2011 02-15 6665.t (goldman sachs) asia technology- integrated electricals_ dram game rul...t mobile dram implications.5213788

February 15, 2011

Asia: Technology: Integrated Electricals

Equity Research

DRAM game rules: A close look at mobile DRAM implications
Rapid mobile DRAM volume growth to benefit Elpida, Hynix & SEC
RATING AND TARGET PRICE
We continue to expect mobile DRAM (narrowly defined, 1GB equivalent) to
grow to 2.0 bn in 2011 and 3.8 bn in 2012 from 0.9 bn in 2010 driven by Rating Stock Price Target Price

adoption into high-grade CPU smartphones and tablet PCs. Mobile DRAM 6665.T
005930.KS
Elpida Memory
Samsung Electronics
B
B
¥ 1,262
W 953,000
¥ 1,400
W 1,110,000
prices are stable, which is likely to be positive for the share prices of DRAM 000660.KS Hynix Semiconductor N W 29,700 W 25,000

makers with higher mobile DRAM exposure in DRAM down-cycles and Note: Stock price as of 2/14/2011
Source: GS Research estimates
early stages of recovery. We see the best gains going to Elpida Memory
(6665.T, Buy), Samsung Electronics (005930.KS, Buy), and Hynix
(000660.KS, Neutral). WHAT IS MOBILE DRAM?

Mobile DRAM is used in mobile phones in ways that are
We think mobile DRAM standardization is about two years off different from the memory modules in conventional
Unlike the PC CPU market, there are no dominant CPU suppliers yet for notebook PCs. In this report, we use mobile DRAM in the
narrowly defined sense of low-power DRAM, which differs
smartphones and tablet PCs. Our view is it will take another two years for a technically from PC DRAM.
mobile DRAM standard to emerge (for a spot market to be established and
expand). Yet we think the needs of end-product and memory module
makers will spur CPU makers to gradually gravitate around a standard, and RELATED RESEARCH

so the mobile DRAM market will come to resemble the PC DRAM market. Elpida Memory (6665.T) Buy: Confirming DRAM game rules:
timeframe important (Apr. 7, 2008)

Overall DRAM supply/demand may be a little tighter than market Elpida Memory (6665.T) Buy: Up to Buy on view that 3Q3/11
expects in 2012 was the earnings floor (Jan. 21, 2011)

We estimate mobile DRAM made up 4% of total DRAM supply in 2010. In
the next two years, we think total DRAM bit supply will grow only 40%-50%
yoy, and on this basis, we expect mobile DRAM demand to make up 7% of
total demand in 2011 and 12% in 2012. In this scenario, our calculations
show 45% growth in DRAM supply outside of mobile DRAM in 2011 and
37% growth in 2012, so while mobile DRAM is unlikely to be the driver of
overall DRAM supply/demand, it may well be a supportive factor.

Long-run, above-market mobile DRAM growth scenario not viable
Some believe mobile DRAM demand will enjoy self-sustained rapid
growth, but we think growth may well return to the level of other DRAM
uses after a rapid-growth stage in the next few years. Mobile DRAM
capacity per end-product tends to grow in conjunction with increases in
CPU processing power, but we think this upward trend in CPU processing
power could slow if handsets and tablets are more regularly used in a
cloud environment. From a systemic standpoint, we think handset
development is unsustainable if it is not accompanied by development in
mobile networks and data centers.
Ikuo Matsuhashi, CMA The Goldman Sachs Group, Inc. does and seeks to do business with
+81(3)6437-9860 ikuo.matsuhashi@gs.com Goldman Sachs Japan Co., Ltd. companies covered in its research reports. As a result, investors should
Michael Bang be aware that the firm may have a conflict of interest that could affect
+82(2)3788-1655 michael.bang@gs.com Goldman Sachs (Asia) L.L.C., Seoul Branch the objectivity of this report. Investors should consider this report as
Taichi Yoneya only a single factor in making their investment decision. For Reg AC
+81(3)6437-9976 taichi.yoneya@gs.com Goldman Sachs Japan Co., Ltd. certification, see the end of the text. Other important disclosures follow
Marcus Shin the Reg AC certification, or go to www.gs.com/research/hedge.html.
+82(2)3788-1154 marcus.shin@gs.com Goldman Sachs (Asia) L.L.C., Seoul Branch Analysts employed by non-US affiliates are not registered/qualified as
research analysts with FINRA in the U.S.

The Goldman Sachs Group, Inc. Global Investment Research

February 15, 2011 Asia: Technology: Integrated Electricals

Summary
• Mobile DRAM is garnering more attention than ever.

• Sustainability of growth: We think the next year or two will be a period of high growth
for mobile DRAM given the increasingly high performance of cellphone CPUs and the
use of mobile DRAM in tablet PCs. Medium term, we think mobile DRAM growth may
fall into line with demand for other products once this high-growth period ends.

• Pricing: We expect mobile DRAM pricing to vary from PC DRAM pricing over the next
two years or so. We think mobile DRAM pricing will be determined through
transactions between DRAM and finished equipment makers, not on a spot market.
This means that DRAM makers should be able to secure stable margins by lowering
prices nearly in line with the cost-cutting curve. We note, however, that prices may
standardize over the medium term.

• Impact on overall DRAM market supply/demand: Mobile DRAM is beginning to have a
positive impact on overall DRAM supply/demand, though we do not see it having a
decisive impact.

• The view on mobile DRAM in the capital markets: We see the capital markets’ view of
mobile DRAM gradually becoming more fixed. Specifically, we think high exposure to
mobile DRAM will be a positive for the share prices of DRAM makers during a
downward trend in the mainstream PC DRAM cycle and the initial stages of a recovery.
If a full-scale recovery in PC DRAM were to occur, the market’s focus would
presumably shift to margin expansion, and as a result mobile DRAM stability might
not be seen as that important.

• We highlight Elpida, Hynix, & SEC: Among major DRAM makers, Elpida and Hynix
have the highest exposure to mobile DRAM, which accounted for roughly 20% of
overall sales in 3Q3/11 (or 4QCY10). Although we estimate that SEC accounted for
50% of mobile DRAM supply in 2H10, the diversified nature of SEC’s earnings
structure limits overall revenue and earnings contribution from mobile DRAM (we
estimate that mobile DRAM accounted 2.5% overall revenue in 4QCY10). Nevertheless,
robust mobile DRAM growth should be positive for SEC but as a supplementary driver
of earnings rather than a decisive driver.

Elpida Memory: Scope to price in earnings recovery momentum and spot price
improvement
We reiterate our Buy rating on Elpida. We expect a sharp earnings recovery and see scope
for this to be priced into the shares. We see a good likelihood that the shares will rebound
in 1Q2011 on a combination of: (1) changes in the company’s product mix (a shift to 40-nm
products and mobile DRAM); (2) other company-specific factors we see driving profit
growth, including the waning impact of inventory valuation losses and the disappearance
of the need to post allowances for uncollectable accounts; and (3) the likelihood that DRAM
spot prices have already hit bottom. Our 12-month price target of ¥1,400 is based on a P/B
of 1.1X, derived from P/B-ROE correlation, and our FY3/12 estimate. Risks include DRAM
spot price trends and a capital raise in the event of a negative market reaction to the
announcement of losses.

Samsung Electronics: Staying bullish based on a diversified earnings model, new
earnings growth potential
We reiterate our Buy rating and bullish stance on Samsung Electronics in light of its
diversified earnings model, which is not limited to DRAM but also encompasses NAND,
AM OLED, smartphones, and Digital Media. Our Buy also takes into consideration its
potential for new earnings growth. Our Director’s Cut-based 12-month price target is

Goldman Sachs Global Investment Research 2


W1,110,000, which equals an EV/EBITDA of 6.1X and P/B of 1.9X on our FY12/11 estimates.
Risks include DRAM spot price trends, lower smartphone margins, and new business
execution risk.

Hynix: Share price could rise on near-term DRAM price bottom
We maintain our Neutral rating, but note that the shares could rise near term on signs that
DRAM prices have bottomed. Our Director’s Cut-based 12-month price target is W25,000,
which equals an EV/EBITDA of 4.2X and P/B of 1.7X on our FY12/11 estimates. Risks include
DRAM spot price trends, changes in the rate of growth in DRAM capacity per PC, and sharp
forex swings.

Our view on DRAM spot prices
As of January 28, DRAM spot prices had rebounded over 20% from a January 24 low. This
is in line with our view that DRAM spot prices tend to rebound during periods of low PC
demand contrary to most expectations. This was noted in our January 21 report (Up to Buy
on view that 3Q3/11 was the earnings floor), and we expect a rebound in 1Q2011.

We expect an extremely brief leveling off in DRAM prices after the Chinese New Year
holidays, but see scope for a more bullish stance in February-March.

Exhibit 1: Spot prices rebounded over 20% from mid-January low
1Gb DDR2/DDR3 ETT/UTT DRAM spot prices

1Gb DDR2 ETT/UTT
(US$) 1Gb DDR3 ETT/UTT
4.0

3.5

3.0 DDR2 1Gb ETT/UTT

180-day mov. ave.

DDR3 1Gb ETT/UTT

180-day mov. ave.
2.5

2.0

1.5

51%
48% rebound
rebound 35%
1.0 rebound
150%
rebound

72%
0.5 rebound
100%
rebound

0.0

Source: DRAMeXchange(Trendforce), Goldman Sachs



1. Mobile DRAM commoditization is probably still two years off

(1) Industry standard for mobile DRAM looks to be some way off
Emergence of a mobile DRAM standard looks to be some way off: In mainstream PCs, Intel
is the dominant CPU supplier and sets the standards for PC DRAM. All PC makers are
comfortable using any Intel-certified DRAM product. Unlike the mainstream PC market,
however, the mobile CPU market for smartphones and tablet PCs are still far from
becoming dominated by a few major CPU suppliers. Considering this, we believe an
industry-wide standard for mobile DRAM is unlikely to emerge soon.

Spot markets are often not viable without a commoditization: One way to view the PC
DRAM market is to recognize the importance of standards in enabling suppliers to produce
DRAM and sell to buyers. Put differently, the PC DRAM market is not one where there is
much risk of DRAM suppliers running out of product supply. In markets where there are
customized and semi-customized products, however, spot markets are usually not viable.

Less price volatility than PC DRAM: As mobile DRAM products are non-standard, we think
prices will be set through negotiations with specific clients, sheltering prices from the
impact of spot price and outside transaction price effects and reducing price volatility. On
the flipside, mobile DRAM is unlikely to earn operating margins close to the nearly 40% on
PC DRAM at the peak of the PC cycle. While there are fewer uncontrollable price declines
with this structure, there are also fewer double-digit (%, yoy) price increases.

Exhibit 2: Market share of CPUs for smartphone less concentrated vs. PCs
CPU shares: PCs vs. mobile phones (2010 estimates)

PC Tablet PC
Texas Marvell Infineon Broadcom
Others Nvidia
AMD Instruments
Qualcomm

Intel Apple/Samsung

All handsets (inc. baseband) Smartphone (excl. baseband)
Others Others
Nvidia Nvidia
Renesas Renesas
Marvel Marvel
Texas
Qualcomm
Instruments
Samsung
Broadcom Qualcomm

Infinion

Texas
ST-Ericsson Instruments
Mediatek Samsung

Source: Goldman Sachs Research



(2) Mobile DRAM unlikely to remain customized in longer run
However, we think mobile DRAM standards will gain traction over time for three reasons.

a) Clients favor standardized products: Dealing with custom products is time consuming
for end-product makers. In particular, we think it is easier for the Taiwanese EMS
companies to use standard products.

b) Memory board makers aim to strike back: An increase in direct shipments by DRAM
makers to end-product makers would likely mean fewer business opportunities for
memory board makers in Taiwan and elsewhere. We think memory board makers will
seek to counter this by procuring CPUs and DRAMs on their own and supplying end-
product makers with package-on-package (PoP) products. We would consider such a
scenario to be a move toward a de facto standard in mobile DRAM.

c) Emergence of dominant mobile CPU suppliers would likely lead to standardization:
We think a standardized mobile DRAM could emerge if market share became much
more concentrated among a few mobile application CPU suppliers, such as Qualcom.

Nevertheless, we think it will take around two years before the aforementioned dynamics
form the mainstream in mobile DRAM.

Exhibit 3: Elpida and Samsung Electronics are ahead of the pack
DRAM majors – progress with mobile DRAM

Company Status
Elpida currently produce non-PC DRAM (including mobile DRAM) in Hiroshima plant
(130K/mo). In Oct-Dec 2010, 50%+ wafer input in the plant (65-70K/mo) was for mobile
Elpida DRAM. Elpida expects this to rise to 60-70% by mid-2011. Once mobile DRAM production
reaches the maximum capacity at the Hiroshima plant, it's likely to produce mobile DRAM at
Rexchip in Taiwan.

SEC produces mobile DRAM in line 13 and some other lines. Mobile DRAM accounts for
Samsung Elec high-teen%+ of SEC's total wafer wafer input (65-70K/mo) in Oct-Dec 2010. It expects the
ratio to be around 20% in Mar 2011 Q and mid-20% by the end of Dec-2011.

Hynix produces mobile DRAM in M10. Mobile DRAM accounts for mid-teen%+ of Hynix's
Hynix total wafer wafer input (40-50K/mo) in Oct-Dec 2010. It expects the ratio to be mid-20% by
the end of Dec-2011.

Micron produces mobile DRAM in Japan and Verginia. Mobile DRAM accounts for 8-10%+
of SEC's total wafer wafer input (around 20K/mo) in Oct-Dec 2010. It doesn't disclose the
Micron
target % in 2011, though it plans to increase mobile DRAM production in its Virginia plnat and
Inotera in Taiwan.

Note: The definition of mobile DRAM may not be consistent across companies.

Source: Discussions with companies.



2. Long-run outlook for mobile DRAM demand

(1) Mobile DRAM to grow to 3.8 bn 1GB-equivalent units in 2012
We continue to expect mobile DRAM (low-power DRAM) in 1GB equivalent units to grow to
2.0 bn in 2011 and 3.8 bn in 2012 from an estimated 0.9 bn in 2010. We think the main
drivers of this growth will be the use of mobile DRAM in cell phones with high-
performance CPUs and tablet PCs.

Mobile DRAM is used in mobile phones in ways that are different from the memory
modules in conventional notebook PCs. In this report, we use mobile DRAM in the
narrowly defined sense of low-power DRAM, which differs technically from PC DRAM.

Exhibit 4: DRAM Market by Application
Differences between broadly and narrowly defined mobile DRAM

GS Est. IDC Est. Gartner Est. DRAMeXchange Est.
(CY2010) (CY2010) (CY2010) (CY2010)

PC/Server

Mobile

Tablet PC

Others

Source: IDC, Goldman Sachs

(2) Mobile DRAM growth to be supportive of PC DRAM prices
We estimate mobile DRAM will consume about 4% of total DRAM supply in 2010. In the
next one or two years, we think total DRAM bit supply is likely to grow only 40%-50%. On
this basis, we think mobile DRAM demand could make up 7% of the overall DRAM market
in 2011 and 12% in 2012. In this scenario, our calculations show 45% bit supply growth in
DRAM supply outside of mobile DRAM in 2011 and 37% growth in 2012. We do not think
mobile DRAM will determine overall DRAM supply/demand, but it may well be supportive.



Exhibit 5: Mobile DRAM may account for 12% of total DRAM supply in 2012
Comparison of mobile DRAM demand and total DRAM supply

100%

80%

60%

40%

20%

0%
DRAM supply Mobile DRAM DRAM supply Mobile DRAM DRAM supply Mobile DRAM
demand demand demand

2010 2011 2012

Note: DRAM total supply = 100%

Source: WSTS (SIA), Goldman Sachs Research estimates.

(3) Our longer-run view
We think mobile DRAM demand growth will taper off after a while for two reasons.

• Slower mobile CPU spec upgrade cycles: Processing power in CPUs for cell
phones/smartphones is rapidly catching up to that of PC CPUs and moving closer to
the cutting-edge. By contrast, we expect mobile CPU advances to be slow. Use of cell
phones/smartphones in a cloud environment would mean less pressure to keep
upgrading CPU processing power at the current pace, and we think consumers would
instead be likely to seek improved battery life. We think the smartphone segment is
moving toward a phase where the frequency of Android OS upgrades will slow down
(they are currently almost non-stop).

• Mobile phones are unlikely to advance alone without attendant advances in computer
and network systems: One feature common to all kinds of systems is that overall
system performance does not improve with a partial system upgrade. A lopsided
approach creates bottlenecks that need to be eliminated. We therefore think mobile
networks and data center (server) specifications will need to be upgraded over time to
keep up with rapid handset advances. As a result, we think the ratio of mobile DRAM
to total DRAM shipments is unlikely to continue climb over the longer term.



Exhibit 6: Scenario analysis: Mobile DRAM demand
Scenario analysis: mobile DRAM demand

Smartphone (mn unit) 300 400 500 600
Tablet PC (mn unit) 20 60 80 100
↓ ↓ ↓ ↓
Average Volume Mobile DRAM Demand (per 1Gb)
1Gb = 0.125GB 320 460 580 700 ←DRAM contents in 1st generation iPad
2Gb = 0.250GB 640 920 CY2011 1160 1400 ←DRAM contents in iPhone4
CY2010
3Gb = 0.375GB 960 1380 1740
CY2012 2100
Main Scenario
4Gb = 0.500GB 1280 1840 2320 2800
6Gb = 0.750GB 1920 2760 3480 4200
8Gb = 1.000GB 2560 3680 4640 5600 ←DRAM contents in netbook in 2010
12Gb = 1.500GB 3840 5520 6960 8400
16Gb = 2.000GB 5120 7360 9280 11200 ←DRMA contents in low-end PC In 2010

Optimistic
Scenario

Source: Goldman Sachs Investment Research

Exhibit 7: Mobile DRAM to grow sharply in 2011-2012, and then move in line with average of PC DRAM growth
Main scenario for mobile (low-power) DRAM unit demand growth (1GB equivalent basis)

(Exhibit) Mobile DRAM Market Size
(CY) 2010 2011 2012 2013-15

Mobile DRAM demand(mn, 1Gb based)...(a) 852 1,980 132% 3,830 93%

Contents per box
Smartphone (mn unit) 280 400 43% 500 25% growth could
DRAM contents per box (GB) 0.36 0.53 45% 0.78 48% potentially slow down.
As a result, its growth
Tablet PC (mn unit) 20 60 200% 100 67% rate will normalize to
DRAM contents per box (GB) 0.25 0.63 150% 0.91 46% DRAM industry
average.

*DRAM Production Volume (mn, 1Gb based)...(b) 15,145 22,718 50% 32,940 45%
(a)÷(b) 6% 9% 12%

Source: Company Data, Goldman Sachs Research estimates

Exhibit 8 shows our forecasts and Elpida’s projection of potential mobile DRAM demand.



Exhibit 8: Mobile DRAM demand forecasts
Our 2010-2012 forecasts and Elipda’s projections of potential mobile DRAM demand

(CY2010=100)
800

700

600

500

400

300

200

100

0
GS Elpida GS Elpida GS Elpida
2010E 2011E 2012E

Source: Company data, Goldman Sachs Research estimates.

3. Mobile DRAM technology

MCP are being joined by combinations of a NAND stacked chip with
a CPU/DRAM PoP
Cellphone DRAM usage entered its initial growth phase around late-1990s, spurred by
second-generation multichip packages (MCPs). The takeoff of smartphones has accelerated
the process. Current high-end smartphones use package on package (PoP), where CPU
chips (packages) and DRAM chips (packages) are incorporated in a third package.

Exhibit 4 shows the example of a NAND stacked chip with a PoP incorporating a CPU and
low-power DRAM. Other patterns include a high-capacity NAND stacked chip, which is
what the iPhone uses. Many other smartphones use a low-capacity NOR flash with a NAND
memory card. By using a memory card, a cellphone maker can avoid NAND price risk and
hold down the total product cost.



Exhibit 9: Requirements changing as cellphones become more sophisticated and shift to smartphones
Differences between MCPand PoP

High Functioning Trend

MCP MCP POP + POP +
1st Generation 2nd Generation NOR&Memory Card Stack chip
MCP
(Multi chip Stacked chip
Package) NOR NAND NOR
Memory Layer of multiple
(Bear die) (Bear die) card NAND chips

Pseudo SRAM DRAM LP DRAM LP DRAM
(Bear die) (Bear die) PoP
(Package on

CPU CPU CPU CPU

Note: Boxes in dotted line are bear die. Boxes in straight line are single-unit chip.

Source: Goldman Sachs Research

Exhibit 10: MCP stacks die chips in one package. PoP stacks packages.
MCP and PoP comparison

MCP(Multi chip Package) PoP(Package on Package)

Source: Elpida Memory

LPDRAM (Low-power DRAM) features

Mobile DRAM generally has the following features.

• Partial Array Self Refresh: Only the DRAM memory cells that need to retain data
are refreshed. A mobile RAM usually has four banks, of which two, or one, are
refreshed. This reduces the electric current. However, data is not saved in cells that
are not refreshed.



• Deep Power Down (DPD): When a device is not being accessed for a long time,
power consumption can be reduced by the use of DPD mode, which turns off all
input buffers except the clock and clock enable.

• Temperature Compensated Self Refresh (TCSR): The surrounding temperature is
gauged by temperature sensors in the device, which make adjustments at
appropriate intervals for the temperature level, thus curbing electric power
consumption. Previously, temperature resistors had to be reprogrammed from
outside to change the refresh cycle.

LP DRAM advantage depends on shrinkage and cost factors such as
yield
Mobile DRAM catalog specs are broadly similar. Ultimate competitive advantage will
depend on progress in areas such as shrinkage. The custom specifications of mobile DRAM
are mostly similar. What ultimately decides which product succeeds and which do not is
the speed of migration to finer design rules. As of end-2010, Elpida’s chip volume
shipments in 4Xnm mobile DRAM were roughly 16% and 32% greater than its two largest
rivals, respectively.

Exhibit 11: DRAM demand outlook by application
Comparison of our estimates and research company forecasts

100%

90%
0.2% 0.3% 0.3% 16%
80% 9% 10% 8% 13% 13%
0.4% 1.2% 9% 13%
1.2%
70% 6% 8% 9%
Others
60%
Tablet PC
50%
Mobile
40%
75% 74% 74% 75% 72% 73% 75% 76%
70% 67% 67% PC/Server
30%

20%

10%

0%
2010 2011E 2012E 2010 2011E 2012E 2010 2011E 2012E 2010 2011E 2012E
GS Est. IDC (12/2010 Est.) Gartner (11/2010 Est.) DRAMeXchange
* Tablet Breakdown (1/2011 Est.)
Not Available * Tablet Breakdown
Not Available

GS est. to be updated.

Source: Goldman Sachs Research, IDC, Gartner



Reg AC
We, Ikuo Matsuhashi, CMA and Michael Bang, hereby certify that all of the views expressed in this report accurately reflect our personal views about
the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly,
related to the specific recommendations or views expressed in this report.

Investment Profile
The Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group and
market. The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on composites
of several methodologies to determine the stocks percentile ranking within the region's coverage universe.
The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows:
Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate
of various return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend
yield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as trailing twelve-month volatility adjusted for dividends.

Quantum
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in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets.

Disclosures

Coverage group(s) of stocks by primary analyst(s)
Ikuo Matsuhashi, CMA: Japan-Integrated Elec./Semicon, Japan-Telecom & IT Services. Michael Bang: Korea Technology.
Japan-Integrated Elec./Semicon: Elpida Memory, Fujikura, Fujitsu, Furukawa Electric, Hitachi, Hitachi Cable, Mitsubishi Electric, NEC, Oki Electric
Industry, Renesas Electronics, Rohm, Sumitomo Electric Industries, Toshiba, Yamaha.
Japan-Telecom & IT Services: Itochu Techno Solutions, Jupiter Telecommunications, KDDI, Nippon Telegraph & Telephone, Nomura Research
Institute, NS Solutions, NTT Data, NTT DoCoMo, Softbank.
Korea Technology: Hynix Semiconductor, LG Display, LG Electronics, LG Innotek Co., Samsung Electro-Mechanics, Samsung Electronics, Samsung
SDI Co., Samsung Techwin, Seoul Semiconductor.

Company-specific regulatory disclosures
The following disclosures relate to relationships between The Goldman Sachs Group, Inc. (with its affiliates, "Goldman Sachs") and companies
covered by the Global Investment Research Division of Goldman Sachs and referred to in this research.
Goldman Sachs beneficially owned 1% or more of common equity (excluding positions managed by affiliates and business units not required to be
aggregated under US securities law) as of the month end preceding this report: Hynix Semiconductor (W29,700)
Goldman Sachs has received compensation for investment banking services in the past 12 months: Hynix Semiconductor (W29,700) and Samsung
Electronics (W953,000)
Goldman Sachs expects to receive or intends to seek compensation for investment banking services in the next 3 months: Elpida Memory (¥1,278),
Hynix Semiconductor (W29,700) and Samsung Electronics (W953,000)
Goldman Sachs has received compensation for non-investment banking services during the past 12 months: Elpida Memory (¥1,278)
Goldman Sachs had an investment banking services client relationship during the past 12 months with: Elpida Memory (¥1,278), Hynix
Semiconductor (W29,700) and Samsung Electronics (W953,000)
Goldman Sachs had a non-investment banking securities-related services client relationship during the past 12 months with: Hynix Semiconductor
(W29,700) and Samsung Electronics (W953,000)
Goldman Sachs had a non-securities services client relationship during the past 12 months with: Elpida Memory (¥1,278), Hynix Semiconductor
(W29,700) and Samsung Electronics (W953,000)
Goldman Sachs has managed or co-managed a public or Rule 144A offering in the past 12 months: Hynix Semiconductor (W29,700)
Goldman Sachs (Asia) L.L.C., Seoul Branch is a liquidity provider for Equity Linked Warrants which has the company's stock as the underlier: Hynix
Semiconductor (W29,700) and Samsung Electronics (W953,000)
Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the company's stock as the underlier as of the
close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD 0087
SAMSUNG ELECTRONICS CO., LTD. CALL.



Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3529970 Equity Linked Warrants which has the company's stock as the underlier as of
the close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD
0801 SAMSUNG ELECTRONICS CO., LTD. CALL.
close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0456
the close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0C04
the close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0E48
the close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0G09
the close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0H00
the close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0C03
HYNIX SEMICONDUCTOR INC. CALL.
the close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0D57
close of business two business days prior to the current date for which it is acting as a liquidity provider: HANWHA SECURITIES CO., LTD. 0059



the close of business two business days prior to the current date for which it is acting as a liquidity provider: HANWHA SECURITIES CO., LTD. 0273
0814 HYNIX SEMICONDUCTOR INC. CALL.
close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0805 HYNIX
SEMICONDUCTOR INC. CALL.
the close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0607
close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0871 HYNIX
SEMICONDUCTOR INC. CALL.

Distribution of ratings/investment banking relationships
Goldman Sachs Investment Research global coverage universe

Rating Distribution Investment Banking Relationships
Buy Hold Sell Buy Hold Sell
Global 31% 54% 15% 50% 42% 37%
As of January 1, 2011, Goldman Sachs Global Investment Research had investment ratings on 3,137 equity securities. Goldman Sachs assigns stocks
as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell
for the purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and views and related definitions' below.



Price target and rating history chart(s)
Elpida Mem ory (6665.T) Stock Price Currency : Japanese Yen Sam sung Ele ctronics (005930.KS) Stock Price Currency : South Korean Won
Goldman Sachs rating and stock price target history Goldman Sachs rating and stock price target history
5,000 1,600 1,200,000 2,500
4200 950
1550 980 1,100,000 848000 602000 950000
1900 814000 915000
4,000 1500 1050 1,400 730000 741000
500 1,000,000 845000 887000 2,000
1400 1200 950 821000 583000
900,000 570000
3,000 1500 2400 1350 1,200
3500 2200
950 1600 800,000 1,500
4600 850 918000
2,000 1,000 824000
700,000
870000 932000 1020000
3300 600,000 1,000
1,000 800 925000
1750 500,000
910000
0 600 400,000 500
Nov 18 Jan 14 Jul 30 Nov 6 Apr 26 Mar 21
Stock Price

Index Price

Stock Price

Index Price
B N B N B NA B CS
F M A M J J A S O N D J F MA M J J A S O N D J F MA M J J A S O N D F M A M J J A S O N D J F M A M J J A S O N D J F MA MJ J A S O N D
2008 2009 2010 2008 2009 2010
Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 12/31/2010. Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 12/31/2010.
Rating Covered by Ikuo Matsuhashi Rating Covered by Michael Bang,
Aug 28, 2008 to N from B
Price target Mar 22, 2009 to N from NA Price target as of Nov 22, 2010
Jan 14, 2010 to N f rom B
Price target at removal Not covered by current analyst Price target at removal Not covered by current analyst
Nov 22, 2010 to B from CS
TOPIX Korea SE Composite
(KOSPI)

The price targets show n should be considered in the context of all prior published Goldman Sachs research, w hich may or The price targets show n should be considered in the context of all prior published Goldman Sachs research, w hich may or
may not have included price targets, as w ell as developments relating to the company, its industry and f inancial markets. may not have included price targets, as w ell as developments relating to the company, its industry and f inancial markets.

Hynix Sem iconductor (000660.KS) Stock Price Currency : South Korean Won
Goldman Sachs rating and stock price target history
40,000 2,500
35,000 29000 26000 17100 29600 26000
30,000 27400 13200 18100 2,000
19400 13000
25,000
6000
20,000 1,500
15,000 23500

10,000 20300 30200 1,000
5,000 21200
0 500
Nov 6 Apr 26 Mar 21
Stock Price

Index Price

N NA N CS
F MA M J J A S O N D J F MA MJ J A S O N D J F MA MJ J A S O N D
2008 2009 2010
Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 12/31/2010.
Rating Covered by Michael Bang,
Aug 28, 2008 to B from N
Mar 22, 2009 to S from NA Price target as of Nov 22, 2010
Jan 14, 2010 to B f rom N
Price target at removal Not covered by current analyst
Nov 22, 2010 to N from CS
Korea SE Composite
(KOSPI)

The price targets show n should be considered in the context of all prior published Goldman Sachs research, w hich may or
may not have included price targets, as w ell as developments relating to the company, its industry and f inancial markets.

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