3G Handsets Feature Strongly In LG's R & D Plans

LG announced today that it plans to spend KRW1.8 trillion for R&D in its Electronics & Telecommunications business unit in 2003, an increase of 20 percent over 2002. This initiative was unveiled at a strategic meeting held today at the LG Production Engineering Research Center in Pyungtaek, Korea.

Inset is Bon-Moo Koo Chairman of LG Korea.

LG Chairman Bon Moo Koo and approximately 40 executives discussed plans at the meeting to build its electronics business to be ranked among the top-three global electronics companies by 2006. LG aims to achieve this goal by implementing strategies to focus on current core business areas and those with high growth potential.

Within the KRW1.8 trillion R&D investment, KRW1 trillion will be allocated to digital TV,
display products including PDP and LCD, organic EL and 3G handsets. LG plans to make digital TV a number-one product in the global market by 2006 while making PDP and LCD leading global products by 2005. In the area of organic EL, LG targets to be ranked number three by 2006 and number one by 2010.

LG will spend KRW350 billion in the development of advances in digital appliances,
optical storage products and digital AV. The company already maintains global leadership in these product lines and plans to enhance this positioning through the development of new cutting-edge products.

The remaining KRW450 billion will be devoted to standardization of technologies,
expansion of the global R&D network, strengthening of the company’s parts businesses as well as enhancements to the CRT and monitor businesses.

In order to boost its R&D competitiveness in the global market, LG is expanding R&D
capabilities in China. In June, LG Electronics completed construction of an innovative
R&D center in Beijing, which currently employs 50 researchers, targeted to increase to
180 by 2003. These researchers will lead LG’s next wave of technology breakthroughs –
developing new products and capabilities for the Chinese market and beyond.