Further, LG plans to double its sales volume, profit and shareholder benefit by 2010 with 30% of its sales volume and 50% of its profit being derived through so-called ‘Blue Ocean Products**.’ The criteria of Blue Ocean Products are growth potential (based on sales performance), market leadership (based on market share) and its contribution toward profit.

“This paradigm management-style shift will not only allow LG to double revenue and generate higher profits while enhancing shareholder value.” CEO S.S. Kim said. “LG will also strengthen its overall capabilities to deliver quality, premium products enhancing its offering to consumers around the world.”

Philosophies of customer-oriented management, competitive advantage in technology and increased management efficiency are central to this initiative. Additional initiatives of this campaign are strengthening business capabilities, enhancing brand value and developing next-generation high-tech business.

While all marketing plans continue to be designed from the viewpoint of its customers, LG will strive to create value for consumers and the market.

Management and Investment Plan
LG’s 2006 sales goal will be a non-consolidated 24 trillion KRW, which is close to last year’s performance. The company also plans to invest 2.5 trillion KRW in total – 1.1 trillion KRW in facilities and 1.4 trillion KRW in R&D. Investment in facilities includes plasma production lines and R&D institutes.

The R&D investment will include new business categories, such as home network, Car Infotainment, Post PC, OLED, DMB as well as flagship products categories, including digital TV, PDP and mobile phones.

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R&D will focus on technological innovation and cost reduction of market dominant flat panel displays, maintaining competitiveness in basic technologies for SoC and SW, and secure product leadership through timely development of premium mobile phones such as SDMB, TDMB, 3G and advanced multimedia phones as digital broadcasting is converged into mobile technology.

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About LG Electronics, Inc.
LG Electronics (KSE: 06657.KS) is a global leader in providing cutting-edge, convergent electronics, information and communications products designed to meet the diverse needs of fast-changing consumers. With consolidated sales of US$37.7 billion and overseas sales of US$ 32.6 billion (86% of total sales), LG Electronics employs more than 70,000 employees in 76 subsidiaries located in 39 countries and operates four business units including Mobile Communications, Digital Appliance, Digital Display and Digital Media. For more information please visit www.lge.com.

Note

* The Concept of Blue Ocean
Blue ocean strategy is about epoch-making move of strengthening business capabilities and streamlining business structure in the five arenas of products, business model, work, system and human resources. For LG, it is the significant choice for the leap to become one of the global top 3 electronics and telecommunications by 2010.

** The Blue Ocean Products
Products or services which create a mass market or significantly increase market shares, profit by offering differentiated values in view of customers.