RNS Number:4097T
Samsung Electronics Co. Ld
18 December 2003







December 18, 2003



Dear Shareholders:



We are writing to update you on the current situation at Samsung Electronics
financial services subsidiaries, Samsung Card and Samsung Capital.
As you already know, the Korean consumer credit market continues to face
challenging times. In trying to address these on-going difficulties within the
industry, Samsung Card and Samsung Capital plan to merge, pending the
approval of the respective companies shareholders. The plan to merge
Samsung Card and Samsung Capital stems from a belief that further
restructuring will have greater efficacy in a single, united entity as opposed
to that of efforts made by two stand-alone firms. The new company composed of
Card and Capital will raise 1 trillion won in additional equity through a rights
issuance. This capital is essential not only for providing a sustainable
financial structure, but also for prompting the markets confidence in the new
merged company. Unlike the fund raising exercise undertaken in April,
the reduction of Samsung Cards Tier 1 capital base rules out the issuance of
convertible bonds, while necessitating new equity recapitalization.


Following third party valuations, Samsung Electronics will be submitting to
the Board of Directors a proposal to participate in the equity issuance of
the new merged company. Once merger ratios are finalized,
Samsung Electronics purchase of additional shares will be limited to
the weighted average of the existing ownership percentage in each financial
subsidiary; currently, Samsung Electronics holds a 56% stake in
Samsung Card and 75% stake in Samsung Capital. Moreover, subject to
an approval of Financial Supervisory Service, Samsung Life will positively
consider a participation in this equity raising exercise in a meaningful
and significant manner. Post this round of funding, Samsung Life will be
a substantial, new shareholder in the merged credit card and consumer
lending finance company. Samsung Electronics remains steadfastly
committed to focusing on our core businesses. As we expressed before,
we hope to decrease the exposure to financial services subsidiaries
currently on our balance sheet.



We would like to communicate to you, the shareholder, that our review
on a possible participation in the new financial services company has not
been made lightly. This measure represents what we consider to be the
best option, among the limited set of choices in a difficult circumstance,
for our shareholders and for the Korean financial system at large.
While the management of the merged company executes the restructuring
process, and implements tough cost reduction and risk controls, the operating
condition of the company will heal with time as the economic
environment improves.

We thank you for your understanding and consideration.



Sincerely,


Woosik Chu
Samsung Electronics






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