Good morning and good evening. Thank you all for joining this conference call. And now we will begin the conference on our fiscal year 2021, Third Quarter Earnings by Samsung Electronics. This conference will start with a presentation followed by a dividend of Q and A session. . Now we share common stock presentation on the fiscal year 2021, Third Quarter Earnings reserves by Samsung Electronics.

Welcome everyone. This is Ben Suh from Investor Relations. Thank you for joining our Third Quarter 2021 earnings call. For additional details regarding our quarterly results, please refer to our earnings presentation, which is available on our IR website at www. Samsung. com/Global/IR. On the call with me today representing each of the business units are; EVP Han Jin Man representing Memory, VP Choi Young Kwon for system LSI SVP Han Shawn Loon, for Foundry, SVP Choi Kwon Young for Samsung Display. VP Kim Dongwon for IT and Mobile. And VP Song Won-Jun for Visual display. In addition, VP from Investor Relations is present on this call as well. I would like to remind you that some of the statements we will be making today are forward-looking based on the environment as we currently see it. And all such statements are subject to certain risks and uncertainties that may cause our actual results to be materially different from those expressed in today's discussion. Before we present our quarterly results, let me first address the third quarter dividend. Today, the Board of Directors approved a quarterly dividend of 361.11 per share for both common and preferred stock. The total payout for the third quarter is the same as it was for the first second quarters, which is W2.451 trillion or 0.5 of the 2021 annual totals of W9.8 trillion in accordance with the shareholder return policy we announced in January. The dividend will be paid in mid-November. Now, I would like to present the results for the third quarter. Despite numerous macro uncertainties in the third quarter, such as global supply chain issues and persistent effects of COVID-19, by actively leveraging our leading technology, outstanding product competitiveness, and differentiated global SCM capabilities. We once again delivered record results. Total revenue for the quarter was W74 trillion, up 16.2% sequentially. With all of our major businesses seeing revenue growth, highlighted by solid sales of foldables and other smartphones, as well as increases in both memory shipments and OLED sales. We have set new records for total revenue in a respective quarter for 3 quarters in a row, and we expect that annual revenue will be well above the previous all-time mark set in 2018. Compared to last year's results, which was our previous all-time high for any quarter, revenue grew 10.5% driven mainly by memory and OLED. Gross profit increased by W4.51 trillion sequentially to W31.11 trillion on the back of cost reductions in memory, mainly from advanced process migrations. The result saw a slight rise in gross margin. SG &A expenses came in at W15.31 trillion of W1.21 trillion quarter-on-quarter, primarily due to an increase in advertising and promotional costs. The percentage of sales, however, they declined by 1.4 percentage points as sales significantly outgrew the SG &A increase. Operating profit increased by W3.31 trillion quarter-on-quarter to W15.8 trillion, our second highest total ever, as a component business improved significantly backed by continued favorable conditions in the memory market and robust sales in the foundry and DP businesses. Our finished product businesses also delivered solid results. Operating margin improved by 1.6% points. On a year-on-year basis, both operating profit and operating margin increased substantially, propelled by our component businesses. I will now briefly review the results of each business unit. For memory, results improved significantly as we actively addressed customer demand, which led to record quarterly bid shipments, as well as the second highest ever revenue for DRAM. Also, costs were reduced by expanding sales of 15-nanometer DRAM and a 128 V-NAND. In Foundry, results improved backed by strong demand from our global customers. In display, mobile panel earnings improved sequentially on effects of product launches by major smartphone customers. However, the large panel business continued to post losses, mainly due to declines in LCD ESP. For the mobile business, results improved sequentially thanks to the expanded sales of our new foldable models and low-to-mid range smartphones, along with sales growth of products in the device ecosystem lineup. In network, we expanded our business overseas, including in North America, in Japan, as we continue to address 5G network demand in the domestic market as well. In CE division, despite a strong expansion of our premium TV and bespoke lineups, profitability declined due to rising material and logistics costs. Regarding currency effects, strengths in most major currencies against the Korean Won, especially the U.S. dollar, had a positive effect on the component business in particular, with a combined impact of approximately W800 billion on our operating profit compared to the previous quarter. Next, I would like to share our business outlook. In the fourth quarter, we will focus on actively meeting demand for memory and systems semiconductors, although, component shortages at some customers may have an effect. We will also maintain solid profitability in our finished product businesses by strengthening our leadership and lineups in the premium segment. For memory, there may be increased demand risks due to longer-than-expected components of high issues. But we will actively address strong fundamental demand for servers resulting from increased investments by major IT companies. For system semiconductors. We expect to increase supply of SOC and related products for mobile phones slated for launch in 2022. And for Foundry, we expect results to improve considerably as we aggressively address demand for advanced processes. For display, we expect the mobile panel business to achieve solid results backed by steady demand for smartphones and expanded sales in new applications. The large panel business, we are on track to begin mass production of QD display as planned. We expect losses to continue due to price declines in LCD panels. The mobile business we aim to secure robust profitability by expanding sales of premium products such as foldables, actively targeting replacement demand with expanded sales of low to mid-range 5G smartphones, and increasing sales of tablets and wearables. The CE division. We will endeavor to expand sales with a focus on promotion of premium products made seasonally strong year-end demand. Now, let's move on to our outlook for 2022. Amid anticipation that Global IT demand will recover, the component business will focus on expanding the advanced node portion of production and enhancing our leadership in next-generation products and technology. In the finished product business, we'll prioritize achieving solid profitability by continuing to strengthen our leadership in line ups in the premium segment. However, there are likely to be uncertainties related to components supply disruptions, and living with COVID-19 transition, as more people are vaccinated. For the memory business we will strive to boost cost competitiveness with volume production of 14 -nanometer DRAM. and seventh-generation V-NAND and also enhanced market leadership by expanding mass production of next-generation products based on our industry-leading EUV technology. System LSI will expand its business by reinforcing its lineup of SOC s, including for models in the volume zone. And we expect Foundry to continue to deliver a strong improvement in results by addressing growing customer demand through active investments and by technology leadership, such as bringing to production the industry's first 3-nanometer gate-all-around process. For Display, the mobile panel business, we expect OLED portion of the market to increase with the rising penetration of 5-key amid a recovery of smartphone demand. And we will closely monitor the supply of some components, such DDIs. Large panel business will strive to secure a position in the premium TV segment is QD display. The mobile business will pursue sales growth and profitability improvements by strengthening its presence in the premium market, with expanded sales of our flagship lineup, including our increasingly popular foldables, as well an enhanced lineup of 5G smartphones for the mass market. At the same time, we'll keep fostering the tablet and wearable businesses, while also continue to develop industry-leading technologies. For network, we will continue to enhance our hardware with custom 5G chips and strengthen software-based virtualization solutions for future growth. And we will also pursue continued expansion overseas. Per se, overall demand is likely to soften as the world transitions to living with COVID-19. But we will focus on proactively capturing growing demand from premium TVs and increasing global sales of bespoke products. Let me now move on to capital expenditures. Capex in the third quarter was W10.21 trillion, with W9.11 trillion invested in semiconductor, and W0.71 trillion in display. The cumulative total as of the end of the Third Quarter is W33.51 trillion with W30 trillion in semiconductor and W2.11 trillion in display. Looking at each business up to the end of the Third Quarter, memory concentrated, its investments on expected '22 demand growth and readiness for next-gen products such as DDR5, with capacity expansions and process migrations in our factory in ComTech in Xi'an. And it also invested in longer-term readiness, such as infrastructure and P3. For Foundry investments focused on capacity expansion for advanced UV notes in Comtech. Display investments centered on accelerating the transition to new technology, to expanding capacity for QD display, as well as mobile modules. We're maintaining our policy to invest flexibly in line with market conditions and given growing uncertainties, including those over component supply, we're carefully reviewing fourth quarter CapEx. And as such, we will not be providing a forecast for annual CapEx for 2021 at this earnings call. Finally, I would like to share some of our key activities and achievements in sustainability management. On October 20th, the leading brand consultant, Interbrand, announced this list of the 100 Best Global Brands, and our Company ranked fifth for the second consecutive year. Our brand was valued at $74.6 billion, a 20% increase compared to last year. We ranked the highest and saw the biggest growth among non-U.S. companies, and we also far surpassed the list average growth rate. Our reorganization to a customer centric management system, sustainability activities, and releases of innovative products were highly valued as we reaffirmed our position as a global Top 5 brands. On October 12th, Forbes released its annual list of the world's best employers and our Company took the top position for a second consecutive year. We believe this achievement recognizes our numerous positives including the Company's prioritization of employee's health and safety in a COVID-19 response, outstanding performance, strengthened DSG activities, healthy corporate culture, and professional development opportunities. In August, we unveiled Galaxy for the planet. The Mobile business' sustainability vision for the Galaxy ecosystem. The Vision outlines instead of initial goals that we aim to reach by 2025, including incorporating recycled materials into all of our new Galaxy products, and also achieving 0 waste to landfill in our mobile worksites around the world. Galaxy for Planet is a continuation of our efforts to create a sustainable future across the lifespan of our products, from production to usage, to disposal. As well as throughout our overall business operations to tackle climate change. Moreover, we aim to spearhead to transition to a circular economy through the reuse and recycling of resources. In August of 2021, the Ministry of Environment gave us incorporating company’s final approval for a new process to be defined as recycling technology under domestic law. This new technology involves the reuse of wastewater sludge generated during the semiconductor manufacturing to produce supplementary material in the steel-making process. Cooperative efforts between Samsung, Hyundai Steel, and Pos Ceramics began in August 2020 with the signing of a technology agreement and resulted in the successful production of steel in April 2021, Hyundai Steel's Dangjin site, by using 30 tons of fluorite alternative products. This new technology was approved after it was reviewed by the National Institute of Environmental Research. And because the technology enables replacing a mineral, it cannot be sourced domestically. It is recognized as the most exemplary case of ESG commitment towards resource circulation. since the Ministry of Environment established its Recycling Environmental Assessment System in 2016. In September, Samsung received product carbon footprint labels certification for four of our new flagship system LSI products. Joining previously certified memory chips from the UK's carbon trust. We now have certifications for 14 semiconductor products. Semiconductor manufacturing has a particularly challenging road to Certification due to its numerous complex processes and need for large quantities of various types of raw materials. However, we pass the strict international assessment standards. Backed by results of our various efforts to reduce carbon emissions. We will continue to strive to minimize carbon emissions with initiatives such as reducing the amount of gas required in our semiconductor manufacturing process, enhancing the efficiency of greenhouse gas treatment equipment, and applying solutions to reduce energy consumption throughout the manufacturing process. I will now turn the Conference Call over to gentlemen from each business unit to present Third Quarter performances and outlooks for their corresponding business segments. We will start with the memory business. Thank you.

Good morning. This is Han Jin Man from the Memory Global sales and marketing office. Third Quarter, the prices reach remained favorable, in demand centering on software stayed strong. We improved our performance significantly, compared to the previous quarter by actively addressing customer demand and reducing costs, by expanding the portion of production using cutting-edge processes. In the case of DRAM for solar, demand continued to grow and as adoption of a new high core CPU that was released in the first half of the year, expanded. Demand from set sales stays solid. The content per box increase. For mobile, despite effects on set bills related to supply issues of some components such as application processors, a demand recovery has become more visible thanks to releases of new products by major manufacturers at the base effect of the second quarter, which was affected by somewhat weak demand. For PCs, demand from end-users has also been robust due to changes such as workplaces, opting for hybrid work patterns alongside strong seasonal effects. However, due growth has been limited by supply constraints and logistics issues for some components. In graphics, memory demand expanded on a rise in demand for Grafix cars due to a revitalization of crypto mining. And the continuing strong demand from game console, which is in peak-season. Despite a resurgence of COVID-19 in major production countries and component supply issues that led to disruptions in set builds along with weakening demand from customer PCs, we actively responded to demand by flexibly operating our plan mix. We set a new record for quarterly DRAM shipments and in particular by significant growth in server sales. And we met our original guidance, not to mention the enhancement we made to cost competitiveness by increasing the 15 nano portion of production. Next, I will talk about the end-market. For some SSDs, along with increased investments by major several customers, enterprise demand recovered. And based on the high capacity trends, spurred by new CPU adoptions, demand was strong from data centers for high capacity products. In the case of mobile, demand has been solid due to the launch of new models and increases in content per box by major customers as we enter strong seasonality. For client SSDs and demand was strong due to our resumption of office work. But memory demand was weak, due to a disruption in that field caused by component supply issues, and inventory adjustments by some customers. In response to growing demand for sub SSDs, we expanded sales of high capacity products of 8 terabyte and above. And increased our production portion of 128-layer products, which led to another quarter of growth. Next, let me tell you about our fourth quarter outlook. In the case of DRAM, we expect fundamental demand for Silva to stray strong thanks to the new CPU adoption and expansion of data center investments. However, we need to keep monitoring impacts of the longer-than-expected component supply issues on set build. For mobile manufacturer is likely to continue to launch new 5G models for there are chances that growth of purchasing demand could be limited due to inventory adjustment of some customers, along with impacts of supply chain issues, for PCs, we expect said Bill growth to stay similar compared to the last quarter. Given the ongoing uncertainties over the supply of some components, the impacts a weakening demand from consumer tree. We will actively address fundamental demand from major server customers and aim for full-fledged sales to PCs, adopting new CPU, and lead the formation of a market ecosystem that is based on mass production of DDR5 for high-end gaming. In addition, we will continue to strengthen our cost competitiveness by maximizing the portion of production using cutting-edge technologies such as 50 nano plus. In case of NAND or Server SSD as business activities normalized alongside increasing vaccination rates and continued growth in enterprise IT budgets, we expect the high capacity trends for Server SSDs to continue and demand to be robust. However, we should keep an eye on the components of lights. For mobile, demand is likely to be solid based on 5G market expansions and high capacity trends is to spend up new models. We also need to monitor impacts of supply chain disruptions on the In the PC markets, more and more companies are expected to resume office work in the second half, so we expect replacement demand for enterprise PCs to pick up. The demand for memory purchases may slow slightly due to the impact of inventory adjustments at some customers. We will secure a stable supply chain based on our strong SCM management system and maintain our differentiation of strategy by continuously expanding our portion of high-value products, while actively responding to overall server demand, and also expanding our lineup of mobile products. Now let's move on to the outlook for next year. First, considering macro uncertainties, adjust the timing of mitigating component supply issues, influences of living with COVID policies amid increasing vaccination rates and raw material pricing issues, we ask for your understanding in the -- it is difficult to provide specific prospect or guidance. Therefore, I'd like to provide a rough outline of the market based on our present forecasts. Although the mentioned uncertainties may impact demand in the memory market next year, the pandemic led -- global consumers to experience more online-based social activities and lifestyle which has been called a new normal. We think most of the demand s in the new normal will persist as a part of our lives. For server and PCs and those whole shifts, we expect fundamental demand to be robust, with the trend towards high capacity, following the expanding new CPU adoption and continued growth of enterprise IT investment. For mobile, we expect shipment growth in high capacity trends to continue with the increase in low to mid-priced 5G models, and also as manufacturers launched products with new form factors. However, since almost all applications are feeling effects of the longer than expected component supply issue. The timing of resolving such issues is the key to increasing visibility of fundamental demand in each application. Furthermore, we expect demand for consumer and segment also to be robust. As the Beijing Winter Olympics have potential to support increased penetration of premium TVs and the move to high capacity. While demand is likely to be strong for PGA in high end PCs, for AI accelerators in the HB market. As we continue to expand the portion 15-nanometer DRAM and 120 layers Venal based on preemptive product mix management, it is aligned with market situation. We will gradually address the server markets where demand is likely to grow, thanks to new adoptions of DDR5 with rising penetration of a high core CPU, and we will also preemptively secure demand for NAND solution products. Moreover, while expanding mass production of 14-nanometer DRAM - nano DRAM in 176 layers of demand, we will continue to strengthen our market competitiveness based on stable cost reductions through next-generation processes and products. Thank you.

Good morning. This is A - Harry Cho from the System LSI In the third quarter, earnings improved due to increased demand for SOCs and DDIs as the major mobile customers launch new products. In particular, the strong demand of DDIs amid continued the shared supply, contributed greatly to earnings improvements via efficient execution of pricing strategies. We affirmed our leadership in mobile image sensor market by introducing ISO sell ATP one, the industry's produced 200-megapixel energy sensor and 50-megapixel license GEN5 the industry's smallest dual-pixel image sensor, featuring faster and more accurate auto focus. Now, let me talk about the outlook of fourth quarter. In fourth quarter we expect earnings to continue to increase due to our higher mass production of mobile associated related products for launches of new 5G smartphone product in 2022 by major smartphone companies. The Company aims to achieve even higher double-digit annual sales growth by maximizing its chip supply capabilities via strengthening Foundry cooperation and flexibly adjusting product mix. In 2022, we plan to improve our performance through meaningful gains in the SoC business, such as by expanding supply of models, for the is always put a new latest model that feature enhanced CPU performance. Thank you.

Good morning. This is A - Shawn Han from the Foundry beginning. In the third quarter, we improved our earning sequentially and set a new record high for third quarter as we significantly increased supply of key products such as advanced process SoCs and GPU s to our global customers with the expansion of mass production at comtech as Fiber Line. In addition, we secured a stable sales base by winning new orders for advanced processes from global customers and we continue our technological leadership by completing the development of the first-generation of GAA, gate auto rolling process, design infrastructure for OLED mass production of 3-nano in 2022. In the fourth quarter, the demand for advanced and mature processes are likely to stay strong. And we expect to set new records for reserves by maximizing supply with revenue growing by more than 10% On top of that, the Company plans to continue its technological leadership by completing design of first-generation GAA, 3-nano products and developing second-generation GAA process, design infrastructure for 3-nano. In the Foundry market in 2022, we expect supply to remain tight due to increase silicon consumption for 5G mobile, solate GPU center demand for HPC, strong CPU demand due to intensifying competition, and solid demand for 8-inch legacy products and consumer applications. We aim to continue to grow by actively investing to expand supply for advanced processes of 5 NANO and below. And we also plan to pursue correlative growth by expanding global customers sales, and no more rising prices for sustainable future investments. Thank you.

Good morning. I'm Choi Kwon Young from the Business Planning team at Samsung Display. In the third quarter, the Mobile Display business recorded a sequential growth in sales and profit and the smartphone sales remained brisk, owing to launches of new flagship phones by major customers. In particular, our profitability improved with the sales of expansion of high-end products, such as affordable points, leading us to achieve our highest ever third quarter profit. Meanwhile, the larger display business has been affected by dependent price declines. And it's a loss increased to some extent, quarter-on-quarter. However, the loss narrowed year-on-year as restarted, facing out sales from this year, in line with the tradition of production lines to be displayed. Next, let me share our outlook for the fourth quarter. For the Mobile Display business, we expect the demand for beta customers, new products to stay solid. And at the same time, series of laptops and gaming devices will co-emit effects of peak seasonality. As a result, we expect the Mobile Business -- Display Business to achieve solid revenue and profits in the fourth quarter. For the larger display business, given our plan to start mass production and supply of QD products, we will kind of all our efforts to ensure the successful debut of our HQ display. Finally, I will share -- I'll look for the display market in display business, the core strategies for 2022. For the Mobile Display business. we expect the environment for the OLED business to remain favorable, fueled by a recovery in smartphones demand. Thanks to an accelerating return to daily lives and wider availability of 5G networks. Moreover, we expect sales of already penance in applications other than smartphones, including laptops and tablets, and just start in earnest.

In. 2022. We at Samsung Display will do our best to capitalize on such trends as new growth engines. However, there are still concerns stemming from a supply crunch of components such as DDIs. So, we'll totally monitor supply chain and take preemptive measures against the potential risks in order to provide products to our customers as scheduled. For the larger display business, we'll complete the reorganization of our business from HD to QD display as planned, and focus on securing leadership in the premium TVs segments with QD display. Thank you for listening.

Good morning. This is Sung-Koo Kim from the mobile communications business. I would like to discuss the IM divisions Q3 results, and the outlook for Q4 in 2022. In Q3, 2021, market demand is expected to have increased quarter-on-quarter due to elevating influences of COVID-19. Our mobile business, revenue increased compared to the previous quarter despite supply constraints in the overall industry. have increased quarter-on-quarter, led by strong sales of the Fold3 and the Flip3, which are being very well received in the market with their distinct experiences, including sophisticated designs on the display camera and resistance, to name a few. As of our enhanced mass-market line up also contributed to the performance. In addition, device ecosystem products such as wearables have contributed to strong growth. We maintained all solid double-digit operating profit margin. Why? Increased marketing investments aimed at mainstreaming the foldable category has some effect on profitability. For the network business, we have enhanced our foundation for growth in 5G by expanding our business overseas, including in North America and Japan, and by actively responding to domestic demand for 5G network deployments. Now let me move on to the Q4 outlook. These tech market demand to increase quarter-on-quarter as a result of original year-end seasonality although uncertainties over component supply constraints are likely to linger. In our mobile business to continue to strive to further expense premium smartphone sales with BeSpoke edition to focus customer's aspirations on our affordable C Series, while also maintaining sales momentum of GalaxyS series. At same time, we will collectively target replacement demand and the growing five-year markets with our competitive 5G lineup for the mass market. In addition, we were increased series of device ecosystem system products, including wearables, PCs by promoting easier, more convenient, connected experience. By doing so, we expect to maintain double-digit operating margin. For the Networks Business, where you're push for business grows in global markets like North America and Southwest Asia. Now let me share our outlook for the next year. Although risk of continuing COVID-19 is likely to proceed, we expect the smartphone market to continue its growth and the market for the wearable devices, which provide consumers with new experiences in their values to maintain gross in the double-digits. For the mobile business, we will strive to strengthen our leadership in the premium market by furthering and seeing product attractiveness and differentiate the experiences of our flagship products. As for our full Double Z-Series, we'll continue to further the distinct competitive advantage based on our unmatched innovative technologies and outstanding user experiences. And also provide Samsung 's unique differentiation, such as BeSpoke addition. We will drive mainstreaming of the foldable category and establish it as a very important category within premium market. Regarding our mass market smartphones, we will continue to extend convenient and unique premium experiences and also actively address diverse regional demand. Rate of team might products such as mass-market 5G smartphones. Furthermore, we will strive to maximize customer retention and immense customer trust and aspiration on our products to solidify our position as a premium brand by providing Samsung 's unique value with consistent and convenient connected experiences, of course, our device ecosystem. With these efforts, we, will try to achieve solid performance growth in 2022. Al so for our foundation for growth in a longer term, we will persistently work on not only developing advanced technologies, but also collaborating openly and inclusively with global leading companies. For the network business, we will continue to address expansion of the domestic 5G network and continue to seek opportunities to grow in overseas markets, including North America, Japan, Southwest Asia, and Europe. In addition, we will proactively prepare for the future by strengthening product competitiveness based on our own 5G chips and further advancing 5G virtualization solutions. Thank you.

Good morning. I'm Song Won-Jun from Sales and Marketing Team of Visual Display. I'd like to review the market conditions and our performance of business in the third quarter of 2021. In Q3, ahead of peak seasonality, the TV market demand increased quarter-on-quarter, but decreased compared to last year when affected by strong pent-up demand. With a focus of mixed improvements, Samsung expanded sales of premium products such as Neo QLED clearly and Lifestyle products. In particularly, newly launched Neo QLED has received good reviews from major magazines and consumers and we are seeing strong sales amid the related such positive responses. Also, lifestyle products are being recognized for data differentiated value in the market, which have also helped boost sales. Against this backdrop, Samsung focused on profitability by actively improving product mix and cost efficiency. However, because of the increase in the cost due to material prices and global largest issues, profit decreased both quarter-and-quarter and year-and-year. For digital appliances in our third quarter, market demand increased slightly year-on-year, thanks to the expansion of demand for new home appliances, led by our changes in consumer lifestyle. However, market growth slowed down quarter-on-quarter as effects of pent-up demand, decline with increasing vaccine supply. External environment also deteriorated because material prices and logistics cost rates. We responded to various consumers’ needs by expanding this lineup and launching in it even more countries, while also introducing new home appliances. Through this, we improved sales both quarter-on-quarter and year-on-year, despite the slowdown of market growth. Even so, profitability inched down due to the impacts of low material price and logistics costs. Now, let us look at the outlook for fourth quarter and for 2022. We expect demand in Q4 to rise quarter-on-quarter, thanks to the effects of strong end-year seasonality. However, reduced effects of pent-up demand, along with an increase in out-of-home activities, are likely to close TV demand to fall year-on-year. The market outlook for Q4 is very different from what it was pre COVID-19. While sales in offline stores are expanding again, with the move to living with COVID policy, meaning advanced monitors. Demand in a year-and-year, Shopping, seasonality -- it's shopping season, maybe dispersed throughout the quarter due to our reluctance by customers to gather in ours numbers and strengthening online and non-contact sales trend is expected to continue. Based on close cooperation with channel partners. We are establishing our sales strategy that can preemptively respond to such changes in the market. We will optimize promotion periods to align with Jesper, demand and offline stores and will induce of selling with premium focused promotion, thereby expanding sales of strategy products such as QLED and the lifestyle. Furthermore, by improving Samsung online sales infrastructure, we provide consumers with a more convenient and easier to use online purchase platform and extend on contact sales opportunities through online promotions teller to each country. Moreover, based on Samsung's global capabilities, we'll minimize the largest risks and focused on securing profitability through optimized operation and efficient cost management. For digital appliances in the fourth quarter, we expect increase in demand for home appliances to slow as more reason translated to our living with COVID policy, which has continued from the third quarter. Also, near material prices and logistics costs are likely to continue to run. We plan to accelerate the global expansion of Bespoke and continue its growth by blustering year-end promotions, and online marketing. In addition, we will optimize supply efficiency by region by responding to risk in the external environment, and pursue profitability improvements by expanding sales with the focus on premium products. Regarding demand for the TV market in 2022, the growth trend, which continue until the end of the first half over 2021 is expected to reverse. In social and economic uncertainties related to COVID-19 as well as the supply in large issues are likely to increase continually. However, we expect demand to premium products such as Super X-screen TVs, and OLED -- QLED products to keep growing in 2020. We will focus on improving our mix of high value-added products by targeting the rising demand via technology call innovation in premium products, including Neo QLED, 8-K and Micro LED. Furthermore, we will continue to add to grow momentum by creating sales opportunities with a differentiated lifestyle product. The active address consumers grow interest in diverse lifestyle value that emerged during COVID-19. In our digital appliances market in 2022, the market is expected to continue to slowdown in growth, following the second half of 2021. As consumer spend less time at home. However, we expected market demand stays as a similar level of 2021. Because of an increase in penetration rates of new home appliances. We will solidify brand planning’s of providing customized products that meet the needs of consumers by introducing a new lineup and expecting global sales of our differentiated products. In addition, we will enhance our supply competitiveness by improving productivity and strengthening our SCM competitiveness, so that we can respond the flexible to external changes such as an increase in logistics costs. Based on this, we will continue to grow and lead the home appliance industry. Thank you.

Thank you. That sums up the third quarter results presentation. Before we move on to the Q&A session, I would like to share several data points in key business areas. For DRAM in the third quarter, our bit growth was a percentage in the low single-digits and ASP increased by a high-single-digit percentage. For the fourth quarter, we expect market bit growth to be flat, and ours to be around the market level. For the full year, we maintain our forecast of market growth in the mid-20% range, and that our bit growth should be similar. For NAND, in the third quarter, our bit gross was a mid-single-digit, and ASP increased by around 10%. For the fourth quarter, we expect market bit growth of a mid-single-digit percentage and our bit growth should be slightly higher than market. For 2021 as a whole, we still expect market bit growth percentage to be in the low 40s. But now believe our bit gross was slightly outperformed the market. In the Display Panel Business in the third quarter, our OLED portion of sales was in the mid-90% range. In OLED sales volume growth was a percentage in the low 20s. The mobile business in the third quarter, sales volume was approximately 72 million units for handsets and 7 million units for tablets. The blended ASP, including tablets, was around $250. In the smartphone portion of handset shipments was in the mid-90% range. For fourth quarter on a sequential basis, we predicted handset shipments will decline and the tablet shipments in blended ASP will increase. The smartphone portion of handset shipments is likely to be in the mid to high 90% range. In the TV business sales volume in the third quarter increased by a mid-single-digit percentage. For the fourth quarter, we expect gross to be in the low 20% range for the full year. We forecast that sales volume will decline in the low 10% range. With that, I will now move on to the Q&A session. First, we will start by taking questions from the conference call.

Now Q&A session will begin. The first question will be presented by Soonhak Lee from Hanwha Investment & Securities. Please go ahead with your question.

premium protective.

I have 2 questions. So, first question is about your CapEx. I think YTD, third quarter your CapEx this year has increase versus last year. Can you give us a detailed breakdown of that CapEx by each of the business divisions? You said that you're not able to provide a full-year guidance on your CapEx, but still, can you give us some color as to do your CapEx this year and what you expect to see next year. Second question is about the display business. First of all, the LCD is going through a down cycle, ASPs are falling. Would that mean that you may actually stopped your LCD production faster than were originally scheduled? And if so, when do you plan to stop your LCD production? Fourth quarter will also be the start of your QD display mass production. Can you give us some updates on how that is going?

Yes, to answer your first question, our YTD third quarter CapEx is currently at 33.5 trillion won. This is mainly attributed to the increase in semiconductor related investments, both our memory as well as foundry investments have increased versus last year.

To give us some details of the investments, in the case of memory, our investment or capex policy remains the same and that we do focus on being able to respond to mid to long-term demand. But also, in terms of executing equipment investments to make that flexible depending on the market situation. And so yes, we will continue to maintain flexibility as we execute our investments during the fourth quarter. Given the remaining uncertainties, we're not able to provide you a full-year guidance on our capex. But overall, when we look at the investments for this year, there are several areas where are these investments are being used. There are definitely investments that we're making in order to increase our capacity to respond to the expected increase in demand next year, but also some of the investments are being made in order to offset some of the decrease in supply that happens as we move up to more advanced nodes. And also, the die size penalty that happens with next-generation products such as CDR5. At the same time, another piece of that investment is being made to continue to maintain our technology competitiveness and as investments for the future in order to, for example, make successful process migrations to gain greater cost competitiveness, as well as, for example, the infrastructure investments we're making in P3 in order to have the capabilities to capture demand in the future. Some of the detail investments that we made on the foundry side includes investments necessary to increase the production scale of our new S5 Line, given the fact that we do see increased demand, especially for the advanced nodes. Also, we're making future investments to maintain our technology leadership. Also, the equipment investments to respond to future demand, as well as some preemptive preparations of essential clean room facilities. You've also asked for some color for next year, but we're still actually working on our business plan for next year, so we are not able to provide you with greater details about next CapEx expectations.

To answer your first question, yes, we are continuing to produce LCD panels. That is at the request of our customers. We are planning to at least continue our production until end of this year. The question is whether to continue production even next year. Currently we are reviewing that and we will actually exercise quite a lot of flexibility as we make that decision, considering both the market situation, whereas you mentioned the LCD panels ASPs is rapidly falling but also the demand from our customers.

As you mentioned also, we are on track to mass production and shipment of our QD display this fourth quarter. We are on track to -- with our original schedules, and according to this, TVs featuring QD displays maybe unveiled in the market next year. Our QD display have many advantages versus existing displays, such as in terms of color reproduction, viewing angle, and brightness, and therefore, we're quite confident that it would set the new standard, especially in the premium TV markets. Our current focus is on the successful unveiling of the QD display in the market. And also, to make this the start of a smooth transition of our large size business towards the QD display.

The next question will be presented by Peter Lee from Citigroup. Please go ahead with your question.

My first question is about your NAND. Your NAND shipments was slightly below your original guidance. Can you give us some details of why? The second question is about the foldable. The successful launch of Galaxy Z Fold 3 and Z Flip 3 has shown that the growth potential of the foldable form factors. In that context, can you give us some your guidance for this year as well as next year of your foldable phone sales?

To answer your first question, yes, as you mentioned, our third quarter manned shipments came in slightly lower than the guidance that we had provided last quarter, which explained by several reasons. Number 1, on the client SSD side, while the PC demand actually remained solid throughout third quarter, there were some supply chain issues with other components that disrupted set build production. Also, some customers went through inventory adjustments. And so, there was a soft demand for client SSDs, especially around the low-end PCs. Also, on the mobile side, even though due to seasonality, the mobile demand itself was also solid. There were some API related component supply issues in the mid end levels. And so, there were also some impact due to delay of our MCP supply. Well, actually while this was happening in the market. We had actually ended the second quarter, came into the third quarter with extremely low inventories. And so, we thought that the best way to manage the situation was to focus during third quarter on increasing -- building in flexibility for the future by using third quarter to normalize our inventory levels, especially around the high-end solution products such as servers and e-storage.

As you know, our focused strategy for our foldable has been to enhance user experience and also to lead the market in a foldables. And based on the strategy by introducing eye-catching designs and also optimizing the foldable usage experience, we have been able to bring up a very positive response from the customers. We think that we have succeeded in actually starting and leading this mainstreaming of foldables in the markets. On top of that, with BeSpoke edition, the zip, Flip3 s innovative user experience is combined with a wide range of customizing and personalization options, and this has generated quite a strong response from the younger customer segments. For example, generation MD.

You've asked about our sales this year and next year, this year our Foldable sales is expected to increase by several times versus what we had last year. And we expect to continue significant growth of our Foldable sales even next year. Also, while we continue to focus on further enhancing our technology and user experience, we will also work on creating stronger partnerships and ecosystem so that the foldable becomes a very important category within the flagship.

The next question will be presented by Ricky So from HSBC. Please go ahead with your question.

My first question is about the memory. It seems that the prices are falling faster than what the market is expecting. Can you share with us, therefore, the short-term market outlook for DRAM and NAND, as well as what you expect to see next year in terms of demand? There are some upside potentials next year as well as downside risks. Can you give us some details of how you perceive these upsides and downside for next year? Second question is about the network business. During the presentation, you mentioned some of the achievements you're making in North America and Japanese network markets. I'm wondering where -- was there any updates on Indian market where there are LTE and 5G auctions going on or being discussed. Can you share us -- share with us some details about what you are planning or doing in India?

To answer your question, I agree that there is quite a lot of uncertainty, especially around various macro issues, such as how the back-to-normal will pan out. Also, the component and supply chain issues, and the raw material price is increasing. However, even though there are these headwinds factors, we also need to think about some of the upside potentials that can come next year, as we prepare for next year's business. Currently, one of the key issues is the supply chain, the component shortage issue, which has disrupted our various applications in set fields. But when we look at the current component shortage versus supply-chain issues, we think that it's not an issue of just absolute shortage of production output of all components, but rather more of a mismatch of the supply chain. And so, compared to our case where the problem is caused by an absolute shortage of capacity, things could actually start to improve earlier than expected, even though it's difficult to say definitively, we're carefully hoping that perhaps the situation may start to somewhat ease from second half of next year. Another factor that may impact demand would be how the post COVID-19 or with COVID situation will unfold in various countries. With more vaccinations happening, many countries are now moving on to what could be referred to as back to normal or living with COVID-19 policies. There's what probably increase the amount of activities that people do face-to-face or in-person. But probably we will not be able to go back to the way we did business or lived before the pandemic, because during the past 2 years, our consumers have experienced the convenience and efficiency that comes with our digital-based new normal society and lifestyle. And I think that even after the pandemic ends, this will be part of our everyday lives and actually move up to the next level of digital transformation. So, given this social trend and also increased investments in new CPUS and major data centers, it is expected that the fundamental demand, especially around servers, will continue to remain solid. You have mentioned the software pricing and there are definitely various uncertainties in the market. And when we talk to customers, we do notice that there is a gap between how we expect the market to unfold versus what the customers are expecting, which also makes our pricing negotiations that much more difficult than before. But given the fact that the memory industry cycle is actually getting a weaker in terms of magnitude and also shorter in terms of cycle duration. And also, the fact that we're currently running at relatively low inventory levels. We do not think that the current price situation calls for concern.

To answer your question about our network business, we have definitely been working in India. The Indian market just went through an auction of 4G frequencies -- seven bands of 4G frequencies were auctioned off during the first half of this year. And so, in India, in order to increase the 4G network capacity, there are new projects coming up. And so, we are creating business opportunities by proposing new base station equipment and network optimization solutions to Indian carriers. We also have in mind the 5G opportunities in India. So, leveraging the 4G large scale commercial networks to help track record that we would have. We are aiming to also expand this to continuous expansion of our 5G business in India. With that in mind, we are building a very strong partnerships with local carriers. The Indian 5G frequency option is scheduled for first half of next year. And so, once that is done, there will be a specific demand for 5G networks. And so currently we are doing the groundwork of our 5G business so that, we would be able to supply the necessary products in a timely manner.

Our next question will be presented by SK Kim from markets. Please go ahead with your question. S. K. Kim:

My first question is about the recent media reports that the Company is planning to mass produce its 3 - nano GAA process earlier than competitors. According to the report, you're planning to go mass production in the first half of next year. Does the Company have any comments or can you offer some details about the technology roadmap for your Foundry business? Also, in that context, can you share with us some comments or plans regarding your mid to long term capacity expansion for the foundries. Second question is about the IM side. It seems that the supply chain, the component supply issues did have an impact on your third quarter business. Can you quantify that impact? And also, do you think that this will continue in your fourth quarter? When do you think the situation would ease? And how is the Company coping with the component shortage?

So, to answer your first question, we are currently on track with target of mass production of our 3-nano GAA process during the first half of next year. And also, by further enhancing and innovating not only our process development, but also manufacturing infrastructure capabilities. We want to approve, once again, Samsung's leadership in GAA process technology by further enhancing our power performance area in the GAA process as we prepare for the second-generation 3-nano. In terms of our capacity plans, currently we're going through unprecedented investments in both infrastructure and equipment, with the aim of securing a sufficient mass production capacity to satisfy the customers’ needs as much as possible in the UV process by expanding our comtech capacity, but also studying the construction of a new fab in the US. If you compare some of our capacity numbers, our capacity as of 2021 has increased by around 1.8 times versus the capacity in 2017. Going forward, we're planning even steeper capacity increases by around 3 times over capacity by year 2026. And so, we are focused on securing as much as maximum mass production capacity to satisfy customer needs.

Regarding the impact of the component that chip shortage on the IM production in third quarter, there was definitely a considerable impact on our third quarter sales volume. The situation does not appear to be easing, so it seems that even the fourth quarter will also have to bear with the part or component supply issues. It's difficult at this point to predict when situation would improve. But we have optimized our supply lead time by strategic partnerships with our partners, so that we're able to at least optimize the part of the time or supply chain that comes within our control, such as receiving the components, using that to produce the product and also shipping the finished products to the channels. At the same time, we're also focusing on minimizing the impact by diversifying our sources and also going through rebalancing of our component supply. And not just as a temporary response. Even after the situation stabilizes, we will actually strengthen our Proactive Response System to market changes through strategic partnerships and collaboration with the key vendors on an ongoing basis. S. K. Kim:

The next question will be presented by to Kim Dongwon from KB Securities. Please go ahead with your question.

My first question is about the Memory business. You mentioned that the memory downcycle is expected to be less in terms of magnitude and also shorter than before. Can you give us some of the reasons why you expect that? Second question is about the TV business. Even though there was this pent-up demand after COVID-19, at the tail of that it seems that there is a softness in consumer durable demand and overall TV demand outlooks are being downward adjusted. Of course, despite that overall TV market trend, the premium segment continues to do very well. So, given that market situation, can you share with us your strategy for the VD business?

The reason why we think that the down cycle or will be less in magnitude in shorter is three-fold. One is the fact that the applications have become much more diverse than before. Previously, the main source of memory demand was the PC, but now memory is being used in a far wider range of applications. Similar to portfolio, volatility decreases if it's well diversified. I think a similar situation is happening in the memory market. Another reason for the change in the down cycle is because we are now working with cutting-edge, very difficult memory processes because of the difficulties of the technology. It's not as easy to maintain the same level as bit growth as before. And there are restrictions and limitations in rapidly increasing memory output. I think we're currently experiencing a part of that impact. For example, our inventory continues to remain at very lean levels of past quarter, as well as this quarter. So, I think the type of -- the difficulty of the memory process technology, while also be a reason why the possibility of an extreme downcycle as what we saw in 2008 is low. And the third reason is that basically, both the vendors and the customers have learned their lesson during the past extreme shortage and also oversupply. That it's best for the entire market to maintain a level of rationality and soundness. And that has also improved the SCM and crisis management capabilities of participants in the memory market. And I think that would also contribute to improving the downcycle.

To answer your question about the TV market outlook, as you mentioned, yes, there was that pent-up demand in the TV market that continued until around first half of this year. Some of that is leveling off and we expect that TV demand in Q4 will decrease slightly on a year-over-year basis. Another factor we have to expect is the impact the -- living with Corona policies may have on the TV demand with higher vaccination rates, especially around developed markets. They are easing off social distancing, people will spend more time outside and this may have an impact on TV demand. But also looking towards next year, there are some positive factors. For example, there is the global sports events happening in the second half of next year, which will drive the consumer needs for large size and high-quality TVs that gives that immersive experience. And this will be a great opportunity for us to expand our sales, especially in key markets such as Europe and Latin America. Despite the stagnation of the TV market, the premium TV demand is expected to continue to grow even next year. And so therefore, our strategy is to focus on Neo QLED 8-K and the strategic products to target the high-end segments of the market to overcome the software market demand. Also, our Neo QLED is already showing very positive sales performance, but we think that that will continue on next year because Neo QLED is a product that offers the markets best picture quality and design, and thus provide and -- differentiated in home activity value. The consumers were -- are now doing various activities at home. In addition to gaming, they're working and also doing home fitness at home. And Neo Q LED is the -- has been providing that value, especially to consumers in the premium segment. In addition to these are the lifestyle TV product groups would also be a major focus for us next year. It provides various values that are not provided by existing TVs. And so, the lifestyle product group would be another way we plan to create new demand among a stagnated TV market and deliver continued growth.

The next question will be presented by Nicolas Gaudois from . Please go ahead with your question.

Good morning. Thanks for taking my question. So, we've got -- considering the recent trend in memory pricing, you restage, reconsidering your investment plans for 2022 for both DRAM and NAND flash, in terms of, number 1, the amount of new capacity of plan to . And number 2, the timing of the equivalent delivery. Thank you.

To answer your question, given the large number of uncertainties that remain at this point, we are currently continuing to discuss our detailed investment plans. These are discussions for both in terms of the size of our investments as well as the detail direction. And so, we are practicing particularly high level of care and caution as we try to work out next year's investment plans. And so, our basic approach to investments remain the same. You referred before that our focus is to continue to maintain the investments in infrastructure at the right levels so that we're prepared to meet with the long-term demand. But in terms of equipment investment execution to do that flexibly, tied with the market situation, that approach still applies. And our basis of is to increase the foundation that we have for sustainable profit generation. And so, our investments, as well as capacity operation, will be adjusted according to that rule.

The last question will be presented Wonsik Lee (ph.) from Korea Investment and Securities. Please go ahead with your question.

My first question is about the concern of the 1A - nano -- the 14 - nano production yields that is in the market. Can you give us some updates of where your yields currently stand? Second question is about the display, the OLEDs. It seems that your rigid and flexible OLED is running at almost full capacity. Do you -- what -- can you give us some detail, about your capacity expansion plans for the mid-to-small size and also how you plan to expand to new applications.

You've mentioned that the market is very worried about our 14 - nano production yield. But actually, internally, we're pleasantly being surprised by the fast speed of ramp up that we're seeing on our 14 - nano at least versus the previous generation. So, I don't think there is any reason to be concerned. As we've mentioned during previous conference call, the rationale behind our 14 - nano process is that leverages our UV but also uses the ecosystem that we have developed in order to give us stronger cost competitiveness. And as we just mentioned, we are ramping up quite fast, we are there. And so, we are confident that with their 14 - nano technology, we will be able to maintain or technology leadership.

To answer your question about our OLED displays, as you mentioned, our OLED utilization is very good. Also given the fact that the customer demand is expected to remain strong next year, probably, this high level of utilization will go on until next year. However, we have seen some areas for improvements in terms of our efficiency, especially around the flexible OLED. For example, we're not able to use some of the capacity when we have to add in high performance as such as whole displays or touch features. And so, in order to improve that, we have continued to make supplemental investments to optimize our lines. And if necessary, we are considering the use of some of our idle LCD lines. Another area where we want to make capacity investments will be in the module lines for -- to capture the foldable demand. Foldable demand is rapidly growing, it is expected to continue growth. So, we are planning to make investments to expand our module line in a timely manner. This will enable us to supply to not only existing customers, but also diversify our customers to globally.

You've also asked about how we're diversifying the OLED applications. And as -- unfortunately, as you mentioned, the OLED panels have recently been used, not only in smartphones, but in other devices such as laptops and game devices. We are currently trying to work out our output for each of these applications. We're still planning that. But roughly, we think that our OLED displays for laptops or tablet products would probably increase around two-fold, 2 times in terms of sales versus this year. And so, we are going to focus on capturing and maintaining OLED leadership in other high-growth applications, in addition to smartphones. And this diversification of the product mix will also help us better cope with the repeated seasonality that we have gone through in the mid to small size panel business. Also, I think it's meaningful to share the fact that this year we've also had some wins in the auto market, which is also rapidly growing with the adoption of EVs and autonomous driving. So, going forward, our OLED business will focus on supplying to various applications, including smartphones and also to winning the leadership in the auto market.

Finally, we will answer questions that were submitted online in advance. As you know, starting from last Earnings Conference Call, we've accepted questions via our web page in advance. And this was part of our efforts to strengthen communication, especially with our retail investors and enhancing understanding of the Company. Variety of questions were submitted this quarter as well. I believe the majority of the submitted questions were sufficiently answers answered during the Q&A session. So, we will answer 2 more questions on topics that actually received a high level of interest from our shareholders, but were not addressed during the Q&A. So, the first question is recently global tech companies have jumped into the

Also, the first question goes to the Foundry business. The question is recently global big tech companies have jumped into the development of their own semiconductors. Against this backdrop, I would like to know in which areas Samsung has an advantage over the leading competitors and whether it has a separate vision to gain long-term technology leadership. This will be answered by Mr. Simon Han of the Foundry business.

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In this age of the Fourth Industrial Revolution, the importance of foundries has actually increased because it is the foundry that implements the ideas from the valve companies into silicon. So, in order to meet the demand for especially the cutting-edge chips such as AI, autonomous driving, 5G, and Mobile SOC, it is critical for foundries to gain the cutting-edge leading process technology through intensive R&D.

In order to grow the Foundry business, we think that there's 3 critical elements that need to be addressed. 1 is, as I just mentioned, to have that advanced cutting-edge process technology. Number 2, would also be providing the design solutions for different applications. Number 3, is of course, to support that with sufficient capacity. And in order to provide the optimized process solutions for our fabulous customers, we, for example, are planning to apply first in the industry in new architecture GAA, in the cutting-edge process of 3-nano, starting mass production next year. Also, we have been providing at the design platform to support the customers design efforts and our design platform is supported by not only for IP for each of the applications, but also a packaging technology that strengthened packaging technology based on a heterogeneous integration. Of course, to satisfy the third -- the sufficient capacity we have been making large-scaled investments and also optimizing our line operation. And we think that the results of these endeavors will become visible gradually by continuing to focus on these 3 key success factors. We will deliver stronger competitiveness of Samsung Foundry.

And the second question that we got from online was about the dividends. The question is Samsung gave a special dividend in the fourth quarter of last year, are you planning to give out a special dividend this fourth quarter as well? And is there a possibility of using that for buyback rather than a payout?

In January, we announced our three-year shareholder policy covering the period of 2021 through 2023. And we remain unchanged, that starting with this year's fourth quarter results, we will announce our annual free cash flow and seriously consider a partial payout if there is a sufficient surplus beyond the annual dividend. So therefore, we will share our free cash flow and whether we will execute as such early payout once the 2021 results are confirmed. However, we have not finalized the method of early returns, whether it will be through dividends or buybacks, or cancellation. But we plan to fulfill the policy in a way that provides the most benefit to our shareholders, stakeholders and the Company. Considering overall environment, including the market condition outlook by business, macro factors, and the stock market trend.

Due to the limited time we're unfortunately unable to answer every question that was submitted, but I would like to thank everybody who shared their opinion, providing us with valuable information to refer to in our decision-making process. And that completes our Conference Call for this quarter. We wish all of you and those close to you, stay strong and in good health. Thank you.