroup a germany hvac specialist last year thereby establishing a strategic foothold for entering the data center cooling market Currently, the company is operating the business centered on FläktGroup in Europe and plans to expand into the largest global data center market, North America. currently the company is operating the business centered on fläktgroup in europe and plans to expand into the largest global data center market north america We plan to establish a Korean subsidiary and factory of FläktGroup to enter the Korean market. we plan to establish a korean subsidiary and factory of fläktgroup to enter the korean market We'll strive to secure leadership in the data center market by expanding our product portfolio and diversifying our geographical footprint. we'll strive to secure leadership in the data center market by expanding our product portfolio and diversifying our geographical footprint

Speaker 3: Thank you for the answer. We'll move on to the next question. Thank you for the answer. thank you for the answer We'll move on to the next question. we'll move on to the next question

Speaker 10: The next question will be by Mr. Taekwon from JPMorgan. Please go ahead. The next question will be by Mr. Taek won from JP Morgan. the next question will be by mr taek won from jp morgan Please go ahead. please go ahead

Speaker 18: Yes, good morning. Thank you for the opportunity to ask a question on NAND. Amid expansion of AI infrastructure, it's mostly been DRAM and HBM drawing great interest, but recently, NAND has been gaining attention as well. Your outlook on the NAND market for AI applications? Yes, good morning. yes good morning Thank you for the opportunity to ask a question on NAND. thank you for the opportunity to ask a question on nand Amid expansion of AI infrastructure, it's mostly been DRAM and HBM drawing great interest, but recently, NAND has been gaining attention as well. amid expansion of ai infrastructure it's mostly been dram and hbm drawing great interest but recently nand has been gaining attention as well Your outlook on the NAND market for AI applications? your outlook on the nand market for ai applications

Speaker 6: Let me take the question on NAND for AI. With proliferation of AI, this has led to higher data capacity and memory requirements to run large language models. To respond to these trends with high-priced HBMs and DRAM structure only, this will increase the cost and capacity burden, prompting the need to broaden the scope of use cases for storage. Recently at GTC, NVIDIA proposed an architecture such as CMX Let me take the question on NAND for AI. let me take the question on nand for ai With proliferation of AI, this has led to higher data capacity and memory requirements to run large language models. with proliferation of ai this has led to higher data capacity and memory requirements to run large language models To respond to these trends with high-priced HBMs and DRAM structure only, this will increase the cost and capacity burden, prompting the need to broaden the scope of use cases for storage. to respond to these trends with high-priced hbms and dram structure only this will increase the cost and capacity burden prompting the need to broaden the scope of use cases for storage Recently at GTC, NVIDIA proposed an architecture such as CMX recently at gtc nvidia proposed an architecture such as cmx That extends AI inference data storage beyond HBM to NAND-based storage rather than relying solely on HBM. This will likely lead to rising demand for high performance storage, such as TLC-based PCIe Gen 6 SSDs. Further, as storage use cases increase in AI systems in the future, there will likely be growing requirements to reduce data transfer latency resulting from performance differences between HBM, DRAM and storage. For large scale inference and data intensive workloads in particular, requirements for high performance, low latency solutions are becoming more critical. We are production ready for super high performance NAND storage solutions, not only Gen 5, but Gen 6 as well, offering enhanced features. For Gen 6, we have received positive feedback from major customers for early sample shipments. That extends AI inference data storage beyond HBM to NAND-based storage rather than relying solely on HBM. that extends ai inference data storage beyond hbm to nand-based storage rather than relying solely on hbm This will likely lead to rising demand for high performance storage, such as TLC-based PCIe Gen 6 SSDs. this will likely lead to rising demand for high performance storage such as tlc-based pcie gen 6 ssds Further, as storage use cases increase in AI systems in the future, there will likely be growing requirements to reduce data transfer latency resulting from performance differences between HBM, DRAM and storage. further as storage use cases increase in ai systems in the future there will likely be growing requirements to reduce data transfer latency resulting from performance differences between hbm dram and storage For large scale inference and data intensive workloads in particular, requirements for high performance, low latency solutions are becoming more critical. for large scale inference and data intensive workloads in particular requirements for high performance low latency solutions are becoming more critical We are production ready for super high performance NAND storage solutions, not only Gen 5, but Gen 6 as well, offering enhanced features. we are production ready for super high performance nand storage solutions not only gen 5 but gen 6 as well offering enhanced features For Gen 6, we have received positive feedback from major customers for early sample shipments. for gen 6 we have received positive feedback from major customers for early sample shipments We will be focusing on AI server and data center segments. We'll lock in preemptive lead in the early Gen 6 market in the second half of the year. We're focused on capturing QLC demand, which has been growing consistently while accelerating V9 migration within QLC as well. In March, we finished development of 2 Tb QLC, delivering differentiated performance and reliability features, with plans to strengthen our market response by expanding our super high capacity lineup, including the 256 TB server SSDs. Based on high-performance QLCs built on advanced nodes and the high capacity of QLC NAND, we will work in close collaboration with our major customers to proactively address and respond promptly to AI-driven NAND demand. We will be focusing on AI server and data center segments. we will be focusing on ai server and data center segments We'll lock in preemptive lead in the early Gen 6 market in the second half of the year. we'll lock in preemptive lead in the early gen 6 market in the second half of the year We're focused on capturing QLC demand, which has been growing consistently while accelerating V9 migration within QLC as well. we're focused on capturing qlc demand which has been growing consistently while accelerating v9 migration within qlc as well In March, we finished development of 2 Tb QLC, delivering differentiated performance and reliability features, with plans to strengthen our market response by expanding our super high capacity lineup, including the 256 TB server SSDs. in march we finished development of 2 tb qlc delivering differentiated performance and reliability features with plans to strengthen our market response by expanding our super high capacity lineup including the 256 tb server ssds Based on high-performance QLCs built on advanced nodes and the high capacity of QLC NAND, we will work in close collaboration with our major customers to proactively address and respond promptly to AI-driven NAND demand. based on high-performance qlcs built on advanced nodes and the high capacity of qlc nand we will work in close collaboration with our major customers to proactively address and respond promptly to ai-driven nand demand

Speaker 3: Thank you. Because of the limited time, we will accept just one final question. Thank you. thank you Because of the limited time, we will accept just one final question. because of the limited time we will accept just one final question

Speaker 10: The final question will be by Mr. Lee Jongwook from Samsung Securities. Please go ahead. The final question will be by Mr. Lee Jongwook from Samsung Securities. the final question will be by mr lee jongwook from samsung securities Please go ahead. please go ahead

Speaker 8: Yes, thank you for the opportunity to ask questions. I have a question on DDI foundry. The TCL and Sony recently established a joint venture. How will it impact the TV industry, and what's your response? The next question is on foundry. Driven by a recent increase in orders, there are growing expectations for increased investments. Could you provide an update on the expansion status of the U.S. Taylor Fab and whether the company's considering the construction of new fabs too? On the other hand, mature nodes seem to have relatively low utilization rates. Could you elaborate on your operational strategy? Yes, thank you for the opportunity to ask questions. yes thank you for the opportunity to ask questions I have a question on DDI foundry. i have a question on ddi foundry The TCL and Sony recently established a joint venture. the tcl and sony recently established a joint venture How will it impact the TV industry, and what's your response? how will it impact the tv industry and what's your response The next question is on foundry. the next question is on foundry Driven by a recent increase in orders, there are growing expectations for increased investments. driven by a recent increase in orders there are growing expectations for increased investments Could you provide an update on the expansion status of the U.S. could you provide an update on the expansion status of the u.s Taylor Fab and whether the company's considering the construction of new fabs too? taylor fab and whether the company's considering the construction of new fabs too On the other hand, mature nodes seem to have relatively low utilization rates. on the other hand mature nodes seem to have relatively low utilization rates Could you elaborate on your operational strategy? could you elaborate on your operational strategy

Speaker 19: Amid intensifying competition due to market stagnation, the TV industry continues to see shifts in the competitive landscape. Amid intensifying competition due to market stagnation, the TV industry continues to see shifts in the competitive landscape. amid intensifying competition due to market stagnation the tv industry continues to see shifts in the competitive landscape The establishment of a joint venture between TCL and Sony, combining their manufacturing capabilities and brain strengths, is a scenario that could have been expected based on past precedents. Across all segments, from premium to entry-level, the company aims to strengthen its competitiveness to proactively reshape the competitive landscape and lead the market. Starting this year, we will introduce Micro RGB and other new form factor products to strengthen differentiated premium leadership. Also, in volume zone, where competition is intense, we will launch new Mini LED to expand our response capabilities to the market. Moreover, the company plans to further advance consumers' AI experiences and further complete a differentiated device experience with competitive services so consumers can be satisfied and make purchase decisions. The establishment of a joint venture between TCL and Sony, combining their manufacturing capabilities and brain strengths, is a scenario that could have been expected based on past precedents. the establishment of a joint venture between tcl and sony combining their manufacturing capabilities and brain strengths is a scenario that could have been expected based on past precedents Across all segments, from premium to entry-level, the company aims to strengthen its competitiveness to proactively reshape the competitive landscape and lead the market. across all segments from premium to entry-level the company aims to strengthen its competitiveness to proactively reshape the competitive landscape and lead the market Starting this year, we will introduce Micro RGB and other new form factor products to strengthen differentiated premium leadership. starting this year we will introduce micro rgb and other new form factor products to strengthen differentiated premium leadership Also, in volume zone, where competition is intense, we will launch new Mini LED to expand our response capabilities to the market. also in volume zone where competition is intense we will launch new mini led to expand our response capabilities to the market Moreover, the company plans to further advance consumers' AI experiences and further complete a differentiated device experience with competitive services so consumers can be satisfied and make purchase decisions. moreover the company plans to further advance consumers' ai experiences and further complete a differentiated device experience with competitive services so consumers can be satisfied and make purchase decisions

Speaker 16: Yes, let me answer the question on foundry. For Taylor Fab, as of last week, April 23 to be exact, we had a successful ceremony with the local community for Fab 1, commemorating the move-in of the equipment and lines. As scheduled, we plan to start operations in 2026 and commence mass production in 2027 and gradually expand to nano capacity. Fab 2 is in the early review phase, in parallel with discussions with global customers on potential awards. For mature process lines, we will focus capacity on high value add specialty demand, which have higher entry barriers, while boldly closing out uncompetitive processes. That is the baseline strategy. Yes, let me answer the question on foundry. yes let me answer the question on foundry For Taylor Fab, as of last week, April 23 to be exact, we had a successful ceremony with the local community for Fab 1, commemorating the move-in of the equipment and lines. for taylor fab as of last week april 23 to be exact we had a successful ceremony with the local community for fab 1 commemorating the move-in of the equipment and lines As scheduled, we plan to start operations in 2026 and commence mass production in 2027 and gradually expand to nano capacity. as scheduled we plan to start operations in 2026 and commence mass production in 2027 and gradually expand to nano capacity Fab 2 is in the early review phase, in parallel with discussions with global customers on potential awards. fab 2 is in the early review phase in parallel with discussions with global customers on potential awards For mature process lines, we will focus capacity on high value add specialty demand, which have higher entry barriers, while boldly closing out uncompetitive processes. for mature process lines we will focus capacity on high value add specialty demand which have higher entry barriers while boldly closing out uncompetitive processes That is the baseline strategy. that is the baseline strategy More specifically, for CIS and DDI product family, where process migration is expected to continue, capacity will be transitioned to the advanced 7nm nodes, while for PMIC, DDI, CIS, which are currently in mass production on 8-in wafers, well, these lines are scheduled for phased closeout. We will optimize our product portfolio reflecting profitability, investment efficiency, to continue to improve our business fundamentals while focusing on developing new specialty products to expand our share of global customers. Thank you. More specifically, for CIS and DDI product family, where process migration is expected to continue, capacity will be transitioned to the advanced 7nm nodes, while for PMIC, DDI, CIS, which are currently in mass production on 8-in wafers, well, these lines are scheduled for phased closeout. more specifically for cis and ddi product family where process migration is expected to continue capacity will be transitioned to the advanced 7nm nodes while for pmic ddi cis which are currently in mass production on 8-in wafers well these lines are scheduled for phased closeout We will optimize our product portfolio reflecting profitability, investment efficiency, to continue to improve our business fundamentals while focusing on developing new specialty products to expand our share of global customers. we will optimize our product portfolio reflecting profitability investment efficiency to continue to improve our business fundamentals while focusing on developing new specialty products to expand our share of global customers Thank you. thank you

Speaker 3: Thank you for the answer. I'd like to thank everybody who shared their valuable opinion. That completes our conference call for this quarter. We wish all of you and those close to you stay strong and in good health. We thank everyone for your participation today, and we look forward to speaking with all of you soon. Thank you. Thank you for the answer. thank you for the answer I'd like to thank everybody who shared their valuable opinion. i'd like to thank everybody who shared their valuable opinion That completes our conference call for this quarter. that completes our conference call for this quarter We wish all of you and those close to you stay strong and in good health. we wish all of you and those close to you stay strong and in good health We thank everyone for your participation today, and we look forward to speaking with all of you soon. we thank everyone for your participation today and we look forward to speaking with all of you soon Thank you. thank you