Good morning, and good evening. Thank you all for joining this conference call, and now we will begin the conference of the fiscal year 2021 fourth quarter earnings results by Samsung Electronics. This conference will start with the presentation followed by a divisional Q&A session. [Operator Instructions]. Now we shall commence the presentation on the fiscal year 2021 fourth quarter earnings results by Samsung Electronics.

Welcome, everyone. This is Ben Suh from Investor Relations. Thank you for joining our fourth 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 our business units are EVP, Han, Jin Man, representing Memory; VP Kenny Han for System LSI; EVP Kang, Moonsoo for Foundry; EVP Choi, Kwon Young for Samsung Display; VP Kim, Sung-Koo for Mobile Experience or MX, which is a previous Mobile Division; and VP ST Chung for Digital Appliances. 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. Also, please note that last December, we merged the IM and CE Divisions to form the DX Division. However, as this was just announced in December, we have maintained the IM and CE distinction in our earnings call materials as well as in portions of this presentation for consistency with our Q1 to Q3 results. With that, I would first like to present the results for the fourth quarter. I'm pleased to report that we once again delivered record results by leveraging our differentiated products and technology leadership despite the challenging macro environment. Total revenue in the fourth quarter grew 3.5% sequentially to KRW 76.6 trillion, setting a consecutive all-time quarterly high, driven mainly by our finished product businesses. We expanded sales of premium smartphones, including foldables, as well as TVs and home appliances amid year-end peak seasonality. We set records for total revenue in a respective quarter for each quarter in 2021, resulting in a record annual revenue of KRW 280 trillion. Gross profit increased by KRW 0.5 trillion sequentially to KRW 31.6 trillion, led by expanded sales of premium smartphones, but gross margin decreased slightly primarily due to a decline in memory prices. SG&A expenses were up KRW 2.5 trillion quarter-on-quarter to KRW 17.8 trillion, mainly due to increased spending on R&D and advertising and promotional activities. As a percentage of sales, they increased by 2.6 percentage points. Operating profit was KRW 13.9 trillion, down from the previous quarter due to a special bonus payment to employees, a decline in memory prices and a seasonal rise in marketing costs for smartphones. On a year-on-year basis, however, both operating profit and operating margin increased substantially, driven by our Semiconductor Businesses. I will now briefly review the results of each business unit. In Memory, results declined versus the prior quarter as ASP edged lower. Bit growth for the quarter came in below guidance as considering our low inventory levels and the market outlook, we refrained from excessive bit shipment efforts. Compared to last year, results improved significantly driven by solid demand across overall applications as well as increases in our advanced node portion and ASP. In Foundry, even though increased overall supply resulted in a new high for revenue, profitability decreased slightly quarter-on-quarter due to a rise in costs associated with advanced processes. On a year-on-year basis, results improved due to the start of operations at the S5 fab in conjunction with price adjustments. In display, earnings continued to improve for the mobile panel business driven by a continuation of solid demand from key customers' new smartphones and increased sales in new application areas. However, the large panel business saw its losses widen considerably due to declines in LCD ASPs and initial costs related to QD display. For the MX Business, revenue increased slightly, led by expanded sales of premium products such as foldables and solid sales of Device Ecosystem products. Profit decreased quarter-on-quarter due to an increase in year-end marketing costs, including for foldables, but increased year-on-year. The network results improved sequentially as revenue grew both at home and abroad. In the CE Business, composed of visual display and digital appliances, we delivered record high quarterly revenue on the back of strong sales of premium products during year-end seasonality, but profits declined slightly quarter-on-quarter amid rising costs, including full logistics. Regarding currency effects, negatives from overall weakness in major emerging currencies against the Korean won, mainly affecting the finished product businesses, were eclipsed by positives from a strong dollar, which mainly affects the DS Division. The net result was a positive impact of approximately KRW 300 billion on operating profit compared to the previous quarter. Next, I would like to share our business outlook. In the first quarter, for Semiconductor Businesses, Memory will actively address a projected recovery of demand, and Foundry will push to stabilize yield and increase supply of key components for flagship products. Our finished product businesses will focus on maintaining solid profitability by strengthening leadership in premium segments with launches of new smartphones and TVs. In Memory, although there are lingering uncertainties, we will concentrate on optimizing our business portfolio including through increased sales of advanced node products to support the server and PC demand recovery and also via sales growth of high value-add products. For System LSI, we will focus on supplying essential SoCs and CISs for our key customers' flagship products. And for Foundry, we will continue to prioritize expanding supply by improving production and yield at advanced processes. In display, despite weak seasonality for smartphones, we expect the mobile panel business to deliver improved results year-on-year, driven by releases of new smartphones by major customers and an expansion of the foldable display customer base. The large panel business losses are likely to be partially mitigated with the mass production of QD display. In the MX Business, despite supply constraints, we expect to deliver revenue and profit growth as well as solid margin led by releases of new flagship models, expanded sales of 5G smartphones for the mass market and increased sales of tablets and wearables. For Network, we target to win new opportunities from European and other global customers. For CE Businesses, amid weak seasonality for TVs and a predicted dip in demand for home appliances, we will endeavor to improve profitability by focusing on sales of premium products, expanding our new category product lineup and increasing the portion of online sales. Now let's move on to the outlook for 2022. Under expectations of a recovery in global IT demand, our component businesses will increase their advanced node portion of production and enhanced leadership in next-generation products and technology. And in the finished product businesses, we will continue to strengthen our leadership and lineups in premium segments as we strive to create new user experiences by enhancing connectivity and synergies between our devices. However, challenges associated with supply issues and COVID-19 are likely to persist. During this year, we will also promote partnerships, secure technology and execute the investments to gain leadership in future growth areas, such as 5G, AI, cloud, IoT and the metaverse. For the Memory Business, we expect demand to increase as enterprises ramp up IT investments, though there are uncertainties such as the extent to which supply issues will ease. In accordance, we will continue to enhance our leadership by expanding supply of high-performance products and increasing application of our industry-leading EUV technology. System LSI will grow its business by reinforcing its lineup of SoCs, including models targeting the 5G volume-zone. And Foundry aims to outpace market growth by extending our technology leadership with mass production of the first-generation GAA process, along with increasing supply to global customers. For display, in the mobile panel business, we expect demand for OLED to continue to increase based on rising penetration of 5G and growth of the foldable market. And we will further strengthen the foundation for stable growth by expanding OLED into new application areas as well. The large panel business will work to secure technology leadership in the premium segment with QD display, while it closes the LCD lines as planned. The MX Business targets increasing market share by concentrating on innovations and flagship products, further differentiating user experiences and also expanding our mass market 5G smartphone lineup. Moreover, we will seek to grow sales of Device Ecosystem products by enhancing the value delivered to customers. For Network, we will focus on capturing 5G network demand and winning new global customers. All as we continue to further strengthen our technologies, including custom development of core 5G chips. For CE Businesses, we will further solidify our market leadership and pursue growth by continuing to expand sales of premium product lines, such as Neo QLED and BESPOKE, and by diversifying the overall lineup with lifestyle and new home appliance products. Next, I would like to share some of our key activities and achievements in sustainability management. At the CES keynote address on January 4, we outlined our eco-friendly initiatives for a sustainable future. We believe that consumers and companies together can contribute to a better future by embracing sustainable products. To this end, we unveiled a range of ambitious eco-friendly activities. For example, in manufacturing displays, including for TVs, we are using 30x more recycled plastic this year than we did last year. And we are moving toward incorporating recycled materials in all mobile products and home appliances by 2025. In addition, our company ranked fourth in the digital inclusion benchmark as announced in December by the World Benchmarking Alliance, a global alliance dedicated to sustainability management. We earned this accolade thanks to our strong support for the technology innovation ecosystem through C-Lab Outside, an initiative aimed at nurturing start-ups in Korea as well as disclosing our AISC principles centering on equity, transparency and responsibility. Furthermore, we participated in a pilot project organized by Korea's Ministry of Environment to reduce work site waste. And on December 31, our Giheung campus received top honors for its efforts, which included strengthening recycling programs and offices, establishing a standard for minimizing the packaging for raw and semi-processed materials and expanding recycling of waste materials. Our work in this area demonstrates our commitment to creating environmental and social value in addition to achieving growth. And we will continue to strengthen our ESG management by fulfilling our social responsibility as a leading global company. Let me now move on to capital expenditures. The annual CapEx for 2021 was KRW 48.2 trillion, with KRW 43.6 trillion invested in semiconductor and KRW 2.6 trillion in display. By business, Memory concentrated its investments on capacity expansions and process migrations and fabs in Pyeongtaek and Xi'an to address demand for advanced nodes, including EUV-based 15-nanometer DRAM and sixth-generation V-NAND as well as on infrastructure at P3. Investments in memory increased year-on-year as we are at the lead of an inflection point in technology and are, thus, preemptively investing in application of next-generation technologies such as EUV. We are executing the investments with a focus on technology leadership. And as a result, we can maintain an efficient investment level when considering our bit share from a mid- to long-term perspective. For Foundry, investments concentrated on capacity expansions for advanced 5-nanometer EUV nodes in Pyeongtaek. Display investments centered on mobile modules and QD display. Finally, let me address the shareholder return. The Board of Directors today approved a quarterly dividend of KRW 361 per share for common stock and KRW 362 per share for preferred stock. The total payout for the fourth quarter is approximately KRW 2.45 trillion, which is in line with the totals in 2021's previous quarters. This represents 1/4 of the annual total of KRW 9.8 trillion in accordance with the current shareholder return policy. The dividend will be paid after final approval at the Annual General Meeting of Shareholders. When we announced the current 3-year shareholder return policy in January of last year, we said that we will disclose the annual free cash flow each year to enhance clarity on the shareholder return pool. And if 50% of the free cash flow significantly exceeds the annual dividend, we would consider an earlier return. The total free cash flow for 2021 was KRW 19.6 trillion, 50% of which is approximately KRW 9.8 trillion. Considering the annual -- projected annual dividend for 2021 is also KRW 9.8 trillion, there was no additional pool for an earlier return. While we achieved solid results in 2021, as I mentioned earlier, we required a considerable amount of CapEx to accelerate migration to next-generation technologies in memory and to secure competitiveness in foundry. And there were also impacts of increased working capital, such as the need to secure additional inventory amid uncertainties of component supply. Although we did not generate a surplus in 2021, we believe our efforts will lead to significant future growth and contribute to increasing shareholder value. In 2022, we will once again step up our efforts to improve our performance by extending our product and technology leadership, increasing cost competitiveness and improving profitability while also enhancing capital management efficiency. I will now turn the conference call over to the gentlemen from each business unit to present fourth quarter performances and outlooks for their corresponding business segment. We will start with the Memory Business. Thank you.

Good morning. This is Han, Jin Man from Memory Global Sales and Marketing Office. The fourth quarter memory demand stand-alone server remained solid, but our performance declined somewhat compared to the previous quarter due to a continuation of global supply chain issues, a slight drive in ASP and payment of one-off special incentives. We came in below initial bit growth guidance as refrained from making excessive bit shipments in consideration of our limited inventory conditions and also the market outlook. In DRAM, impacts on set from global supply chain issues differed by degree that were felt throughout all applications. In server, however, demand remained strong, thanks to an increase in DRAM content per box with increased adoption of high core CPUs amid a continuation of solid end demand. For graphics, graphics card supply shortage remained as demand stayed robust, backed by strong demand for gaming PCs, along with rising demand for crypto mining. PC and mobile have felt relatively more effects of set build disruptions caused by component supply issues. For PC, consumers continue their tendency to adjust inventory. In mobile, major smartphone manufacturers released new 5G models with concurrent risk, such as the spread of a COVID variant, impacted memory demand to some extent. Based on preemptive product mix adjustment, we actively addressed an increase in server and graphics demand. And to enhance competitiveness, we continue to increase our cutting-edge portion of processes. Even so, we were below bit growth guidance as we tried to optimize supply plan, considering our inventory condition and market outlook. Next, I'll talk about the NAND market. For server SSD, fundamental demand from major data center customers was robust, but there were some market effects related to disruptions in the IC component supply chain. Demand for client SSD was somewhat stagnant because of inventory adjustment by some customers and set build disruptions caused by component supply issues. In the case of mobile, supply and demand of APs were disrupted, and memory demand fell slightly. But the high-density trend continued, thanks to impacts of peak end year seasonality. We focused on optimizing sales such as reducing wafer shipments as well as strengthening high-value solution businesses in consideration of our inventory situation, while identifying impacts on production caused by changes in line operation due to the lockdown in Xi'an. In addition, we continue to strengthen our competitiveness by increasing our cutting-edge portion of processes. And by expanding the server business, we are actively addressing growth in high-end, high-capacity demand. Now let me share the outlook for the fourth quarter. In the case of DRAM, some uncertainties are likely to persist, but we expect issues related to component supply and demand to dissipate gradually. We are seeing signs of improvement in set builds mainly by server and PC. For server, we expect demand to remain strong, thanks to the high-density trend alongside increasing investment centering on data centers, while the high-quality CPU portion continues to increase. As demand for PC improves, mainly for corporate-oriented, the high-end laptops, demand will increase for cutting-edge products such as DDR5. And as some customers complete inventory adjustment, with the impact of flow seasonality, it will partially ease. For mobile, we expect the demand base to be reasonably solid as major manufacturers launch products based on new form factors and increased the portion of LPDDR5. However, risks such as operational restrictions at some production sites due to the spread of COVID variant need to be carefully monitored. We will keep working to maximize the quality of our business portfolio by selling products of our cutting-edge node and expanding sales of high-value products, while actively addressing customer demand from overall applications. In NAND, for server SSD, we expect demand for server builds to be robust, thanks to continuing investment mainly data centers. We should keep an eye on corporate demand, along with the spread of COVID variants. In the PC market, we think build demand will recover mainly for laptops along with gradual improvements in component supply issues. And for mobile, despite being amid slow seasonality, we expect the high-density trend for storage to persist as manufacturers launch new 5G models. We plan to minimize risk of supply disruptions by securing a diverse product portfolio centered on high-value products while returning to normal production operation after the lockdown in Xi'an being lifted. Now let's move on to the full year outlook. Under the risk of demand fluctuations, such as ones related to the pace of mitigation of component supply constraints as well as changes of prolonged effects of a COVID-19 variant, we ask for your understanding in that it is difficult to provide specific annual bit growth guidance. Therefore, I'd like to share our view of the market situation for each application. First, for server, DRAM content per box is projected to keep rising, thanks to the adoption of new CPUs supporting DDR5 and the expansion of AI-oriented servers centered on data centers. In addition, coupled with the expansion of investment by major companies, set build demand deferred by last year's component issues should lead to solid set build growth. On the other hand, for PCs, we need to monitor detailed impacts on demand as a delayed return to daily life, driven by a new variant, would impact demand from contactless services such as education, gaming and others amid an expected increase in replacement demand in the content per box due to the spread of the new OS. For mobile, with the resumption of 5G infrastructure investment by countries and the strengthening of 5G lineups by manufacturers, content per box is likely to keep rising focusing on major manufacturers. And set shipments centering on the low- to mid-priced models are also anticipated to rise amid growth in emerging markets. Based on preemptively managing our product mix to align with market conditions, we will proactively address market demand by expanding our supply portion of high-performance products such as HPPM for graphic and cutting-edge interfaces like DDR5 and LPDDR5. Based on high-value, solution-oriented portfolio management and our industry-leading EUV capabilities, we will focus on qualitative growth through stable continued cost reductions and strengthened market leadership.

Good morning. This is Kenny Han from the System LSI Business. In the fourth quarter last year, we reached a record high for quarterly revenue, driven by an increase in demand for SoCs, DDIs and PMICs as major mobile customers launched new flagship products. However, operating profit fell slightly due to the influence of special bonuses. To improve our performance even further in the coming quarters, we have started to supply our flagship 4-nanometer SoC, featuring an AMD GPU for the first time as well as related products. In addition, our 108-megapixel image sensors have been increasingly selected by our customers for adoption in their upcoming major models. In the first quarter of this year, effects of year-end weak seasonality for the mobile industry and inventory adjustment by Chinese companies are likely to continue. But demand for OLED DDI, NFC/eSE and PMIC products is expected to stay strong. As major customers launch flagship smartphones, we plan to focus on expanding supply of SoCs with a significantly improved GPU, NPU capabilities as well as ultra-high-resolution image sensors. In 2022, by maximizing supply of volume-zone 5G SoCs and technology-leading 108- and 200-megapixel sensors, we expect revenue growth to accelerate year-on-year while profitability should rise on the back of price adjustment. Thank you.

Good morning. This is Moonsoo Kang from the Foundry Business. In the fourth quarter, we outpaced industry growth and set a new high for Q4 revenue. In particular, we continue to increase sales to large-scale HPC customers and also established the base for future growth by securing orders from new large customers in HPC applications. In addition, we work to improve our response to customer demand with efforts to stabilize the global supply chain conforming new type investments in Taylor U.S.A. and in Korea. However, there were also headwinds as we're enable to fully satisfy customer demand amid the supply disruption, and profitability fell slightly due to delay in ramping our advanced nodes. In the first quarter of 2022, we expect the industry to remain in tight supply across all nodes and our advanced node portion, which increased significantly from Q4, to keep rising. Given this, we will focus on improving yield in advanced process nodes to enhance our supply stability and profitability. To strengthen our technology leadership, we will complete the qualification of first-generation GAA process 3GAE for mass production in the first half of this year, and we will continue to develop the second-generation GAA process, 3GAP, as scheduled. For the Foundry market in 2022, we expect supply to remain tight due to rapid penetration of 5G technology, solid HPC demand, growing outsourcing by IDM and the need to build up safety inventory amid prolonged pandemic. We will continue our technology leadership through mass production of the 3GAE process in the first half, and we aim to exceed market growth on a full year basis by expanding capacity of advanced nodes, normalizing prices to ensure future investments and adding new customers to our global client base. Thank you.

Good morning. I'm Kwon Young Choi from the Business Planning Deployment at Samsung Display. In the fourth quarter, the mobile display business sustained upward trend in earnings following the previous quarter, backed by robust sales of smartphones with the OLED display, which are now mainstream in the premium segment and also by the competitiveness and the stability of Samsung Display supply chain management. In addition to smartphones, sales and revenues of products for notable PCs and gaming increased steeply quarter-on-quarter, contributing to our earnings growth. Meanwhile, in the logic display business, we have successfully mass produced and delivered our 3D displays for TVs and monitors, which have garnered positive reviews from our customers. Next, let me share the outlook for the first quarter of 2022. For the mobile display business, we project that release of our new products by major customers and increasing adoption of flexible displays will mitigate weak effects of weak seasonality. However, given persistent supply issues for some components, concerns linger over potential short supply of certain products such as DDI. For the large display business, where the QD display TVs and monitors having made their official market debut, we expect losses to narrow gradually. Finally, I will share our outlook for the display market in Samsung Display's core strategies for 2022. For the mobile display business, despite projected macro risks such as ones related to fast tapering as well as the Omicron's variant of COVID-19, we expect adoption of OLED displays to keep expanding this year, driven by rising penetration of 5G smartphones and the growth of OLED display markets. Such market trend should create a favorable business environment for Samsung Display. As for the IT market, we expect the growth to slow compared to last year, and rising sales in the premium segment are likely to accelerate penetration of OLED displays. We plan to strike a balance in the mobile display business structure with both flexible and rigid OLED. To that end, we plan to expand adoption of flexible OLED to more than just the high-end devices by providing its astounding technological capabilities to the midrange segment as well. We will also diversify application for rigid OLED, ranging from IT to gaming to automotive based on our unrivaled production capacity and cost competitiveness. For the large display business, we expect auto large displays and differentiated products to drive solid demand for premium TVs. And we will focus on securing leadership in the premium TV and monitor segments through QD displays. Thank you. Sung-Koo Kim: Good morning. This is Sung-Koo Kim from the MX Business. I would like to discuss the Q4 2021 results and outlook for the MX and Network Business. In Q4 2021, the market grew compared to the previous quarter due to year-end seasonality. As for the MX Business, despite the component supply shortage, revenue increased slightly Q-o-Q. In particular, in the new market that we created with an innovative form factor, our foldable Z Series model, Z Fold3 and Z Flip3, have garnered positive feedback for their nice design, durability and user experience that are tailored to foldable. This contributed to increased sales, and we believe foldables are smoothly entering the mainstream. Also, the Galaxy S Series maintained sales momentum, thanks to active marketing, enabling further enhanced user experience with the new One UI 4.0. Accordingly, our premium smartphone sales increased Q-o-Q. Solid sales of our Device Ecosystem products, including PC, tablets and wearable devices, with their enhanced and seamless connected experience also contributed to the performance. In the meantime, investments in active marketing to mainstream foldables and preparations to launch new models in Q1 2022 affected profitability to some degree. The Network Business improved its performance compared to the previous quarter, driven by the growth of domestic and overseas business. Now let me give you the outlook for Q1 2022. Demand for smartphone and tablets is expected to decrease due to seasonality as well as uncertainties around the component supply. In our MX Business, we will strive to expand the customer base for our flagship products by fulfilling customer needs with the Galaxy S21 FE, which preserves core user experience of Galaxy S21 and comes in a diverse range of color options or add on affordable price. Also, our new Galaxy S Series model, featuring the best Galaxy performance and experience, will enhance customer retention of our premium products. In turn, this will lift the standard for flagship products even higher and contribute to increased sales of our flagship smartphones as well as an increase in overall smartphone ASP. Also, our competitive 5G lineup for the mass market will add as a volume driver by addressing replacement demand and thus actively sees growth opportunities in the market. In addition, we will continue to focus on increasing sales of our Device Ecosystem products such as wearables, PCs and tablets by actively promoting the immense competitiveness and seamless connected experience across the product line. With these efforts, we will strive to secure solid profitability in Q1 2022 amid an unstable component supply situation. The Network Business aims to secure additional new contracts in the global markets, including from hereon. Next, let me provide an outlook for 2022. Despite current uncertainties, including prolonged pandemic and component supply issues, we expect the smartphone market to continue to grow in 2022 following substantial growth in 2021, while the wearable market is projected to see strong double-digit growth. In our MX Business, we will continue to pursue user experience-driven innovation to solidify leadership in the flagship market. We also strengthened the tailored experience of each product, including the ultimate flagship experience with the Galaxy S Series and optimized Galaxy Z Series experience to cater to various lifestyles and needs of our customers. In the mass market, we are not only strengthening our 5G lineup but also expand the application of our convenient and differentiated experience and enhanced product completeness. With these efforts, we aim to increase our smartphone market share. Also, we will keep enhancing customer value by continually adding to our differentiated user experience, which includes consistent and convenient connected experience across devices in our Device Ecosystem and by further strengthening product competitiveness. Furthermore, we expand such convenient connected experience beyond MX products to TVs and home appliances to enrich the value that our customers experience in daily lives. By doing so, we will strive to achieve material growth in 2022 and bolster our profitability with an improved product mix and enhanced operational efficiency. The Network Business will focus on actively expanding its overseas business while also responding to extension of the 5G network in the domestic market. Also, we will thoroughly prepare for the future with continued efforts to strengthen our technology and competitiveness including our own 5G chipset. Thank you for your attention.

Good morning. I'm ST Chung from the sales and marketing team of Digital Appliances, and I will address business condition of the businesses. First, I would like to review the market conditions and our performance in the fourth quarter of 2021. The TV market grew Q-on-Q amid peak seasonality but decreased compared to the previous year when it was affected by the total pent-up demand. By working closely with the channel partner in advanced, Samsung preemptively targeted seasonal demand starting at end of October and expanded sales mainly of high-value products, such as new QLED models and life-size screen. However, operating profit decreased slightly quarter-on-quarter due to cost pressures such as global logistics issue. For Digital Appliance in the fourth quarter, market growth was slow due to diminishing impact of the pent-up demand and material and logistical who stayed on an uptrend seen in the previous quarter. Samsung actively addressed the various consumer needs. We improved our mix via increasing sales with our focus of premium products such as BESPOKE and new category products. In addition, through improving our operational efficiency and reducing costs, we achieved a better result compared to the previous quarter despite the nuance in the external environment. Now let us look at the outlook for the first quarter of 2022 and 2022 as a whole. We expect the overall TV market in Q1 to decrease quarter-on-quarter following the year-end peak season and also coming lower compared to the same period last year, when it was affected by a continuation of a strong impact of pent-up demand, mainly on advanced market. We plan to push, expand sales by capturing demand mainly for premium products by actively leveraging our number of promotional opportunities such as those associated with the major sporting events. Furthermore, we will lead the market by strengthening sales in the life-size screen category, including The Freestyle, which was released in CES this year and improved our returns. For Digital Appliance in the first quarter, we expect demand for home appliances to decline slightly year-on-year. Also, we expect to continue [indiscernible] of increases in logistics and material costs. We will target the premium market more aggressively by expanding the BESPOKE lineup mainly in advanced markets, such as North America and Europe. Also, we plan to expand sales by providing our customers with our differentiated experience, offering significantly expanded consumer contact points, both online and off-line. In addition, we will secure profitability by continuing to improve our cost efficiency throughout our operations. Regarding the TV market in 2022, we expect to market on [indiscernible] to consist, including those triggered by COVID-19, an external issue in driving supply and logistics. However, we also expect demand to keep rising for premium and super big TV, Samsung will focus on targeting demand for an increasing sales of innovative premium products, including our next-gen MICRO LED and new QLED model. At the same time, we will strengthen our sales of life-sized screen, our own differentiated product line and expand the TV accessory ecosystem while also providing different user experience and creating new demand through various services and platform, which is optimized for in-home activities like media and gaming. In the Digital Appliance market in 2022, market growth of home appliances will probably be sluggish year-on-year, but we expect to see demand edge up for the new category product that reflect changing lifestyle trend, also slight demand growth in the emerging markets. We will continue to grow by strengthening global sales via expanding the areas of -- we hope for -- we differentiated the stock product also by expanding [indiscernible] by region and improve the [indiscernible] market, we'll keep launching new category products that reflect the change in consumer needs brand. Furthermore, by expanding use of our model product and thus increasing productivity, we will enhance operational efficiency and also secure supply continuity to proactively manage the future external risks. Thank you.

That sums up the fourth quarter results presentations. Before we move on to the Q&A session, I would like to share several data points in key business areas. Considering the heightened macro uncertainties, we will not be providing annual guidance at this time. In the fourth quarter for DRAM, our bit growth decreased by a percentage in the mid-single digits, and ASP declined by a similar magnitude. In the first quarter of 2022, we expect market bit growth to fall by low single-digit percentage, and we should be similar to the market. For NAND, in the fourth quarter, both our bit growth and ASP declined in the low single-digit percentage range. For the first quarter of 2022, we expect market bit growth to decrease by a low single digit, and our bit growth should slightly outperform the market. In the display business, in the fourth quarter, our OLED portion of sales was in the high 90% range and OLED sales volume grew by a low single-digit percentage. Turning to wireless. Sales volume in the fourth quarter was approximately 72 million units for handsets and 7 million units for tablets with a blended ASP of USD 253. The smartphone portion of handset sales volume was in the mid-90% range. For the first quarter of 2022, we expect to see sequential increases in handset and tablet sales volume as well as in blended ASP. The smartphone portion of handset sales should stay similar in the mid-90s. In the TV business, in the fourth quarter of 2021, sales volume grew by a percentage approaching the mid-teens. And in this quarter, we expect sales volume to decline by a low single-digit percentage. With that, I will now move on to the Q&A session. First, we will start taking questions from the conference call.

[Operator Instructions]. The first question will be presented by J.J. Park from JPMorgan. J.J. Park: Oh, I have two questions. The first question is about the Memory CapEx. You said that the Memory CapEx last year increased. Can you give us that divided into the NAND- versus the DRAM-related CapEx spending last year? Also, can you give us some guidance for CapEx Memory this year? Second question is about the shareholder return. During the presentation, you mentioned that 50% of the free cash flow for last year is roughly the same as the distributable profits for this year. And therefore, there would not be any additional pool of funds available for shareholder return. But I also noticed that the company does have on hand more than KRW 100 trillion of net cash. And so maybe not last year, but perhaps this year, can we expect any upside on the shareholder return? Is the company considering it's not -- that cash size when it decides shareholder return for this year?

To answer your first question about the memory CapEx. Yes, as we mentioned, the overall memory CapEx in 2021 did increase year-over-year. It's difficult to give you the breakdown between DRAM and NAND. But overall, there was an increase in the facility equipment-related CapEx spending. To explain the reasons why there was an increase in CapEx, mainly it's explained by how we have expanded our advanced node-related equipment and also invested more in the node migration in order to respond to the increasing demand that was above what was expected during the start of last year. Also, another main reason for our CapEx is our preemptive investments that we're making in next-generation technologies, such as EUV, as we go through a technology inflection point. But this all is consistent with our CapEx policy of executing CapEx equipment investments flexibly in line with the market situation. And so we believe that the supply bit growth that we are achieving is in line with the market demand levels because we execute flexibly our equipment-related investments. We do pursue bit growth around the leading technology node. And I think that is why compared to at least a bit share that we have, our investment size, in a mid- to long-term perspective, is not high. You've also asked for some guidance for CapEx this year. Actually, given the various uncertainties, we are still actually discussing specific investments planned for this year, but our basic approach is that we will tap both investments and our productivity improvements in order to generate the bit growth this year. Also, as we prepare the planning and execution of our investment plans, we are aware that there is a tendency of equipment delivery lead times getting longer due to the supply chain issue.

To answer your second question, when the 3-year shareholder return policy that was announced early last year, covering periods of 2021 to 2023, actually took into account the global uncertainties and the expected increase of cash needs for the company. Now looking back at the past 1 year, the global uncertainty actually was more aggravated than we had anticipated, and cash needs increases -- increased as expected. And so even though last year the business results improved, our net cash position has stayed almost the same. On the other hand, as you know, we operate the largest and the highest level of a global production network in the IT industry, which requires a large scale of operating capital. Last year, we also went through some unexpected production disruptions in Austin and the Xi'an fabs. Also, we always need to keep the capabilities to execute inorganic growth opportunities in order to maintain consistent growth. So considering all of those factors, the company believes it is not appropriate at this point to bring any major changes to its shareholder return policy given the fact that conservative cash operation is necessary. Now that said, we think the efficiency of its capital management is something that the company continues to focus on.

The next question will be presented by Sung Kyo Kim from Daiwa Capital Market. S. K. Kim: My first question is about the DRAM clean room space. You -- looking at the information, you may actually have a limited clean room space for your DRAM this year. Also, your inventory levels are relatively low. This may imply that you may actually, in terms of bit growth, underperform the market or your competitors on the DRAM side. There was a change of management at the end of last year. Considering all of that, can you share your opinion regarding the clean room space limitations and how you plan to respond to that? Second question is about the CE business. There is overall cost increasing factors, including raw material prices and logistics costs increasing. First of all, can you share, from the company's perspective, until when do you think the situation will continue? What will be the implications to your CE business? And how do you plan to respond?

To answer your first question about the clean room. Of course, securing enough clean room in order to meet the demand growth in the market is one of the key critical investment strategies for the Memory division. Clean rooms, this is actually quite large investments, and many factors need to be considered. So deciding a clean room investment is a decision that should be made based on a midterm, at least a 3- to 4-year horizon perspective. Looking towards this year, at the current levels, we do not expect any major problems in meeting the demand that's expected in the market this year.

Well, to answer your question about the heightened cost base for the Consumer Electronics business, of course, there are many reasons that are driving the elevated level of raw material and logistic prices. There's large demand for logistics, but there is a shortage of workers to man the ships and the ports, and there is overall inflation driving an upward trend of raw material prices. As we mentioned during the presentation, the company does expect this heightened level of raw material and logistics cost risk to continue throughout this year. In response to this assumption of heightened risk. First of all, we are thoroughly analyzing the situation of each of our key manufacturing hubs in order to improve the overall supply competitiveness by increasing the production efficiency for each region and also executing overall operational improvements. Also, we are preparing to respond to this on the sales side by accelerating revenue growth through the increased sales of premium products such as BESPOKE and continuously launching new models.

The next question will be presented by Peter Lee from Citigroup.

My first question is about the memory side. Even though overall memory demand was quite solid last year. Fourth quarter, we noticed that both your DRAM and NAND shipments actually performed under the guidance and competitors. Can you give us some explanation as to why this happened, which appears to be quite unusual, especially given the -- given where the market and you were in the second quarter of last year? We do notice that the company's management was changed at the end of the year. Is this an implication of any strategy change on the part of the company? Second question is about the mobile side. From the market, we're also wondering what the exact demand would look like for smartphones in year '22. Can you share with us your demand outlook for smartphones this year? And do you expect to increase your market share by outgrowing the market again?

To answer your question of why our bit growth was below market in fourth quarter. As you mentioned, yes, in fourth quarter, demand was solid, but especially around the servers. On the other side, there were some downstream production disruptions due to the global supply chain issue, even though the degree of the disruption varies depending on the customer. And this did have an impact on memory demand in the fourth quarter. Seeing that, we also consider that our inventory levels were not at high levels. We also wanted to prepare against any production impact due to the Xi'an lockdown. And so we actually refrained from any aggressive sales in the fourth quarter. And this was the main reason why our bit growth was below guidance in fourth quarter. Now the reason why we made that decision was because of our insight into a change in the nature of the market that has been happening recently. We do notice that the memory market actually is becoming more diversified. The product lineup is much more diversified before. And given the wide diversity of product lineup, we thought that most critical capability was the ability to supply the products that the customer needs based on having an optimized product mix. And so I think the reason -- I think the best way of understanding what happened in fourth quarter was that it was our strategic choice in order for us to be able to supply the products that the customer needs stably from a long-term perspective.

To answer your question about the smartphones. First, our outlook for the smartphone market this year is that it will continue the growing trend continuing from last year. Main drivers being the mainstreaming of foldable phones and also the wider penetration of 5G mobile phones. Our strategy at the flagship level is to continue to expand the sales of flagships and to improve our product mix by, first of all, maximizing the user base through our foldable Z series which has been attracting not only the premium, super premium users, but the MZ generation of females as well as the customers of the competitors. Also, a part of our flagship strategy would be the S series, the new model of the S series, which will contribute to retention of existing customers and also to further widen the premium customer base through the S21 FE. Our strategy on the mass tier will be to actively absorb the mass tier 5G replacement demand globally by preparing a wider 5G full lineup and also to continue to produce global megahit models in the mass tier that provide core user experiences that the users appreciate. Therefore, we will use the mass-tier models to become clear volume drivers that can respond preemptively to mass-tier brands. By the 2 strategies, we plan to not only increase our entire market share in the smartphone market this year, but also further increase the leadership we have in the premium market.

The next question will be presented by Do-Yeon Choi from Shinhan Investment. Do-Yeon Choi: I have a question for the mobile, the MX division. Last year, you successfully mainstreamed the foldable form factor, received strong response from the market, but you also have the Galaxy Series. And so combining the 2, can you share with us your overall strategy in the flagship this year?

To answer your question, actually, the key point of our flagship tier, premium tier strategy would be to further concentrate on strengthening our user experience. This will enhance the value of the flagship product by providing not only the best hardware but also software services and ecosystem. Also, therefore, we will further enhance the differentiated experience for each of our premium products. For example, S Series providing the best flagship experience, Z Series providing the optimized foldable experience, in order to satisfy the diverse lifestyles and needs of the consumers. Also, we will be refocusing our marketing strategy around customer experience and also continue a full year brand marketing campaign to make the brand more aspired and strengthen the premium brand position to maximize our flagship sales volume.

The next question will be presented by Dongwon Kim from KB Securities.

My first question is about the DRAM prices. After DRAM price being increased in the first quarter, it's now back to a downward trend in 3 quarters' time. Are there different views as to where it will go further? Some are expecting that DRAM prices upturn again shortly. Others are saying it's not likely the prices to improve in the second half of this year. As a leader in this segment, what is your outlook on DRAM movement going forward? Also, it appears that the cycle itself is getting shorter. Do you think the cycle will stay this way in the future? My second question is about the QD display. I'm hearing that the customers have received a QD display supply. Can you share with us your customers' response to the QD display? And also, can you share with us some details about where you think your technology level is and how you compare in terms of cost competitiveness?

To answer your question about the market outlook. Of course, there are still various variables that could impact supply and demand this year, including at what pace the parts supply issue will be eased, the possibility of additional increase in raw materials and various geopolitical risk. But looking at the market, there are many factors that support a strong demand side. For example, there will be increased adoption of high core CPUs, launch of new CPU that supports DDR5 and also expected increase of IT investment by major companies. So this supports the view that there will be fundamental strong demand, especially around servers. Also, if we look at the mobile side, demand is expected to remain solid, given the likely penetration of 5G and also the adoption of new form factors by the major mobile OEMs. Now on the supply side, there is definitely the lead time for the equipment overall and the industry is getting longer. Also, it's becoming more and more challenging to maintain the node migration and investment efficiency. And so given that, I think it is much more important ever than before to maintain the ability to respond to customer demand in a timely manner by maintaining the right product mix. Regarding price, of course, it's difficult for us to also predict price at this point. But we also noticed, as you mentioned, a clear tendency of the memory market cycle height and also the length getting shorter than before. Also considering that our inventory remains to be at fair levels, these are all signs that indicate a possible stabilizing of the market. Also recently, a third-party agency did announce its view that the market may actually change direction during the first half. And so we are adding this as one of the possible scenarios.

To answer your question about the QD display, yes, we have heard the market has high expectations, but also some concerns about the QD display. We started mass production of the QD display fourth quarter last year and have made deliveries to the customers. The customer response is that the QD display has definitely advantages compared to competing products. We are currently working with customers to have TVs and monitors using the QD display be positioned in the higher end of the premium product lineup. We believe that as our utilization improves, we would also be able to increase the shipments of our QD display. We believe that the QD display definitely will take position as a premium display. And we believe that as we are able to increase our shipments with improving utilization towards the end of this year, we will be able to see an increase in demand, especially around the premium products by offering QD as a way of differentiating the performance in the ultra large-sized TV and monitor market.

The next question will be presented by Wonsik Lee from Korea Investments and Securities.

My first question is about the foundry. There is continuous noise regarding the -- your foundry low yield in the advanced nodes. Can you give us an update of the yield and how you plan to address this? Second question is about the flexible OLED market. In the small and midsized flexible OLED market, competition is becoming more intense. How do you plan to respond to this?

To answer your first question, yes, as you know, in response to global demand for the advanced nodes, we have been going through unprecedented scale of investments and development and is maintaining the technology leadership in the advanced nodes. As we move on to the advanced nodes, the challenge of maintaining and securing initial stable yield has increased. Now in terms of response, even though there has been somewhat of a delay in our initial advanced node ramp up versus our plan, we do expect this to improve and stabilize gradually. And in order to address this, we are considering looking into, for example, establishing the multipath faster than originally scheduled by securing the infrastructure space and making the optimized timing of investments for ramp-up and also working with the research center, dividing roles in order to establish plans of better achieving yield early on in the advanced nodes.

To your second question, as you mentioned, the competition in the flexible OLED market is getting more intense. And we have been recognized the premium value in the OLED market with our continuous technology differentiation and performance improvements. And we are continuing to focus from various angles to maintain that leadership. We were the first company to succeed in mass production. We pioneered the OLED market. And during the past several decades of investments in R&D, we have accumulated a huge body of patents and know-how. Also, in order to protect our differentiated technology and further enhance the value, we have actually branded our proprietary OLED technology, such as Diamond Pixel or the ECO 2 display OLED for low-power technology, in order to establish our position and also to actively communicate to the market. We also believe that receiving the recognition for our IP and receiving the fair compensation for it is an important part of our obligations and responsibility. And currently, we're looking into various ways in order to get that guaranteed. Under today's ESG environment, it's important that proper business practices are honored, and we will do our best to have that happen.

The last question will be presented by Nicolas Gaudois from UBS.

On NAND flash, there's been several announcements from your peers on seventh generation 3D NAND technology as well as QLC for bit sales for products recently. In that context, could you update us on Samsung's strategy and roadmap for both, please?

Yes. To answer your question, actually, we have been delivering for server and consumer applications starting from the fifth generation V-NAND that actually adopt the CTF QLC technology. And also, we have actually maintained the technology leadership in the market, especially for the enterprise QLC SSDs. Now for the seventh generation V-NAND, our focus is on establishing a technology leadership that satisfies the demands of all applications, including SSD and e-storage. And another focus is actually creating an ecosystem through cooperation with partners in preparation of a wider adoption of QLC. You've also asked about our roadmap. And for the seventh-generation V-NAND QLC, the launching timing will be decided based on customer schedules, priorities and also the market situation. For reference, we're expecting at the PC application level, the demands of our customers for QLC products will become more visible and tangible after this year.

Finally, we will answer questions that were submitted online in advance. Starting from the last earnings call, we have been accepting questions via our webpage in advance of an earnings release as part of our efforts to strengthen communication with individual investors and to enhance understanding of the company. A variety of questions were submitted this quarter as well. I believe the majority of the submitted questions have already been sufficiently answered during the Q&A session. So we will answer 2 more questions on topics that garnered a high level of interest from shareholders but were not addressed during the Q&A session. The first question is the following. The company has been treating the Foundry like a new business to nurture, but the market is fiercely competitive. I would like to hear your opinion on what distinctive advantage Samsung has over its competitors to accelerate growth. This will be answered by EVP Moonsoo Kang on behalf of Foundry division.

To answer your question, as you mentioned, yes, in order to develop our Foundry business, we have been executing unprecedented scale of investments and also focused on developing technology. And in addition to securing the technology leadership through these efforts, another focus of our Foundry business is to further expand the ecosystem by building strong partnerships with other companies within the foundry industry. We believe this will help alleviate customers' concerns about foundry source concentration and also will be able to provide meaningful solutions for the entire foundry industry. Also, our focus is on developing a total system level solution using, for example, advanced packaging technologies, such as 2.5D and 3D which can maximize both the density and performance. Also, we're leveraging our collaborative relationship with the Memory division in order to provide solutions that are differentiated from other companies.

The last question is the following. The global market demand for 5G smartphones is expected to grow significantly this year. Against this backdrop, what are Samsung Electronics' strategy on the lineup and sales expansion? This will be answered by VP Sung Koo Kim of the MX division. Sung-Koo Kim: Yes, as you mentioned, the 5G smartphone market has been growing very rapidly. It is expected to continue this growth. Market outlook is that this year, 5G smartphones would account for more than half of the smartphone shipments in the entire market. Now in order to actively absorb this mass of 5G replacement demand, we have prepared a full 5G lineup across the entire price range starting from the flagship models of the S family and the foldable Z Series as well as the mass entry level. Our -- especially our focus in terms of strategy as we respond to the compete -- competition, the intense competition in the mass segment is to leverage the Galaxy experience that we have. We have the excellent S Series experience, which we will roll out even to the mass tier models so that all Galaxy users will be able to share and enjoy the premium Galaxy experience. Also, on the sales side, we will be proposing 5G handsets, mass 5G handsets to all of our channels, and also look into collaboration with the carriers in order to increase 5G handset sales, which will also benefit the carriers in terms of further upside in their ARPU. Through these initiatives, we will focus on continuing the high growth momentum versus market this year.

Due to time constraints, we are unfortunately unable to answer every question that was submitted. However, I would like to thank everyone who shared their opinion, providing us with valuable information to refer in our decision-making process. And that completes our conference call this quarter. We wish all of you and those close to you stay strong and in good health. Thank you.