February 15, 2011Asia: Technology: Integrated Electricals                                                                 ...
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2011 02-15 6665.t (goldman sachs) asia technology- integrated electricals_ dram game rul...t mobile dram implications.5213788

  1. 1. February 15, 2011Asia: Technology: Integrated Electricals Equity ResearchDRAM game rules: A close look at mobile DRAM implicationsRapid mobile DRAM volume growth to benefit Elpida, Hynix & SEC RATING AND TARGET PRICEWe continue to expect mobile DRAM (narrowly defined, 1GB equivalent) togrow to 2.0 bn in 2011 and 3.8 bn in 2012 from 0.9 bn in 2010 driven by Rating Stock Price Target Priceadoption 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 1,110,000prices are stable, which is likely to be positive for the share prices of DRAM 000660.KS Hynix Semiconductor N W 29,700 W 25,000makers with higher mobile DRAM exposure in DRAM down-cycles and Note: Stock price as of 2/14/2011 Source: GS Research estimatesearly 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 areWe think mobile DRAM standardization is about two years off different from the memory modules in conventionalUnlike 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 differssmartphones 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 andexpand). Yet we think the needs of end-product and memory modulemakers will spur CPU makers to gradually gravitate around a standard, and RELATED RESEARCHso 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 3Q3/11expects in 2012 was the earnings floor (Jan. 21, 2011)We estimate mobile DRAM made up 4% of total DRAM supply in 2010. Inthe 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% oftotal demand in 2011 and 12% in 2012. In this scenario, our calculationsshow 45% growth in DRAM supply outside of mobile DRAM in 2011 and37% growth in 2012, so while mobile DRAM is unlikely to be the driver ofoverall DRAM supply/demand, it may well be a supportive factor.Long-run, above-market mobile DRAM growth scenario not viableSome believe mobile DRAM demand will enjoy self-sustained rapidgrowth, but we think growth may well return to the level of other DRAMuses after a rapid-growth stage in the next few years. Mobile DRAMcapacity per end-product tends to grow in conjunction with increases inCPU processing power, but we think this upward trend in CPU processingpower could slow if handsets and tablets are more regularly used in acloud environment. From a systemic standpoint, we think handsetdevelopment is unsustainable if it is not accompanied by development inmobile 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 shouldMichael 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 asTaichi 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 followMarcus 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
  2. 2. February 15, 2011 Asia: Technology: Integrated ElectricalsSummary • 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 isGoldman Sachs Global Investment Research 2
  3. 3. February 15, 2011 Asia: Technology: Integrated Electricals 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 SachsGoldman Sachs Global Investment Research 3
  4. 4. February 15, 2011 Asia: Technology: Integrated Electricals1. 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 ResearchGoldman Sachs Global Investment Research 4
  5. 5. February 15, 2011 Asia: Technology: Integrated Electricals (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, its 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 SECs 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 Hynixs 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 SECs total wafer wafer input (around 20K/mo) in Oct-Dec 2010. It doesnt 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.Goldman Sachs Global Investment Research 5
  6. 6. February 15, 2011 Asia: Technology: Integrated Electricals2. 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.Goldman Sachs Global Investment Research 6
  7. 7. February 15, 2011 Asia: Technology: Integrated Electricals 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.Goldman Sachs Global Investment Research 7
  8. 8. February 15, 2011 Asia: Technology: Integrated ElectricalsExhibit 6: Scenario analysis: Mobile DRAM demandScenario analysis: mobile DRAM demandSmartphone (mn unit) 300 400 500 600Tablet 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 ScenarioSource: Goldman Sachs Investment ResearchExhibit 7: Mobile DRAM to grow sharply in 2011-2012, and then move in line with average of PC DRAM growthMain 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.Goldman Sachs Global Investment Research 8
  9. 9. February 15, 2011 Asia: Technology: Integrated Electricals 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.Goldman Sachs Global Investment Research 9
  10. 10. February 15, 2011 Asia: Technology: Integrated ElectricalsExhibit 9: Requirements changing as cellphones become more sophisticated and shift to smartphonesDifferences 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 CPUNote: Boxes in dotted line are bear die. Boxes in straight line are single-unit chip.Source: Goldman Sachs ResearchExhibit 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.Goldman Sachs Global Investment Research 10
  11. 11. February 15, 2011 Asia: Technology: Integrated Electricals • 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, GartnerGoldman Sachs Global Investment Research 11
  12. 12. February 15, 2011 Asia: Technology: Integrated ElectricalsReg ACWe, Ikuo Matsuhashi, CMA and Michael Bang, hereby certify that all of the views expressed in this report accurately reflect our personal views aboutthe 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 ProfileThe Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group andmarket. The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on compositesof several methodologies to determine the stocks percentile ranking within the regions 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 years estimate over current years estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregateof 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, dividendyield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as trailing twelve-month volatility adjusted for dividends.QuantumQuantum is Goldman Sachs proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used forin-depth analysis of a single company, or to make comparisons between companies in different sectors and markets.DisclosuresCoverage 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 ElectricIndustry, Renesas Electronics, Rohm, Sumitomo Electric Industries, Toshiba, Yamaha.Japan-Telecom & IT Services: Itochu Techno Solutions, Jupiter Telecommunications, KDDI, Nippon Telegraph & Telephone, Nomura ResearchInstitute, NS Solutions, NTT Data, NTT DoCoMo, Softbank.Korea Technology: Hynix Semiconductor, LG Display, LG Electronics, LG Innotek Co., Samsung Electro-Mechanics, Samsung Electronics, SamsungSDI Co., Samsung Techwin, Seoul Semiconductor.Company-specific regulatory disclosuresThe following disclosures relate to relationships between The Goldman Sachs Group, Inc. (with its affiliates, "Goldman Sachs") and companiescovered 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 beaggregated 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 SamsungElectronics (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), HynixSemiconductor (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 companys stock as the underlier: HynixSemiconductor (W29,700) and Samsung Electronics (W953,000)Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD 0087SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs Global Investment Research 12
  13. 13. February 15, 2011 Asia: Technology: Integrated ElectricalsGoldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3529970 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0801 SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD 9313SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD 0065SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0456SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3535730 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0C04SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3550000 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0E48SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3578580 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0G09SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3418730 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0G99SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0924SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3448730 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0G10SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3600000 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0H00SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0923SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3445610 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0H01SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0869SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3550000 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0799 SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3544780 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0C03SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3547060 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0798 SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3132500 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0800 SAMSUNG ELECTRONICS CO., LTD. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3083150 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0H02HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3547990 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0D57HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: HANWHA SECURITIES CO., LTD. 0059HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs Global Investment Research 13
  14. 14. February 15, 2011 Asia: Technology: Integrated ElectricalsGoldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 946640 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANWHA SECURITIES CO., LTD. 0273HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3420640 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANWHA SECURITIES CO., LTD. 0210HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3406960 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANWHA SECURITIES CO., LTD. 0209HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3550000 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0814 HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0805 HYNIXSEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3550000 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0815 HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3485760 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0607HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3550000 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0809 HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3596640 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANWHA SECURITIES CO., LTD. 0288HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 0 Equity Linked Warrants which has the companys stock as the underlier as of theclose of business two business days prior to the current date for which it is acting as a liquidity provider: DAISHIN SECURITIES CO., LTD. 0871 HYNIXSEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3448500 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0810 HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3438840 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0811 HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3550000 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0812 HYNIX SEMICONDUCTOR INC. CALL.Goldman Sachs (Asia) L.L.C., Seoul Branch beneficially owned 3549000 Equity Linked Warrants which has the companys stock as the underlier as ofthe close of business two business days prior to the current date for which it is acting as a liquidity provider: HANA DAETOO SECURITIES CO., LTD0813 HYNIX SEMICONDUCTOR INC. CALL.Distribution of ratings/investment banking relationshipsGoldman 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 stocksas Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sellfor the purposes of the above disclosure required by NASD/NYSE rules. See Ratings, Coverage groups and views and related definitions below.Goldman Sachs Global Investment Research 14
  15. 15. February 15, 2011 Asia: Technology: Integrated ElectricalsPrice 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.Regulatory disclosuresDisclosures required by United States laws and regulationsSee company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manageror co-manager in a pending transaction; 1% or other ownership; compensation for certain services; types of client relationships; managed/co-managed public offerings in prior periods; directorships; for equity securities, market making and/or specialist role. Goldman Sachs usually makes amarket in fixed income securities of issuers discussed in this report and usually deals as a principal in these securities.The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts,professionals reporting to analysts and members of their households from owning securities of any company in the analysts area of coverage.Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analystas officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their households from serving as anofficer, director, advisory board member or employee of any company in the analysts area of coverage. Non-U.S. Analysts: Non-U.S. analysts maynot be associated persons of Goldman Sachs & Co. and therefore may not be subject to NASD Rule 2711/NYSE Rules 472 restrictions oncommunications with subject company, public appearances and trading securities held by the analysts.Distribution of ratings: See the distribution of ratings disclosure above. Price chart: See the price chart, with changes of ratings and price targets inprior periods, above, or, if electronic format or if with respect to multiple companies which are the subject of this report, on the Goldman Sachswebsite at http://www.gs.com/research/hedge.html.Additional disclosures required under the laws and regulations of jurisdictions other than the United StatesThe following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States lawsand regulations. Australia: This research, and any access to it, is intended only for "wholesale clients" within the meaning of the AustralianCorporations Act. Canada: Goldman Sachs & Co. has approved of, and agreed to take responsibility for, this research in Canada if and to the extent itrelates to equity securities of Canadian issuers. Analysts may conduct site visits but are prohibited from accepting payment or reimbursement by thecompany of travel expenses for such visits. Hong Kong: Further information on the securities of covered companies referred to in this research maybe obtained on request from Goldman Sachs (Asia) L.L.C. India: Further information on the subject company or companies referred to in thisresearch may be obtained from Goldman Sachs (India) Securities Private Limited; Japan: See below. Korea: Further information on the subjectcompany or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. Russia: Research reportsdistributed in the Russian Federation are not advertising as defined in the Russian legislation, but are information and analysis not having productpromotion as their main purpose and do not provide appraisal within the meaning of the Russian legislation on appraisal activity. Singapore: Furtherinformation on the covered companies referred to in this research may be obtained from Goldman Sachs (Singapore) Pte. (Company Number:198602165W). Taiwan: This material is for reference only and must not be reprinted without permission. Investors should carefully consider theirown investment risk. Investment results are the responsibility of the individual investor. United Kingdom: Persons who would be categorized asretail clients in the United Kingdom, as such term is defined in the rules of the Financial Services Authority, should read this research in conjunctionwith prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent to them byGoldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available fromGoldman Sachs International on request.Goldman Sachs Global Investment Research 15
  16. 16. February 15, 2011 Asia: Technology: Integrated ElectricalsEuropean Union: Disclosure information in relation to Article 4 (1) (d) and Article 6 (2) of the European Commission Directive 2003/126/EC is availableat http://www.gs.com/client_services/global_investment_research/europeanpolicy.html which states the European Policy for Managing Conflicts ofInterest in Connection with Investment Research.Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer under the Financial Instrument and Exchange Law, registered with the KantoFinancial Bureau (Registration No. 69), and is a member of Japan Securities Dealers Association (JSDA) and Financial Futures Association of Japan(FFAJ). Sales and purchase of equities are subject to commission pre-determined with clients plus consumption tax. See company-specificdisclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the JapaneseSecurities Finance Company.Ratings, coverage groups and views and related definitionsBuy (B), Neutral (N), Sell (S) -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buyor Sell on an Investment List is determined by a stocks return potential relative to its coverage group as described below. Any stock not assigned asa Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review Committee manages various regional Investment Lists to aglobal guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular coveragegroup may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent investmentrecommendations focused on either the size of the potential return or the likelihood of the realization of the return.Return potential represents the price differential between the current share price and the price target expected during the time horizon associatedwith the price target. Price targets are required for all covered stocks. The return potential, price target and associated time horizon are stated in eachreport adding or reiterating an Investment List membership.Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group athttp://www.gs.com/research/hedge.html. The analyst assigns one of the following coverage views which represents the analysts investment outlookon the coverage group relative to the groups historical fundamentals and/or valuation. Attractive (A). The investment outlook over the following 12months is favorable relative to the coverage groups historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following12 months is neutral relative to the coverage groups historical fundamentals and/or valuation. Cautious (C). The investment outlook over thefollowing 12 months is unfavorable relative to the coverage groups historical fundamentals and/or valuation.Not Rated (NR). The investment rating and target price have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in anadvisory capacity in a merger or strategic transaction involving this company and in certain other circumstances. Rating Suspended (RS). GoldmanSachs Research has suspended the investment rating and price target for this stock, because there is not a sufficient fundamental basis fordetermining, or there are legal, regulatory or policy constraints around publishing, an investment rating or target. The previous investment rating andprice target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspendedcoverage of this company. Not Covered (NC). Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The informationis not available for display or is not applicable. Not Meaningful (NM). The information is not meaningful and is therefore excluded.Global product; distributing entitiesThe Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs, and pursuantto certain contractual arrangements, on a global basis. Analysts based in Goldman Sachs offices around the world produce equity research onindustries and companies, and research on macroeconomics, currencies, commodities and portfolio strategy. This research is disseminated inAustralia by Goldman Sachs & Partners Australia Pty Ltd (ABN 21 006 797 897) on behalf of Goldman Sachs; in Canada by Goldman Sachs & Co.regarding Canadian equities and by Goldman Sachs & Co. (all other research); in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by GoldmanSachs (India) Securities Private Ltd.; in Japan by Goldman Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., SeoulBranch; in New Zealand by Goldman Sachs & Partners New Zealand Limited on behalf of Goldman Sachs; in Russia by OOO Goldman Sachs; inSingapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman Sachs & Co.Goldman Sachs International has approved this research in connection with its distribution in the United Kingdom and European Union.European Union: Goldman Sachs International, authorized and regulated by the Financial Services Authority, has approved this research inconnection with its distribution in the European Union and United Kingdom; Goldman Sachs & Co. oHG, regulated by the Bundesanstalt fürFinanzdienstleistungsaufsicht, may also distribute research in Germany.General disclosuresThis research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that weconsider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such. We seek to update our research asappropriate, but various regulations may prevent us from doing so. Other than certain industry reports published on a periodic basis, the largemajority of reports are published at irregular intervals as appropriate in the analysts judgment.Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We haveinvestment banking and other business relationships with a substantial percentage of the companies covered by our Global Investment ResearchDivision. Goldman Sachs & Co., the United States broker dealer, is a member of SIPC (http://www.sipc.org).Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and ourproprietary trading desks that reflect opinions that are contrary to the opinions expressed in this research. Our asset management area, ourproprietary trading desks and investing businesses may make investment decisions that are inconsistent with the recommendations or viewsexpressed in this research.We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in,act as principal in, and buy or sell, the securities or derivatives, if any, referred to in this research.This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would beillegal. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs ofindividual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, ifappropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income from themGoldman Sachs Global Investment Research 16
  17. 17. February 15, 2011 Asia: Technology: Integrated Electricalsmay fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.Fluctuations in exchange rates could have adverse effects on the value or price of, or income derived from, certain investments.Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors.Investors should review current options disclosure documents which are available from Goldman Sachs sales representatives or athttp://www.theocc.com/about/publications/character-risks.jsp. Transactions cost may be significant in option strategies calling for multiple purchaseand sales of options such as spreads. Supporting documentation will be supplied upon request.All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not allresearch content is redistributed to our clients or available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of ourresearch by third party aggregators. For all research available on a particular stock, please contact your sales representative or go tohttp://360.gs.com.Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY10282.Copyright 2011 Goldman Sachs.No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the priorwritten consent of The Goldman Sachs Group, Inc.Goldman Sachs Global Investment Research 17

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